American Jobs Plan (2021)

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    Senators and Biden Aides Struggle to Save Bipartisan Infrastructure Deal

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    A looming deadline and a last-minute need for a new revenue source are complicating a deal that was announced nearly a month ago.WASHINGTON — Congressional negotiators and the Biden administration tried on Monday to salvage a nearly $600 billion bipartisan agreement to invest in roads, water pipes and other physical infrastructure, after Republicans rejected a key component to pay for the plan and resisted Democratic plans for an initial procedural vote on Wednesday.Senators and administration officials are still working to hammer out the details of the deal, including how to ensure that a plan to finance it will secure 60 votes for Senate passage. White House officials expressed confidence on Monday that the agreement could be finalized. But its fate was uncertain.Mr. Biden is pushing his economic agenda in parts. The bipartisan agreement is meant to be Step 1 — with a much larger, Democratic bill to follow. But weeks after their announcement of a deal, the bipartisan group has not released legislative text or received external confirmation that it is fully financed. A top negotiator said over the weekend that the group jettisoned a key plan included in the deal that would have raised revenue by giving the I.R.S. more power to catch tax cheats.Republicans have come under pressure to oppose that funding method from conservative anti-tax groups, who say it would empower auditors to harass business owners and political targets. Democrats say the increased enforcement would target large corporations and people who earn more than $400,000 — and note that improved tax enforcement has been a bipartisan goal of administrations dating back decades.Still, on Monday evening Senator Chuck Schumer of New York, the majority leader, set up a procedural vote to begin moving toward debate on the bipartisan deal, even without the text of the plan, on Wednesday. Mr. Schumer said that if senators agreed to consider infrastructure legislation, he would move to bring up either the bipartisan deal, should one materialize this week, or a series of individual infrastructure bills that have been approved on a bipartisan basis by Senate committees.The plan was an effort to force negotiators to move toward finalizing details and a critical mass of Republicans to commit to advancing the deal, with Democrats eager to advance the legislation before the Senate leaves for its August recess. Mr. Schumer said he had support from the five main Democratic negotiators involved in talks.“It is not a deadline to determine every final detail of the bill,” he said. A vote of support on Wednesday, he added, would signal that “the Senate is ready to begin debating and amending a bipartisan infrastructure bill.”On Monday, Mr. Biden pushed for passage of the agreement during remarks at the White House, where he promoted his administration’s economic progress. But administration officials made clear later in the day that their patience for the finalization of the bipartisan agreement was running thin.“We believe it’s time to move forward with this vote — with congressional action,” Jen Psaki, the White House press secretary, said at a news briefing. Asked what the administration’s backup plan was if the plan failed to clear the test vote, Ms. Psaki demurred.“We’re not quite there yet,” she said. “There is a lot of good work that’s happened. Two days is a lifetime in Washington, so I don’t think we’re going to make predictions of the death of the infrastructure package.”Republican leaders said they wanted to see legislative text before voting on a deal.“We need to see the bill before voting to go to it. I think that’s pretty easily understood,” Senator Mitch McConnell of Kentucky, the Republican leader, told reporters on Monday. “I think we need to see the bill before we decide whether or not to vote for it.”Democrats have argued that negotiators have had nearly a month to iron out the details and that the Senate has previously taken procedural votes without finalized bill text — including when Mr. McConnell led his caucus in a failed attempt to repeal and replace the Affordable Care Act in 2017.The biggest sticking point remains how to pay for the plan. The I.R.S. plan was estimated to bring in more than $100 billion in new tax revenue over a decade.It is unclear what the group will turn to as a substitute. White House officials and the 10 core Senate negotiators — five Democrats and five Republicans — were working on Monday to find a new revenue source.Senator Rob Portman, Republican of Ohio and a key negotiator, floated the prospect on Sunday of undoing a Trump-era rule that changes the way drug companies can offer discounts to health plans for Medicare patients as an option. The Congressional Budget Office estimated in 2019 that it would cost $177 billion over 10 years, and the rule has not yet been implemented.Ms. Psaki told reporters that the administration is “open to alternatives, very open to alternatives from this end.”“But we’ll let those conversations happen privately and be supportive of them from our end,” she said.Senators were expected to virtually meet Monday evening as they continued to haggle over the details. The group met for more than two hours Sunday evening.“I think we need to see the bill before we decide whether or not to vote for it,” Senator Mitch McConnell, the Republican leader, told reporters on Monday.Stefani Reynolds for The New York TimesMr. Biden continued to push on Monday for legislative action, casting his economic policies, along with vaccination efforts, as a critical driver of accelerating growth. He promised that his remaining agenda items would help Americans work more and earn more money while restraining price increases, pushing back on a critique from Republicans.Administration officials and Mr. Biden say the Democrats’ $3.5 trillion plan — the larger bill that would follow the bipartisan infrastructure bill — will dampen price pressures by increasing productivity. The president said the proposals would free up Americans to work more through subsidized child care, national paid leave and other measures, as well as improve the efficiency of the economy.The spending “won’t increase inflation,” Mr. Biden said. “It will take the pressure off inflation.”He also said he had faith in the independent Federal Reserve and its chair, Jerome H. Powell, to manage the situation. The Fed is responsible for maintaining both price stability and maximum employment.“As I made clear to Chairman Powell of the Federal Reserve when we met recently, the Fed is independent. It should take whatever steps it deems necessary to support a strong, durable economic recovery,” Mr. Biden said. “But whatever different views some might have on current price increases, we should be united on one thing: passage of the bipartisan infrastructure framework, which we shook hands on — we shook hands on.”Mr. Biden used more of the speech to push for the $3.5 trillion plan, which Democrats aim to pursue without Republican support through a process known as budget reconciliation, which bypasses a Senate filibuster.In describing the varied social and environmental initiatives he hopes to include in the plan, the president repeatedly stressed the need for government action as a means to raising living standards and creating jobs.That plan contains the bulk of Mr. Biden’s $4 trillion economic agenda that is not included in the bipartisan bill, like expanding educational access, building more affordable and energy-efficient housing, incentivizing low-carbon energy through tax credits and a wide range of other social programs meant to invest in workers.Republicans have also amplified concerns about inflation since Democrats pushed through a $1.9 trillion pandemic relief bill in March. In a letter to his conference this week, Representative Kevin McCarthy of California, the Republican leader, said that “prices on everything from gas to groceries are skyrocketing,” and he vowed that “we will continue to hold Democrats to account for their reckless handling of the economy.”Mr. Biden’s economic team has said repeatedly that inflation increases are largely a product of the pandemic and will fade in the months or years to come.Mr. Biden dismissed a question from a reporter after the speech about the potential for unchecked inflation, which he said no serious economist foresaw.Margot Sanger-Katz More

