Treasury Secretary Janet Yellen says the United States is still in a "deep hole" with millions of lost jobs but President Joe Biden's $US1.9 trillion relief plan could be enough to restore full employment by next year.
Republican senators argue Biden's proposal is too expensive and cite criticism from former treasury secretary Larry Summers that passage of the measure could run the risk of triggering runaway inflation.
Summers also contends Biden's plan would make less money available for other initiatives such as improving infrastructure.
Yellen, a former Federal Reserve chair who is the first woman to lead the Treasury Department, said on Sunday the central bank had the tools to handle any potential inflationary threat.
She said the urgent need now was to deal with the problems raised by the pandemic-induced recession: joblessness, lost small businesses and school closures.
"We face a huge economic challenge here and tremendous suffering in the country. We have got to address that," Yellen said.
"That's the biggest risk."
The House and Senate this past week approved legislation necessary to pass Biden's package through a process known as reconciliation, which only requires 51 votes in the Senate.
The Senate is split 50-50, with Vice President Kamala Harris the tiebreaking vote.
House Speaker Nancy Pelosi hopes to approve specific budget details of Biden's proposal over the next fortnight to get the measure through Congress before current unemployment benefits run out in mid-March.
House Democrats plan to propose boosting the child tax credit, now at a maximum of $US2000, to as much as $3600 per child annually.
The proposal will be part of the COVID-19 relief bill they are writing and expected to largely follow Biden's plan.
The House Ways and Means Committee has jurisdiction over about half of Biden's $US1.9 ($A2.5) trillion proposal, including support for workers, the jobless and people's health care costs.
The committee's Democrats were expected to release their full plan on Monday.
Republicans cite warnings raised by Summers that the $US1.9 trillion plan is too large and Biden is violating his campaign promise to work with Republicans once elected.
"Larry Summers is a liberal Democrat ... in favour of big government spending and he has said, this is way too much," said Senator Pat Toomey.
Biden and his team argue a big economic package is needed to avoid the mistakes made in 2009 when the Obama administration was unable to get increased support through Congress, resulting in a long, slow recovery after the 2008 financial crisis.
The government reported Friday that the economy only created 49,000 jobs in January after having lost jobs in December.
Yellen said that raised fears the job market is stalling with 10 million people still unemployed and 4 million who have dropped out of the labor market.
"We're in a deep hole with respect to the job market and a long way to dig out," she said.
Citing a report from the Congressional Budget Office, Yellen said the unemployment rate could remain elevated for years to come and it could take until 2025 to get unemployment back to 4 per cent.
The jobless rate stood at a half-century low of 3.9 per cent before the pandemic hit.
She said if Biden's package is approved, the country could get back to full employment by next year.
"There's absolutely no reason why we should suffer through a long, slow recovery," Yellen said.
Australian Associated Press