Biden, Joseph R Jr

More stories

  • 150 Shares199 Views

    in Economy

    Fed Signals Rate Increase in March, Citing Inflation and Strong Job Market

    by

    Federal Reserve officials signaled on Wednesday that they were on track to raise interest rates in March, given that inflation has been running far above policymakers’ target and that labor market data suggests employees are in short supply.Central bankers left rates unchanged at near-zero — where they have been set since March 2020 — but the statement after their two-day policy meeting laid the groundwork for higher borrowing costs “soon.” Jerome H. Powell, the Fed chair, said officials no longer thought America’s rapidly healing economy needed so much support, and he confirmed that a rate increase was likely at the central bank’s next meeting.“I would say that the committee is of a mind to raise the federal funds rate at the March meeting, assuming that the conditions are appropriate for doing so,” Mr. Powell said.While he declined to say how many rate increases officials expected to make this year, he noted that this economic expansion was very different from past ones, with “higher inflation, higher growth, a much stronger economy — and I think those differences are likely to be reflected in the policy that we implement.”The Fed was already slowing a bond-buying program it had been using to bolster the economy, and that program remains on track to end in March. The Fed’s post-meeting statements and Mr. Powell’s remarks signaled that central bankers could begin to shrink their balance sheet holdings of government-backed debt soon after they begin to raise interest rates, a move that would further remove support from markets and the economy.Investors have been nervously eyeing the Fed’s next steps, worried that its policy changes will hurt stock and other asset prices and rapidly slow down the economy. Stocks on Wall Street gave up their gains and yields on government bonds rose as Mr. Powell spoke. The S&P 500 ended with a loss of 0.2 percent after earlier rising as much as 2.2 percent. The yield on 10-year Treasury notes, a proxy for investor expectations for interest rates, jumped as high as 1.87 percent.The Fed has pivoted sharply from boosting growth to preparing to cool it down as businesses report widespread labor shortages and as prices across the economy — for rent, cars and couches — soar. Consumer prices are rising at the fastest pace since 1982, eating away at paychecks and creating a political liability for President Biden and Democrats. It is the Fed’s job to keep inflation under control and to set the stage for a strong job market.Understand Inflation in the U.S.Inflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Your Questions, Answered: We asked readers to send questions about inflation. Top experts and economists weighed in.What’s to Blame: Did the stimulus cause prices to rise? Or did pandemic lockdowns and shortages lead to inflation? A debate is heating up in Washington.Supply Chain’s Role: A key factor in rising inflation is the continuing turmoil in the global supply chain. Here’s how the crisis unfolded.“The Fed has completed its pivot from being patient to panicked on inflation,” Diane Swonk, the chief economist at Grant Thornton, wrote in a research note to clients after the meeting. “Its next move will be to raise rates.”The Fed’s withdrawal of policy support could temper consumer and corporate demand as borrowing money to buy a car, a boat, a house or a business becomes more expensive. Slower demand could give supply chains, which have fallen behind during the pandemic, room to catch up. By slowing down hiring, the Fed’s moves could also limit wage growth, which might otherwise feed into inflation if employers raised prices to cover higher labor costs.Investors nudged up their expectations for rate increases following the meeting and now project the Fed to raise rates five times this year, based on market pricing, and for the Fed’s policy rate to end the year between 1.25 and 1.5 percent. And economists increasingly warn that it is possible central bankers could move quickly — perhaps lifting borrowing costs at each consecutive meeting instead of leaving gaps, or in half-percentage point increases instead of the quarter-point moves that are more typical.But Mr. Powell demurred when asked about the pace of rate increases, saying that it was important to be “humble and nimble” and that “we’re going to be led by the incoming data and the evolving outlook.”“He went out of his way not to commit to a preset course,” said Subadra Rajappa, the head of U.S. rates strategy at Société Générale. The lack of clarity over what happens next “is a setup for a volatile market.”While interest rates are expected to rise over the coming years, most economists and investors do not expect them to return to anything like the double-digit levels that prevailed in the early 1980s. The Fed anticipates that its longer-run interest rate might hover around 2.5 percent.Investors also have been eagerly watching to see how quickly the Fed will shrink its balance sheet of asset holdings. The Fed’s policy committee released a statement of principles for that process on Wednesday, setting out plans to “significantly” reduce its holdings “in a predictable manner” and “primarily” by adjusting how much it reinvests as assets expire.“They are trying, I think, to reduce market uncertainty around the balance sheet — but they’re telling us it’s happening,” said Priya Misra, the global head of rates strategy at TD Securities, adding that the release suggested that the process would begin within a few months.Mr. Powell noted during his news conference that both of the areas the Fed is responsible for — fostering price stability and maximum employment — had prodded the central bank to “move steadily away” from helping the economy so much.“There are many millions more job openings than there are unemployed people,” Mr. Powell said. “I think there’s quite a bit of room to raise interest rates without threatening the labor market.”The unemployment rate has fallen to 3.9 percent, down from its peak of 14.7 percent at the worst economic point in the pandemic and near its February 2020 level of 3.5 percent. Wages are growing at the fastest pace in decades.Inflation F.A.Q.Card 1 of 6What is inflation? More

