President Biden’s massive COVID stimulus plan gets support from IMF chief

On Friday, IMF chief Kristalina Georgieva backed the ambitious $1.9 trillion economic stimulus plan proposed by US President Joe Biden’s to tackle the turmoil caused by the COVID-19 pandemic.

“The US does have fiscal space to take additional relief and support measures,” she told reporters, AFP reported.

And it is “appropriate” to use that firepower “given the exceptional uncertainties, and most importantly, given the fact that there is still a lot of pain for households and businesses.”

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Far from tagging the package excessive, Georgieva expressed support for many of the proposal’s elements including funding for vaccines, testing, food assistance, as well as tax credits for low-income workers.

“The fund has been a big proponent of using even more Earned Income Tax Credit (and) refundable childcare credit,” she said during an event with reporters.

Even with the Republicans baulking at the high price tag for the plan that now enjoys broad popular support, Biden on Friday pledged to “act fast” to push the legislation through Congress.

Democrats hold a narrow majority in the Senate, so they could approve the measure without Republican support.

Meanwhile, Republicans also have opposed providing aid to struggling state and local governments, however, Georgieva said conditions make that aid necessary.

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“There is clearly a need to support states and local governments… so they can provide the services that are expected from them,” she said, AFP reported.

Georgieva opined a US recovery would benefit the global economy, and spending by Washington on areas such as education serves as an important “signal” to the rest of the world.

Agreeing on the need to “be watchful of risks” such as rising government debt, she said, “we have the best possible secretary of the Treasury for this potential risk to financial stability,” referring to Janet Yellen.