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    Republicans Denounce Inflation, but Few Economists Expect Their Plans to Help

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    Proposed tax and spending cuts by the G.O.P., which is making a push to take back Congress, are unlikely to bring down rapidly rising prices any time soon.WASHINGTON — Republicans are riding a wave of anger over inflation as they seek to recapture the House and the Senate this fall, hammering Democrats on President Biden’s economic policies, which they say have fueled the fastest price gains in 40 years.Republican candidates have centered their economic agenda on promises to help Americans cope with everyday price increases and to increase growth. They have pledged to reduce government spending and to make permanent parts of the 2017 Republican tax cuts that are set to expire over the next three years — including incentives for corporate investment and tax reductions for individuals.And they have vowed to repeal the corporate tax increases that Mr. Biden signed into law in August while gutting funding for the Internal Revenue Service, which was given more money to help the United States go after high-earning and corporate tax cheats.“The very fact that Republicans are poised to take back majorities in both chambers is an indictment of the policies of this administration,” said Senator Bill Cassidy, Republican of Louisiana, noting that “if you look at the spending that they did on a partisan basis, we certainly would be able to stop that.”But while Republicans insist they will be better stewards of the economy, few economists on either end of the ideological spectrum expect the party’s proposals to meaningfully reduce inflation in the short term. Instead, many say some of what Republicans are proposing — including tax cuts for high earners and businesses — could actually make price pressures worse by pumping more money into the economy.“It is unlikely that any of the policies proposed by Republicans would meaningfully reduce inflation in 2023, when rapidly rising prices will still be a major problem for the economy and for consumers,” said Michael R. Strain, an economist at the conservative American Enterprise Institute.As they position themselves for the midterm elections, Republicans have also indicated that they might try to hold the nation’s borrowing limit hostage to achieve spending cuts. The debt ceiling, which caps how much the federal government can borrow, has increasingly become a fraught arena for political brinkmanship.The State of the 2022 Midterm ElectionsBoth parties are making their final pitches ahead of the Nov. 8 election.Florida Governor’s Debate: Gov. Ron DeSantis and Charlie Crist, his Democratic challenger,  had a rowdy exchange on Oct. 24. Here are the main takeaways from their debate.Strategy Change: In the final stretch before the elections, some Democrats are pushing for a new message that acknowledges the economic uncertainty troubling the electorate.Last Dance?: As she races to raise money to hand on to her embattled House majority, Speaker Nancy Pelosi is in no mood to contemplate a Democratic defeat, much less her legacy.Secretary of State Races: Facing G.O.P. candidates who spread lies about the 2020 election, Democrats are outspending them 57-to-1 on TV ads for their secretary of state candidates. It still may not be enough.Multiple top Republicans have signaled that unless Mr. Biden agrees to reduce future government spending, they will refuse to lift the borrowing cap. That would effectively bar the federal government from issuing new bonds to finance its deficit spending, potentially jeopardizing on-time payments for military salaries and safety-net benefits, and roiling bond markets.Mr. Biden has tried to push back against the Republicans and cast the election not as a referendum on his economic policies, but as a choice between Democratic policies to reduce costs on health care and electricity and Republican efforts to repeal those policies. He has accused Republicans of stoking further price increases with tax cuts that could add to the federal budget deficit, and of risking financial calamity by refusing to raise the debt limit.“We, the Democrats, are the ones that are fiscally responsible. Let’s get that straight now, OK?” Mr. Biden said during remarks on Monday to workers at the Democratic National Committee. “We’re investing in all of America, reducing everyday costs while also lowering the deficit at the same time. Republicans are fiscally reckless, pushing tax cuts for the very wealthy that aren’t paid for, and exploiting the deficit that is making inflation worse.”The challenge for Mr. Biden is that voters do not seem to be demanding details from Republicans and are instead putting their trust in them to turn around an economy that voters believe is headed in the wrong direction. Polls suggest Americans trust Republicans by a wide margin to handle inflation and other economic issues.In a nationwide deluge of campaign ads and in public remarks, Republicans have pinned much of their inflation-fighting agenda on halting a stimulus spending spree that began under President Donald J. Trump and continued under Mr. Biden, in an effort to help people and businesses survive the pandemic recession. Those efforts have largely ended, and Mr. Biden has shown no desire to pass further stimulus legislation at a time of rapid price growth.Representative Jason Smith of Missouri, the top Republican on the House Budget Committee, said in a statement that “the first step in combating inflation is to stop the historically reckless spending spree occurring under one-party Democrat rule in Washington, and that will only happen with a Republican majority in Congress.”