  • 138 Shares169 Views

    in Economy

    Rapid Inflation Fuels Debate Over What’s to Blame: Pandemic or Policy

    by

    The White House is emphasizing that inflation is worldwide. Economists say that’s true — but stimulus-spurred consumer buying is also to blame.The price increases bedeviling consumers, businesses and policymakers worldwide have prompted a heated debate in Washington about how much of today’s rapid inflation is a result of policy choices in the United States and how much stems from global factors tied to the pandemic, like snarled supply chains.At a moment when stubbornly rapid price gains are weighing on consumer confidence and creating a political liability for President Biden, White House officials have repeatedly blamed international forces for high inflation, including factory shutdowns in Asia and overtaxed shipping routes that are causing shortages and pushing up prices everywhere. The officials increasingly cite high inflation in places including the euro area, where prices are climbing at the fastest pace on record, as a sign that the world is experiencing a shared moment of price pain, deflecting the blame away from U.S. policy.But a chorus of economists point to government policies as a big part of the reason U.S. inflation is at a 40-year high. While they agree that prices are rising as a result of shutdowns and supply chain woes, they say that America’s decision to flood the economy with stimulus money helped to send consumer spending into overdrive, exacerbating those global trends.The world’s trade machine is producing, shipping and delivering more goods to American consumers than it ever has, as people flush with cash buy couches, cars and home office equipment, but supply chains just haven’t been able to keep up with that supercharged demand.Kristin J. Forbes, an economist at the Massachusetts Institute for Technology, said that “more than half of the increase, at least, is due to global factors.” But “there is also a domestic demand component that is important,” she said.The White House has tried to address inflation by boosting supply — announcing measures to unclog ports and trying to ramp up domestic manufacturing, all of which take time. But rising inflation has already imperiled Mr. Biden’s ability to pass a sprawling social policy and climate bill over fears that more spending could add to inflation. Senator Joe Manchin III, the West Virginia Democrat whose vote is critical to getting the legislation passed, has cited rising prices as one reason he won’t support the bill.The demand side of today’s price increases may prove easier for policymakers to address. The Federal Reserve is preparing to raise interest rates to make borrowing more expensive, slowing spending down, in a recipe that could help to tame inflation. Fading government help for households may also naturally bring down demand and soften price pressures.Inflation has accelerated sharply in the United States, with the Consumer Price Index climbing by 7 percent in the year through December, its fastest pace since 1982. But in recent months, it has also moved up sharply across many countries, a fact administration officials have emphasized.“The inflation has everything to do with the supply chain,” President Biden said during a news conference on Wednesday. “While there are differences country by country, this is a global phenomenon and driven by these global issues,” Jen Psaki, the White House press secretary, said after the latest inflation data were released.It is the case that supply disruptions are leading to higher inflation in many places, including in large developing economies like India and Brazil and in developed ones like the euro area. Data released in the United Kingdom and in Canada on Wednesday showed prices accelerating at their fastest rate in 30 years in both countries. Inflation in the eurozone, which is measured differently from how the U.S. calculates it, climbed to an annual rate of 5 percent in December, according to an initial estimate by the European Union statistics office.“The U.S. is hardly an island amidst this storm of supply disruptions and rising demand, especially for goods and commodities,” said Eswar Prasad, a professor of trade policy at Cornell University and a senior fellow at the Brookings Institution.But some economists point out that even as inflation proves pervasive around the globe, it has been more pronounced in America than elsewhere.“The United States has had much more inflation than almost any other advanced economy in the world,” said Jason Furman, an economist at Harvard University and former Obama administration economic adviser, who used comparable methodologies to look across areas and concluded that U.S. price increases have been consistently faster.The difference, he said, comes because “the United States’ stimulus is in a category of its own.”White House officials have argued that differences in “core” inflation — which excludes food and fuel — have been small between the United States and other major economies over the past six months. And the gaps all but disappear if you strip out car prices, which are up sharply and have a bigger impact in the United States, where consumers buy more automobiles. (Mr. Furman argued that people who didn’t buy cars would have spent their money on something else and that simply eliminating them from the U.S. consumption basket is not fair.)Administration officials have also noted that the United States has seen a robust rebound in economic growth. The International Monetary Fund said in October that it expected U.S. output to climb by 6 percent in 2021 and 5.2 percent in 2022, compared with 5 percent growth last year in the euro area and 4.3 percent growth projected for this year.“To the extent that we got more heat, we got a lot more growth for it,” said Jared Bernstein, a member of the White House Council of Economic Advisers.While many nations spent heavily to protect their economies from coronavirus fallout — in some places enough to push up demand, and potentially inflation — the United States approved about $5 trillion in spending in 2020 and 2021. That outstripped the response in other major economies as a share of the nation’s output, according to data compiled by the International Monetary Fund.Many economists supported protecting workers and businesses early in the pandemic, but some took issue with the size of the $1.9 trillion package last March under the Biden administration. They argued that sending households another round of stimulus, including $1,400 checks, further fueled demand when the economy was already healing.Consumer spending seemed to react: Retail sales, for instance, jumped after the checks went out.Americans found themselves with a lot of money in the bank, and as they spent that money on goods, demand collided with a global supply chain that was too fragile to catch up.Jutharat Pinyodoonyachet for The New York TimesAdam Posen, president of the Peterson Institute for International Economics, said the U.S. government spent too much in too short a time in the first half of 2021.“If there had not been the bottlenecks and labor market shortages, it might not have mattered as much. But it did,” he said.Inflation F.A.Q.Card 1 of 6What is inflation? More

