Janet Yellen: COVID Bill Will Return Labor Market by 2022

The $1.9 trillion stimulus package that is expected to pass this week will help the country's labor market recover to pre-pandemic levels by 2022, or two years sooner than most experts have expected, Treasury Secretary Janet Yellen said Monday. 

"This is a bill that will really provide Americans the relief they need to get to the other side of this pandemic," Yellen told MSNBC's Stephanie Ruhle. "We expect the resources here to really fuel a very strong economic recovery. I'm anticipating, if all goes well, that our economy will be back to full employment where we were before the pandemic next year. And the Congressional Budget Office estimated that without this, it could probably take until 2024."

She added that the package, with its money for vaccinations, benefit checks, child tax credits, food and rental assistance, and more will "bring millions, hundreds of millions of Americans the relief they need."

Yellen also defended the money that is going to state and local governments, a point of contention among Republicans opposing the package. 

"There has been a decline in employment of 1.4 million people because those governments are suffering declines in revenue and (have) extra expenses due to the pandemic," said Yellen. "They'll get the money that they need to make sure that first responders, policemen, firemen can stay on the job."

Still, there are long-term challenges the nation has faced for a very long time, said Yellen, including the issue that millions of Americans do not make a living wage and weren't even before the pandemic. 

"This is the package we need to revive our economy to where it was, (but) we have a K shaped recovery going on in which high-income people are doing much better than those at the bottom of the economic ladder, low wage workers and minorities," said Yellen. "That problem frankly existed before the pandemic struck, although it was made immeasurably worse by the pandemic."

So once the pandemic passes, the administration will turn to recovery and to "build back better and address the problems that have been festering in the U.S. for a long time, leading to rising inequality."

She also rejected the argument that the relief measures could result in inflation and higher interest rates. 

"I really don't think that that's going to happen," said Yellen. "We had a 3.5% unemployment rate before the pandemic and there was no sign of inflation increasing. It was too low, rather than too high."

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