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    Building Solar Farms May Not Build the Middle Class

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    To hear Democrats tell it, a green job is supposed to be a good job — and not just good for the planet.The Green New Deal, first introduced in 2019, sought to “create millions of good, high-wage jobs.” And in March, when President Biden unveiled his $2.3 trillion infrastructure plan, he emphasized the “good-paying” union jobs it would produce while reining in climate change.“My American Jobs Plan will put hundreds of thousands of people to work,” Mr. Biden said, “paying the same exact rate that a union man or woman would get.”But on its current trajectory, the green economy is shaping up to look less like the industrial workplace that lifted workers into the middle class in the 20th century than something more akin to an Amazon warehouse or a fleet of Uber drivers: grueling work schedules, few unions, middling wages and limited benefits.Kellogg Dipzinski has seen this up close, at Assembly Solar, a nearly 2,000-acre solar farm under construction near Flint, Mich.“Hey I see your ads for help,” Mr. Dipzinski, an organizer with the local electrical workers union, texted the site’s project manager in May. “We have manpower. I’ll be out that way Friday.”“Hahahahaha …. yes — help needed on unskilled low wage workers,” was the response. “Competing with our federal government for unemployment is tough.”For workers used to the pay standards of traditional energy industries, such declarations may be jarring. Building an electricity plant powered by fossil fuels usually requires hundreds of electricians, pipe fitters, millwrights and boilermakers who typically earn more than $100,000 a year in wages and benefits when they are unionized.But on solar farms, workers are often nonunion construction laborers who earn an hourly wage in the upper teens with modest benefits — even as the projects are backed by some of the largest investment firms in the world. In the case of Assembly Solar, the backer is D.E. Shaw, with more than $50 billion in assets under management, whose renewable energy arm owns and will operate the plant.While Mr. Biden has proposed higher wage floors for such work, the Senate prospects for this approach are murky. And absent such protections — or even with them — there’s a nagging concern among worker advocates that the shift to green jobs may reinforce inequality rather than alleviate it.“The clean tech industry is incredibly anti-union,” said Jim Harrison, the director of renewable energy for the Utility Workers Union of America. “It’s a lot of transient work, work that is marginal, precarious and very difficult to be able to organize.”The Lessons of 2009Since 2000, the United States has lost about two million private-sector union jobs, which pay above-average wages. To help revive such “high-quality middle-class” employment, as Mr. Biden refers to it, he has proposed federal subsidies to plug abandoned oil and gas wells, build electric vehicles and charging stations and speed the transition to renewable energy.Industry studies, including one cited by the White House, suggest that vastly increasing the number of wind and solar farms could produce over half a million jobs a year over the next decade — primarily in construction and manufacturing.David Popp, an economist at Syracuse University, said those job estimates were roughly in line with his study of the green jobs created by the Recovery Act of 2009, but with two caveats: First, the green jobs created then coincided with a loss of jobs elsewhere, including high-paying, unionized industrial jobs. And the green jobs did not appear to raise the wages of workers who filled them.The effect of Mr. Biden’s plan, which would go further in displacing well-paid workers in fossil-fuel-related industries, could be similarly disappointing.In the energy industry, it takes far more people to operate a coal-powered electricity plant than it takes to operate a wind farm. Many solar farms often make do without a single worker on site.In 2023, a coal- and gas-powered plant called D.E. Karn, about an hour away from the Assembly Solar site in Michigan, is scheduled to shut down. The plant’s 130 maintenance and operations workers, who are represented by the Utility Workers Union of America and whose wages begin around $40 an hour plus benefits, are guaranteed jobs at the same wage within 60 miles. But the union, which has lost nearly 15 percent of the 50,000 members nationally that it had five years ago, says many will have to take less appealing jobs. The utility, Consumers Energy, concedes that it doesn’t have nearly enough renewable energy jobs to absorb all the workers.Joe Duvall, the local union president at the D.E. Karn generating complex in Essexville, Mich. The plant, about an hour away from the Assembly Solar site, is scheduled to go offline in 2023.Erin Schaff/The New York Times“A handful will retire,” said Joe Duvall, the local union president. “The younger ones I think have been searching for what they’d like to do outside of Karn.”While some of the new green construction jobs, such as building new power lines, may pay well, many will pay less than traditional energy industry construction jobs. The construction of a new fossil fuel plant in Michigan employs hundreds of skilled tradespeople who typically make at least $60 an hour in wages and benefits, said Mike Barnwell, the head of the carpenters union in the state.By contrast, about two-thirds of the roughly 250 workers employed on a typical utility-scale solar project are lower-skilled, according to Anthony Prisco, the head of the renewable energy practice for the staffing firm Aerotek. Mr. Prisco said his company pays “around $20” per hour for these positions, depending on the market, and that they are generally nonunion.Mr. Biden has proposed that clean energy projects, which are subsidized by federal tax credits, pay construction workers so-called prevailing wages — a level set by the government in each locality. A few states, most prominently New York, have enacted similar mandates.But it’s not clear that the Senate Democrats will be able to enact a prevailing wage mandate over Republican opposition. And the experience of the Recovery Act, which also required prevailing wages, suggests that such requirements are less effective at raising wages than union representation. Union officials also say that much of the difference in compensation arises from benefits rather than pay.A Different Kind of OwnerUnion officials concede that some tasks, like lifting solar panels onto racks, don’t necessarily require a skilled trades worker. But they say that even these tasks should be directly supervised by tradespeople, and that many others must be performed by tradespeople to ensure safety and quality. “If you hire people off the street at $15 per hour, they’re not skilled and they get injuries,” Mr. Barnwell