US Secretary of the Treasury Janet Yellen on Thursday said that US President Joe Biden’s fiscal 2022 budget plan will push US debt above the size of the US economy, but will not contribute to inflationary pressures, which she views as temporary.
Yellen told a US House of Representatives Appropriations subcommittee hearing that the White House and the Treasury were closely monitoring inflation, but there was still slack in the economy that can absorb increased spending.
“The recent inflation we have seen will be temporary, it’s not something that’s endemic,” Yellen said, responding to numerous questions about inflationary pressures.
Supply bottlenecks and shortages
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On March 11, 2021, President Biden signed into law the American Rescue Plan Act (ARPA) that contains a new, temporary COBRA subsidy. The ARPA COBRA subsidy requires employers to cover 100% of an employee’s cost of continuing group health coverage under COBRA from April 1, 2021 through September 31, 2021 for those who lost their health care coverage on account of a reduction of hours or an involuntary termination. On April 7, 2021, the Department of Labor released answers to frequently asked questions (FAQs) related to the ARPA COBRA subsidy and model notices. On May 18, 2021, the U.S. Internal Revenue Service released its own guidance Notice 2021-31 for employers, plan administrators, and insurers concerning the ARPA COBRA subsidy.