  • 138 Shares139 Views

    in Economy

    Biden Looks to Intel’s U.S. Investment to Buoy His China Agenda

    by

    The president said passage of a China competition bill was needed “for the sake of our economic competitiveness and our national security.”The $20 billion investment would bring the new plant to Ohio, with operations expected to begin in 2025.Sarahbeth Maney/The New York TimesWASHINGTON — In celebrating a $20 billion investment by Intel in a new semiconductor plant in Ohio, President Biden sought on Friday to jump-start a stalled element of his economic and national security agenda: a huge federal investment in manufacturing, research and development in technologies that China is also seeking to dominate.With two other major legislative priorities sitting moribund in Congress — the Build Back Better Act and legislation to protect voting rights — Mr. Biden moved to press for another bill, and one that has significant bipartisan support.But he has lost seven critical months since the Senate passed the measure, a sprawling China competition bill that would devote nearly a quarter of a trillion dollars to domestic chip manufacturing, artificial intelligence research, robotics, quantum computing and a range of other technologies. The bill amounts to the most expansive industrial policy legislation in U.S. history.Speaking at the White House, Mr. Biden said that America was in a “stiff economic and technological competition” with China. He chose the words deliberately, knowing that while it sounds obvious to American ears, Chinese officials in recent months have protested the use of the word “competition,” declaring that it has echoes of a Cold War-like contest.“We’re going to insist everyone, including China, play by the same rules,” Mr. Biden continued. “We’re going to invest whatever it takes in America, in American innovation, in American communities, in American workers.”He argued that the initiative would be a long-term solution to supply chain disruptions and rising inflation and would free American weapons systems from depending on foreign parts.After months in which he rarely mentioned the China competition bill so that he did not lose focus on other elements of his agenda, Mr. Biden said on Friday that its passage was needed “for the sake of our economic competitiveness and our national security.”Understand the Supply Chain CrisisThe Origins of the Crisis: The pandemic created worldwide economic turmoil. We broke down how it happened.Explaining the Shortages: Why is this happening? When will it end? Here are some answers to your questions.Lockdowns Loom: Companies are bracing for more delays, worried that China’s zero-tolerance Covid policy will shutter factories and ports.A Key Factor in Inflation: In the U.S., inflation is hitting its highest level in decades. Supply chain issues play a big role.“Today, we barely produce 10 percent of the computer chips despite being the leader in chip design and research,” he said. “We don’t have the ability to make the most advanced chips now, right now.”Pervasive shortages of chips, which are needed to power everything from cars and washing machines to medical equipment and electrical grids, have forced some factories to shutter their production lines and knocked a full percentage point off U.S. growth last year, according to some estimates.While the Biden administration has billed Intel’s new investment near Columbus, Ohio, as a partial remedy for supply chain disruptions that have led to global chip shortages and spurred inflation, the project would do little to resolve any economic problems in the short term. The Ohio plant, the first phase of what Intel said could be an investment of up to $100 billion, is not expected to begin operation until 2025, and many analysts have forecast chip shortages to begin to abate later this year.Intel’s chief executive, Patrick Gelsinger, presented Gov. Mike DeWine of Ohio with a silicon wafer on Friday. The Biden administration has billed Intel’s new investment as a partial remedy for supply chain disruptions.Paul Vernon/Associated PressBut in addition to providing positive headlines for a beleaguered White House, Intel’s plans may help build momentum for a key element of Mr. Biden’s agenda that was set aside as lawmakers contended with ambitious bills on infrastructure, social spending and voting rights. Speaker Nancy Pelosi indicated on Thursday that House committees would soon turn to negotiations with the Senate to move the China competition legislation toward a vote.When the bill passed the Senate by a wide margin in June, it was sold in part as a jobs plan and in part as a move to avoid leaving the United States perilously dependent on its biggest geopolitical adversary.China is not yet a major producer of the world’s most advanced chips, and it does not have the capability to make semiconductors with the smallest circuits — in part because the United States and its allies have blocked it from purchasing lithography equipment needed to make those chips.But Beijing is pumping vast amounts of government funding into developing the sector, and it is also flexing its military reach over Taiwan, one of the largest manufacturers of advanced chips. China accounted for 9 percent of global chip sales in 2020, barely trailing the global market share of Japan and the European Union, according to the Semiconductor Industry Association. That was up from only 3.8 percent of global chip sales five years ago.At the World Economic Forum this week, Ursula von der Leyen, the president of the European Commission, announced plans for Europe to propose its own legislation early next month to promote the development of the semiconductor industry and to anticipate shortages.John Neuffer, the chief executive of the Semiconductor Industry Association, said Japan, South Korea, India and other countries were also introducing their own incentives in a bid to attract a strategically important industry.“The clock is ticking,” Mr. Neuffer said. “None of us are working in a vacuum. This is a global industry.”Mr. Biden’s push to enact the China competition bill comes amid growing frustration in corporate circles with his economic policies toward the country. Executives have complained that the administration still has not clarified whether it will lift any of the tariffs that President Donald J. Trump placed on China or how it will press Beijing for further trade concessions.How the Supply Chain Crisis UnfoldedCard 1 of 9The pandemic sparked the problem. More

  • 88 Shares129 Views

    in Economy

    Biden Will Nominate Three New Fed Officials

    by