said. “We would never let a bunch of assemblers work together alone.”One potentially dangerous job is wiring the hundreds or thousands of connections on a typical project — from solar panels to boxes that combine their energy to the inverters and transformers that make the electricity compatible with the rest of the grid.Mr. Barnwell’s union has developed a contract that would employ far more skilled workers than the industry norm so that two-thirds of the workers on a project are tradespeople or apprentices. To be more competitive with nonunion employers, the contract offers tradespeople only $18 an hour in benefits, roughly half the usual amount, and a wage of slightly under $30 an hour. Apprentices earn 60 to 95 percent of that wage plus benefits, depending on experience.So far, there have been relatively few takers. A key reason is that while utilities have traditionally built their own coal- and gas-powered plants, they tend to obtain wind and solar energy from other companies through so-called power purchase agreements. That electricity is then sent to customers through the grid just like electricity from any other source.Once construction is completed, many solar farms often operate without a single worker on-site.Erin Schaff/The New York TimesWhen utilities build their own plants, they have little incentive to drive down labor costs because their rate of return is set by regulators — around 10 percent of their initial investment a year, according to securities filings.But when a solar farm is built and owned by another company — typically a green energy upstart, a traditional energy giant or an investment firm like D.E. Shaw, the owner of Assembly Solar in Michigan — that company has every incentive to hold down costs.A lower price helps secure the purchase agreement in the first place. And because the revenue is largely determined by the purchase agreement, a company like D.E. Shaw must keep costs low to have a chance of earning the kind of double-digit returns that a regulated utility earns. Every dollar D.E. Shaw saves on labor is a dollar more for its investors.“For third parties selling power to utilities, they are competing to get the contract,” said Leah Stokes, a political science professor at the University of California, Santa Barbara, who studies utilities. “And the difference between what they’re paid and what their costs are is profit.”Union Labor, ‘Where Possible’In mid-2019, the electrical workers union in Flint elected a trim and tightly coiled man named Greg Remington as its business manager and de facto leader. Around the same time, Mr. Remington ran into an official with Ranger Power, the company developing the project for D.E. Shaw, at a local planning commission meeting.“He was all smiles — ‘Oh, yeah, we look forward to meeting,’” Mr. Remington said of the official. “But he never returned another phone call. I sent emails and he never got back to me.”Development is the stage of a solar project in which a company buys or leases land, secures permits and negotiates a power purchase agreement with a utility. After that, the developer may cede control of the project to a company that will build, own and operate it.But the two companies often work in tandem, as in the case of D.E. Shaw and Ranger Power, which are joint-venture partners “on certain Midwest projects and assets,” according to a Ranger spokeswoman. D.E. Shaw helps fund Ranger Power’s projects, and its involvement provides the resources and credibility to get projects off the ground.Greg Remington, the business manager at the electrical workers local in Flint, Mich. “A lot of this stuff, you’ve got to strike while the iron is hot,” he said of getting a union foothold in green energy construction projects.Erin Schaff/The New York TimesWhen a lawyer for Ranger Power appeared at a Board of Zoning Appeals hearing in Indiana to help advance a Ranger project there in 2019, he emphasized that “the development backing is from D.E. Shaw Renewable Investments,” adding that “they own and operate 31 wind and solar projects across the nation, and they have over $50 billion in investments.” (The firm’s project portfolio is now much larger.)Still, given the sometimes messy maneuvering that goes into obtaining land and permits, it can be helpful for a prominent firm like D.E. Shaw to stand at arm’s length from the development process.In a 2018 letter to a local building trades council in Southern Illinois, known as the Egyptian Building Trades, a Ranger Power official wrote that a solar project the company was developing in the area was “committed to using the appropriate affiliates of the Egyptian Building Trades, where possible, to provide skilled craftsmen and women to perform the construction of the project.” The letter said any entity that acquired the project would be required to honor the commitment.But the project mostly hired nonunion workers to install solar panels. According to a complaint filed by a local union last fall with the Illinois Commerce Commission, the construction contractor has used workers who are not qualified and not supervised by a qualified person “to perform electrical wiring and connections” and paid them less than the union rate.Prairie State Solar, an entity owned by D.E. Shaw that was created to oversee the project, has denied the claims. Prairie State has hired union tradespeople for a portion of the work. Ranger officials likewise played up the construction jobs that the Assembly Solar project would bring to Michigan. But by the time Mr. Remington got involved, the county had approved the project and he had little leverage to ensure that they were union jobs. “A lot of this stuff, you’ve got to strike while the iron is hot,” he said.County officials say that the project is bringing large benefits — including payments to landowners and tax revenue — and that they have no say over organized labor’s involvement. “I don’t think it’s our responsibility in any way to intervene on behalf of or against a union,” said Greg Brodeur, a county commissioner.‘Like a Moving Assembly Line’On an afternoon in mid-May, several laborers coming off their shift at Assembly Solar said they were grateful for the work, which they said paid $16 an hour and provided health insurance and 401(k) contributions. Two said they had moved to the area from Memphis and two from Mississippi, where they had made $9 to $15 an hour — one as a cook, two in construction and one as a mechanic.Jeff Ordower, an organizer with the Green Workers Alliance, a group that pushes for better conditions on such projects, said that out-of-state workers often found jobs through recruiters, some of whom make promises about pay that don’t materialize, and that many workers ended up in the red before starting. “You don’t get money till you get there,” Mr. Ordower said. “You’re borrowing money from friends and family just to get to the gig.”The Assembly Solar workers described their jobs installing panels: Two workers “throw glass,” meaning they lift a panel onto the rack, while a third “catches it,” meaning he or she guides the panel into place. Another group of workers passes by afterward and secures the panels to the rack.One of the men, who identified himself as Travis Shaw, said he typically worked from 7 a.m. until 5 p.m. six days a week, including overtime. Another worker, Quendarious Foster, who had been on the job for two weeks, said the workers motivated themselves by trying to beat their daily record, which stood at 30 “trackers,” each holding several dozen panels.