.css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.“Republicans,” he added, “will fight to bring down the cost of living and impose fiscal restraint in Washington, and that begins by ensuring Democrats are not able to impose round after round of new inflationary spending.”Economists largely agree that the Federal Reserve is most responsible for fighting inflation, which policymakers are trying to do with rapid interest rates increases. But they say Congress could plausibly help the Fed by reducing budget deficits, in order to slow the amount of consumer spending power in the economy.One way to do that would be to significantly and quickly reduce federal spending. Such a move could result in widespread government layoffs and reduced support for low-income individuals — who would be less able to afford increasingly expensive food and other staples — and could prompt a recession. “The amount of cuts you’d have to do to move the needle on inflation are completely off the table,” said Jon Lieber, a former aide to Senator Mitch McConnell of Kentucky who is now the Eurasia Group’s managing director for the United States.Still, Mr. Lieber said that likelihood would not sully the Republican pitch to voters this fall. “Midterm votes are a referendum on the party in power,” he said, “and the party in power has responsibility for inflation.”“The very fact that Republicans are poised to take back majorities in both chambers is an indictment of the policies of this administration,” said Senator Bill Cassidy, a Republican.Haiyun Jiang/The New York TimesBiden administration officials contend that the Republican plans, rather than curbing inflation, could worsen America’s fiscal situation.Administration economists estimate that two policies favored by Republicans — repealing a new minimum tax on large corporations included in the Inflation Reduction Act and extending some business tax cuts from Mr. Trump’s 2017 legislation — could collectively increase the federal budget deficit by about $90 billion next year.Such an increase could cause the Federal Reserve to raise rates even faster than it already is, further choking economic growth. Or, alternatively, it could add a small amount to the annual inflation rate — perhaps as much as 0.2 percentage points. Fully repealing the Inflation Reduction Act would also mean raising future costs for prescription drugs for seniors on Medicare, including for insulin, and potentially raising future electricity costs.“Their plan to repeal the I.R.A. and double down on the Trump tax cuts for the wealthy will worsen inflation,” said Jared Bernstein, a member of Mr. Biden’s Council of Economic Advisers. “On top of that, they’re also explicit that they’re coming for Social Security and Medicare, making this a terribly destructive agenda that starts by fighting the Fed and moves on to devastating vulnerable seniors.”Conservative economists say the inflation impact of extending Mr. Trump’s tax cuts could be much smaller, because those extensions could lead businesses to invest more, people to work more and growth to increase across the economy. They also say Republicans could help relieve price pressures, particularly for electricity and gasoline, by following through on their proposals to reduce federal regulations governing new energy development.“Those things are going to be positive for investment, job creation and capacity” in the economy, said Donald Schneider, a former chief economist for Republicans on the House Ways and Means Committee and the deputy head of U.S. policy at Piper Sandler.A budget proposal unveiled this year by the Republican Study Committee, a conservative policy group within the House Republican conference, included plans to permanently extend the Trump tax cuts and to impose work requirements on federal benefits programs, in hopes of reducing federal spending on the programs and increasing the number of workers in the economy.“We know for a fact that federal spending continues to keep inflation high, which is why a top priority in next year’s Republican majority will be to root out waste, fraud and abuse of taxpayer money,” Representative Kevin Hern, Republican of Oklahoma, said in a statement. Mr. Hern, who helped devise the budget, called it “one of many proposals to address the dire situation we’re in.”As they eye the majority, top Republicans have suggested that they will consider an economically risky strategy to potentially force Mr. Biden to agree to spending cuts, including for safety-net programs. Representative Kevin McCarthy of California, who is the minority leader and is seen as the clear pick to be speaker should Republicans win control of the House, suggested to Punchbowl News this month that he would be open to withholding Republican votes to raise the federal borrowing limit unless Mr. Biden and Democrats agreed to policy changes that curb spending.How to use that leverage has divided Republicans. Some, like Representative Nancy Mace of South Carolina, who fended off a Trump-backed primary challenger, are supportive of that option.But other Republicans — particularly candidates laboring to present a more centrist platform in swing districts held by Democrats — have shied away from openly supporting cuts to safety-net programs.“Absolutely not,” Lori Chavez-DeRemer, a Republican and former mayor running in Oregon’s Fifth Congressional District, said when asked if she would support cuts to Medicare and Social Security as a way to rein in federal spending. “Cutting those programs is not where I, as a Republican, see myself. I want to make sure that we can fill those coffers.” More

