Infrastructure Investment and Jobs Act (2021)

Latest story

138 Shares139 Views

2025 Could Be a Great Time to Be President, Economically Speaking

by

Trends already underway make for a sunny outlook over the next few years. The question is who will get to take credit.The next couple of years are shaping up to be solid for the U.S. economy. Inflation is returning to normal. As that happens, the Federal Reserve is preparing to cut interest rates. A huge burst of infrastructure spending under the Biden administration has taken time to ramp up, but projects both small and large are likely to break ground in earnest in 2025 and 2026.Things can always go wrong — the job market could cool more than expected, financial market problems could surface, and risks tied to the election in November could stoke uncertainty — but the base-case outlook is bright. The question now is who will get to take credit for it.One clear answer: It won’t be the person who shepherded some of the policies that are laying the positive groundwork. President Biden announced on Sunday that he was ending his candidacy for re-election, passing the Democratic baton to Vice President Kamala Harris.Mr. Biden isn’t entirely responsible for the sunny outlook. White House officials play a relatively minor role in slowing inflation and exert no direct control over interest rates. But big policy packages passed on his watch are helping to fuel a burst in green-energy, manufacturing and infrastructure investment that is expected to continue over the next several years. Expansions of dams and locks will be underway. Dozens of airport upgrades will be completed. Semiconductor factories will begin churning out chips.It’s a reminder that big and potentially transformative public investments can take time — and multiple political cycles — to play out. It could also be an opportunity for the next resident of the White House to take a victory lap.Former President Donald J. Trump is already hinting at an optimistic future on the campaign trail. The Republican platform, which he had a heavy hand in shaping, pledged to “destroy inflation” and vowed that interest rates would be lower while declaring that the Republican Party will be one of infrastructure and manufacturing. If economists’ most likely projections come true, those promises should be well within reach.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