    The nominees would bring more diverse leadership to the Fed, which has struggled to expand its ranks.President Biden plans to nominate three new Federal Reserve officials as he seeks to remake the central bank at a critical economic moment, a White House official familiar with the matter said on Thursday.If confirmed, his picks would result in the most diverse Fed board in the institution’s history.The White House plans to nominate Lisa Cook, an economist at Michigan State University who has researched racial disparities and labor markets, and Philip Jefferson, an economist and administrator at Davidson College, to open seats on the Fed’s Board of Governors. Both Ms. Cook and Mr. Jefferson are Black.Mr. Biden will also nominate Sarah Bloom Raskin to serve as the Fed’s vice chair for supervision, a job created to help police the nation’s largest banks after the 2008 financial crisis.Mr. Biden had previously nominated Jerome H. Powell for a second stint as Fed chair and Lael Brainard, now a governor, as vice chair of the central bank. If they are confirmed to their posts, the seven-person Fed board would have four women, one Black man and two white men — the most diverse team in the Fed’s roughly 108 years of existence.The administration had promised to make the Fed — historically dominated by white men — look more like the public it served, and prominent lawmakers have pushed for a focus on tougher financial regulation. The picks seek to deliver along those dimensions.“The headline is, and should be, about diversity,” said Kaleb Nygaard, a senior research associate at the Yale Program on Financial Stability who studies the Fed, explaining that personnel choices are a big moment for Mr. Biden. “This is the biggest chance he’s got to send a message about what he wants the Fed to be focused on.”Ms. Raskin, who served as a Fed governor during the Obama administration, has a track record of arguing for more forceful bank oversight and would be likely to usher in an era of stricter rules for the titans of global finance, a priority of some powerful congressional Democrats.If confirmed, Ms. Raskin would be in charge of determining the need for new financial regulations, enacting existing rules and running large and globally important banks through their annual health checks, which are commonly called stress tests.Ms. Raskin would succeed Randal K. Quarles, who was appointed by former President Donald J. Trump and had criticized some of the rules that were imposed on banks after the 2008 financial crisis. As vice chair, Mr. Quarles instituted a number of adjustments to regulation and supervision that made oversight less onerous for banks, and that critics argued weakened financial rules.Mr. Quarles’s term as vice chair expired in October, and he left the Fed at the end of December.Ms. Raskin, a Harvard-trained lawyer who studied economics as an undergraduate at Amherst College, has spent time in the private sector. She is a former deputy secretary at the Treasury Department, where she focused on financial system cybersecurity, among other issues. She also spent several years as Maryland’s commissioner of financial regulation. Ms. Raskin is married to Representative Jamie Raskin, a Maryland Democrat.If confirmed, Ms. Raskin will face a number of pressing issues. The vice chair for supervision serves as the Fed’s chief connection with banks and markets, a role that will take on more prominence as the central bank considers whether to issue a digital currency. The vice chair will have to navigate new technologies, like stablecoins and cryptocurrencies, and assess what those mean for banks.The Fed is developing climate-risk scenarios to judge banks’ exposure, something the vice chair for supervision will be highly involved in. And the person will need to work with other regulators at the Financial Stability Oversight Council — an interagency group focused on guarding against systemic financial risks — to deal with weaknesses in money market funds and other financial instruments that the pandemic laid bare.Mr. Biden’s other picks for the Fed would also enter their jobs at a challenging juncture, as unemployment falls swiftly and inflation remains high, but millions of former workers are still missing from jobs.The Fed is contemplating how quickly to react by removing support from the economy, and all governors hold a constant vote on monetary policy, giving the new picks a potential say in the matter.Dr. Cook — who would be the first Black woman ever to sit on the Fed’s board — is well known for her work in trying to improve diversity in economics, including through the American Economic Association Summer Program, which helps to prepare undergraduates for potential careers in the field.She attended Spelman College and the University of Oxford and earned a doctorate in economics from the University of California, Berkeley. She was an economist on the White House Council of Economic Advisers under President Barack Obama.She has not said much publicly about her monetary policy philosophy, though she has spoken favorably about keeping the Fed independent from politics. Her published work examines a wide range of topics: her doctoral thesis focused on credit markets in tsarist and post-Soviet Russia, while some of the work she is most famous for looked into mortality and race, and segregation and lynching.Dr. Cook is an academic focused on macroeconomics, but “she is not a traditional one — she has looked at what we get wrong, sometimes, in the economy,” Julia Coronado, founder of the research firm MacroPolicy Perspectives, said in an interview before the pick was announced. “She is somebody who can hold her own, I think, in that room.”Mr. Jefferson has worked as a research economist at the Fed board, and studied at the University of Virginia and Vassar College. He has written about the economics of poverty, and his research has delved into whether monetary policy that stokes investment with low interest rates helps or hurts less-educated workers.“My findings suggest that opportunities start to open up for them as the labor market gets tight,” he said in an interview with the Minneapolis Fed in 2018.He has also spoken candidly about his experience as a minority in economics.“In graduate school at the University of Virginia, I was the only African American in the program the entire time there,” he said in that 2018 interview, noting that that had followed him into his professional appointments. “It has been a long, lonely road professionally.”And he said economics needed more diverse voices.“We need to be sitting around the table,” he said. “I think it is crucially important for public policy that we hear voices that represent diversity.”With the new slate of candidates, what is arguably the top policymaking body in global economics will become much more varied in both race and gender.There were briefly three women on the board in the early 1990s, and again in the 2010s. The Fed has had three Black board members in its history, all men, and none of them sat on the board contemporaneously.It is unclear how the reworked board might alter debate over current monetary policy, which could involve sticky choices about how quickly to slow an economy struggling with rapid price increases. The Fed has signaled it is prepared to raise interest rates, which could choke off inflation but also slow the job market and wage growth.Mr. Powell, the Fed chair, emphasized this week that achieving full employment — a goal that the Fed has emphasized in recent years as a way to foster inclusion and opportunity across the economy — depended on maintaining price stability.“If inflation does become too persistent, if these high levels of inflation get entrenched in our economy, and in people’s thinking, then inevitably that will lead to much tighter monetary policy from us, and it could lead to a recession, and that would be bad for workers,” Mr. Powell said while testifying before lawmakers on Tuesday. More