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    Howard Rosenthal, Who Quantified Partisanship in Congress, Dies at 83

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    He took part in studies that found the widening ideological divide to be the largest since post-Civil War Reconstruction.Prof. Howard Rosenthal, a political scientist whose pioneering research confirmed quantitatively that Congress is more politically polarized than at any point since Reconstruction, died on July 28 at his home in San Francisco. He was 83.His son Prof. Jean-Laurent Rosenthal, a professor at the California Institute of Technology, said the cause was heart failure.There was good news from the algorithm that Professor Rosenthal and his colleagues developed to analyze congressional roll-call votes: The ideological gap between the left and right had grown so great that, mathematically at least, it could not get much worse.“Professor Rosenthal was a trailblazing figure in political science, who collaborated with economists and drew on game theory and other formal methods to help define the modern subfield of political economy,” said Prof. Alan Patten, chairman of the politics department at Princeton, where Professor Rosenthal taught between stints at Carnegie Mellon University in Pittsburgh and New York University.“With his co-authors,” Professor Patten said, “he was especially known for work measuring and analyzing political polarization, a phenomenon that is of more relevance than ever in contemporary American politics.”With his fellow professors Keith T. Poole of the University of Georgia and Nolan McCarty of Princeton, Professor Rosenthal systematically calculated the conservatism or liberalism of members of Congress.In 2002, they concluded that a representative’s votes can generally be predicted on the basis of his or her previous positions on issues regarding race and on government intervention in the economy, like tax rates and benefits for the poor.Their analysis showed that a legislator’s party affiliation was a much better augur of voting behavior than it had been 25 years earlier.Moreover, they concluded, from 1955 to 2004 the proportion of unalloyed centrists in the House of Representatives had declined to 8 percent from 33 percent, and the number of centrist senators had dropped to nine from 39.In 2013, with Professors Poole and McCarty and Prof. Adam Bonica of Stanford, Professor Rosenthal investigated why the nation’s political system had failed to come to grips with growing income inequality.Among other conclusions, they found a correlation between the changes in the share of income going to the top 1 percent and the level of polarization between the political parties in the House.The researchers also documented an increase in campaign contributions to Democratic candidates from millionaires listed in the Forbes 400 — as that list included more technology innovators than oil and manufacturing magnates — and a tack in the party’s platform from general social welfare policies to an agenda focused on identities of ethnicity, gender, race and sexual orientation.In 2014, Professors Rosenthal and Poole and their collaborators wrote in The Washington Post that “Congress is now more polarized than at any time since the end of Reconstruction” in the 19th centurySamuel L. Popkin, a professor emeritus of political science at the Massachusetts Institute of Technology who befriended Professor Rosenthal when they were classmates there, said in an email that he was “the instigator or spark for most of the advances” in studying legislatures and voting. He credited Professor Rosenthal with developing new statistical measurements for analyzing data.Howard Lewis Rosenthal was born on March 4, 1939, in Pittsburgh to Arnold Rosenthal, a businessman, and Elinor (Lewis) Rosenthal, a homemaker.He received a Bachelor of Science degree in economics, politics and science in 1960 and a doctorate in political science in 1964, both from M.I.T. He was a professor at Carnegie Mellon from 1971 to 1993 and at Princeton from 1993 to 2005, and had been at N.Y.U. since 2005.His marriage to Annie Lunel ended in divorce. His second wife, Margherita (Spanpinato) Rosenthal, died before him. In addition to his son Jean-Laurent, from his first marriage, he is survived by a daughter from that marriage, Illia Rosenthal; a son, Gil, from his second marriage; a sister, Susan Thorpe; and four granddaughters.Predicting votes by members of Congress on the basis of statistical models built on previous votes was initially considered controversial. But one byproduct of those predictions, applied to election voters, went a long way toward establishing the model’s credibility.“Challenged by a detractor to predict the 1994 midterm elections,” John B. Londregan, a political scientist at Princeton and a partner in one project, said in a statement, “we predicted a Republican majority in the U.S. House for the first time in almost 40 years, something that met with incredulity on the part of many colleagues.” They were, of course, right.Professor Rosenthal was awarded the Duncan Black Prize from the Public Choice Society in 1980, the C.Q. Press Award from the American Political Science Association in 1985 and the William H. Riker Prize for Political Science from the University of Rochester in 2010.In 1997, he and Professor Poole published “Congress: A Political-Economic History of Roll Call Voting.” With Professor McCarty, they wrote “Polarized America: The Dance of Ideology and Unequal Riches” (2006).In 2007, after analyzing 2.8 million roll-call votes in the Senate and 11.5 million in the House, Professors Rosenthal and Poole produced an updated version of their 1997 book, which had predicted “a polarized unidimensional Congress with roll-call voting falling almost exclusively along liberal-conservative ideological lines.”“We were right,” the authors concluded. “This makes us feel good as scientists, but lousy as citizens.” More

