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VideoThe former Federal Reserve chair Janet Yellen testifies at the Senate Finance Committee hearing on her nomination to be Treasury secretary.CreditCredit…Kriston Jae Bethel for The New York Times
Janet L. Yellen, President-elect Joseph R. Biden’s nominee to be Treasury secretary, said at her confirmation hearing on Tuesday that investing in vaccine distribution and expanded jobless benefits will provide the biggest “bang” for the economy in a future stimulus package to help Americans get through the current “dark” economic time.
Speaking before the Senate Finance Committee, Ms. Yellen said that her core focus will be on helping struggling workers find good jobs and receive better wages, and she laid out the impact that the pandemic has had on the economy.
“It’s been particularly brutal in its impact on minorities and on women,” Ms. Yellen said.
The Treasury nominee said that additional stimulus measures should be focused on those who have been hardest hit and that expanding unemployment insurance and food stamps benefits would be a critical way to do this. The most pressing priority, however, is spending to ensure that the vaccine is quickly and widely distributed so that the pandemic can be ended and normal economic activity can resume, she said.
With Democrats set to take control of the Senate, the hearing lacked some of the contentiousness that was on display when Trump administration nominees sat for confirmation hearings.
Senator Ron Wyden of Oregon, the top Democrat on the finance committee, said that “nobody could be better qualified for this job” than Ms. Yellen.
Senator Charles E. Grassley of Iowa, the current Republican chairman of the committee, pressed Ms. Yellen to ensure that the Biden administration does not raise taxes on the middle class and small businesses. He also urged her to cooperate transparently with Congressional oversight. However, he offered no critique about her qualifications for the job.
Yet areas of tension do exist, including the Biden administration’s plans to raise taxes on wealthy Americans and corporations and to increase spending to combat the pandemic.
Republican senators, including Mr. Grassley, asked Ms. Yellen to commit to not raising taxes on small businesses and also questioned whether she was going to roll back the 2017 tax package that President Trump pushed through without any Democratic support.
Ms. Yellen said that Mr. Biden does not plan to repeal the entire 2017 tax law, but that after the pandemic is over he will look to reverse provisions in the law that benefit the rich and big corporations.
Ms. Yellen demurred when asked whether she would oppose any effort to repeal a cap that lawmakers placed on state and local tax deductions as part of the 2017 tax overhaul. That limit has primarily hurt higher earners in high-tax, largely blue states and many Democrats have pushed to lift the cap.
Ms. Yellen said she believes “in a fair and progressive tax code where wealthy individuals and corporations pay their fair share” but that she would want to “study and evaluate what the impact has been on state and local governments” before making a decision.
Republicans also pressed Ms. Yellen on the federal deficit, which ballooned under Mr. Trump’s watch as he pushed through tax cuts and higher government spending even before the pandemic hit.
Ms. Yellen agreed that the “long-term fiscal trajectory is a cause for concern” but said the economy will suffer severe damage without more financial help during the pandemic.
“To avoid doing what we need to do now to address the pandemic and the economic damage that it’s causing would likely leave us in a worse place economically and with respect to our debt situation than doing what’s necessary,” she said.
Ms. Yellen took a hard line on China at her confirmation hearing on Tuesday, warning that she would use a “full array” of tools to combat what she described as abusive economic practices.
“China is clearly our most important strategic competitor,” Ms. Yellen said, suggesting that the Biden administration would take a skeptical view of the world’s second-largest economy.
Ms. Yellen accused China of dumping products, stealing intellectual property, providing illegal subsidies to its companies and having weak labor and environmental standards. She said that the United States needs to work with its allies to compel China to curb such abuses.
The Biden administration is inheriting a tense relationship with China, which frayed during President Trump’s trade war and then again amid the pandemic, with the United States accusing China of not doing enough to prevent the virus from leaving its borders.
One of the biggest decisions facing the Biden administration and Ms. Yellen is whether to keep Mr. Trump’s tariffs on $360 billion worth of Chinese imports, which have raised costs for many American companies. Ms. Yellen was not asked whether she would prefer to keep those in place or not.