“Solar is like a moving assembly line,” said Mr. Prisco, the staffing agency leader. “Instead of the product moving down the line, the people move. It replicates itself over and over again across 1,000, 2,000 acres.”The solar industry is shaping up to look less like a workers’ paradise than something more akin to an Amazon warehouse: grueling work schedules, middling wages and steady profits for wealthy investors.Erin Schaff/The New York TimesMr. Prisco and other experts said meeting a tight deadline was often critical. In some cases, project owners must pay a penalty to the electricity buyer if there are delays.Elsewhere on the site, Mr. Remington pointed out a worker whom he had seen splicing together cables, but she declined to comment when approached by a reporter. Mr. Remington, who visits frequently and has the moxie of a man who, by his own accounting, has been chased around “by some of the finest sheriffs” in Michigan during hunting season, said he had asked the worker the day before if she was a licensed journeyman or if a journeyman was directly supervising her work, as state regulations require. The worker indicated that neither was the case.A spokeswoman for McCarthy Building Companies, the construction contractor for D.E. Shaw Renewable Investments, said that all electrical apprentices were supervised by licensed journeymen at the state-mandated ratio of three-to-one or better and that all splices involved a licensed electrician.During a brief encounter on site with a reporter, Brian Timmer, the project manager who had exchanged a text with a union organizer, said, “That’s the reason I can’t talk to you” when he was asked about union labor. “It gets a lot of people upset.” (Mr. Remington said he was later told by McCarthy that it might use union electricians for a limited assignment — repairing some defective components.)The county electrical inspector, Dane Deisler, said that McCarthy had produced licenses when he had asked to see them, but that he hadn’t “physically gone through and counted” the licenses and didn’t know how many licensed electricians were on site.Mr. Remington is convinced there are far fewer than a project of this scale requires. “That’s a high-voltage splice box right there,” he said while driving around the perimeter, alluding to potential dangers. He pointed to another box and said, “Tell me if you don’t think that’s electrical work.”Later, explaining why he invested so much effort in a job site where few of his members are likely to be employed, Mr. Remington reflected on the future. “Well, this is going to be the only show in town,” he said. “I want us to have a piece of it.” More

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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 Insists He Can Do More With Less on the Economy

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    The president’s aides say they have found ways to replace lead pipes, wire homes for broadband and build charging hubs for electric cars, for less money than initially proposed.President Biden and his team have entered a “do more with less” phase of his economic agenda, dictated by the political realities of a closely divided Congress.The American Jobs Plan that Mr. Biden unveiled in March included $330 billion in new spending that the administration promised would replace every lead drinking pipe in America, connect every home to high-speed internet and build 500,000 charging stations for electric cars and trucks.The compromise agreement that Mr. Biden struck with centrist senators last month would still accomplish all of those goals, White House officials insist — even though it spends only about 40 percent of what Mr. Biden initially proposed for broadband, electric vehicles and water infrastructure.Biden aides say they have found creative ways to stretch federal dollars, often by leveraging private investment, in order to maintain the president’s top goals for his economic program. But they have had to scrap other targets as a result, and Mr. Biden is now barreling toward another round of potentially difficult compromises, this time forced by moderates in his own party, over the second half of his agenda, known as the American Families Plan.In a speech on Wednesday, Mr. Biden gave no hint that he was scaling back his ambitions.“It’s time that we have to think bigger and we have to act bolder,” Mr. Biden said at a community college in suburban Chicago, his latest stop in a tour to rally support for his agenda.Using sweeping rhetoric, the president compared his ambitions to those of former President Ronald Reagan, who presided over an economic boom during his eight-year tenure.In 1984, “Ronald Reagan was telling us it was an American morning,” Mr. Biden said, referring to Mr. Reagan’s re-election campaign ad that bragged that it was “morning in America” because of his policies.“This is going to be an American century,” Mr. Biden said.But first, there will have to be compromise. The negotiations ahead will pose a challenge to the expansive vision Mr. Biden laid out to overhaul the American economy, with new and costly government interventions to lift advanced industries and train and support the workers of the future. His objective in the weeks to come will be to pack as much of that agenda as possible into a pair of bills that are unlikely to spend as much as he wants, with his economic legacy hanging on the choices he and congressional leaders make.Administration officials say Mr. Biden will continue to prioritize large and unifying national goals, including the extension of an enlarged tax credit for parents, the creation of America’s first federally funded paid leave program for workers and a government guarantee of four additional years of public education via preschool and community college.“The president is fully committed to delivering on the full ambition of the jobs plan and the families plan,” Brian Deese, the director of the White House National Economic Council, said in an interview, in which he called the bipartisan infrastructure deal a “historic investment.”“But,” Mr. Deese added, “I think the president has made clear that he understands the nature of the legislative process — that he understands that at the end of the day, nobody’s going to get everything that they want.”Workers removing pieces of lead pipe in Newark. Mr. Biden’s original infrastructure plan promised to replace every lead drinking pipe in the country.Bryan Anselm for The New York TimesIn order to reach a $579 billion consensus framework with a group of senators that included five Republicans, Mr. Biden agreed to drop entire planks of the first half of his agenda, the jobs plan, including housing and home health care. He also lost about a third of his proposed spending in areas like roads, bridges and broadband.Some of those dropped items could resurface in a second economic package that Mr. Biden is negotiating: a plan to bundle as much as possible of the remainder of the president’s $4 trillion agenda into a bill passed entirely with Democratic votes. Along with housing and health care, that bill could include Mr. Biden’s proposals for child care, education and poverty, along with some additional efforts to reduce the emissions that cause climate change.But not all of the trimmed money will end up in that bill.Mr. Biden has promised Senate negotiators he will not push for additional spending in the partisan bill in specific areas like broadband and water pipes that were addressed in the bipartisan deal. Centrist Democrats in the Senate, including Joe Manchin III of West Virginia and Jon Tester of Montana, are likely to agree to only some of Mr. Biden’s proposed spending programs in the partisan bill, in large part because they oppose parts of Mr. Biden’s plans to tax corporations and high earners in order to offset the cost of new spending.Mr. Biden has repeatedly said he had to make difficult choices on physical infrastructure and settle for a deal that falls well short of his ambitions. But