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    Trump Officials Gave Pandemic Loan to Trucking Company Despite Objections

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    WASHINGTON — Democratic lawmakers on Wednesday released a report alleging that top Trump administration officials had awarded a $700 million pandemic relief loan to a struggling trucking company in 2020 over the objections of career officials at the Defense Department.The report, released by the Democratic staff of the House Select Subcommittee on the Coronavirus Crisis, describes the role of corporate lobbyists during the early months of the pandemic in helping to secure government funds as trillions of dollars of relief money were being pumped into the economy. It also suggests that senior officials such as Steven Mnuchin, the former Treasury secretary, and Mark T. Esper, the former defense secretary, intervened to ensure that the trucking company, Yellow Corporation, received special treatment despite concerns about its eligibility to receive relief funds.“Today’s select subcommittee staff report reveals yet another example of the Trump administration disregarding their obligation to be responsible stewards of taxpayer dollars,” Representative James E. Clyburn of South Carolina, the Democratic chairman of the subcommittee, said in a statement. “Political appointees risked hundreds of millions of dollars in public funds against the recommendations of career D.O.D. officials and in clear disregard of provisions of the CARES Act intended to protect national security and American taxpayers.”The $2.2 trillion pandemic relief package that Congress passed in 2020 included a $17 billion pot of money set up by Congress and controlled by the Treasury Department to assist companies that were considered critical to national security. In July 2020, the Treasury Department announced it was giving a $700 million loan to the trucking company YRC Worldwide, which has since changed its name to Yellow.Lobbyists for Yellow had been in close touch with White House officials throughout the loan process and had discussed how the company employs Teamsters as its drivers, according to the report.Mark Meadows, the White House chief of staff, was a “key actor” coordinating with Yellow’s lobbyists, according to correspondences that the committee obtained. The report also noted that the White House’s political operation was “almost giddy” in its effort to assist with the application.The loan raised immediate questions from watchdog groups because of the company’s close ties to the Trump administration and because it had faced years of financial and legal turmoil. The firm had lost more than $100 million in 2019 and was being sued by the Justice Department over claims that it had defrauded the federal government for a seven-year period. It recently agreed to pay $6.85 million to resolve allegations “that they knowingly presented false claims to the U.S. Department of Defense by systematically overcharging for freight carrier services and making false statements to hide their misconduct.”To qualify for a national security loan, a company needed certification by the Defense Department.According to the report, defense officials had recommended against certification because of the accusations that the company had overcharged the government. They also noted that the work that the company had been doing for the federal government — which included shipping meal kits, protective equipment and other supplies to military bases — could be replaced by other trucking firms.But the day after a defense official notified a Treasury official that the company would not be certified, one of Mr. Mnuchin’s aides set up a telephone call between him and Mr. Esper.The report indicated that Mr. Esper was not initially familiar with the status of Yellow’s certification. Before the call, aides prepared a summary of the analysis and recommendations of the department’s career officials that concluded that the certification should be rejected. Before those reached Mr. Esper, Ellen M. Lord, the department’s under secretary for acquisition and sustainment who was appointed by Mr. Trump, intervened and requested a new set of talking points that argued that the company should receive the financial support “to both support force readiness and national economic security.” Ms. Lord could not immediately be reached for comment.After the call with Mr. Mnuchin, Mr. Esper certified that the company was critical to national security, and a week later the approval of the loan was announced.Mr. Mnuchin then sent an email to Mr. Meadows that included news reports praising the loan. He highlighted positive comments from James P. Hoffa, the longtime president of the Teamsters union, who according to documents in the report made a direct plea to President Donald J. Trump about the loan.Mr. Esper and Mr. Mnuchin declined to comment. A former Treasury official familiar with the process said the loan saved 25,000 union jobs during an economic crisis and prevented disruption to the national supply chain that the Defense Department, businesses and consumers had depended on. The former official said that because of the terms of the loan, taxpayers were profiting from the agreement.A spokesman for Mr. Esper said that the company met the criteria to be eligible for the loan and emphasized that the report made clear that senior staff at the Defense Department recommended that he certify it. The Treasury Department made the final decision to issue the loan, the spokesman added.The Trump InvestigationsCard 1 of 6Numerous inquiries. More