But her sharp words come nearly one year after the Trump administration signed the first phase of a trade deal between the two countries, suggesting that she does not believe the agreement succeeded in dealing with the most critical structural problems in the economic relationship between the two countries.
Ms. Yellen is expected to take a somewhat different approach from the Trump administration, including working with allies to combat China and investing in America’s economy to help the nation better compete with China.
Ms. Yellen suggested the United States should invest heavily in infrastructure and adopt economic policies that address climate change, which she described as, “one of the most critical questions facing the economy and the world.”
Investing in clean technology, renewable energy and providing incentives for electric cars would be priorities for protecting the environment and creating jobs, Ms. Yellen said.
Credit…Win Mcnamee/Getty Images
Janet L. Yellen won the endorsement on Tuesday of eight former Treasury secretaries, who called for her speedy Senate confirmation so that she can assume the job under President-elect Joseph R. Biden Jr.
The letter of support was released shortly ahead of Ms. Yellen’s testimony at her confirmation hearing before the Senate Finance Committee. The group said that any delay would pose an unnecessary risk to the economy at a critical time.
“With millions of Americans out of work, long-term unemployment rising, and activity stalled in large sectors of the economy, daunting challenges will face the incoming administration. Addressing these pressing issues will require thoughtful engagement by the Department of the Treasury,” they wrote. “Any gap in its leadership would risk setting back recovery efforts.”
They added that a delay in confirming Ms. Yellen would also sow confusion among American allies, who traditionally rely on the United States for global economic leadership in times of crisis.
The letter was signed by George P. Shultz, James A. Baker III, Robert E. Rubin, Lawrence H. Summers, John W. Snow, Henry M. Paulson, Jr., Timothy F. Geithner and Jacob J. Lew. That all-male crew reflects the significance of Ms. Yellen’s nomination — if confirmed, she would be the first woman to lead the Treasury in its 231-year history.
The former secretaries said that Ms. Yellen, a former Federal Reserve chair, was uniquely qualified for the job because of her experience and knowledge.
Ms. Yellen is expected to have a smooth path to confirmation. An acting Treasury secretary is expected to fill the void at the Department between when Treasury Secretary Steven Mnuchin departs on Wednesday at noon and when Ms. Yellen is confirmed.
Credit…David Zalubowski/Associated Press
The average price for a one-way domestic flight dropped to $135 last summer, its lowest level in at least two decades, according to an analysis of new federal data by Cirium, an aviation data firm.
Normally, personal travel picks up during the summer and drops in the fall. That decline is usually offset by corporate travel, but with few people boarding planes and businesses having paused most employee travel during the pandemic, airlines cut fares to fill the reduced number of seats they were still selling.
“Summer was their last best chance to generate revenue,” said Jon Jager, a Cirium analyst.
The firm came up with its estimates by analyzing Transportation Department data on airfares from July to September, which was released on Tuesday. The $135 average price for a one-way ticket last summer included taxes and fees and is the lowest quarterly average airfare, before adjusting for inflation, since at least 2000, according to Cirium. The price also represents a 32 percent decline from the $198 average in summer 2019.
Airline travel has recovered somewhat since falling more than 95 percent in April, but it remains subdued. On Monday, just over 875,000 people were screened by the Transportation Security Administration, compared with nearly 2.3 million on the same day last year. Over the past week, the agency has screened only about 37 percent as many passengers as it did a year ago.
The fare data also varies substantially by airline. At Delta Air Lines, the gross fare for a one-way ticket from New York to Los Angeles declined 21 percent, to $298, from the summer of 2019 to the summer of 2020, for example. Fares on the same route over the same period fell 32 percent at United Airlines and 46 percent at American Airlines.
Over all, Delta’s airfares dropped 20 percent from the first quarter of 2020 to the third quarter, while prices dropped 26 percent for Southwest Airlines, 27 percent for United and 31 percent for American.
