WASHINGTON (Reuters) – U.S. economic growth will not return to pre-pandemic levels for years without additional fiscal stimulus, Neera Tanden, Democratic President Joe Biden’s nominee to head the U.S. Office of Management and Budget, told senators on Wednesday.
Tanden told a confirmation hearing before the Senate Budget Committee it was critical to monitor any potential increases in interest rates that would raise the cost of government borrowing, but it was more important at this moment to ensure the prospects for a strong economic recovery.
“We should absolutely monitor interest rates,” Tanden said, noting that while interest rates had remained low in recent years, it was possible they could rise in the future and it was critical to keep an eye on long-term deficits.
Tanden also said current high rates of unemployment constituted a “deep crisis” for the economy that required more aid at the moment.
“In this particular moment, the concerns … are significant about scarring in the economy, and basically growing at a low level too long,” she said, citing a recent Congressional Budget Office study that showed further spending was needed to ensure gross domestic product (GDP) growth returned to earlier levels.
“They say we would not get to pre-pandemic levels with our GDP for several years,” she said.
(Reporting by Andrea Shalal and Patricia Zengerle; Editing by Andrea Ricci)
