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    Democrats Roll Out $3.5 Trillion Budget to Fulfill Biden’s Broad Agenda

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    “We’re going to get a lot done,” President Biden said, as Senate Democrats began drafting the details on a social and environmental bill that could yield transformative change.WASHINGTON — President Biden and congressional Democrats vowed on Wednesday to push through a $3.5 trillion budget blueprint to vastly expand social and environmental programs by extending the reach of education and health care, taxing the rich and tackling the warming of the planet.The legislation is still far from reality, but the details that top Democrats have coalesced around are far-reaching. Prekindergarten would be universal for all 3- and 4-year-olds, two years of community college would be free, utilities would be required to produce a set amount of clean energy, and prescription drug prices would be lowered. Medicare benefits would be expanded, and green cards would be extended to some undocumented immigrants.At a closed-door luncheon in the Capitol, Mr. Biden rallied Democrats and the independents aligned with them to embrace the plan, which would require every single one of their votes to move forward over united Republican opposition. But crucial moderate lawmakers had yet to say whether they would accept the proposal, with a majority of policy details left to resolve.Mr. Biden’s message to the senators on Wednesday, said Senator Richard Blumenthal of Connecticut, was “be unified, strong, big and courageous.”Senate Democratic leaders have said they aim to pass both the budget blueprint and a narrower, bipartisan infrastructure plan that is still being written before the chamber leaves for the August recess — a complex and politically tricky task in a 50-50 Senate. The narrowly divided House would also have to pass the budget blueprint before both chambers begin tackling the detailed legislation.Speaker Nancy Pelosi, who must ultimately get the package through the House, embraced the deal, telling Democrats in a letter on Wednesday, “This budget agreement is a victory for the American people, making historic, once-in-a-generation progress for families across the nation.”The outline includes large swaths of Mr. Biden’s $4 trillion economic agenda. It wraps in every major category from his American Families Plan, including investments in child care, paid leave and education, and expanded tax credits that this week will begin providing a monthly check to most families with children.“I think we’re going to get a lot done,” Mr. Biden told reporters as he left his first in-person lunch with the Democratic caucus as president.Nodding to budget constraints, party leaders conceded that many of the programs included in their plan — including the tax credits — could be temporary, leaving a future Congress to decide whether to extend them further.The proposal also includes some measures that go beyond what Mr. Biden has called for, like expanding Medicare to cover dental, vision and hearing benefits. Democratic leaders left it to the Senate Finance Committee to decide whether to include reducing the eligibility age for Medicare to 60, a priority of Senator Bernie Sanders of Vermont, the Budget Committee chairman.The resolution would also create what would effectively be a tax on imports from countries with high levels of greenhouse gas emissions. That could violate Mr. Biden’s pledge not to raise taxes on Americans earning less than $400,000 a year if the tax is imposed on products that typical consumers buy, such as electronics from China.Democrats on Mr. Sanders’s committee must produce a budget resolution in the coming days that includes so-called reconciliation instructions to other Senate committees, which in turn will draft legislation detailing how the $3.5 trillion would be spent — and how taxes would be raised to pay for it.That would pave the way for Democrats to produce a reconciliation bill this fall that would be shielded from a filibuster, allowing them to circumvent Republican opposition but requiring all 50 of their members — and a majority in the narrowly divided House — to pass it.“In some cases, it doesn’t provide all the funding that I would like to do right now,” Mr. Sanders said. “But given the fact that we have 50 members, and that compromises have got to be made, I think this is a very, very significant step forward.”He added: “If you’re asking me at the end of the day, do I think we’re going to pass this? I do.”A neighborhood in Austin, Texas, where many homes have solar panels. The blueprint of the legislation includes clean energy provisions and other social programs.Tamir Kalifa for The New York TimesAt the private lunch, Senator Chuck Schumer of New York, the majority leader, outlined the proposal and the directives it would lay out.Democrats included the creation of a civilian climate corps to add jobs to address climate change and conservation, and to provide for child care, home care and housing investments. They are also expected to try to include a path to citizenship for some undocumented immigrants and address labor protections.Democrats would also extend expanded subsidies for Americans buying health insurance through the Affordable Care Act that were included in the broad pandemic aid law that Mr. Biden signed this year.Huge investments would go to renewable energy and a transformed electrical system to move the U.S. economy away from oil, natural gas and coal to wind, solar and other renewable sources. The budget blueprint is to include a clean energy standard, which would mandate the production of electricity driven by renewable sources and bolster tax incentives for the purchase of electric cars and trucks.To fully finance the bill, it is expected to include higher taxes on overseas corporate activities to alleviate incentives for sending profits overseas, higher capital gains rates for the wealthy, higher taxes on large inheritances and stronger tax law enforcement.Senator Ron Wyden of Oregon, the chairman of the Finance Committee, said on Wednesday that he was also preparing to overhaul a deduction for companies not organized as corporations, like many small businesses and law firms — created by the 2017 Republican tax law — in order to cut taxes from small businesses but raise additional revenues from wealthy business owners.Specific provisions will have to pass muster with the strict budgetary rules that govern the reconciliation process, which require that provisions affect spending and taxation, not just lay out new policies. The Senate parliamentarian could force Democrats to overhaul or outright jettison the clean energy standard, the provision that climate activists and many scientists most desire, as well as the immigration and labor provisions, among others.Moderate Democrats, who had balked at a progressive push to spend as much as $6 trillion on Mr. Biden’s entire economic agenda, largely declined to weigh in on the blueprint until they saw detailed legislation, saying they needed to evaluate more than an overall spending number.