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    Yellen Says Aim Is ‘Maximum Pain’ for Russia Without Hurting U.S.

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    WASHINGTON — Treasury Secretary Janet L. Yellen said on Wednesday that the United States would continue taking steps to cut Russia off from the global financial system in response to its invasion of Ukraine and argued that the sanctions already imposed had taken a severe toll on the Russian economy.She addressed the House Financial Services Committee as the United States rolled out a new array of sanctions on Russian banks and state-owned enterprises and on the adult children of President Vladimir V. Putin. The White House also announced a ban on Americans making new investments in Russia no matter where those investors are based.“Our goal from the outset has been to impose maximum pain on Russia, while to the best of our ability shielding the United States and our partners from undue economic harm,” Ms. Yellen told lawmakers.The measures introduced on Wednesday included “full blocking” sanctions against Sberbank, the largest financial institution in Russia, and Alfa Bank, one of the country’s largest privately owned banks.Sberbank is the main artery in the Russian financial system and holds over a third of the country’s financial assets. In February, the Treasury announced limited sanctions against Sberbank, but Wednesday’s sanctions, a senior Biden administration official said, will effectively freeze relations between the bank and the U.S. financial system.The administration also announced sanctions against two adult daughters of Mr. Putin: Katerina Tikhonova and Maria Putina, who has been living under an assumed name, Maria Vorontsova. Others connected to Russian officials with close ties to Mr. Putin will also face sanctions, including the wife and daughter of Russia’s foreign minister, Sergey Lavrov, and members of Russia’s security council, including former Prime Minister Dmitri Medvedev. The official said those people would be effectively cut off from the U.S. banking system and any assets held in the United States.President Biden said on Wednesday that the new sanctions would deal another blow to the Russian economy.“The sense of brutality and inhumanity, left for all the world to see unapologetically,” Mr. Biden said, describing Russia’s actions as war crimes. “Responsible nations have to come together to hold these perpetrators accountable, and together with our allies and our partners we’re going to keep raising the economic costs and ratchet up the pain for Putin and further increase Russia’s economic isolation.”Experts suggested that the latest round of sanctions were unlikely to compel Mr. Putin to change course. Hundreds of American businesses have pulled out of Russia in recent weeks, making new investments unlikely.“The asset freezes on the additional banks aren’t nothing, but this isn’t the most significant tranche we’ve seen to date,” said Daniel Tannebaum, a partner at Oliver Wyman who advises banks on sanctions.Other American agencies are joining the effort to exert pressure on Russia.In a news conference on Wednesday, officials from the Justice Department and the F.B.I. also announced a series of actions and criminal charges against Russians, including the takedown of a Russian marketplace on the dark web and a botnet, or a network of hijacked devices infected with malware, that is controlled by the country’s military intelligence agency.Justice Department officials also celebrated the seizing of the Tango, a superyacht owned by the Russian oligarch Viktor F. Vekselberg, and charged a Russian banker, Konstantin Malofeev, with conspiring to violate U.S. sanctions. Mr. Malofeev is one of Russia’s most influential magnates and among the most prominent conservatives in the country’s Kremlin-allied elite. (The indictment renders his surname as Malofeyev.)At the hearing, Ms. Yellen told lawmakers that she believed Russia should be further isolated from the geopolitical system, including being shut out of international gatherings such as the Group of 20 meetings this year, and should be denounced at this month’s meetings of the International Monetary Fund and the World Bank. She added that the United States might not participate in some G20 meetings that are being held in Indonesia this year if Russians attended.Ms. Yellen, whose department has been developing many of the punitive economic measures, rebutted criticism that the penalties leveled so far had not been effective, in part because there are some exceptions to allow Russia to sell energy.The Russia-Ukraine War and the Global EconomyCard 1 of 6Rising concerns. More