he has also cast the bipartisan deal as the nation’s largest increase in infrastructure spending since President Dwight D. Eisenhower created the interstate highway system, claiming that it would create “millions” of new jobs — without providing any White House estimates to back that up — and that it would achieve many of the same goals as his far more expensive original plan.In some cases, Mr. Biden has narrowed his ambitions to focus on the highest priorities of his agenda — like removing lead pipes that poison children and stunt their academic development. Administration officials say the bipartisan deal will allow them to work through far less of the nation’s road maintenance backlog than Mr. Biden’s plan would have. The administration also agreed to reduce funding for an effort to help communities of color that were disrupted by past infrastructure efforts, like Black neighborhoods in New Orleans and Syracuse, from $20 billion in Mr. Biden’s plan to $1 billion in the bipartisan bill.In other areas, the White House overhauled its entire funding approach to try to keep its goals.The American Jobs Plan would have spent $174 billion to help the United States support a rapid acceleration in electric vehicle production and usage, including the 500,000 charging stations that have been a favorite Biden talking point going back to the presidential campaign.An electric vehicle charging in Clifton, N.J. Mr. Biden’s plan included funding for 500,000 electric vehicle charging stations.Bryan Derballa for The New York TimesThe bipartisan agreement contains less than one-tenth as much spending on electric vehicles, which many Republicans say do not fit the traditional definition of infrastructure. White House officials say there is $7.5 billion in the agreement for federal grants to build charging stations across the country, and another $7.5 billion in a new financing tool that will generate loans and public-private partnerships to support charging stations.Some liberal groups blasted the switch. In a joint statement, Varshini Prakash, the executive director of the Sunrise Movement, and Alexandra Rojas, the executive director of Justice Democrats, said Mr. Biden’s jobs plan “is already based on Biden’s compromise with progressive Democrats after the 2020 primaries.”“We can’t afford to water the policies down any further,” they added.The compromise plan similarly reduces the broadband funding Mr. Biden proposed, to $65 billion from $100 billion. Aides say that will still be enough money to wire every home in the country for high-speed internet, citing estimates from the Federal Communications Commission and the Federal Reserve Bank of Richmond, though they concede the effort could take longer than anticipated in Mr. Biden’s original plan. Some outside experts say the money will not be enough to reach the most difficult-to-wire homes in the country. “It will not bridge the digital divide alone,” said Adie Tomer, a fellow at the Brookings Metropolitan Policy Program who leads the Metropolitan Infrastructure Initiative.It could be more difficult for Mr. Biden to wring efficiencies out of his families plan, which includes $1.8 trillion in spending and tax cuts focused on what administration officials call “human infrastructure.” The plan includes federal funding for workers to take paid leave to care for themselves or a family member, universal prekindergarten for 3- and 4-year-olds, two free years of community college and the extension of an expanded tax credit for parents that is meant to fight child poverty.If Mr. Biden is forced to trim that spending to appease Democratic centrists, he will face difficult choices. He could eliminate certain efforts entirely, or reduce their reach — for example, by guaranteeing free prekindergarten only to children of low- and middle-income families.He could also take a time-honored route in Washington when it comes to the tax credits in his plan, including the child poverty effort: Mr. Biden’s legislation could create or extend those credits for only a year or two, then count on a future Congress to make them permanent. More

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    States and Cities Scramble to Spend $350 Billion Stimulus

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    The Biden administration is betting on the funds to keep the recovery humming, but Republicans say the money is being wasted.WASHINGTON — When Steve Adler, the mayor of Austin, heard the Biden administration planned to give billions of dollars to states and localities in the $1.9 trillion pandemic aid package, he knew exactly what he wanted to do with his cut.The remarkable growth of the Texas capital, fueled by a technology boom, has long been shadowed by a rise in homelessness, so local officials had already cobbled together $200 million for a program to help Austin’s 3,200 homeless people. When the relief package passed this spring, the city government quickly steered 40 percent of its take, about $100 million, to fortify that effort.“The inclination is to spread money around like peanut butter, so that you help out a lot of people who need relief,” Mr. Adler, a Democrat, said in an interview. “But nobody really gets all that they need when you do that.” The mayor of Austin, Steve Adler, steered $100 million of pandemic relief funding to initiatives that help the homeless population.Ilana Panich-Linsman for The New York TimesThe stimulus package that President Biden signed into law in March was intended to stabilize state and city finances drained by the coronavirus crisis, providing $350 billion to alleviate the pandemic’s effect, with few restrictions on how the money could be used.Three months after its passage, cash is starting to flow — $194 billion so far, according to the Treasury Department — and officials are devoting funds to a range of efforts, including keeping public service workers on the payroll, helping the fishing industry, improving broadband access and aiding the homeless.“It’s not like all places are rushing out to do the most aspirational things, since the first thing they need to do is replace lost revenue,” said Mark Muro, a senior fellow with the Brookings Institution, a nonpartisan Washington think tank. “But there is much more flexibility in this program than in previous stimulus packages, so there is more potential for creativity.”The local decisions are taking on greater national urgency as the Biden administration negotiates with Republicans in Congress over a bipartisan infrastructure package. Some Republican lawmakers want money from previous relief packages to be repurposed to pay for infrastructure, arguing that many states are in far better financial shape than expected and the money should be put to better use.The administration, sensitive to those concerns, has begun bending the program’s rules to allow the money to be spent even more broadly. In May, the Treasury Department told states they could use their funding to pay for lotteries intended to encourage vaccinations. In June, President Biden prodded local governments to consider using the cash to address the recent rise in violent crime, which his aides regard as a serious political hazard heading into the 2022 midterm elections.For the most part, local officials have been focused on undoing the damage of the past year and a half.Maine officials are looking to spend $16 billion to bolster the fishing industry, which is facing a combination of lobster shortages and hungry consumers, flush with money after more than a year in lockdown. Alaska is already pouring cash into its fishing sector.In North Carolina, the concerns are more terrestrial: The governor wants to direct $45 million in relief funds to the motor sports sector, which took a hit when the pandemic