Credit…Anna Moneymaker for The New York Times
The chairman of the Federal Trade Commission, Joseph Simons, said on Tuesday that he would leave the post on Jan. 29 after a tenure during which the agency brought multiple major enforcement actions against Facebook.
Mr. Simons, a Republican whom President Trump picked to lead the agency, became the agency’s leader in the middle of a data privacy investigation into Facebook. The case resulted in a record $5 billion fine for the social media giant. Late last year, he sided with the two Democrats in the five-member agency in to sue Facebook for antitrust violations.
Mr. Simons leaves as the agency continues investigations of Big Tech, including an antitrust investigation of Amazon.
“As technology and our economy continue to evolve through the digital age, the F.T.C.’s staff work tirelessly so that consumers continue to benefit from a fair and competitive marketplace,” Mr. Simons said in a statement. “It’s been a privilege to be part of that effort.”
In addition to replacing Mr. Simons at the agency, President-elect Joseph R. Biden Jr. will also need to fill the spot held by Rohit Chopra, a Democratic commissioner. Mr. Biden’s transition team has announced plans to nominate Mr. Chopra as director of the Consumer Financial Protection Bureau.
Credit…Paul Sancya/Associated Press
Microsoft has agreed to invest in the autonomous vehicle division of General Motors called Cruise in a bid to become a supplier of technology for self-driving cars.
The software giant is participating in an investment round that will inject $2 billion into Cruise. G.M. and Honda are also participating in this round, which values the business at $30 billion.
“Microsoft, as the gold standard in the trustworthy democratization of technology, will be a force multiplier for us as we commercialize our fleet of self-driving, all-electric, shared vehicles,” Cruise’s chief executive, Dan Ammann, said in a statement.
As part of the partnership, G.M. has agreed to use Microsoft’s Azure cloud-computing service to manage and provide data services related to autonomous cars.
Cruise is developing vehicles that G.M. hopes to use in driverless taxi and delivery services, though it is not clear how soon the company will begin such services. The automaker, Tesla and other companies have fallen behind the schedules they once offered for having large commercial fleets of autonomous cars on the road picking up passengers and delivering goods.
Credit…Gian Ehrenzeller/EPA, via Shutterstock
The global pandemic ravaging American businesses and low-wage employees has barely lapped at the revenues and profits of the country’s biggest banks. Now, banks are saying that the worst of the pandemic’s potential to do them harm has passed.
Bank of America revealed on Tuesday that it had adjusted its calculations for how much cash it needed to set aside for a disaster, joining other large American banks in releasing some rainy-day funds based on an improved economic forecast. Goldman Sachs also said on Tuesday that it had adjusted its reserves, lowering them for some of its businesses while raising them slightly for its new consumer credit card division.
The banks can now use their freed-up cash to do things they avoided last year, like making new loans. They are also preparing to start distributing money to shareholders again after the Federal Reserve lifted temporary restrictions on share buybacks and dividend payments late last year.
“We continued to see signs of a recovery, led by increased consumer spending, stabilizing loan demand by our commercial customers and strong markets and investing activity,” Bank of America’s chief executive, Brian Moynihan, said in a statement accompanying the bank’s earnings report.
The bank released $828 million, less than its counterparts Citigroup and JPMorgan Chase each shed. But the move reflected similar changes to expectations of how the economy would perform this year, now that a vaccine for the coronavirus has begun to be distributed and Congress has passed another economic stimulus package.
In the fourth quarter of 2020, Bank of America earned $5.5 billion after taking in revenue of just over $20 billion. The numbers were not record-setting — in the same period in 2019, earnings were $7 billion and revenue was $22.3 billion — but they signaled that the bank was handily weathering the economic conditions caused by the pandemic. Revenue and income in its giant consumer business was down compared with the previous year, but business in its Wall Street division was better.
In the last three months of 2020, the bank took in $3.9 billion in revenue from trading in the financial markets and other related activities, a 14 percent increase from the same period a year earlier. The division earned $834 million for the quarter, compared with $638 million during the same period in 2019.
