U.S. must reorient framing of fiscal policy to boost public investment: treasury secretary

WASHINGTON, May 18 (Xinhua) -- The United States must reorient its framing of fiscal policy to address the problem of "long-standing underinvestment" in public infrastructure and institutions, Treasury Secretary Janet Yellen said Tuesday.

"For decades, the prevailing focus has been on the need to decrease and then limit the size of government as a share of the economy," Yellen said in prepared remarks to the Global Forum on Economic Recovery hosted by U.S. Chamber of Commerce.

This approach to U.S. fiscal policy, "founded on a distrust of government motives and effectiveness, along with resistance to higher taxes," has led to insufficient public investment in infrastructure, research and development, education and childcare, she noted.

The U.S. treasury secretary touted President Joe Biden's American Jobs Plan, the 2.3-trillion-dollar package focused on infrastructure, manufacture, research and development, among others, and the American Families Plan, the 1.8-trillion-dollar package focused on education and childcare.

"These policies will promote a dynamic economy with greater opportunity for workers, higher living standards, and, over time, reduced inequality," Yellen said.

The Biden administration is also proposing to fundamentally reform the corporate tax system, along with a series of tax reforms, which will help offset the cost of the proposed public investments, she noted.

Such tax reforms, she said, will ensure that the corporate sector and wealthy individuals can pay their fair share.

The policies that we passed in March 2020 are not the policies we need in May 2021.

U.S. Senate Minority Leader Mitch McConnell, however, recently said that no Senate Republicans would support the 4.1-trillion-U.S.-dollar spending package proposed by President Biden, adding that his party is open to discussions on a much smaller package.

"We are a reopening country flooded with vaccines. Record job openings. Democrats should not be taxing the Americans who are back at work to continue paying extra benefits to those staying home," McConnell said in a tweet Monday.