“We’ve got to get more meat on the bones for me,” Senator Jon Tester, Democrat of Montana, told reporters, though he added that he would ultimately vote for the budget blueprint. “I’ve got to get more information on what’s in it.”The size of the package could be shaped by the success or failure of the bipartisan infrastructure plan, which would devote nearly $600 billion in new spending to roads, bridges, tunnels, transit and broadband. The group of lawmakers negotiating that package has yet to release legislative text as they haggle over the details of how to structure and pay for the plan.“I want to be able to tell people in South Carolina: I’m for this, I’m not for that,” said Senator Lindsey Graham of South Carolina, the top Republican on the Senate Budget Committee.Stefani Reynolds for The New York TimesIf Republicans cannot deliver enough votes to move the package past a filibuster, Democrats could simply fold physical infrastructure spending into their reconciliation plan and take away any chance for Republicans to shape it, said Senator Rob Portman, Republican of Ohio and one of the negotiators of the bipartisan bill.“If we don’t pass infrastructure, they’re going to put even more infrastructure in than we have and worse policies,” said Mr. Portman, who fielded skepticism from his colleagues at a private Republican lunch on Tuesday. Some Republicans had hoped that a bipartisan accord on physical infrastructure projects would siphon momentum from a multitrillion-dollar reconciliation package. Instead, it appears very much on track, and it may intensify the pressure on Republicans to come to terms on a bipartisan package, even if they fiercely oppose the rest of the Democrats’ agenda.“I want to be able to tell people in South Carolina: I’m for this, I’m not for that,” said Senator Lindsey Graham of South Carolina, the top Republican on the Budget Committee and a peripheral presence in the bipartisan talks.He added that the lengthy floor debate over the blueprint would allow Republicans to “ferociously attack it, to have amendments that draw the distinctions between the parties, to scream to high heaven that this is not infrastructure.”Senator Joe Manchin III of West Virginia, a moderate Democrat, said he looked “forward to reviewing this agreement” but was also interested in how the programs would be financed.Sarahbeth Maney/The New York TimesSenator Joe Manchin III of West Virginia, the centrist Democrat whose support might be determinative, told reporters after lunch with the president that he had concerns about some of the climate language. But he did not rule out supporting the budget proposal or the subsequent package. Senator Kyrsten Sinema, Democrat of Arizona and another key moderate, also hung back on Wednesday.Still, the $3.5 trillion package had plenty in it to appeal to senior Democrats who were eager to use it to advance their longtime priorities. For Senator Patty Murray of Washington, the chairwoman of the Health, Education, Labor and Pensions Committee, it was an extension of a more generous child tax credit, as well as subsidies for child care, prekindergarten and paid family leave.For Mr. Sanders, it was the Medicare and climate provisions.“Finally, we are going to have America in the position of leading the world in combating climate change,” he said.Mr. Tester said the need for school construction was so high that trillions could go to that alone.“The plan is a strong first step,” said Senator Elizabeth Warren, Democrat of Massachusetts, adding that she was focused on funding universal child care. “We’re slicing up the money now to find the right ways to make that happen.”The budget measure is expected to include language prohibiting tax increases on small businesses, farms and people making less than $400,000, fulfilling a promise Mr. Biden has maintained throughout the negotiations. Asked on Wednesday whether the proposed carbon tariff would violate that pledge, Mr. Wyden replied, “We’ve not heard that argument.”Lisa Friedman More

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    Biden Administration Moves to Unkink Supply Chain Bottlenecks

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    A swath of recommendations calls for more investments, new supply chains and less reliance on other countries for crucial goods.WASHINGTON — The Biden administration on Tuesday planned to issue a swath of actions and recommendations meant to address supply chain disruptions caused by the coronavirus pandemic and decrease reliance on other countries for crucial goods by increasing domestic production capacity. More

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    Activists Crashed Exxon’s Board, but Forcing Change Will Be Hard

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    The tension between climate goals and lifting Exxon Mobil’s profits could make it difficult for activists to make progress.The growing urgency to address climate change and concerns about the financial performance of Exxon Mobil aligned this week to help activist investors place two directors on the company’s board.But it is not clear if the activists can deliver on their dual goals — reducing the emissions that are warming the planet and lifting the profits and stock price of Exxon. The potential tensions between those objectives could doom the investor effort to transform the company and the oil industry.Getting Exxon, a behemoth company with $265 billion in revenue in 2019 and oil and gas fields around the world, to switch to cleaner energy will be a yearslong and difficult process. It is unlikely to produce quick returns and could sap profits for a while as the company spends a small fortune to retool itself.And the biggest investment firms, which lent critical support to the activists and control a lot of Exxon’s stock, may be too timid to keep the pressure on company executives and board members who are determined to resist big changes.The manifesto put together by Engine No. 1, the hedge fund with a tiny stake in Exxon that led the dissident effort, is not particularly extreme. Nor does it contain a lot of details. The two people who won seats on the board declined interview requests, citing their new roles.“Two votes on a board of a dozen directors doesn’t win the day,” said Dan Becker, director of the Center for Biological Diversity’s Safe Climate Transport Campaign. Still, he argued that it was “enough to bring a message” to the rest of the board. “Will it change everything? Probably not quickly.”Engine No. 1’s victory, which was not expected and came in the face of fierce opposition from management, has delivered a jarring reminder of the perils of doing too little to change — and veteran oil executives say it will encourage activists to push for change at other companies like Chevron, the second-largest U.S. oil company after Exxon.