  • 100 Shares189 Views

    in Economy

    As Infrastructure Money Flows, Wastewater Improvements Are Key

    by

    The new law allocates $11.7 billion for wastewater and stormwater projects. Will it get to the impoverished communities who need it most?HAYNEVILLE, Ala. — What babbles behind Marilyn Rudolph’s house in the rural countryside is no brook.A stained PVC pipe juts out of the ground 30 feet behind her modest, well-maintained house, spewing raw wastewater whenever someone flushes the toilet or runs the washing machine. It is what is known as a “straight pipe” — a rudimentary, unsanitary and notorious homemade sewage system used by thousands of poor people in rural Alabama, most of them Black, who cannot afford a basic septic tank that will work in the region’s dense soil.“I’ve never seen anything like it. It’s kind of like living with an outhouse, and I can never, ever get used to it,” said Ms. Rudolph’s boyfriend Lee Thomas, who moved in with her three years ago from Cleveland.“I’ve lived with it all my life,” said Ms. Rudolph, 60.If any part of the country stands to see transformational benefits from the $1 trillion infrastructure act that President Biden signed in November, it is Alabama’s Black Belt, named for the loamy soil that once made it a center of slave-labor cotton production. It is an expanse of 17 counties stretching from Georgia to Mississippi where Black people make up three-quarters of the population.About $55 billion of the infrastructure law’s overall funding is dedicated to upgrading systems around the country that handle drinking water, wastewater and stormwater, including $25 billion to replace failing drinking-water systems in cities like Flint, Mich., and Jackson, Miss.Hayneville’s town square. The infrastructure package targets funding toward “disadvantaged” areas like Hayneville and surrounding towns, part of the Biden administration’s goal of redressing structural racism.Charity Rachelle for The New York TimesLess attention has been paid to the other end of the pipe: $11.7 billion in new funding to upgrade municipal sewer and drainage systems, septic tanks, and clustered systems for small communities. It is a torrent of cash that could transform the quality of life and economic prospects for impoverished communities in Alabama, Mississippi, North Carolina, Oklahoma, Illinois, Michigan and many tribal areas.In this part of Alabama, the center of the civil rights struggle 60 years ago, the funding represents “a once-in-a-lifetime chance to finally make things right, if we get it right,” said Helenor Bell, the former mayor of Hayneville in Lowndes County, who runs the town’s funeral home.But while the funding is likely to lead to substantial improvements, there are no guarantees it will deliver the promised benefits to communities that lack the political power or the tax base to employ even the few employees needed to fill out applications for federal aid.“I am very worried,” said Catherine Coleman Flowers, a MacArthur fellow whose 2020 book “Waste” highlighted the sanitation crisis in Lowndes County. “Without federal intervention, we would have never had voting rights. Without federal intervention, we will never have sanitation equity.”Mark A. Elliott is an engineering professor at the University of Alabama who works with an academic consortium that is designing a waste system optimized for the region’s dense clay soil. He said he was concerned that more affluent parts of the state might siphon off federal assistance intended for the poor.“My hope is that at least 50 percent of this money goes to the people who are in most desperate need, not for helping to subsidize the water bills of wealthy communities,” Mr. Elliott said. “Sanitation is a human right, and these people need help.”Straight pipes are just one element of a more widespread breakdown of antiquated septic tanks, inadequate storm sewers and poorly maintained municipal systems that routinely leave lawns covered in foul-smelling wastewater after even a light rainstorm.The infrastructure package targets funding toward “disadvantaged” areas like Hayneville and surrounding towns, part of the Biden administration’s goal of redressing structural racism. Yet the infrastructure package gives states broad latitude in how to allocate the funding, and it contains no new enforcement mechanisms once the money is out the door.A PVC pipe behind Ms. Rudolph’s house spews raw wastewater whenever someone flushes the toilet or runs the washing machine.Matthew Odom for The New York TimesThe wastewater funding is moving through an existing federal-state loan program that typically requires partial or complete repayment, but under the new legislation, local governments with negligible tax bases will not have to pay back what they borrow. As an additional enticement, Congress cut the required state contribution from 20 percent to 10 percent.“A lot of people know that the bill isn’t just about drinking water, but the wastewater part is just as important,” said Senator Tammy Duckworth, Democrat of Illinois, who helped draft the provisions after assisting two small cities in her state, Cahokia Heights and Cairo, upgrade failing sewer systems that flooded neighborhoods with raw sewage.The Environmental Protection Agency, which is administering the program, said in November that the first tranche of funding for drinking water and wastewater projects, $7.4 billion, would be sent to states in 2022, including about $137 million for Alabama.Biden administration officials are confident the scale of the new spending — which represents a threefold increase in clean water funding over the next five years — will be enough to ensure poor communities gets their fair share. “We want to change the way E.P.A. and states work together to ensure overburdened communities have access to these resources,” said Zachary Schafer, an agency official overseeing the implementation of the program. But major questions remain — including whether individual homeowners without access to municipal systems can tap the money to pay for expensive septic systems — and the guidelines will not be ready until late 2022. While the revolving loan fund is generally regarded as a successful program, a study last year by the Environmental Policy Innovation Center and the University of Michigan found that many states were less likely to tap revolving loan funds on behalf of poor communities with larger minority populations.Alabama’s revolving loan fund has financed few projects in this part of the state in recent years, apart from a major wastewater system upgrade in Selma, according to the program’s annual reports.The water funding is not likely to be divvied up in Alabama until later this year. The Republican-controlled state legislature is still negotiating with Gov. Kay Ivey, a Republican, over what to do with tens of millions of dollars allocated through the $1.9 trillion stimulus package Mr. Biden signed in March.A flooded yard in Hayneville in 2019. Straight pipes are just one element of a more widespread infrastructure breakdown in the area.Julie Bennett/Associated PressEvery member of the state legislature is up for re-election next year, and legislators from bigger, more powerful communities in Birmingham, Huntsville and Mobile, eager to deliver to voters, have already begun preparing their applications.The Infrastructure Bill at a GlanceCard 1 of 5The bill receives final approval. More