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    House Votes to Suspend Normal Trade Relations With Russia

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    WASHINGTON — The House voted overwhelmingly on Thursday to strip Russia of its preferential trade status with the United States, moving to further penalize the country’s economy in response to the invasion of Ukraine.The lopsided 424-to-8 vote came after President Biden announced last week that the United States and its European allies would take new steps to isolate Russia from the global trading system. All of the lawmakers who opposed the measure were Republicans.The bill, which would allow the United States to impose higher tariffs on Russian goods, is the latest in a series of measures that lawmakers have approved to support Ukraine and punish Russia for its invasion. Others include a ban on Russian oil and gas products and a $13.6 billion military and humanitarian aid package.The trade measure still needs Senate approval. Senator Chuck Schumer, Democrat of New York and the majority leader, said he would work to move it through the chamber quickly.The House vote came a day after President Volodymyr Zelensky of Ukraine delivered a searing speech to Congress via video link in which he urged lawmakers to do more to help his country and penalize Russia. His address, as well as a wrenching video he showed of Russian-inflicted carnage in Ukraine, hung heavily over the House floor on Thursday as lawmakers debated the trade bill.Mr. Zelensky “showed us the absolute horrors that Russia is inflicting on the Ukrainian people in full view of the world,” said Representative Richard E. Neal, Democrat of Massachusetts and the chairman of the Ways and Means Committee. “And he pleaded for us to do more. With the legislation that stands before us at this hour, we intend to answer his call.”Top lawmakers in the House proposed nearly a month ago to strip Russia of its trading status and begin a process to expel the country from the World Trade Organization. But last week, as the House worked to advance the legislation in tandem with a measure to ban the importation of Russian oil and gas products, Democrats stripped out the trade provision at the request of the Biden administration, which sought more time to confer with European allies about the move.“Folks, I know I’ve occasionally frustrated you,” Mr. Biden said to House Democrats at their retreat in Philadelphia last week. “But more important than us moving when we want to is making sure all of NATO is together — is together. They have different vulnerabilities than we do.”The move by the United States to strip Russia of its preferential trade status — known as “permanent normal trade relations” — carries symbolic weight, but trade experts have said it would have a limited economic effect compared with other sanctions that have already been imposed.The legislation passed by the House would also suspend normal trade relations with Belarus, in recognition of its role in aiding Russia’s attack on Ukraine.Stripping Russia of its trading status would be the latest in a growing list of economic penalties imposed on the country, whose economy is facing collapse.Russia-Ukraine War: Key Things to KnowCard 1 of 4A key vote. More