“This is an example of the domino theory,” said Jorge Piñon, a former senior executive at Amoco and BP who is now at the University of Texas at Austin. “One piece has fallen and you will see others follow. Exxon and Chevron are going to face quite a bit of pressure that in my opinion they are not going to be able to withstand and they will have to give in to new demands.”With governments around the world making ambitious commitments to cut emissions, including offering incentives for electric vehicles, and requiring utilities to shut down power plants powered by fossil fuels, the demand for Exxon’s main products could decline, depressing profits. Investors say Exxon and Chevron have been too slow to adapt to that shift compared with European oil companies like BP and Royal Dutch Shell.“If you want to be a public company in a carbon-intensive industry you are going to have to convince investors that you still have a viable business in a low-carbon future,” said Mark Viviano, a managing partner at Kimmeridge, an energy-focused private equity firm.Exxon management says it realizes it must prepare for a lower-carbon future, and has supported the goals of the Paris climate agreement. But the company gave up on solar energy decades ago, and today its efforts to remake itself for an energy transition rely on some moonshot ideas that may not work out.It is a global leader in capturing carbon from industry and storing it below ground, and in recent weeks it has proposed an enormous $100 billion carbon capture and storage project along the Houston Ship Channel that could be a model for the world. But for the plan to be economically viable, the federal government would have to impose a carbon tax or another kind of price on carbon, a tough sell in Washington these days.Exxon has also worked for years to make advanced biofuels from algae, a project that other companies have abandoned. And it continues to bet heavily on exploration for oil and gas at a time when demand for such products may be peaking.Shareholders voted to retain Darren Woods as chief executive and chairman, a move that a Morgan Stanley research report viewed as an endorsement of his strategy to spend less on capital projects, reduce costs and continue to pay a generous dividend.“I’m not sure Exxon is going to change how they are going to deal with the energy transition,” said Mark Boling, a former executive vice president at Southwestern Energy, a Texas oil and gas company. “I think they have made a decision on how they are going to go and a few new board members are not going to make a difference.”Engine No. 1 managers are not saying much about their plans.“We’ve redefined what’s possible,” Chris James, founder of Engine No. 1, said in an interview after the vote. “Our overall goal is really greater transparency, which brings accountability, transparency on the impacts of what the business does as well as accountability on how to manage those impacts.”The two Engine No. 1 nominees who won election so far, Gregory Goff and Kaisa Hietala, have deep experience in the energy industry. Mr. Goff was chief executive of Andeavor, a refining and marketing company, while Ms. Hietala was executive vice president at Neste, a Finnish refiner and pioneer in biofuels.Engine No. 1 managers come across as cautious and modest in interviews. They don’t make brash pronouncements or hurl insults at Exxon as many climate activists often do.“There is no one big change,” said Charlie Penner, Engine No. 1’s head of active engagement. “Nothing is going to happen quickly.”Some big asset managers contend that companies like Exxon will have a better performance over the long run if they reduce their reliance on selling oil and gas, which many believe will fall in price if the world moves toward electric vehicles.Bryan Derballa for The New York TimesThe votes of giant asset management firms with big stakes in Exxon were critical in securing victory for Engine No. 1’s nominees. But it’s not clear how hard asset managers that voted for the hedge fund’s candidates like BlackRock, Exxon’s second-biggest shareholder, and Vanguard, its largest, will now push for climate-focused objectives.Laurence D. Fink, BlackRock’s chief executive, has said in recent years that he sees climate change as a big threat — and his firm has often used its enormous voting power to influence companies, and frequently targeted directors.In explaining its Exxon votes, BlackRock said Wednesday that the company had not done enough to assess the impact of a reduction in demand for fossil fuels, and contended this had “the potential to undermine the company’s long-term financial sustainability.”These big investors place a lot of faith in companies and the profit motive to make changes that can cost trillions of dollars. This year, Mr. Fink wrote that he had “great optimism about the future of capitalism and the future health of the economy — not in spite of the energy transition, but because of it.”But investors have not always rewarded companies that have announced ambitious plans to reduce emissions and move toward cleaner energy.Over the last five years, Exxon’s shares have fallen by about a third — a period over which the S&P 500 stock index was up about 100 percent. Its stock has done worse than the shares of other large oil companies. Yet, the shares of BP and Shell, two European companies that are investing a lot in cleaner sources of energy, are also lower — BP is down more than 17 percent over five years and Shell is down more than 26 percent.And despite their efforts, energy companies as a whole have not reduced emissions by nearly enough to stop temperatures rising above levels that scientists believe are dangerous for the planet, and many experts are calling for more far-reaching changes. The International Energy Agency said last week that countries needed to stop approving new oil and gas fields immediately for the world to reach net zero carbon emissions by 2050.Roberta Giordano, finance program campaigner for the Sunrise Project, an environmental group, said BlackRock, Vanguard and other asset managers needed to go much further, starting with the removal of Mr. Woods as Exxon’s chief executive.“Once again this shareholder season, BlackRock has failed to fully use its massive voting power on climate,” she said.But more optimistic analysts argue that Exxon could help the world reduce emissions and make money doing it. For example, the company’s experience with offshore oil drilling could be used to build offshore wind farms, said Geoffrey Heal, a professor at Columbia Business School. And Exxon could spend more on technology that removes carbon from the atmosphere and help make it affordable.“If I was one of the directors,” Mr. Heal said, “I’d be pushing for that.” More

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    For Clean Energy, Buy American or Buy It Quick and Cheap?

