Inauguration Day 2021, Janet Yellen's Confirmation Hearing

SAS Financial Advisors, LLC |


Wednesday, January 20th - today is inauguration day. There are enormous challenges facing the new administration. Managing the pandemic, reviving the economy for those who have suffered, racial justice, climate change and healing the divisions in our country. The goals are set high for the administration’s first 100 days. The initial impact of the inauguration should lower the general anxiety felt by many. We will no longer pay attention to governing by tweet. The more normal governing principles should apply immediately with a slew of executive orders on President Biden’s first day.


Economic Impact

We can expect some immediate impact on the economy as President Biden’s fiscal stimulus package is introduced into a newly changed Congress-smaller Democratic majority in the House and a Senate with new majority leader Senator Chuck Schumer.

Biden’s stimulus plan focuses on supplementing the already passed and distributed $600 payment to $2000 for qualifying Americans-individuals with income below $75k and couples below $150k, an increase in unemployment compensation from $300 to $400, and extended through September, substantial funding for Covid-19 management and supply, distribution and delivery of the vaccine, school fiscal support to move to reopen, state and city aid and more for a total of $1.9 trillion.

Goldman Sachs speculates that the final package will be closer to $1.1 trillion. Janet Yellen, Biden’s Treasury Secretary nominee gave her testimony in her confirmation hearing today. In both her written and her spoken testimony she recommends going bigger. The risks of going small and letting the economy and employment stagnate is bigger than increasing the national debt. Economists are changing their thinking from when the last time Yellen served in the Clinton administration and chaired his Council of Economic Advisors. If we remember, that was the last time the federal budget was balanced. At the time the budget and deficit common wisdom was that those two items mattered.

The Phillips curve indicates inflation and unemployment have a stable and inverse relationship. The theory claims that with economic growth comes inflation. Inflation leads to increased jobs and lower unemployment. Inflation would occur when the unemployment rate would drop below what the Federal Reserve thought was full employment, 5%. Low and behold unemployment dropped below 5% and inflation has persisted below 2% after the financial meltdown. Truthfully, economists have not figured out why. Hindsight is brilliant but no economist predicted the extinction of the Phillips curve. Of course, this could change. Predicting economic behavior is far from a science.

Why does low unemployment no longer lift inflation (, pay-wall link)
Why does low unemployment no longer lift inflation (, no pay-wall link through

The result of this new analysis is that federal deficits and debt are ok-so far. The federal debt acceleration from the financial meltdown until now has not caused an increase in inflation. Therefore, the pile on in debt will continue with the expectation that inflation will not increase, the economy will grow its way out. In the meantime, the Federal Reserve has emphasized that it will keep interest rates low until the economy recovers. We shall see if this all works.


Tax Timelines

Forms 1099-R and 1099-Q for tax year 2020 are now both available for your accounts on TD Ameritrade Institutional online at

  • Form 1099-R reports distributions from IRAs and Qualified Retirement Plans (401(k)s for most).
  • Form 1099-Q reports distributions from Coverdell Education Savings Accounts (ESAs)
  • Form 5498 which reports any funds returned to the IRA or QRP account in the form of a rollover will be issued in May, 2021


To access your 2020 tax documents:

  1. Login to your account at
  2. Go to the “Documents” tab
  3. From the left hand menu, choose “Tax Documents”
  4. Download your 2020 Forms 1099-R and 1099-Q for your records
  5. Please pass along these forms to your tax advisor for your filing
Please note that distributions that are taken from allowable IRAs and QRPs including distributions that were returned at a later date (this may include 60-day rollovers, Coronavirus Related Distributions, Required Minimum Distributions taken in early 2020 and replaced by August 31, 2020 as per IRS granted relief) will be reported on the 1099-R or 1099-Q form.
Tax forms are electronic unless you have changed your communication preferences on advisorclient to receive a paper copy.

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