  • 138 Shares199 Views

    in Economy

    Child Tax Credit’s Extra Help Ends, Just as Covid Surges Anew

    by

    A pandemic benefit that many progressives hoped to make permanent has lapsed in a congressional standoff. Researchers say it spared many from poverty.For millions of American families with children, the 15th of the month took on a special significance in 2021: It was the day they received their monthly child benefit, part of the Biden administration’s response to the pandemic.The payments, which started in July and amounted to hundreds of dollars a month for most families, have helped millions of American families pay for food, rent and child care; kept millions of children out of poverty; and injected billions of dollars into the U.S. economy, according to government data and independent research.Now, the benefit — an expansion of the existing child tax credit — is ending, just as the latest wave of coronavirus cases is keeping people home from work and threatening to set off a new round of furloughs. Economists warn that the one-two punch of expiring aid and rising cases could put a chill on the once red-hot economic recovery and cause severe hardship for millions of families already living close to the poverty line.“It’s going to be hard next month, and just thinking about it, it really makes me want to bite my nails to the quick,” said Anna Lara, a mother of two young children in Huntington, W.Va. “Honestly, it’s going to be scary. It’s gong to be hard going back to not having it.”Ms. Lara, 32, lost her job in the pandemic, and with the cost of child care rising, she has not been able to return to work. Her partner kept his job, but the child benefit helped the couple make ends meet at a time of reduced income and rising prices.“Your children watch you, and if you worry, they catch on to that,” she said. “With that extra cushion, we didn’t have to worry all the time.”The end of the extra assistance for parents is the latest in a long line of benefits “cliffs” that Americans have encountered as pandemic aid programs have expired. The Paycheck Protection Program, which supported hundreds of thousands of small businesses, ended in March. Expanded unemployment benefits ended in September, and earlier in some states. The federal eviction moratorium expired last summer. The last round of stimulus payments landed in Americans’ bank accounts last spring.Relative to those programs, the rollback in the child tax credit is small. The Treasury Department paid out about $80 billion over six months in the form of checks and direct deposits of up to $300 per child each month. That is far less than the more than $240 billion in stimulus payments issued on a single day last March.Unlike most other programs created in response to the pandemic, the child benefit was never intended to be temporary, at least according to many of its backers. Congress approved it for a single year as part of the $1.9 trillion American Rescue Plan, but many progressives hoped that the payments, once started, would prove too popular to stop.That didn’t happen. Polls found the public roughly divided over whether the program should be extended, with opinions splitting along partisan and generational lines. And the expanded tax credit failed to win over the individual whose opinion mattered most: Senator Joe Manchin III, Democrat of West Virginia, who cited concerns over the cost and structure of the program in his decision to oppose Mr. Biden’s climate, tax and social policy bill. The bill, known as the Build Back Better Act, cannot proceed in the evenly divided Senate without Mr. Manchin’s support.To supporters of the child benefit, the failure to extend it is especially frustrating because, according to most analyses, the program itself has been a remarkable success. Researchers at Columbia University estimate that the payments kept 3.8 million children out of poverty in November, a nearly 30 percent reduction in the child poverty rate. Other studies have found that the benefit reduced hunger, lowered financial stress among recipients and increased overall consumer spending, especially in rural states that received the most money per capita.Congress last spring expanded the existing child tax credit in three ways. First, it made the benefit more generous, providing as much as $3,600 per child, up from $2,000. Second, it began paying the credit in monthly installments, usually deposited directly into recipients’ bank accounts, turning the once-yearly windfall into something closer to the children’s allowances common in Europe.Finally, the bill made the full benefit available to millions who had previously been unable to take full advantage of the credit because they earned too little to qualify. Poverty experts say that change, known in tax jargon as “full refundability,” was particularly significant because without it, a third of children — including half of all Black and Hispanic children, and 70 percent of children being raised by single mothers — did not receive the full credit. Mr. Biden’s plan would have made that provision permanent.“What we’ve seen with the child tax credit is a policy success story that was unfolding, but it’s a success story that we risk stoping in its tracks just as it was getting started,” said Megan Curran, director of policy at Columbia’s Center on Poverty and Social Policy. “The weight of the evidence is clear here in terms of what the policy is doing. It’s reducing child poverty and food insufficiency.”But the expanded tax credit doesn’t just go to the poor. Couples earning as much as $150,000 a year could receive the full $3,600 benefit — $3,000 for children 6 and older — and even wealthier families qualify for the original $2,000 credit. Critics of the policy, including Mr. Manchin, have argued that it makes little sense to provide aid to relatively well-off families. Many supporters of the credit say they’d happily limit its availability to wealthier households in return for maintaining it for poorer ones.Mr. Manchin has also publicly questioned the wisdom of unconditional cash payments, and has privately voiced concerns that recipients could spend the money on opioids, comments that were first reported by The Wall Street Journal and confirmed by a person familiar with the discussion. But a survey conducted by the Census Bureau found that most recipients used the money to buy food, clothing or other necessities, and many saved some of the money or paid down debt. Other surveys have found similar results.For one of Mr. Manchin’s constituents, Ms. Lara, the first monthly check last year arrived at an opportune moment. Her dishwasher had broken days earlier, and the $550 a month that she and her family received from the federal government meant they could replace it.Ms. Lara, who has a 6-year-old daughter and a 3-year-old son and whose partner earns about $40,000 a year, said the family had long lived “right on the edge of need” — not poor, but never able to save enough to withstand more than a modest setback.The monthly child benefit, she said, let them step a bit further back from the edge. It allowed her to get new shoes and a new car seat for her daughter, stock up on laundry detergent when she found it on sale and fix the brakes on her car.A line at a Covid testing site in Atlanta on Friday. The child tax benefit is ending just as the latest wave of coronavirus cases is keeping people home from work.Nicole Craine for The New York Times“None of the dash lights are on, which is amazing,” she said.Some researchers have questioned the policy’s effectiveness, particularly over the long term. Bruce D. Meyer, an economist at the University of Chicago who studies poverty, said that whatever the merits of direct cash payments at the height of the pandemic-induced disruptions, a permanent policy of providing unconditional cash to parents could have unintended consequences. He and several co-authors recently published a working paper finding that the child benefit could discourage people from working, in part because it eliminated the work incentives built into the previous version of the tax credit.“Early on, we just wanted to get cash in people’s hands — we were worried about a recession, we were worried about people being able to pay for their groceries,” Mr. Meyer said. Now, he said, “we certainly should be more focused on the longer-term effects, which include likely larger effects on labor supply.”Analyses of the data since the new child benefit took effect, however, have found no evidence that it has done much to discourage people from working, and some researchers say it could actually lead more people to work by making it easier for parents of young children to afford child care.“There’s every reason to believe that in the current labor market, the child tax credit is work-enabling, and no evidence to the contrary has been presented,” said Samuel Hammond, director of poverty and welfare policy at the Niskanen Center, a research organization in Washington.Mr. Hammond said the child benefit should also have broader economic benefits. In a report last summer, he estimated that the expansion would increase consumer spending by $27 billion nationally and create the equivalent of 500,000 full-time jobs. The biggest impact, on a percentage basis, would come in rural, mostly Republican-voting states where families are larger and incomes are lower, on average.Some Republican critics of the expanded child tax credit, including Senator Roy Blunt of Missouri, have argued that it has essentially done too much to increase spending — that by giving people more money to spend when the supply chain is already strained, the government is contributing to faster inflation.But many economists are skeptical that the tax credit has played much of a role in causing high inflation, in part because it is small compared with both the economy and the earlier rounds of aid distributed during the pandemic.“That’s a noninflationary program,” said Joe Brusuelas, chief economist at the accounting firm RSM. “That’s dedicated toward necessities, not luxuries.”For those receiving the benefit, inflation is an argument for maintaining it. Ms. Lara said she had noticed prices going up for groceries, utilities and especially gas, stretching her budget even thinner.“Right now, both of my vehicles need gas and I can’t put gas in the car,” she said. “But it’s OK, because I’ve got groceries in the house and the kids can play outside.”Emily Cochrane More

