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  • January 20, 2021
Janet Yellen appears before the Senate Finance Committee on Tuesday. 
Credit…Anna Moneymaker for The New York Times

Republicans foreshadowed their opposition to President-elect Joseph R. Biden Jr.’s economic plans on Tuesday, pressing Janet L. Yellen, his nominee for Treasury secretary, to defend a $1.9 trillion stimulus proposal that would provide more direct payments to individuals, expanded jobless benefits and money for states and cities.

The opposition from Republicans on the Senate Finance Committee during Ms. Yellen’s confirmation hearing underscored the challenge that the incoming Biden administration will face in trying to push its proposal through Congress given the narrow control it has in the Senate and House.

“We’re looking at another spending blowout,” said Senator Patrick J. Toomey, Republican of Pennsylvania. “The only organizing principle I can understand, it seems, is to spend as much money as possible, seemingly for the sake of spending it.”

Mr. Toomey took issue with Mr. Biden’s plans to send more money to states and cities, a measure that Republicans have opposed for the last year and that was dropped from the last round of stimulus talks in order to win passage of the $900 billion aid package. He also expressed concern about Mr. Biden’s proposed tax increases and his call for raising the minimum wage to $15.

Senator Tim Scott, Republican of South Carolina, seized on Mr. Biden’s call to raise the minimum wage from $7.25, arguing to Ms. Yellen that doing so would hurt small businesses while they are vulnerable and would lead to more job losses.

Other Republicans complained that the Biden economic plan is fiscally irresponsible given the nation’s growing debt load and the federal budget deficit, which topped $3 trillion last year. Senator Bill Cassidy, Republican of Louisiana, said that Mr. Biden’s plan is not sufficiently targeted and that giving an additional $1,400 in direct payments to some people who have not lost jobs is not an efficient use of federal resources.

Ms. Yellen rebutted their arguments point by point, making the case that doing too little to stimulate the economy would be more costly in the long run. She said that economic research have shown minimal job losses from raising the minimum wage, pointing to studies of neighboring states when one imposes an increase and the other does not.

She also argued that jobless benefits, which under Mr. Biden’s plan would be supplemented with an extra $400 per week, are not sufficient to address the financial struggles facing families and that the $1,400 stimulus checks are important in situations where one person, generally a woman, has left a job to care for children who are out of school.

“There are many families that are bearing exceptional financial burdens that are not addressed by unemployment compensation,” she said.

Ms. Yellen did offer some assurances to Republicans who are fearful that Democrats will repeal the entire 2017 tax law, which slashed taxes for individuals and corporations. She said that while Mr. Biden does want to make changes to the law, including raising the corporate tax rate, such actions are not an immediate priority.

“The focus right now is on providing relief and on helping families keep a roof over their heads and food on the table, and not on raising taxes,” she said.

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