Goldman Sachs earned just over $4.5 billion in the final quarter of 2020 on revenue of $11.7 billion, which was 18 percent higher than the same quarter of 2019 thanks to a jump in its Wall Street trading and investment banking businesses. It pared down the amount of money it was setting aside to deal with losses in wholesale loans, but added more for its consumer credit card business, which it started in the spring of 2019.
Credit…Erik S Lesser/EPA, via Shutterstock
As Washington girds itself for President-elect Joseph R. Biden Jr.’s inauguration on Wednesday, lawmakers have asked transportation and hospitality companies for help “identifying and preventing the ongoing and extreme threat of further violent attacks.” Here’s how companies are responding:
Airlines: American, Delta, Southwest and United have imposed bans on firearms in checked luggage on flights to the Washington area. American has also suspended alcohol service, and Alaska Air has limited the number of tickets available for flights to and from Washington.
Hotels and hospitality: Airbnb has canceled reservations in Washington for this week. Expedia’s Vrbo is still accepting bookings, but rolled out new procedures on Monday that include screening guests against federal threat lists. A spokesman for Hyatt said the chain had increased security personnel and was limiting hotel access to registered guests. The InterContinental Hotels Group is hiring extra security for its company-owned hotels and recommending that its franchised hotels do the same, a spokesman said. A representative for Hilton declined to discuss security measures but said it was “well-informed and mindful of current events.”
Other travel companies: To “avoid any disruptions” in Washington, the bus operator Vamoose canceled service Tuesday through Thursday. And the electric scooter companies Lime, Lyft, Spin and Helbiz are disabling service downtown.
Stocks climbed on Tuesday, with Wall Street rebounding from a small decline the week before, as Janet Yellen, the incoming Biden administration’s pick for Treasury secretary, promoted a vigorous fiscal response to the pandemic at a Senate hearing.
The S&P 500 rose about half a percent in early trading, following mixed trading in Europe and a rally in Asia.
Ms. Yellen, the former chair of the Federal Reserve, told senators at her confirmation hearing on Tuesday morning that the United States needed a robust fiscal stimulus package.
U.S. government bond prices fell on Tuesday. The yield on 10-year notes rose three basis points, or 0.03 percentage points, to 1.11 percent. Though Treasury yields remain extremely low by historical standards, they have risen this month in anticipation of a Democratic-held White House and Congress pursuing a large spending plan. President-elect Joseph R. Biden Jr. proposed a $1.9 trillion relief package last week.
Oil prices rose. Futures of Brent, Europe’s benchmark, rose 1.2 percent to $55.38 a barrel. Futures of West Texas Intermediate rose to $52.54 a barrel. The International Energy Agency cut its estimates for oil demand for 2021 because of lockdowns to curb the spread of the coronavirus. But oil prices have recovered in recent months after Saudi Arabia and some other nations cut production.
The Senate confirmation hearing of Janet Yellen as Treasury secretary begins on Tuesday, with a focus on reviving the pandemic-stricken economy, recovering lost jobs and regulating Wall Street. On economic stimulus, “right now, with interest rates at historic lows, the smartest thing we can do is act big,” Ms. Yellen is set to say in her opening remarks.
Corporate earnings season is ramping up, with more of America’s big banks releasing fourth-quarter earnings. Bank of America and Goldman Sachs reported on Tuesday, while Morgan Stanley steps up on Wednesday.
Netflix also reports its latest earnings on Tuesday, followed by Procter & Gamble and United Airlines on Wednesday, and IBM and Intel on Thursday.
Joseph R. Biden Jr. is expected to issue dozens of executive orders on Thursday, his first full day in office as president. He will also present legislative proposals for a $1.9 trillion stimulus bill, changes to immigration laws and other priorities of his administration.
The U.S. Federal Housing Finance Agency on Tuesday extended its moratorium on foreclosures and and evictions related to a foreclosure to the end of February, from the end of January. The extension should buy more time for the incoming Biden administration, which has indicated it wants to extend both the moratorium on foreclosures and rental evictions by several months — or at least until the pandemic begins to subside.