halted NASCAR.Maine officials are looking to spend $16 billion to bolster the fishing industry, which is facing a combination of lobster shortages and hungry consumers, flush with money after more than a year in lockdown.Greta Rybus for The New York TimesIn conservative-leaning states like Wyoming that did not incur major budget deficits during the coronavirus, officials have been freed to spend much of their cash on infrastructure improvements, especially rural broadband.Places like Orange County, Calif., that poured significant funding into fighting the spread of the pandemic are using a lot of their money to pay for huge community vaccination campaigns. And the midsize cities that make up the county — Irvine, Garden Grove and Anaheim — are directing most of their $715 million to plug virus-ravaged budgets.Last week, New York City passed its largest budget ever, about $99 billion, bolstered by $14 billion in federal pandemic aid that will be used in nearly every facet of the city’s finances, like an infusion of cash needed to cover budget gaps and an array of new programs, including youth job initiatives, college scholarships and a $1 billion backup fund for health emergencies.Local officials, especially Democrats, have tried to leverage at least some of the windfall to address chronic social and economic problems that the coronavirus exacerbated.After a series of community meetings in Detroit, Mayor Mike Duggan and the City Council opted for a plan that divided the city’s $826 million payout roughly in half, with about $400 million going to recoup Covid-19 losses, and $426 million to an array of job-creation programs, grants for home repairs and funding to revitalize blighted neighborhoods.In Philadelphia, officials are considering using $18 million of the new aid to test a “universal basic income” pilot program to help poor people. That is among the uses specifically suggested in the administration’s guidance. Several other big cities, including Chicago, are considering similar plans.The Cherokee Nation, which is receiving $1.8 billion of the $20 billion set aside for tribal governments, is replicating the law’s signature initiative — direct cash payments to citizens — by sending $2,000 checks to around 400,000 members of the tribe in multiple states.The $350 billion program has led to legal battles, with officials in many Republican-led states fighting one of the few restrictions placed on use of the money, a prohibition against deploying it to subsidize tax cuts, and partisan clashes erupting over which projects should have been given priority.And the cash has spawned partisan conflict. Gov. Mark Gordon of Wyoming, a Republican, announced this month that the state would use only a fraction of the approximately $1 billion it was expected to receive on emergency expenditures this year, and would discuss how to use the rest.“These are dollars borrowed by Congress from many generations yet to come,” he said in a statement this spring.The idea of the federal government distributing such vast sums has been charged from the start. Republican lawmakers successfully blocked a large state and local package during the Trump administration, denouncing it as a “blue-state bailout” that helped fiscally-irresponsible local governments.Not a single Republican in either house of Congress voted for the bill. Yet the vast majority of officials from conservative states have welcomed the aid without much fuss. In general, Republican governors and agency officials have tilted toward financing economic development and infrastructure improvements, particularly for upgrading broadband in rural areas, rather than funding social programs.When the administration updates the guidance for the funding this summer, they are likely to loosen the restrictions on internet-related projects at the behest of Republican state officials, a senior White House official said.One of the most ambitious plans in the nation is being formulated by Indiana, a Republican-controlled state that is using $500 million of the stimulus money for projects aimed at stemming the decades-long exodus of workers from postindustrial towns and cities.“It’s huge — it’s found money — nobody thought it was going to be there,” said Luke Bosso, the chief of staff at the Indiana Economic Development Corporation, which has been working on the effort for years. Cleveland-Cliffs steel mill in Burns Harbor, Ind. Indiana is using its stimulus funds on projects aimed at stemming the exodus of workers from postindustrial towns and cities. Taylor Glascock for The New York TimesWhile lawmakers in Washington debate the scope of a new infrastructure bill this year, the package that passed in March already represents a major down payment for a variety of infrastructure projects.Christy McFarland, the research director of the National League of Cities, said that many cities across the country were preparing to put money into infrastructure projects that had been delayed by the pandemic, and investing in more affordable housing and spending on core needs such as water, sewer and broadband.However, she said she was also seeing creative ideas such as recurring payments to the poor and investments in remote work support emerge as cities look to expand their safety nets and modernize their work forces.“We’re also seeing communities that never recovered from the Great Recession, have an opportunity to think much bigger,” Ms. McFarland said. “They’re asking what they could do that would be transformational.”The slow pace of recovery from the last recession has been a driving force behind the White House’s push. Mr. Biden has been eager to avoid a mistake that hobbled the last recovery’s pace — underestimating the drag that faltering local governments would have on the national economy. Gene Sperling, a former Obama adviser now overseeing Mr. Biden’s pandemic relief efforts, said not providing help to local governments meant annual economic growth “of about 2 percent versus growth of 3 percent.”The effort also serves Mr. Biden’s political objectives by bypassing national Republicans to build trust with voters in rural counties, small towns and midsize cities in the Midwest and elsewhere.“Something like this creates a space for a White House to be talking to governors and mayors of both parties about the basic mechanisms of governing that just cuts through the politics,” Mr. Sperling said. “That’s a good thing.” More

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    Biden’s Economic Agenda Faces Familiar Hurdle With Fight Over Financing

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    As Democrats pursue both bipartisan infrastructure negotiations and a catch-all economic package, old divisions persist on how to fund the spending.WASHINGTON — President Biden’s ambitions for a large-scale investment in the nation’s aging public works system along with other parts of his economic agenda hinge on what has always been the most difficult problem for lawmakers: agreeing on how to pay for the spending.That question has sent a group of centrist senators scrounging to find creative ways to cover nearly $600 billion in new spending that they want to include as part of a potential compromise plan to invest in roads, broadband internet, electric utilities and other federal infrastructure projects.The White House and Republicans have ruled out entire categories of potential ways to raise revenues. The impasse has become the subject of increasingly urgent talks between a large group of Senate Democrats, Republicans, White House officials and, at times, the president himself.Among the ideas that senators have discussed in recent days are repurposing unspent coronavirus relief funds, increasing enforcement by the I.R.S. and establishing user