"I would expect that if this package is passed that we would get back to full employment next year," Yellen told CNN's Jake Tapper on "State of the Union."
"The Congressional Budget Office issued an analysis recently and it showed that if we don't provide additional support, the unemployment rate is going to stay elevated for years to come," she added. "It would take (until) 2025 in order to get the unemployment rate down to 4% again."
Yellen's assessment comes as the White House is pushing the President's package through Congress, where it faces resistance from Republicans opposed to its price tag as well as some of its key elements. Lawmakers are under pressure to pass a relief package as Americans continue to suffer financially amid the pandemic's economic fallout.
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Full employment does not mean the unemployment rate is at zero, but, instead, generally that employers have hired as many qualified professionals as they need.
The January jobs report showed that even though 49,000 jobs were added last month, the nation is still down nearly 10 million jobs since before the crisis. The report also detailed that the unemployment rate fell to 6.3%, beating economists' expectations, marking the first decrease in two months.
The CBO said in a report issued last week that the number of employed Americans won't return to its pre-pandemic level until 2024, showing just how long the job market still has to go to heal after suffering the steepest loss on record in April, when 20.5 million jobs were lost and the unemployment rate shot up to 14.7% in a single month as the coronavirus ravaged the country.
Biden's plan, which the secretary said is "big enough to address (the) full range of needs" facing the country's economy, includes a wide range of immediate assistance for struggling families, such as $1,400 stimulus checks and extended unemployment, nutrition and eviction aid, and longer-term changes, such as a $15 hourly minimum wage -- though the President recently conceded that a minimum wage increase might not be included in the final proposal due to the Senate's rules.
Inflation 'a risk that we have to consider'
Yellen, who has not appeared overly worried that the unprecedented amount of stimulus from Congress will spark any persistent inflationary pressures, said Sunday that the risk of Democrats' plan causing inflation is one worth taking.
"My predecessor, you know, has indicated that there's a chance that this will cause inflation to rise. And that's also a risk that we have to consider," she said, responding to criticism from Larry Summers, a former top economic adviser in the Obama administration.
Summers noted in a column in The Washington Post last week that Biden's proposal is actually three times as large as the projected shortfall in economic output, whereas the 2009 stimulus measure was only half the size of the gap. This much stimulus could cause the economy to overheat and "set off inflationary pressures of a kind we have not seen in a generation," he argued.
But Yellen, a former chair of the Federal Reserve, downplayed those concerns Sunday, saying that the country has "the tools to deal with that risk if it materializes."
"But we face a huge economic challenge here and tremendous suffering in the country. We have got to address that. That's the biggest risk," she told Tapper.
In response to criticism of his column, Summers wrote in a separate piece that "history is not encouraging" when it comes to counting on the Fed to "control the situation effectively if inflation starts to rise."
"We have no experience with fiscal stimulus like that under consideration and the impact on inflation expectations," he wrote.
Democrats push ahead
Democrats have made moves to allow them to pass the relief proposal without Republican support.
The House and the Senate each passed a budget resolution Friday that set the stage for Democrats to be able to use a process known as "budget reconciliation" to pass the bill on a party-line vote, possibly in late February or March. Taking that route would present an early test of Biden's stated commitment to bipartisanship.
Democratic Rep. Debbie Dingell, a member of the Bipartisan Problem Solvers Caucus, defended Biden's attempt to pass the relief bill with or without GOP support on "Inside Politics" Sunday morning, telling CNN's Abby Phillip, "We can't let politics become the enemy of the good."
"We want them there. We're going to try to work with them. We're listening. Their input is there, but we've got to get a bill done," Dingell, who represents Michigan, said of her Republican colleagues.
Among those opposed to Biden's plan is Republican Sen. Pat Toomey of Pennsylvania, who told Tapper later on "State of the Union" that the plan is "not the right solution."
The country, he said, doesn't have an "economy in collapse the way it was in March" 2020. Instead, Toomey argued that there should be talks for directly helping those working in the restaurant, hospitality and entertainment industries.