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    President Biden says slowing climate change will create jobs. Tension between unions and environmentalists shows it’s not so simple.Patricia Fahy, a New York State legislator, celebrated when a new development project for the Port of Albany — the country’s first assembly plant dedicated to building offshore wind towers — was approved in January.“I was doing cartwheels,” said Ms. Fahy, who represents the area. But she was soon caught in a political bind.A powerful union informed her that most of the equipment for New York’s big investment in offshore windmills would not be built by American workers but would come from abroad. Yet when Ms. Fahy proposed legislation to press developers to use locally made parts, she met opposition from environmentalists and wind industry officials. “They were like, ‘Oh, God, don’t cause us any problems,’” she recalled.Since President Biden’s election, Democrats have extolled the win-win allure of the transition from fossil fuels, saying it can help avert a climate crisis while putting millions to work. “For too long we’ve failed to use the most important word when it comes to meeting the climate crisis: jobs, jobs, jobs,” Mr. Biden told Congress last month.On Tuesday, his administration gave final approval to the nation’s first large-scale offshore wind project, off Martha’s Vineyard in Massachusetts, again emphasizing the jobs potential.But there is a tension between the goals of industrial workers and those of environmentalists — groups that Democrats count as politically crucial. The greater the emphasis on domestic manufacturing, the more expensive renewable energy will be, at least initially, and the longer it could take to meet renewable-energy targets.That tension could become apparent as the White House fleshes out its climate agenda.“It’s a classic trade-off,” said Anne Reynolds, who heads the Alliance for Clean Energy New York, a coalition of environmental and industry groups. “It would be better if we manufactured more solar panels in the U.S. But other countries invested public money for a decade. That’s why it’s cheaper to build them there.”There is some data to support the contention that climate goals can create jobs. The consulting firm Wood Mackenzie expects tens of thousands of new jobs per year later this decade just in offshore wind, an industry that barely exists in the United States today.And labor unions — even those whose members are most threatened by the shift to green energy, like mineworkers — increasingly accept this logic. In recent years, many unions have joined forces with supporters of renewable energy to create groups with names like the BlueGreen Alliance that press for ambitious jobs and climate legislation, in the vein of the $2.3 trillion proposal that Mr. Biden is calling the American Jobs Plan.But much of the supply chain for renewable energy and other clean technologies is in fact abroad. Nearly 70 percent of the value of a typical solar panel assembled in the United States accrues to firms in China or Chinese firms operating across Southeast Asia, according to a recent report by the Center for Strategic and International Studies and BloombergNEF, an energy research group.Batteries for electric vehicles, their most valuable component, follow a similar pattern, the report found. And there is virtually no domestic supply chain specifically for offshore wind, an industry that Mr. Biden hopes to see grow from roughly a half-dozen turbines in the water today to thousands over the next decade. That supply chain is largely in Europe.Many proponents of a greener economy say that importing equipment is not a problem but a benefit — and that insisting on domestic production could raise the price of renewable energy and slow the transition from fossil fuels.“It is valuable to have flexible global supply chains that let us move fast,” said Craig Cornelius, who once managed the Energy Department’s solar program and is now chief executive of Clearway Energy Group, which develops solar and wind projects.Those emphasizing speed over sourcing argue that most of the jobs in renewable energy will be in the construction of solar and wind plants, not making equipment, because the manufacturing is increasingly automated.But labor groups worry that construction and installation jobs will be low paying and temporary. They say only manufacturing has traditionally offered higher pay and benefits and can sustain a work force for years.Partisans of manufacturing also point out that it often leads to jobs in new industries. Researchers have shown that the migration of consumer electronics to Asia in the 1960s and ’70s helped those countries become hubs for future technologies, like advanced batteries.As a result, labor leaders are pressing the administration to attach strict conditions to the subsidies it provides for green equipment. “We’re going to be demanding that the domestic content on this stuff has to be really high,” said Thomas M. Conway, the president of the United Steelworkers union and a close Biden ally.The experience of New York reveals how delicate these debates can be once specific jobs and projects are at stake.Patricia Fahy, a New York State legislator, met opposition from environmentalists and wind industry officials over efforts to press developers to use locally made parts.Mohamed Sadek for The New York TimesA slip at the Port of Albany was created for ships with oversize cargo from overseas, including components for the wind industry.Mohamed Sadek for The New York TimesLate last year, the Communications Workers of America began considering ways to revive employment at a General Electric factory that the union represents in Schenectady, N.Y., near Albany. The factory has shed thousands of employees in recent decades.Around the same time, the state was close to approving bids for two major offshore wind projects. The eventual winner, a Norwegian developer, Equinor, promised to help bring a wind-tower assembly plant to New York and upgrade a port in Brooklyn.“All of a sudden I focus on the fact that we’re talking about wind manufacturing,” said Bob Master, the communications workers official who contacted Ms. Fahy, the state legislator. “G.E. makes turbines — there could be a New York supply chain. Let’s give it a try.”In early February, the union produced a draft of a bill that would ask developers like Equinor to buy their wind equipment from manufacturers in New York State “to the maximum extent feasible” — not just towers but other components, like blades and nacelles, which house the mechanical guts of a turbine. Ms. Fahy, a member of the Assembly, and State Senator Neil Breslin, a fellow Democrat from the Albany area, signed on as sponsors.Environmentalists and industry officials quickly raised concerns that the measure could discourage developers from coming to the state.