In Alan García's second presidency, Velásquez was sworn as the third Prime Minister of Peru of the administration, succeeding Yehude Simon in 2009.

Although not selected as the nominee, he was part of the presidential ticket of Mercedes Aráoz in which he was the candidate for First Vice President until her withdrawal from the election in January 2011.

Thanks to his outstanding parliamentary work, Congressman Velásquez was entrusted by his party to run for the presidency of Congress for the annual period of sessions 2008 - 2009, competing with the opposition Víctor Andrés García Belaúnde of the Parliamentary Alliance, whom he won with a vote of 66 votes to 46 for Belaunde, electing him head of the National Congress.

The board of directors chaired by Velásquez was made up of Alejandro Aguinaga —First Vice President (Lambayeque) - Álvaro Gutiérrez —Second Vice President (Arequipa) - and Fabiola Morales (Piura), this was a purely provincial list, after so many years directed by Lima parliamentarians and that many of the objectives proposed by this parliamentary conformation was to achieve a reinforcement of the decentralization process in Peru so many times put in the background by centralism.

On 11 July 2009, President Alan García named him as prime minister during the controversy surrounding indigenous clashes with the government when 34 people died.

The appointment of Velásquez, considered a party loyalist, was seen by pundits as an attempt by García to tighten his grip on power for his final term.

Although not selected as the nominee, he was part of the presidential ticket of Mercedes Aráoz in which he was the candidate for First Vice President until her withdrawal from the election in January 2011.