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

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    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

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    Debt Ceiling Window Is Narrowing, Bipartisan Policy Center Warns

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    The United States faces a default sometime between Dec. 21 and Jan. 28 if Congress does not act to raise or suspend the debt ceiling, a Washington think tank warned on Friday.The projection from the think tank, the Bipartisan Policy Center, was a narrower window than it provided last month, and the nonpartisan group suggested that the actual deadline, or X-date, could be toward the earlier end of that range.Democrats and Republicans appear to have tempered their tone around raising the debt limit this time around. While lawmakers have not settled on a path to lifting the borrowing cap, they are exploring a series of ways to raise it, including some that could ultimately hand more power to the White House to avoid the kind of standoffs that have routinely crippled Washington.Republicans continue to publicly insist that Democrats must act alone to address the issue, while Democrats have countered that raising the borrowing cap is a shared responsibility given that both political parties have incurred big debts over the last several years.“Those who believe the debt limit can safely be pushed to the back of the December legislative pileup are misinformed,” said Shai Akabas, the director of economic policy at the Bipartisan Policy Center. “Congress would be flirting with financial disaster if it leaves for the holiday recess without addressing the debt limit.”Treasury Secretary Janet L. Yellen warned lawmakers in November that the United States could be unable to pay its bills soon after Dec. 15. During testimony before the Senate Banking Committee this week, she underscored the urgency of the matter.“I cannot overstate how critical it is that Congress address this issue,” Ms. Yellen said. “America must pay its bills on time and in full. If we do not, we will eviscerate our current recovery.”In September, Ms. Yellen called for the debt limit to be eliminated, explaining that it had become a destructive policy that posed unnecessary risks to the economy. After approaching the first default in American history, Congress in October raised the statutory debt limit by $480 billion, an amount the Treasury Department estimated would allow the government to continue borrowing through early December.Congressional leaders have been quietly discussing ways to address the debt ceiling, after Republicans warned that they would not help Democrats clear the 60-vote threshold needed to break a Republican filibuster against legislation to raise the borrowing cap.Senators Chuck Schumer of New York, the majority leader, and Mitch McConnell of Kentucky, the minority leader, have spoken repeatedly in recent weeks about the issue, but they have remained tight-lipped in public about a possible solution.The debate has been further complicated by former President Donald J. Trump and his continued influence over the Republican Party. He has repeatedly railed at Mr. McConnell and the other Republican senators who backed a procedural vote in October that cleared the way for Democrats to raise the debt limit.But Mr. McConnell, while pushing for Democrats to raise the borrowing cap without help from his conference, pledged this week that a default would be avoided.Senators Chuck Schumer of New York, second from left, and Mitch McConnell of Kentucky, center, have spoken repeatedly in recent weeks about the debt ceiling.Al Drago for The New York Times“Let me assure everyone the government will not default, as it never has,” Mr. McConnell said on Tuesday. Pressed further, he added, “We’re having useful discussions about the way forward.”Cut out of both the $1.9 trillion coronavirus relief package that passed in March and the $2.2 trillion climate, tax and spending plan that Democrats are trying to push through the Senate, Republicans have refused to help Democrats accommodate debt incurred by both parties. They have taken that position even though leaders of both parties signed off on the spending that helped the debt balloon.Democrats, in turn, have balked at a Republican demand to use a fast-track process known as budget reconciliation to raise the debt limit without Republican votes. Democrats used the process to pass the coronavirus relief package and they are using it again for the climate, tax and spending plan, but they have argued that Republicans should help keep the government from defaulting.Understand the U.S. Debt CeilingCard 1 of 6What is the debt ceiling? More

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    Stocks Hit a Record as Investors See Progress Toward a Spending Deal