fees for drivers, including indexing the gas tax to inflation.Mr. Biden dispatched aides to Capitol Hill on Tuesday for discussions that his press secretary, Jen Psaki, said yielded progress but no agreement. Top White House officials are set to meet on Wednesday evening with Senator Chuck Schumer of New York, the majority leader, and Speaker Nancy Pelosi of California. Those discussions will center on infrastructure negotiations as well as a separate effort to move a large chunk of the president’s $4 trillion economic agenda through the Senate without any Republican votes using a procedural mechanism known as reconciliation.Among those expected to attend the meeting are Brian Deese, the director of the National Economic Council; Steve Ricchetti, a top adviser to Mr. Biden; Louisa Terrell, the director of the White House Office of Legislative Affairs; Shalanda Young, the acting director of the Office of Management and Budget, and Susan E. Rice, who leads the White House Domestic Policy Council, according to an official familiar with the plans.Democratic leaders in Congress are preparing to move a sweeping, multitrillion-dollar bill through the reconciliation process to avoid the need for Republican votes and approve spending on physical infrastructure, education, emissions reduction, child care, paid leave, antipoverty efforts and more. But centrist Democrats in the Senate — along with Mr. Biden — have said repeatedly that they want to strike a deal with Republicans on what would be a pared-down version of the president’s plan to rebuild roads, bridges and other infrastructure projects.The bipartisan group has not reached public agreement on how to finance the spending. Moderates in both parties insist that any deal be paid for with new revenues. Mr. Biden has offered $4 trillion in potential revenue sources, all concentrated on increasing the tax burden on businesses and high earners. Republicans have countered with hundreds of billions of their own, including increased taxes for drivers and repurposing previously borrowed money from the $1.9 trillion Covid relief bill that Mr. Biden signed into law this year.The senators who spearheaded the original framework spent much of Tuesday huddling with Mr. Deese, Mr. Ricchetti and Ms. Terrell to iron out the details of an outline to provide for $1.2 trillion over eight years, of which $579 billion is new funding, and how to finance it.“These things are always complicated and tough,” said Senator Rob Portman, Republican of Ohio, as he left the Capitol on Tuesday. “We’re getting there. We’re moving in the right direction.”Both sides did not appear to have enough common ground to formally announce how they would fund the plan. Shuttling across the Capitol for hourslong meetings scheduled around votes, the five Democrats and five Republicans declined to offer specifics beyond their prevailing optimism and plans to continue discussions.“Pay-fors,” Senator Bill Cassidy of Louisiana, one of the Republicans negotiating the agreement, said when asked what the remaining stumbling blocks were. “Anytime you’re coming up with $579 billion, you’ve got to figure out how to do it.”Mr. Biden has pledged to not raise taxes on the middle class, including at the gasoline pump. Senate Republicans refuse to increase tax rates for businesses and high earners. Both sides have dug in, to the surprise of some business leaders and other lobbyists in Washington.White House officials have shifted in recent weeks to pressing Republicans to support one of Mr. Biden’s proposals that would not amount to an increase in tax rates: a plan to spend tens of billions of dollars on increased enforcement by the I.R.S. The administration says such a plan would collect hundreds of billions of dollars from high earners and corporations that owe, but do not pay, their fair share of taxes. Republicans say they are concerned about the scope of the provision, but they have continued to discuss it in private meetings.“I would say we’ve put a lot of different options on pay-fors on the table,” Ms. Psaki told reporters on Tuesday. “And our view is: There’s a fundamental question right now. Are Republicans, members of Congress, do they believe that rich people should have to pay the taxes they owe, or should we increase the cost of travelers who are just trying to make it to work? That’s the basic question here. So we’ll see if they can make progress on that exact point.”Senator Kyrsten Sinema, Democrat of Arizona, is among the group of centrists that reached a tentative agreement on a framework for an infrastructure plan this month.Erin Schaff/The New York TimesLawmakers expressed optimism that a deal could be reached this week, but they acknowledged the division over raising revenues. “It’s always the hard part of an infrastructure package,” said Senator Shelley Moore Capito, Republican of West Virginia, who unsuccessfully tried to negotiate an even narrower package with Mr. Biden.“There’s a pretty good dividing line sometimes between Republicans and Democrats — certainly is on taxes,” she added. “But the president’s taken any kind of user fee off the table — which is traditionally where you pay for these things — so that just makes it extra hard.”Neil Bradley, the executive vice president and chief policy officer at the U.S. Chamber of Commerce, said on Tuesday that he expected any final deal to include some money from Mr. Biden’s plans to increase I.R.S. enforcement.He said he expected a final deal to have some pay-for surprises. “I suspect they’re going to have some creative ones that we don’t know about yet,” Mr. Bradley said.The debate over how to finance Mr. Biden’s economic agenda will also extend to any package that lawmakers seek to push through using reconciliation, which could be as much as $6 trillion. Senator Bernie Sanders, the Vermont independent who chairs the Senate Budget Committee, has asked Democrats on the panel to outline their priorities for the package as he aims to pass a budget blueprint to start the process by July.“I think the priorities that the president has established, that we have established, are solid,” Mr. Sanders said in an interview as he described his strategy. “But, you know, we’re going to have to make sure that we end up with numbers that 50 members can agree on.”He added that his intention was to pay for new initiatives — like child care subsidies and health care expansion — through “progressive taxation,” including raising taxes on the wealthy and corporations. But he did not extend that to one-off spending like road or bridge repairs or improving water systems, saying, “it is not necessary to pay for, in my view, one-time capital improvements in the infrastructure.”In an early indication of what Mr. Sanders called an effort to “soothe the edges,” he said he was open to relaxing a $10,000 cap on how much taxpayers can deduct in state and local taxes.Several Democrats, particularly lawmakers representing New York and California, have warned that they might not support any changes to the tax code that do not address that provision. A draft budget document circulated by staff on Capitol Hill and obtained by The New York Times appeared to include funds for a partial repeal of the state and local tax deduction, which could mean eliminating the cap for all but the highest earners, or raising the level of the cap. There were few details about how those funds would be distributed, and lawmakers and aides cautioned that the plan was in flux.“I have a problem with extremely wealthy people being able to get the complete deduction,” Mr. Sanders said. “I think that’s an issue we’ll have to work on.”Cecilia Kang More

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    Yellen Won a Global Tax Deal. Now She Must Sell It to Congress.

