Yellen hearing foreshadows battle over tax policy as cuts expire

Treasury Secretary Janet Yellen testified Thursday at a congressional hearing that presaged a partisan battle over tax policy in the coming election, with sweeping reductions set to expire at the end of next year.

Yellen reiterated, under questioning at the Senate Finance Committee, that President Joe Biden supports extending income-tax reductions for those earning less than $400,000 a year.

“The president has made clear he would oppose raising back the taxes for working class people and families making under $400,000,” Yellen said.

Ranking Republican Mike Crapo of Idaho highlighted that the Biden administration’s 2025 budget proposal hadn’t addressed the expiring elements of the 2017 tax package, which was enacted under former President Donald Trump.

Crapo blasted the Biden budget for proposing $5 trillion of new and increased taxes. The committee’s Democratic chair, Ron Wyden of Oregon, countered that Trump’s platform in the presidential election features “more tax breaks for multinational corporations and big handouts for those at the very, very top.”

Trump’s policies would generate bigger fiscal deficits and “pile up more debt,” Wyden said.

Yellen said the Biden administration’s budget would reduce the deficit by $3 trillion over a decade. Crapo referred to its spending proposals as “staggering.”