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    After weeks of fluctuations driven in part by Washington gridlock, share prices hit another high and put a dismal September in the rearview mirror.Wall Street likes what it’s hearing from Washington lately.The S&P 500 inched to a new high on Thursday, continuing a rally aided by signs of progress in spending talks that could pave the way for an injection of some $3 trillion into the U.S. economy.The index rose 0.3 percent to 4,549.78, its seventh straight day of gains and a fresh peak after more than a month of volatile trading driven by nervousness over the still-wobbly economic recovery and policy fights in Washington.The S&P 500’s performance this year

    Source: S&P Dow Jones IndicesBy The New York TimesBut even baby steps by lawmakers have helped end a market swoon that began in September.Share prices began to rise this month when congressional leaders struck a deal to allow the government to avoid breaching the debt ceiling, ending a standoff that threatened to make it impossible for the country to pay its bills. The rally has gained momentum as investors and analysts grow increasingly confident about a government spending package using a recipe Wall Street can live with: big enough to bolster economic growth, but with smaller corporate tax increases than President Biden’s original $3.5 trillion spending blueprint.“It seems like we’re kind of reaching a middle ground,” said Paul Zemsky, chief investment officer, multi-asset strategies at Voya Investment Management. “The president himself has acknowledged it’s not going to be $3.5 trillion, it’s going to be something less. The tax hikes are not going to be as much as the left really wanted.”Share prices had marched steadily higher for much of the summer, hitting a series of highs and cresting on Sept. 2. But a number of anxieties sapped their momentum as the certainty that markets crave began to evaporate. Gridlock over government spending, continuing supply chain snarls, higher prices for businesses and consumers and the Federal Reserve’s signals that it would begin dialing back its stimulus efforts all helped sour investor confidence. The S&P 500’s 4.8 percent drop in September was its worst month since the start of the pandemic.It has made up for it in October, rising 5.6 percent this month. But it’s not just updates out of Washington that have renewed investors’ optimism.The country has seen a sharp drop in coronavirus infections in recent weeks, raising, once again, the prospect that economic activity can begin to normalize. And the recent round of corporate earnings results that began in earnest this month has started better than many analysts expected. Large Wall Street banks, in particular, reported blockbuster results fueled by juicy fees paid to the banks’ deal makers, thanks to a surge of merger activity.Elsewhere, shares of energy giants have also buoyed the broad stock market. The price of crude oil recently climbed back above $80 a barrel for the first time in roughly seven years, translating into an instant boost to revenues for energy companies.But the recent rally seemed find its footing two weeks ago. On Oct. 6, word broke that Senator Mitch McConnell of Kentucky, the Republican leader, was willing to offer a temporary reprieve allowing Congress to raise the debt ceiling. The market turned on a dime from its morning slump, finishing the day in positive territory. That week turned out to be the market’s best since August.Once done as a matter of course in Washington, raising the debt ceiling has been an increasingly contentious issue in recent years — with sometimes serious implications for the market. In August 2011, a rancorous battle over the debt ceiling sent share prices tumbling sharply as investors began to consider the prospect that the United States could actually default on its debts.But the recent deal on the ceiling — even though it only pushed a reckoning into December — suggested to investors that there’s little appetite in Washington for a replay of a decade ago.“I think that let some pressure out of the system,” said Alan McKnight, chief investment officer of Regions Asset Management. “What it signaled to the markets was that you can find some area of agreement. It may not be very large. But at least they can come together.”With the impasse broken, the rally gained strength. Last Thursday, the S&P 500 jumped 1.7 percent — its best day in roughly seven months — as financial giants like Morgan Stanley and Bank of America reported stellar results.Potential progress on a deal in Washington has only brightened investors’ outlook.“Democrats are now moving in the same direction, and hard decisions are being made,” wrote Dan Clifton, an analyst with Strategas Research, who monitors the impact of policy on financial markets, in a note to clients on Wednesday.Understand the U.S. Debt CeilingCard 1 of 6What is the debt ceiling? More