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    The Treasury secretary worked with finance ministers from the G7 to win support for a global minimum tax. But selling the idea to Republican lawmakers will not be easy.Treasury Secretary Janet L. Yellen secured a landmark international tax agreement over the weekend, one that has eluded the United States for nearly a decade. But with a narrowly divided Congress and resistance from Republicans and business groups mounting, closing the deal at home may be an even bigger challenge.The Biden administration is counting on more than $3 trillion in tax increases on corporations and wealthy Americans to help pay for its ambitious jobs and infrastructure proposals. Republicans have expressed opposition to any rise in taxes and have warned that President Biden’s big spending plans are fueling inflation and will deter business investment. Business groups have complained that higher taxes pose a threat to the economic recovery and will put American companies at a competitive disadvantage.Persuading members of the Group of 7 advanced economies to agree on Saturday to a global minimum tax of at least 15 percent was intended to help the Biden administration win support for its U.S. tax increases. If enacted, the global minimum tax would require that companies pay at least a 15 percent tax on income, regardless of where they are based, making it less advantageous to relocate operations to countries with lower tax rates.In an interview on Sunday, Ms. Yellen acknowledged the legislative challenge ahead and defended the Biden administration’s plans to raise taxes on corporations. She stood behind Mr. Biden’s proposal to raise the corporate tax rate in the United States to 28 percent from 21 percent.“We think it’s a fair way to collect revenues,” Ms. Yellen said on her flight back to the United States from London after attending two days of meetings with G7 finance ministers. “I honestly don’t think there’s going to be a significant impact on corporate investment.”Ms. Yellen played down the relationship between tax rates and business spending, arguing that the $1.5 trillion tax cuts that Republicans passed in 2017 did little to lift American investment. She said that the changes to the international tax code would ultimately be beneficial to U.S. firms and that even those who face higher taxes, such as Amazon, Facebook and Google, would gain from the additional certainty about their tax bills.But the fate of Mr. Biden’s proposals is not certain, and Ms. Yellen now faces the task of convincing lawmakers that large tax and spending increases will not hinder the economic recovery.Mr. Biden has been negotiating with Republican lawmakers and has expressed a willingness to narrow the scope of his tax and spending plans to rebuild the nation’s roads and bridges. The president has offered to drop his proposal to raise the corporate rate to 28 percent to secure bipartisan support, though White House officials expect to try to push that higher rate through in a separate legislative vehicle that can pass without any Republican support.Ms. Yellen acknowledged that compromise on the corporate tax rate might be necessary and said that she hoped for a bipartisan infrastructure agreement. Republicans are resisting any changes to the 2017 tax law, which cut the corporate tax rate to 21 percent.It is unclear if Republicans will support the international tax agreement, particularly a decision to impose a new tax on big, multinational corporations — even if they have no physical presence in the countries where they sell those services. That part of the agreement was offered by the United States to put to rest a fight with European countries over their digital services taxes that would hit large American technology companies.Some lawmakers have already criticized the idea as ceding taxing authority to other governments, and many business groups were still absorbing the agreement over the weekend. Ms. Yellen believes that the concept will not cost the United States much in terms of lost tax revenue. However, the fact that European countries are not dropping their digital services taxes until a deal is fully enacted has already been criticized by top Republicans in the House and Senate given it could take four years for the agreement to be put in place.If the Biden administration cannot shepherd the tax legislation through Congress, the agreement on the global minimum tax — and a separate deal that was reached on Saturday on a system for taxing large companies based on where their goods and services are sold — will be for naught. Negotiators are hoping to broaden the agreement to more countries at the Group of 20 meetings in Italy next month and then finalize a pact in October. Then countries, including the United States, will have to change their laws accordingly.The G7 summit was Ms. Yellen’s first trip abroad as Mr. Biden’s top economic diplomat. In London, Ms. Yellen received praise from her counterparts for restoring American leadership and for the Biden administration’s embrace of multilateralism after four years of President Donald J. Trump’s “America First” policies.The Treasury secretary described the job as more grueling than her previous role as chair of the Federal Reserve, pointing to the scale of the relief programs that she is overseeing and the department’s vast portfolio. An economist who has focused for years on monetary policy, Ms. Yellen is now in charge of sanctions policy, tax policy, overseeing regulators and dealing regularly with Congress.Beyond the tax negotiations, Ms. Yellen is grappling with the sensitive question of inflation and whether the president’s policies are going to stoke higher prices for a sustained period. Businesses in the United States have expressed growing concern about rising prices, along with a shortage of commodities, and a lack of available workers.Ms. Yellen maintained that she believed rising prices were a short-term issue related to the reopening of the economy and snarled supply chains. Still, the chance of a sustained jump in prices remains a concern that she is tracking closely.To determine if inflation is more than a temporary matter, Ms. Yellen is monitoring two key metrics: inflation expectations and wage increases for low-paid workers. Rising pay for the lowest-wage workers could potentially lead to “an inflationary trend” if there is broad excess demand for workers in the labor market, she warned.“We don’t want a situation of prolonged excess demand in the economy that leads to wage and price pressures that build and become endemic,” Ms. Yellen said. “Looking at wage increases, you can have a wage price spiral, so you need to be careful.”She added: “I do not see that happening now.”At the G7 meeting, Ms. Yellen raised eyebrows when she said that inflation could remain higher for the rest of the year, with rates around 3 percent. However, in the interview, she said that the comment was misinterpreted. She said that she expected inflation rates to be elevated for the next few months but then settle down to be consistent with the 2 percent rate that is the Federal Reserve’s long-term target.“I don’t see any evidence that inflation expectations are getting out of control,” Ms. Yellen said.Critics have suggested that the Biden administration’s extension of pandemic unemployment insurance is fueling the labor shortage by encouraging workers to stay at home and collect generous benefits. At least 20 states have moved to cut off benefits early to encourage people to go back to work.Ms. Yellen said the difference in how states were handling jobless benefits could shed new light on the dynamic, but that she still saw no evidence that the supplement was slowing job creation. She pointed to a lack of child care and positions that were permanently lost because of the pandemic as the more probable reason that employers in some sectors were struggling to find staff.“We wanted to support people,” Ms. Yellen said. “This isn’t something that should be in place forever.”Although the economy is improving, Ms. Yellen said that seven million jobs that were lost since the pandemic still had not been restored. Some of them might never come back.“We’re not in a tight labor market at this point,” she said. More

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    Biden Narrows Infrastructure Proposal to Win Republican Support

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    The president offered new concessions this week, including dropping his plan to reverse some of the 2017 tax cuts, as he tries to win support from Senate Republicans.WASHINGTON — President Biden offered a series of concessions to try to secure a $1 trillion infrastructure deal with Senate Republicans in an Oval Office meeting this week, narrowing both his spending and tax proposals as negotiations barreled into the final days of what could be an improbable agreement or a blame game that escalates quickly. More