“So far, Equinor has gone above and beyond what any other company has done,” said Lisa Dix, who led the Sierra Club’s campaign for renewable energy in New York until recently. “Why do we need more onerous requirements on companies given what we got?”Ms. Dix and other clean-energy advocates had worked with labor unions to persuade the state that construction jobs in offshore wind should offer union-scale wages and representation. And New York’s system for evaluating clean-energy bids already awarded points to developers that promised local economic benefits.Ms. Reynolds, the head of the environmental and industry coalition in New York, worried that going beyond the existing arrangement could make the cost of renewable energy unsustainable.“If it became bigger and more noticeable on electric bills, the common expectation is that political support for New York’s clean-energy programs would erode,” she said.The communications workers sought to offer reassurance, not entirely successfully. “I said to them, ‘We’re trade unionists: We ask for everything, the boss offers us nothing, and then we make a deal,’” Mr. Master said. “‘But I do think there’s no reason why turbines should be coming from France as opposed to Schenectady.’”The final language, a compromise negotiated with the state’s building trades council and passed by the Legislature in April, allows the state to award additional points in the bidding process to developers that pledge to create manufacturing jobs in the state, a slight refinement of the current approach. (It also effectively requires that workers who build, operate or maintain wind and solar plants either receive union-scale wages or can benefit from union representation.)While the law included a “buy American” provision for iron and steel, the state’s energy research and development agency, known as NYSERDA, can waive the requirement.The agency’s chief executive, Doreen Harris, said she was generally pleased that the existing approach remained intact and predicted that the state would have blade and nacelle factories within a few years.Some analysts agreed, arguing that most offshore wind equipment is so bulky — often hundreds of feet long — that it becomes impractical to ship across the Atlantic.“There’s a point at which importation of all goods and services doesn’t make economic sense,” said Jeff Tingley, an expert on the offshore wind supply chain at the consulting firm Xodus.Importing parts has made economic sense for Britain, which had installed more offshore wind turbines than any other country by the start of this year but had made little of the equipment.Suzie Howell for The New York TimesBut that has not always reflected the experience of the United Kingdom, which had installed more offshore wind turbines than any other country by the start of this year but had manufactured only a small portion of the equipment.“Even with the U.K. being the biggest market, the logistics costs weren’t big enough to justify new factories,” said Alun Roberts, an expert on offshore wind with the British-based consulting firm BVG Associates.A 2017 report indicated that the country manufactured well below 30 percent of its offshore wind equipment, and Mr. Roberts said the percentage had probably increased slightly since then. The country currently manufactures blades but no nacelles.All of which leaves the Biden administration with a difficult choice: If it genuinely wants to shift manufacturing to the United States, doing so could require some aggressive prodding. A senior White House official said the administration was exploring ways of requiring that a portion of wind and solar equipment be American-made when federal money was involved.But some current and former Democratic economic officials are skeptical of the idea, as are clean-energy advocates.“I worry about local content requirements for offshore wind from the federal government right now,” said Kathleen Theoharides, the Massachusetts secretary of energy and environmental affairs. “I don’t think adding anything that could potentially raise the cost of clean energy to the ratepayer is necessarily the right strategy.”Mr. Master said the recent legislation in New York was a victory given the difficulty of enacting stronger domestic content policies at the state level, but acknowledged that it fell short of his union’s goals. Both he and Ms. Fahy vowed to keep pressing to bring more offshore wind manufacturing jobs to New York.“I could be the queen of lost causes, but we want to get some energy around this,” Ms. Fahy said. “We need this here. I’m not just saying New York. This is a national conversation.” More

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    China's Solar Dominance Presents Biden With Human Rights Dilemma

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    President Biden’s vow to work with China on issues like climate change is clashing with his promise to defend human rights.WASHINGTON — President Biden has repeatedly pledged to work with China on issues like climate change while challenging Beijing on human rights and unfair trade practices.But those goals are now coming into conflict in the global solar sector, presenting the Biden administration with a tough choice as it looks to expand the use of solar power domestically to reduce the United States’ carbon dioxide emissions.The dilemma stems from an uncomfortable reality: China dominates the global supply chain for solar power, producing the vast majority of the materials and parts for solar panels that the United States relies on for clean energy. And there is emerging evidence that some of China’s biggest solar companies have worked with the Chinese government to absorb minority workers in the far western region of Xinjiang, programs often seen as a red flag for potential forced labor and human rights abuses.This week, Mr. Biden is inviting world leaders to a climate summit in Washington, where he is expected to unveil an ambitious plan for cutting America’s emissions over the next decade. The administration is already eyeing a goal of generating 100 percent of the nation’s electricity from carbon-free sources such as solar, wind or nuclear power by 2035, up from only 40 percent last year. To meet that target, the United States may need to more than double its annual pace of solar installations.That is likely to be an economic boon to China, since the United States still relies almost entirely on Chinese manufacturers for low-cost solar modules, many of which are imported from Chinese-owned factories in Vietnam, Malaysia and Thailand.China also supplies many of the key components in solar panels, including more than 80 percent of the world’s polysilicon, a raw material that most solar panels use to absorb energy from sunlight. Nearly half of the global supply comes from Xinjiang alone. In 2019, less than 5 percent of the world’s polysilicon came from U.S.-owned companies.