United States

U.S. Treasury's Yellen touts infrastructure bill as reducing economic inequality

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U.S. Treasury Secretary Janet Yellen answers questions during the Senate Appropriations Subcommittee hearing to examine the FY22 budget request for the Treasury Department on Capitol Hill in Washington, DC, U.S., June 23, 2021. Greg Nash/Pool via REUTERS

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ATLANTA, Aug 4 (Reuters) - U.S. Treasury Secretary Janet Yellen on Wednesday traveled to Atlanta to call for passage of the $1 trillion bipartisan infrastructure bill, saying it would help reverse wage and racial inequalities and start to mitigate climate change.

Yellen, in excerpts of remarks to be delivered at the city of Atlanta's economic development authority, called the bill, now under debate in the U.S. Senate, the largest infrastructure investment since the construction of the interstate highway system began in the 1950s under the Eisenhower administration.

"Funding for transit and road projects that will connect more people to communities that are growing – and bring growth to the communities that aren’t," she said.

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Investments in a half a million electric vehicle charging stations will accelerate a transition to a greener, more resilient economy, she said.

But Yellen added that Congress needs to push ahead with other investments in President Joe Biden's "American Families Plan," including increased access to education and child care, a permanently expanded child tax credit, more affordable housing and healthcare improvements.

Democrats plan to pursue these as part of a $3.5 trillion spending package under budget reconciliation rules requiring only a simple majority in the Senate - allowing the party to potentially approve it without Republican support.

"There is a good faith discussion about how much spending is too much. But if we are going to make these investments, now is fiscally the most strategic time to make them," Yellen said, adding that the cost of federal debt payments is expected to be below historical levels for the next decade.

"Over the longer-term there’s a plan to pay for these investments through a long overdue reformation of the tax code, particularly the corporate tax code, which will make it fairer without touching the vast majority of Americans, those who make less than $400,000 a year," she said.

Such investments will help the United States remain the world's preeminent economic power, she said.

"We have a chance now to repair the broken foundations of our economy, and on top of it, to build something fairer and stronger than what came before."

During her visit, Yellen also met with Atlanta-area business leaders to discuss the recovery from the pandemic, including Delta Air Lines (DAL.N) chief executive Ed Bastian, Coca-Cola (KO.N) North American president Alfredo Rivera and homebuilder PulteGroup (PHM.N) CEO Ryan Marshall.

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Reporting by David Lawder; Editing by Steve Orlofsky and Aurora Ellis

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