Kaplan, president of the Dallas Fed, stresses that extra spending is required to maintain the financial restoration

Robert Kaplan, president of the U.S. Federal Reserve in Dallas, in a CNBC interview Tuesday, supported more spending on various fronts as the economy tries to shake off the effects of the Covid-19 pandemic.

President Joe Biden has proposed spending $ 1.9 trillion to provide Americans with more cash payments and improved unemployment benefits, as well as minimum wage increases, funding for vaccination programs, and support for schools in conjunction with state and local governments.

Republicans in Congress have come up with a more modest $ 618 billion plan that includes lower direct payments and no funding to state and local governments.

While Kaplan did not endorse either plan, he said additional tax aid was needed for a number of urgent priorities.

“It is important that we have money for vaccinations and tests. It is important that people who are unemployed continue to have relief beyond March,” CNBC central bank official Steve Liesman said during a “Squawk Box” interview.

“It is important that we have enough money to reopen schools and one of the big problems with this pandemic is that women with children have left the workforce disproportionately. Therefore, reopening schools in person will be of vital importance To have money for it and money for childcare. ” We need it if we want to grow faster. “

Kaplan spoke the day after the Congressional Budget Office painted a fairly optimistic picture of impending growth.

The CBO projected real GDP growth of 3.7% – below the Fed’s median of 4.2% – and an unemployment rate set to return to pre-pandemic levels by 2024. Inflation is expected to hit the Fed’s 2% target after 2023. However, the office also forecast that the Fed would maintain low rates throughout the decade.

As Congress considers pumping more money into the economy, the Fed continues to keep short-term lending rates near zero and buys at least $ 120 billion worth of bonds every month.

Kaplan did not speculate on when the central bank would begin curtailing the high level of accommodation it provided.

“There will be time for this discussion. I think we will be healthier to stop these extraordinary measures,” he said. “But right now we are in the teeth of this pandemic, so I think we should be aggressive.”

Like other Fed officials, he stressed the importance of keeping the public health aspect tied to economic growth.

“It makes the urgency to get people vaccinated all the greater, and this process is critical to the recovery of the economy – better mobility, engagement, personal reopening of schools are central to everything we see in the economy,” said he

Kaplan has announced that it expects GDP growth of around 5% this year. While he sees the next few months as “sluggish”, he said Tuesday that growth is expected to accelerate around June and increase in the second half of the year.