  • 125 Shares199 Views

    in Economy

    U.S. Effort to Combat Forced Labor Targets Corporate China Ties

    by

    The Biden administration is expected to face scrutiny as it decides how to enforce a new ban on products made with forced labor in the Xinjiang region of China.A far-reaching bill aimed at barring products made with forced labor in China became law after President Biden signed the bill on Thursday.But the next four months — during which the Biden administration will convene hearings to investigate how pervasive forced labor is and what to do about it — will be crucial in determining how far the legislation goes in altering the behavior of companies that source products from China.While it is against U.S. law to knowingly import goods made with slave labor, the Uyghur Forced Labor Prevention Act shifts the burden of proof to companies from customs officials. Firms will have to proactively prove that their factories, and those of all their suppliers, do not use slavery or coercion.The law, which passed the House and Senate nearly unanimously, is Washington’s first comprehensive effort to police supply chains that the United States says exploit persecuted minorities, and its impact could be sweeping. A wide range of products and raw materials — such as petroleum, cotton, minerals and sugar — flow from the Xinjiang region of China, where accusations of forced labor proliferate. Those materials are often used in Chinese factories that manufacture products for global companies.“I anticipate that there will be many companies — even entire industries — that will be taken by surprise when they realize that their supply chains can also be traced back to the Uyghur region,” said Laura Murphy, a professor of human rights and contemporary slavery at Sheffield Hallam University in Britain.If the law is enforced as written, it could force many companies to rework how they do business or risk having products blocked at the U.S. border. Those high stakes are expected to set off a crush of lobbying by companies trying to ease the burden on their industries as the government writes the guidelines that importers must follow.“Genuine, effective enforcement will most likely mean there will be pushback by corporations and an attempt to create loopholes,” said Cathy Feingold, the international director of the A.F.L.-C.I.O. “So the implementation will be key.”Behind-the-scenes negotiations before the bill’s passage provided an early indication of how consequential the legislation could be for some of America’s biggest companies, as business groups like the U.S. Chamber of Commerce and brand names like Nike and Coca-Cola worked to limit the bill’s scope.The Biden administration has labeled the Chinese government’s actions in Xinjiang — including the detention of more than a million Uyghurs and other predominantly Muslim minorities, as well as forced conversions, sterilization and arbitrary or unlawful killings — as genocide.Human rights experts say that Beijing’s policies of moving Uyghurs into farms and factories that feed the global supply chain are an integral part of its repression in Xinjiang, an attempt to assimilate minorities and strip them of their culture and religion..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-1g3vlj0{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-1g3vlj0{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-1g3vlj0 strong{font-weight:600;}.css-1g3vlj0 em{font-style:italic;}.css-1g3vlj0{margin-bottom:0;margin-top:0.25rem;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}In a statement last week, Jen Psaki, the White House press secretary, said that Mr. Biden welcomed the bill’s passage and agreed with Congress “that action can and must be taken to hold the People’s Republic of China accountable for genocide and human rights abuses and to address forced labor in Xinjiang.” She added that the administration would “work closely with Congress to implement this bill to ensure global supply chains are free of forced labor.”Yet some members of the administration argued behind closed doors that the bill’s scope could overwhelm U.S. regulators and lead to further supply chain disruptions at a time when inflation is accelerating at a nearly 40-year high, according to interviews with more than two dozen government officials, members of Congress and their staff. Some officials also expressed concerns that an aggressive ban on Chinese imports could put the administration’s goals for fighting climate change at risk, given China’s dominance of solar panels and components to make them, people familiar with the discussions said.John Kerry, Mr. Biden’s special envoy for climate change, and Wendy R. Sherman, the deputy secretary of state, separately conveyed some of those concerns in calls to Democratic members of Congress in recent months, according to four people familiar with the discussions.Senator Marco Rubio, Republican of Florida and one of the bill’s lead authors, criticized those looking to limit its impact, saying that companies that want to continue to import products and officials who are reluctant to rock the boat with China “are not just going to give up.” He added, “They’re all going to try to weigh in on how it’s implemented.”A solar farm near Wenquan, China. The Xinjiang region’s substantial presence in the solar supply chain has been a key source of tension in the Biden administration.Gilles Sabrié for The New York TimesOne reason the stakes are so high is because of the critical role that Xinjiang may play in many supply chains. The region, twice the size of Texas, is rich in raw materials like coal and oil and crops like tomatoes, lavender and hops; it is also a significant producer of electronics, sneakers and clothing. By some estimates, it provides one-fifth of the world’s cotton and 45 percent of the world’s polysilicon, a key ingredient for solar panels.Xinjiang’s substantial presence in the solar supply chain has been a key source of tension in the Biden administration, which is counting on solar power to help the United States reach its goal of significantly cutting carbon emissions by the end of the decade.In meetings this year, Biden administration officials weighed how difficult it would be for importers to bypass Xinjiang and relocate supply chains for solar goods and other products, according to three government officials. Officials from the Labor Department and the United States Trade Representative were more sympathetic to a far-reaching ban on Xinjiang goods, according to three people familiar with the discussions. Some officials in charge of climate, energy and the economy argued against a sweeping ban, saying it would wreak havoc on supply chains or compromise the fight against climate change, those people said.Ana Hinojosa, who was the executive director of Customs and Border Protection and led the government’s enforcement of forced labor provisions until she left the post in October, said that agencies responsible for “competing priorities” like climate change had voiced concerns about the legislation’s impact. Companies and various government agencies became nervous that the law’s broad authorities could prove “devastating to the U.S. economy,” she said.“The need to improve our clean energy is real and important, but not something that the government or the U.S. should do on the backs of people who are working under conditions of modern-day slavery,” Ms. Hinojosa added.In a call with Speaker Nancy Pelosi of California this year, Mr. Kerry conveyed concerns about disrupting solar supply chains while Ms. Sherman shared her concerns with Senator Jeff Merkley, Democrat of Oregon, according to people familiar with the conversations.Mr. Merkley, one of the lead sponsors of the bill, said in an interview that Ms. Sherman told him she was concerned the legislation was not duly “targeted and deliberative.” The conversation was first reported by The Washington Post.“I think this is a targeted and deliberative approach,” Mr. Merkley said. “And I think the administration is starting to see how strongly Republicans and Democrats in both chambers feel about this.”A State Department official said that Ms. Sherman did not initiate the call and did not express opposition to the bill. Whitney Smith, a spokeswoman for Mr. Kerry, said any accusations he lobbied against the Uyghur Forced Labor Prevention Act were “false.” Ms. Pelosi declined to discuss private conversations.Nury Turkel, a Uyghur-American lawyer who is the vice chairman of the U.S. Commission on International Religious Freedom, said the United States must “tackle both genocide and ecocide.”“Policymakers and climate activists are making it a choice between saving the world and turning a blind eye to the enslavement of Uyghurs,” he said. “It is false, and we cannot allow ourselves to be forced into it.”Administration officials have also argued that the United States can take a strong stance against forced labor while developing a robust solar supply chain. Emily Horne, a spokeswoman for the National Security Council, said that Mr. Biden “believes what is going on in Xinjiang is genocide” and that the administration had taken a range of actions to combat human rights abuses in the region, including financial sanctions, visa restrictions, export controls, import restrictions and a diplomatic boycott of the 2022 Beijing Olympics in February.“We have taken action to hold the P.R.C. accountable for its human rights abuses and to address forced labor in Xinjiang,” Ms. Horne said, using the abbreviation for the People’s Republic of China. “And we will continue to do so.”Farm workers picking cotton near Qapqal, China, in 2015. By some estimates, Xinjiang produces one-fifth of the world’s cotton.Adam Dean for The New York TimesThe law highlights the delicate U.S.-China relationship, in which policymakers must figure out how to confront anti-Democratic practices while the United States is economically dependent on Chinese factories. China remains the largest supplier of goods to the United States.One of the biggest hurdles for U.S. businesses is determining whether their products touched Xinjiang at any point in the supply chain. Many companies complain that beyond their direct suppliers, they lack the leverage to demand information from the Chinese firms that manufacture raw materials and parts.Government restrictions that bar foreigners from unfettered access to sites in Xinjiang have made it difficult for many businesses to investigate their supply chains. New Chinese antisanctions rules, which threaten penalties against companies that comply with U.S. restrictions, have made vetting even more difficult.The Chinese government denies forced labor is used in Xinjiang. Zhao Lijian, a government spokesman, said U.S. politicians were “seeking to contain China and hold back China’s development through political manipulation and economic bullying in the name of ‘human rights.’” He promised a “resolute response” if the bill became law.Lawmakers struggled over the past year to reconcile a more aggressive House version of the legislation with one in the Senate, which gave companies longer timelines to make changes and stripped out the S.E.C. reporting requirement, among other differences.The final bill included a mechanism to create lists of entities and products that use forced labor or aid in the transfer of persecuted workers to factories around China. Businesses like Apple had lobbied for the creation of such lists, believing they would provide more certainty for businesses seeking to avoid entities of concern.Lisa Friedman More