“It’s put the Democrats in a hard position,” said Francine Sullivan, the vice president for business development at REC Silicon, a polysilicon maker based in Norway with factories in the United States. “Do you want to stand up to human rights in China, or do you want cheap solar panels?”The administration is increasingly under pressure from influential supporters not to turn a blind eye to potential human rights abuses in order to achieve its climate goals.“As the U.S. seeks to address climate change, we must not allow the Chinese Communist Party to use forced labor to meet our nation’s needs,” Richard L. Trumka, the president of the A.F.L.-C.I.O., wrote in a letter on March 12 urging the Biden administration to block imports of solar products containing polysilicon from the Xinjiang region.China’s hold over the global solar sector has its roots in the late 2000s. As part of an effort to reduce dependence on foreign energy, Beijing pumped vast amounts of money into solar technology, enabling companies to make multibillion-dollar investments in new factories and gain market share globally.China’s boom in production caused the price of panels to plummet, accelerating the adoption of solar power worldwide while forcing dozens of companies in the United States, Europe and elsewhere out of business.A solar equipment factory in China’s Jiangxi Province in January. China’s hold over the global solar sector has its roots in the late 2000s, when Beijing began pumping vast amounts of money into solar technology.CHINATOPIX, via Associated PressIn the past few years, Chinese polysilicon manufacturers have increasingly shifted to Xinjiang, lured by abundant coal and cheap electricity for their energy-intensive production.Xinjiang is now notorious as the site of a vast program of detention and surveillance that the Chinese government has carried out against Muslim Uyghurs and other minority groups. Human rights groups say the Chinese authorities may have detained a million or more minorities in camps and other sites where they face torture, indoctrination and coerced labor.In a report last year, Horizon Advisory, a consultancy in Washington, cited Chinese news reports and government announcements suggesting that major Chinese solar companies including GCL-Poly, East Hope Group, Daqo New Energy, Xinte Energy and Jinko Solar had accepted workers transferred with the help of the Chinese government from impoverished parts of Xinjiang.Jinko Solar denied those allegations, as did the Chinese government. Zhang Longgen, a vice chairman of Xinjiang Daqo — a unit of one of the companies cited by Horizon Advisory — said that the polysilicon plants were not labor intensive, and that the company’s workers were freely employed and could quit if they wanted, according to Global Times, a Chinese Communist Party-owned newspaper. The report said that only 18 of the 1,934 workers at Xinjiang Daqo belonged to ethnic minorities, and that none were Uyghur.The other companies did not respond to requests for comment.Experts have had difficulty estimating how many laborers may have been coerced into working in Chinese solar facilities given restrictions on travel and reporting in Xinjiang. Many multinational companies have also struggled to gain access to the region’s factories to rule out the risk of forced labor in their supply chains.Mark Widmar, the chief executive of First Solar, a solar panel maker based in the United States, said exposure to Xinjiang was “the unfortunate reality for most of the industry.”“How the industry has evolved, it’s made it difficult to be comfortable that you do not have some form of exposure,” he said. “If you try to follow the spaghetti through the spaghetti bowl and really understand where your exposure is, that’s going to be tough.”The revelations have attracted attention from lawmakers and customs officials, and prompted concerns among solar investors that the sector could be destined for tougher regulation.Under the Trump administration, American customs agents took a harder line against products reportedly made with forced labor in Xinjiang, including a sweeping ban on cotton and tomatoes from the region. Those restrictions have forced a reorganization of global supply chains, especially in the apparel sector.The Biden administration has said it is still reviewing the Trump administration’s policies, and it has not yet signaled whether it will pursue other bans on products or companies. But both Mr. Biden and his advisers have insisted that the United States plans to confront China on human rights abuses in Xinjiang.A spokeswoman for the National Security Council said that the draconian treatment of Uyghurs “cannot be ignored,” and that the administration was “studying ways to effectively ensure that we are not importing products made from forced labor,” including solar products.Congress may also step in. Since the beginning of the year, the House and Senate have reintroduced versions of the Uyghur Forced Labor Prevention Act, which would assume that imports from Xinjiang were made with forced labor and block them from American ports, unless the importer showed proof otherwise. The House version of the bill singles out polysilicon as a priority for enforcement.The legislation has broad bipartisan support and could be included in a sweeping China-related bill that Democrats hope to introduce this year, according to congressional staff members.Amid the threat of new restrictions, the Solar Energy Industries Association, a trade group, has led an effort to help solar companies trace materials in their supply chain. It has also organized a pledge of 236 companies to oppose forced labor and encouraged companies to sever any ties with Xinjiang by June.Some Chinese companies have responded by reshuffling their supply chains, funneling polysilicon and other solar products they manufacture outside Xinjiang to American buyers, and then directing their Xinjiang-made products to China and other markets.Analysts say this kind of reorganization is, in theory, feasible. About 35 percent of the world’s polysilicon comes from regions in China other than Xinjiang, while the United States and the European Union together make up around 30 percent of global solar panel demand, according to Johannes Bernreuter, a polysilicon market analyst at Bernreuter Research.John Smirnow, the general counsel for the Solar Energy Industries Association, said most solar companies were already well on their way toward extricating supply chains from Xinjiang.A high-security facility that is believed to be a re-education camp in the Xinjiang region of China in 2019. President Biden and his advisers have said that they plan to confront China on human rights abuses in Xinjiang.Greg Baker/Agence France-Presse — Getty Images“Our understanding is that all the major suppliers are going to be able to supply assurances to their customers that their products coming into the U.S. do not include polysilicon from the region,” he said.But it is unclear if this reorganization will quell criticism. Episodes of forced labor have also been reported in Chinese facilities outside Xinjiang where Uyghurs and other minorities have been transferred to work. And restrictions on products from Xinjiang could spread to markets including Canada, Britain and Australia, which are debating new rules and guidelines.Human rights advocates have argued that allowing Chinese companies to cleave their supply chains to serve American and non-American buyers may do little to improve conditions in Xinjiang and have pressed the Biden administration for stronger action.