Yellen: Biden Budget to Raise Debt-to-GDP Ratio

The proposed budget by the United States President Joe Biden will increase the ratio of the public debt to the gross domestic product (GDP), Secretary of the Treasury, Janet Yellen, said on Thursday.

However, the budget will not add extra pressures on the inflation rate, Yellen noted.

Speaking to a hearing by the House of Representatives Appropriations subcommittee, the Treasury Secretary said that the White House and Treasury are closely monitoring inflation.

The first budget proposal by the Biden administration for the coming fiscal is expected to be revealed on Friday.

The debt to GDP ratio will likely exceed its current level near 100%, which increased due to the recent additional government spending on economic relief and stimulus packages against the coronavirus pandemic.

Recent media reports expected the budget will include Biden’s plans to increase spending on renovating infrastructure, investing in renewable energy sources, and creating new job opportunities, as well as spending on providing care for children and the elderly, and supporting families. It will also include the needed corporate tax reforms to finance the additional spending.