  • 138 Shares119 Views

    in Economy

    As Humanitarian Disaster Looms, U.S. Opens Door for More Afghanistan Aid

    by

    The Treasury Department and the United Nations offered new protection for aid from sanctions meant to pressure the Taliban.Facing pressure to prevent a humanitarian and economic catastrophe in Afghanistan, the Biden administration on Wednesday took steps to allow more aid to flow into the Taliban-led country.The measures exempt aid groups from stringent economic sanctions that were imposed against the Taliban before they seized control of the government and have been strangling Afghanistan’s economy under its leadership. But diplomats and activists said that easing the restrictions might not be enough to rescue the country from what one U.N. official on Wednesday called “shocking” need and suffering.At the same time, some Republicans said the Biden administration risked legitimizing and even funding Taliban leaders.The U.S. actions and mixed response underscore the challenge that Afghanistan continues to pose for the Biden administration four months after the last American troops withdrew from the country. Administration officials have been struggling to address the dire humanitarian needs without empowering the Taliban.The United States fought a 20-year war against the Taliban and does not recognize them as the legitimate government of Afghanistan. After the group’s takeover in August, the Biden administration halted most aid to Afghanistan, froze $9.5 billion of its foreign reserves and pressured the International Monetary Fund to delay emergency support.A combination of the coronavirus pandemic, a severe drought, the loss of foreign aid and frozen currency reserves have left Afghanistan’s fragile economy on the brink of collapse, with aid groups warning that the harsh winter could lead to mass starvation and a refugee crisis.After weeks of calls for swifter action, the Treasury Department said on Wednesday that it was issuing new “general licenses” that would make it easier for nongovernmental organizations, international aid groups and the U.S. government to provide relief to Afghans while maintaining economic leverage over the Taliban to prevent human rights abuses and terrorist activity..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-1g3vlj0{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-1g3vlj0{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-1g3vlj0 strong{font-weight:600;}.css-1g3vlj0 em{font-style:italic;}.css-1g3vlj0{margin-bottom:0;margin-top:0.25rem;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}The actions came soon after the United Nations Security Council passed a related resolution, sponsored by the United States, that exempts humanitarian activities in Afghanistan from international sanctions for a year.Biden administration officials note that the United States remains the world’s top provider of humanitarian aid to Afghanistan, even after it cut off most assistance after the Taliban takeover.“We are committed to supporting the people of Afghanistan,” Wally Adeyemo, the deputy Treasury secretary, said in a statement.The department’s general licenses allow financial transactions involving the Taliban and members of the Haqqani network, who share power in the new Afghan government, as long as the money is used for purposes such as projects to meet basic human needs, civil society development, environmental and natural resource protection and similar efforts. The United States considers both groups terrorist organizations.The Treasury move expands the type of relief activity that can take place in Afghanistan and broadens the level of contact that international groups can have with the Taliban. It also allows the Taliban to collect taxes related to that assistance.Alex Zerden, the Treasury Department’s financial attaché at the U.S. Embassy in Kabul from 2018 to 2019, called the move “absolutely a step in the right direction,” saying it addressed requests for clarity from private sector and nongovernmental organizations about how to operate in Afghanistan without violating U.S. sanctions and providing the Taliban with illegal revenue.But many close observers said far more remained to be done.“We need a bigger humanitarian response, but without a functioning economy and banking system, we are facing terrible odds,” David Miliband, the president and chief executive of the International Rescue Committee, wrote on Twitter. “Need massive economic stabilization package to stop the rip current.”The United States provided Afghanistan with $3.95 billion in foreign aid last year, about two-thirds of which was security assistance for the former government’s fight against the Taliban. U.S. humanitarian aid for the country and for Afghan refugees in the region has totaled nearly $474 million so far this year.“We’re very conscious of the fact that there is an incredibly difficult humanitarian situation right now, one that could get worse as winter sets in,” Secretary of State Antony J. Blinken said in a news conference on Tuesday.He added that the United States was determined to ensure “that the Taliban make good on the expectations of the international community,” including by respecting women’s rights, not carrying out reprisals against political enemies and denying safe haven to international terrorist groups.Morgan Ortagus, a State Department spokeswoman during the Trump administration, condemned the U.S. actions as “extremely dangerous.” She said on Twitter that the Treasury Department licenses “send the signal that if you take over enough territory with enough people in it, you too can gain legitimacy.”The Security Council resolution, which was adopted unanimously, seeks to reduce the legal and political risks of delivering aid to Afghanistan. It exempts humanitarian activities such as payments and delivery of goods and services from U.N. sanctions for a one-year period, and requires updates to ensure that aid is not diverted to the Taliban.China on Monday blocked a narrower version drafted by the United States that would have allowed only case-by-case exemptions.After passage of the broader measure, China’s U.N. ambassador, Zhang Jun, said on Twitter that the new resolution “can only fix the faucet, but to keep the water running, the international community need to make joint efforts.”Citing “shocking levels of need and suffering,” the top U.N. official for emergency humanitarian efforts, Martin Griffiths, said the effect that the 160 aid organizations working in Afghanistan could have “depends on the cooperation of the de facto authorities in the country and on the flexibility of the funding we receive.”Governments and international organizations have been accelerating their efforts to provide assistance in recent weeks.The World Bank has said that the Afghanistan Reconstruction Trust Fund donors would transfer $280 million to UNICEF and the World Food Program by the end of the year to provide humanitarian aid.The Treasury Department this month issued a license allowing personal remittance payments to be sent to people in Afghanistan. And the United States on Wednesday announced that it would donate another million Covid-19 vaccine doses to Afghanistan, bringing the total U.S. contribution to 4.3 million doses.But the need remains enormous. Three former U.S. military commanders in Afghanistan and several former ambassadors and other officials this month signed a letter, published by the Atlantic Council, calling on the Biden administration to show “the courage to act” and expedite creative steps to prop up the Afghan economy and feed the hungry without benefiting the Taliban.“We believe the United States has a reputational interest and a moral obligation in vigorously joining efforts to help the Afghan people preserve at least some of the social and economic gains made over the last 20 years,” the authors wrote. “We believe that ways to do so can be found, while erecting barriers to assistance being diverted to purposes other than those for which it is intended.”Such admonitions came as Taliban officials pleaded for swift international relief, which they said was also in the West’s self-interest.“The impact of the frozen funds is on the common people and not Taliban authorities,” the Taliban’s deputy foreign minister, Sher Mohammad Abbas Stanikzai, said on Sunday, according to Reuters.Mr. Stanikzai warned that if “the political and economic situation doesn’t change,” Afghan refugees would pour into neighboring countries and Europe.Rick Gladstone More