“The message has to be clear to the Chinese government that this economic model is not going to be supported by governments or businesses,” said Cathy Feingold, the director of the A.F.L.-C.I.O.’s International Department.Chinese companies are also facing pressure from Beijing not to accede to American demands, since that could be seen as a tacit criticism of the government’s activities in Xinjiang.In a statement in January, the China Photovoltaic Industry Association and China Nonferrous Metals Industry Association condemned “irresponsible statements” from U.S. industries, which they said were directed at curbing Xinjiang’s development and “meddling in Chinese domestic affairs.”“It is widely known that the ‘forced labor’ issue is in its entirety the lie of the century that the United States and certain other Western countries have concocted from nothing,” they said.On Monday, Secretary of State Antony Blinken warned that the United States was falling behind China on clean energy production.But bringing solar manufacturing back to the United States could be a challenge, analysts said, given the time needed to significantly bolster American production, and it could also raise the price of solar panels in the short term.The United States still has a handful of facilities for manufacturing polysilicon, but they have faced grim prospects since 2013, when China put retaliatory tariffs on American polysilicon. Hemlock Semiconductor mothballed a new $1.2 billion facility in Tennessee in 2014, while REC Silicon shut its polysilicon facility in Washington in 2019.China has promised to carry out large purchases of American polysilicon as part of a trade deal signed last year, but those transactions have not materialized.In the near term, tensions over Xinjiang could be a boon for the few remaining U.S. suppliers. Ms. Sullivan said some small U.S. solar developers had reached out to REC Silicon in recent months to inquire about non-Chinese products.But American companies need the promise of reliable, long-term orders to scale up, she said, adding that when she explains the limited supply of solar products that do not touch China, people become “visibly ill.”“This is the big lesson,” Ms. Sullivan added. “You become dependent on China, and what does it mean? We have to swallow our values in order to do solar.”Chris Buckley More

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    President Biden Unveils Plan to Raise Corporate Taxes

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    #styln-signup .styln-signup-wrapper { max-width: calc(100% – 40px); width: 600px; margin: 20px auto; padding-bottom: 20px; border-bottom: 1px solid #e2e2e2; } The Biden administration unveiled its plan to overhaul the corporate tax code on Wednesday, offering an array of proposals that would require large companies to pay higher taxes to help fund the White House’s economic agenda. […] More

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    Biden Details $2 Trillion Plan to Rebuild Infrastructure and Reshape the Economy

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    The president will begin selling his proposal on Wednesday, saying it would fix 20,000 miles of roads and 10,000 bridges, while also addressing climate change and racial inequities and raising corporate taxes.WASHINGTON — President Biden will unveil an infrastructure plan on Wednesday whose $2 trillion price tag would translate into 20,000 miles of rebuilt roads, repairs to the 10 most economically important bridges in the country, the elimination of lead pipes and service lines from the nation’s water supplies and a long list of other projects intended to create millions of jobs in the short run and strengthen American competitiveness in the long run.Biden administration officials said the proposal, which they detailed in a 25-page briefing paper and which Mr. Biden will discuss in an afternoon speech in Pittsburgh, would also accelerate the fight against climate change by hastening the shift to new, cleaner energy sources, and would help promote racial equity in the economy.The spending in the plan would take place over eight years, officials said. Unlike the economic stimulus passed under President Barack Obama in 2009, when Mr. Biden was vice president, officials will not in every case prioritize so-called shovel ready projects that could quickly bolster growth.But even spread over years, the scale of the proposal underscores how fully Mr. Biden has embraced the opportunity to use federal spending to address longstanding social and economic challenges in a way not seen in half a century. Officials said that, if approved, the spending in the plan would end decades of stagnation in federal investment in research and infrastructure — and would return government investment in those areas, as a share of the economy, to its highest levels since the 1960s.The proposal is the first half of what will be a two-step release of the president’s ambitious agenda to overhaul the economy and remake American capitalism, which could carry a total cost of as much as $4 trillion over the course of a decade. Mr. Biden’s administration has named it the “American Jobs Plan,” echoing the $1.9 trillion pandemic relief bill that Mr. Biden signed into law this month, the “American Rescue Plan.”“The American Jobs Plan,” White House officials wrote in the document detailing it, “will invest in America in a way we have not invested since we built the interstate highways and won the Space Race.”While spending on roads, bridges and other physical improvements to the nation’s economic foundations has always had bipartisan appeal, Mr. Biden’s plan is sure to draw intense Republican opposition, both for its sheer size and for its reliance on corporate tax increases to pay for it.Administration officials said the tax increases in the plan — including an increase in the corporate tax rate and a variety of measures to tax multinationals on money they earn and book overseas — would take 15 years to fully offset the cost of the spending programs.The spending in the plan covers a wide range of physical infrastructure projects, including transportation, broadband, the electric grid and housing; efforts to jump-start advanced manufacturing; and other industries officials see as key to the United States’ growing economic competition with China. It also includes money to train millions of workers, as well as money for initiatives to support labor unions and providers of in-home care for older and disabled