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Yellen says Biden budget raises U.S. debt-to-GDP ratio but is responsible

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WASHINGTON, May 27 (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.

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

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

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