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Yellen skips House small business hearing, defying legal requirements and angering both sides

Treasury Secretary Janet Yellen is under fire from Democrats and Republicans for skipping an appearance before the legally required House Small Business Committee.

According to the $ 900 billion Covid-19 relief bill passed by Congress in December, Yellen and small business administrator Isabel Guzman are required to testify before both House small business committees to help oversee the disbursement of aid.

House Small Business Committee Chair Nydia Velazquez, DN.Y., announced on Wednesday that Yellen was a no-show.

“Unfortunately, Secretary of the Treasury Yellen has refused to appear before us in total disregard of the law, which requires her to do so,” Velazquez said. “While she and her team may believe their role in P3s and other Covid small business aid programs is diminishing as we move towards economic renaissance – they are sorely mistaken.”

The Treasury Department made inquiries with its legal counsel ahead of Wednesday’s hearing as to whether Yellen herself was due to attend, a person familiar with the matter told CNBC.

Velazquez’s complaint was echoed by rank Republican member Rep. Blaine Luetkemeyer of Missouri.

“While I am glad that we are having a conversation with Small Business Administrator Guzman, I am deeply disappointed and concerned that Secretary Yellen is not with us today, as the appearance of the Secretary of the Treasury is required by law, ”he said in prepared remarks. .

Guzman appeared before the House committee on Wednesday.

Velazquez and his fellow lawmakers had hoped to question Yellen given the Treasury’s important role in delivering the nearly $ 1,000 billion paycheck protection program, managed more directly by the SBA. His absence also contrasts with the appearances of former Treasury Secretary Steven Mnuchin before the body during President Donald Trump’s tenure.

When asked to explain why Yellen would not appear before the House committee, the Treasury Department offered CNBC this statement: “Secretary Yellen looks forward to continuing a strong commitment from Congress and will testify before Congress several times over the next month, including tomorrow. We will continue to work with Congress to coordinate the scheduling of as many hearings as possible. “

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It is striking that Yellen – a longtime public servant and highly regarded by both parties as the former chairman of the Federal Reserve – would bypass a legal obligation. The bipartisan reprimand for his absence is also notable given the Biden administration’s stated efforts to work closely and foster relationships with all members of Capitol Hill.

A person familiar with the tensions between Yellen and the House Small Business Committee said lawmakers initially accepted the Treasury Department’s offer to make Assistant Secretary Adewale “Wally” Adeyemo available as a replacement, but the committee s ‘is then overturned.

A second person who spoke to CNBC replied and said that although the Treasury offered Adeyemo as an alternative, this was never confirmed by the committee.

This may be due to the text of the Covid-19 Relief Bill of December 2020, which explicitly requires both the Secretary of the Treasury and the SBA Administrator to testify before the House and Senate no later than 120 days after. promulgation of the law.

Yellen is scheduled to appear before the House appropriations subcommittee on financial services and general government on Thursday.

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