WASHINGTON — The Senate confirmed Janet L. Yellen, a labor economist and former Federal Reserve chair, to be Treasury secretary on Monday, putting in place a key lieutenant to President Biden at a perilous economic moment, as the new administration tries to revive an economy that has been battered by the coronavirus pandemic.
By a vote of 84 to 15, the Senate confirmed Ms. Yellen, making her the first woman to hold the top job at Treasury in its 232-year history. Her quick bipartisan confirmation underscored the support she has from both Republicans and Democrats given her previous stint as Fed chair from 2014 to 2018.
Ms. Yellen now faces a new and considerable challenge. As Treasury secretary, she will be responsible for helping Mr. Biden prepare the $1.9 trillion stimulus package he has proposed, steer it through Congress and — if it is approved — oversee the deployment of trillions of dollars of relief money.
The magnitude of the task became clear over the weekend, as a bipartisan group of senators met virtually with senior White House officials on Sunday and expressed doubt that such a large package was necessary.
Lawmakers in both parties raised the prospect of curtailing elements of the proposal, including the eligibility for a suggested round of $1,400 checks to individuals and ensuring that a more targeted distribution of additional aid, according to multiple people familiar with the discussion. They also asked the White House to provide data that would justify the proposed spending, which includes $350 billion in state and local aid and $130 billion to reopen schools shuttered by the pandemic.
Now, Ms. Yellen will be thrust into the middle of the talks, responsible for convincing many Republicans and some Democrats that the economy needs another multi-trillion dollar spending package. At her confirmation hearing and in written responses to lawmakers, Ms. Yellen echoed Mr. Biden’s view that Congress must “act big” to prevent the economy from long-term scarring and defended using borrowed money to finance another aid package, saying not doing so would leave workers and families worse off.
“The relief bill late last year was just a down payment to get us through the next few months,” Ms. Yellen said. “We have a long way to go before our economy fully recovers.”
Ms. Yellen also argued that “near-term fiscal support is not inconsistent with long-term fiscal sustainability,” explaining that a healthier economy would ultimately generate more revenue for the government.
The Biden administration has said that it hopes a package can win bipartisan support in Congress. However, Democrats have signaled a willingness to turn to a budgetary mechanism known as reconciliation that would allow them to pass the legislation with a simple majority and bypass the usual 60-vote threshold needed.
David Wessel, a senior fellow at the Brookings Institution, where Ms. Yellen most recently worked, said that she is likely to play a key role in working with Congress given her credibility with both Republicans and progressive Democrats. He suggested that, because of Mr. Biden’s long history in the Senate, Ms. Yellen could be less involved in haggling with lawmakers and deployed to make the economic case for certain policies.
Jan. 25, 2021, 9:55 p.m. ET
“I expect they’ll use her as an asset when they need an expert,” Mr. Wessel said. “Particularly if some people need to be talked into something.”
While she gained the support of many Republicans, several voted against her confirmation, including Senator Dan Sullivan, Republican of Alaska. Mr. Sullivan said on the Senate floor that he voted against Ms. Yellen because she refused to commit to being an advocate for “all of the above” energy policy, including natural gas and oil. Ms. Yellen has made combating climate change and creating incentives for clean energy a priority at Treasury.
“As a matter of fact I thought it was shocking,” Mr. Sullivan said, noting that he made the decision to vote against Ms. Yellen’s confirmation reluctantly given her strong qualifications.
In addition to negotiating with lawmakers, Ms. Yellen will have the responsibility of being the United States’ most senior economic diplomat at a time of frayed global tensions. Ms. Yellen will have to try to repair America’s economic relationships around the world, including with allies like Canada, Mexico and the European Union, which became strained under President Donald J. Trump.
Those relationships will be critical given the Biden administration’s plan to try to combat what Ms. Yellen called China’s “illegal, unfair and abusive” economic practices by marshaling allies to exert pressure on Beijing.
At her confirmation hearing, Ms. Yellen said that China was “engaging in practices that give it an unfair technological advantage” and said the administration was prepared to use America’s “full array of tools” to address that. One of her first challenges will be to review the trade deal that Mr. Trump struck with Beijing, including China’s failure to meet it commitments, and determine if the United States should keep tariffs on $360 billion worth of Chinese goods.
Longer term, Ms. Yellen plans to help carry out Mr. Biden’s tax proposals, which include a higher corporate tax and tax increases for the rich.
Ms. Yellen plans to bring other big changes to the mission of the Treasury Department, including using its powers to help assess the economic risks of climate change and create incentives to support clean energy technologies. She will also be focused on promoting policies that reduce racial inequality.
“It is the responsibility of the Treasury secretary to strengthen the U.S. economy, foster widespread economic prosperity and promote an economic agenda that leads to long-run economic growth,” Ms. Yellen said in a written response to lawmakers that was released on Thursday.
Ms. Yellen will be under pressure to quickly staff a Treasury Department that had been depleted under her predecessor, Steven Mnuchin. Her deputy, Wally Adeyemo, will require Senate confirmation and Ms. Yellen will need to select under secretaries to be in charge of international affairs, sanctions and domestic finance.
Earlier this month, the Treasury Department announced a chief of staff, Didem Nisanci, and a team of senior advisers, many of whom served in the Obama administration, to work with Ms. Yellen. On Monday, Treasury announced another slate of hires, including the appointment of Mark J. Mazur, a former senior Treasury official during the Obama administration, to be deputy assistant secretary for tax policy in the office of legislative affairs.
Emily Cochrane contributed reporting.