Americans, while also increasing the pay of the workers who provide that care.The Biden administration’s infrastructure plan proposes $80 billion for Amtrak and freight rail.Alyssa Schukar for The New York TimesMany of the items in the plan carry price tags that would have filled entire, ambitious bills in past administrations.Among them: a total of $180 billion for research and development, $115 billion for roads and bridges, $85 billion for public transit, and $80 billion for Amtrak and freight rail. There is $42 billion for ports and airports, $100 billion for broadband and $111 billion for water infrastructure — including $45 billion to ensure no child ever is forced to drink water from a lead pipe, which can slow children’s development and lead to behavioral and other problems.The plan seeks to repair 10,000 smaller bridges across the country, along with the 10 most economically significant ones in need of a fix. It would electrify 20 percent of the nation’s fleet of yellow school buses. It would spend $300 billion to promote advanced manufacturing, including a four-year plan to restock the country’s Strategic National Stockpile of pharmaceuticals, including vaccines, in preparation for future pandemics.In many cases, officials cast those goals in the language of closing racial gaps in the economy, sometimes the result of previous federal spending efforts, like interstate highway developments that split communities of color or air pollution that affects Black and Hispanic communities near ports or power plants.Officials cast the $400 billion spending on in-home care in part as a salve to “underpaid and undervalued” workers in that industry, who are disproportionately women of color.Mr. Biden’s pledge to tackle climate change is embedded throughout the plan. Roads, bridges and airports would be made more resilient to the effects of more extreme storms, floods and fires wrought by a warming planet. Spending on research and development could help spur breakthroughs in cutting-edge clean technology, while plans to retrofit and weatherize millions of buildings would make them more energy efficient.The president’s focus on climate change is centered, however, on modernizing and transforming the United States’ two largest sources of planet-warming greenhouse gas pollution: cars and electric power plants.A decade ago, Mr. Obama’s economic stimulus plan spent about $90 billion on clean energy programs intended to jump-start the nation’s nascent renewable power and electric vehicle industries. Mr. Biden’s plan now proposes spending magnitudes more on similar programs that he hopes will take those technologies fully into the mainstream.It bets heavily on spending meant to increase the use of electric cars, which today make up just 2 percent of the vehicles on America’s highways.The plan proposes spending $174 billion to encourage the manufacture and purchase of electric vehicles by granting tax credits and other incentives to companies that make electric vehicle batteries in the United States instead of China. The goal is to reduce vehicle price tags.The money would also fund the construction of about a half-million electric vehicle charging stations — although experts say that number is but a tiny fraction of what is needed to make electric vehicles a mainstream option.Mr. Biden’s plan proposes $100 billion in programs to update and modernize the electric grid to make it more reliable and less susceptible to blackouts, like those that recently devastated Texas, while also building more transmission lines from wind and solar plants to large cities.It proposes the creation of a “Clean Electricity Standard” — essentially, a federal mandate requiring that a certain percentage of electricity in the United States be generated by zero-carbon energy sources like wind, solar and possibly nuclear power. But that mandate would have to be enacted by Congress, where prospects for its success remain murky. Similar efforts to pass such a mandate have failed multiple times over the past 20 years.Bayfront homes in Mastic Beach, N.Y. The infrastructure plan has provisions intended to help communities deal with the effects of climate change.Johnny Milano for The New York TimesThe plan proposes an additional $46 billion in federal procurement programs for government agencies to buy fleets of electric vehicles, and $35 billion in research and development programs for cutting-edge, new technologies.It also calls for making infrastructure and communities more prepared for the worsening effects of climate change, though the administration has so far provided few details on how it would accomplish that goal.But according to the document released by the White House, the plan includes $50 billion “in dedicated investments to improve infrastructure resilience.” The efforts would defend against wildfires, rising seas and hurricanes, and there would be a focus on investments that protect low-income residents and people of color.The plan also includes a $16 billion program intended to help fossil fuel workers transition to new work — like capping leaks on defunct oil wells and shutting down retired coal mines — and $10 billion for a new “Civilian Climate Corps.”Mr. Biden would fund his spending in part by eliminating tax preferences for fossil fuel producers. But the bulk of his tax increases would come from corporations generally.He would raise the corporate tax rate to 28 percent from 21 percent, partly reversing a cut signed into law by President Donald J. Trump. Mr. Biden would also take a variety of steps to raise taxes on multinational corporations, many of them working within an overhaul of the taxation of profits earned overseas that was included in Mr. Trump’s tax law in 2017.Those measures would include raising the rate of a minimum tax on global profits and eliminating several provisions that allow companies to reduce their American tax liability on profits they earn and book abroad.Mr. Biden would also add a new minimum tax on the global income of the largest multinationals, and he would ramp up enforcement efforts by the Internal Revenue Service against large companies that evade taxes.Administration officials expressed hope this week that the plan could attract bipartisan support in Congress. But Republicans and business groups have already attacked Mr. Biden’s plans to fund the spending with corporate tax increases, which they say will hurt the competitiveness of American companies. Administration officials say the moves will push companies to keep profits and jobs in the United States.Joshua Bolten, the president and chief executive of the Business Roundtable, a powerful group representing top business executives in Washington, said on Tuesday that his group “strongly opposes corporate tax increases as a pay-for for infrastructure investment.”“Policymakers should avoid creating new barriers to job creation and economic growth,” Mr. Bolten said, “particularly during the recovery.”Coral Davenport More