FILE PHOTO: U.S. Treasury Secretary Janet Yellen attends an economic briefing with U.S. President Joe Biden in the Roosevelt Room at the White House in Washington, U.S., March 5, 2021. REUTERS/Tom Brenner/File Photo
May 27, 2021
WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen said on Thursday that President Joe Biden’s fiscal 2022 budget request will increase the U.S. federal debt-to-GDP ratio above its current level of about 100% over the next decade.
But Yellen told a U.S. House of Representatives Appropriations subcommittee that Biden’s budget plans were fiscally responsible, partly because the real interest burden to finance the federal debt is currently negative because long-term Treasury yields of 1.6% are below a 2% inflation rate.
“We’ll have a temporary period of spending too and some of these increases, will – beyond the budget window – will result in lower deficits and more tax revenue to support those expenditures. I believe it is a fiscally responsible program,” Yellen said.
(Reporting by David Lawder; Editing by Chris Reese)