More stories

  • 125 Shares179 Views

    in Economy

    Rural Georgia Factory, Flush With Federal Funds, Votes to Unionize

    by

    Friday’s victory by the United Steelworkers at a factory building electric school buses was a test for Democratic hopes that clean-energy funding from Washington could bolster organized labor.Workers at a rural Georgia factory that builds electric school buses under generous federal subsidies voted to unionize on Friday, handing organized labor and Democrats a surprise victory in their hopes to turn huge new infusions of money from Washington into a union beachhead in the Deep South.The company, Blue Bird in Fort Valley, Ga., may lack the cachet of Amazon or the ubiquity of Starbucks, two other corporations that have attracted union attention. But the 697-to-435 vote by Blue Bird’s workers to join the United Steelworkers was the first significant organizing election at a factory receiving major federal funding under legislation signed by President Biden.“This is just a bellwether for the future, particularly in the South, where working people have been ignored,” Liz Shuler, president of the A.F.L.-C.I.O., said Friday evening after the vote. “We are now in a place where we have the investments coming in and a strategy for lifting up wages and protections for a good high-road future.”The three bills making up that investment include a $1 trillion infrastructure package, a $280 billion measure to rekindle a domestic semiconductor industry and the Inflation Reduction Act, which included $370 billion for clean energy to combat climate change.Each of the bills included language to help unions expand their membership, and Blue Bird’s management, which opposed the union drive, had to contend with the Democrats’ subtle assistance to the Steelworkers.Banners appeared outside the Blue Bird plant in the period leading up to the union vote.Jonathan Weisman/The New York TimesBlue Bird stands to benefit from the new federal funds. Last year, it hailed the $500 million that the Biden administration was providing through the infrastructure bill for the replacement of diesel-powered school buses with zero- and low-emission buses. Georgia school systems alone will get $51.1 million to buy new electric buses, but Blue Bird sells its buses across the country. Still more money will come through the Inflation Reduction Act, another law praised by the company.But that money came with strings attached — strings that subtly tilted the playing field toward the union. Just two weeks ago, for instance, the Environmental Protection Agency, which administers the Clean School Bus Program, pushed a demand on all recipients of federal subsidies to detail the health insurance, paid leave, retirement and other benefits they were offering their workers.They also required the companies to have “committed to remain neutral in any organizing campaign and/or to voluntarily recognize a union based on a show of majority support.” And under the rules of the infrastructure bill, no federal money may to be used to thwart a union election.The Steelworkers union used the rules to its advantage. In late April, it filed multiple unfair labor practice charges against Blue Bird’s management, citing $40 million in rebates the company had received from the E.P.A., which stipulated that those funds could not be used for anti-union activity.“The rules say if workers want a union, you can’t use any money to hire anti-union law firms, or use people to scare workers,” Daniel Flippo, director of the Steelworkers district that covers the Southeast, said before the vote. “I’m convinced Blue Bird has done that.”Politicians also got involved. Georgia’s two Democratic senators and southwestern Georgia’s Democratic House member also subtly nudged the plant’s management, in a union-hostile but politically pivotal state, to at least keep the election fair.“I have been a longtime supporter of the USW and its efforts to improve labor conditions and living standards for workers in Georgia,” the Democratic congressman, Representative Sanford Bishop, wrote of the United Steelworkers in an open letter to Blue Bird workers. “I want to encourage you in your effort to exercise your rights granted by the National Labor Relations Act.”Blue Bird’s management minimized such pressure in its public statements, even as it fought hard to beat back union organizers.“Although we respect and support the right for employees to choose, we do not believe that Blue Bird is better served by injecting a labor union into our relationship with employees,” said Julianne Barclay, a spokeswoman for the company. “During the pending election campaign, we have voiced our opinion to our employees that a union is not in the best interest of the company or our employees.”Friday’s union victory has the labor movement thinking big as the federal money continues to flow, and that could be good for Mr. Biden and other Democrats, especially in the pivotal state of Georgia.“Workers at places like Blue Bird, in many ways, embody the future,” Mr. Flippo said after the vote, adding, “For too long, corporations cynically viewed the South as a place where they could suppress wages and working conditions because they believed they could keep workers from unionizing.”The Blue Bird union shop, 1,400 workers strong, will be one of the biggest in the South, and union leaders said it could be a beachhead as they eyed new electric vehicle suppliers moving in — and potentially the biggest, most difficult targets: foreign electric vehicle makers like Hyundai, Mercedes-Benz and BMW, which have located in Georgia, Alabama and South Carolina in part to avoid unions.“Companies move there for a reason — they want as smooth a path toward crushing unions as possible,” said Steve Smith, a national spokesman for the A.F.L.-C.I.O. “But we have federal money rolling in, a friendly administration and a chance to make inroads like we have never had before.”The Blue Bird plant, which rises suddenly off a rural highway lined with peach and pecan orchards, has long made it a practice to hire less educated workers, some of whom have prison records and most of whom start at $16 or $17 an hour, said Alex Perkins, a main organizer for the United Steelworkers in Georgia.A union was a tough sell for such vulnerable workers against a management that was fiercely opposed, organizers conceded. Coming off the last shift of the day on Thursday, most workers declined to speak on the record. A clutch of about a dozen workers stood on Friday at the Circle K gas station across the street from the plant in the predawn darkness, holding pro-union signs as the first workers arrived to cast ballots under the gaze of National Labor Relations Board monitors.But Cynthia Harden, who has worked at the plant for five years and voted in favor of organizing, did talk about the pressure workers were under to vote against it. Slide shows on the voting process, which showed ballots marked “no,” said that the company could go broke if the union won, and there was a sudden appearance of food trucks at lunch and banners on the perimeter fence reading, “We Love Our Employees!”“They’ve made some changes already, but if the union hadn’t started, nothing would have happened,” she said.The letter that Georgia’s Democratic senators, Raphael Warnock and Jon Ossoff, wrote to Matt Stevenson, Blue Bird’s chief executive and president, was remarkably timid, praising the company for its cooperation and its well-paying jobs before “encouraging all involved, whatever their desired outcome, to make sure that the letter and the spirit of the National Labor Relations Act are followed.”Mr. Perkins fumed at that tone, considering the work that unions had put in to help Mr. Warnock win re-election last year. “I won’t forget it next time,” he said.Both senators declined requests to comment on the election. More

  • 75 Shares159 Views

    in Economy

    After Pandemic Rebound, U.S. Manufacturing Droops

    by

    The pandemic had a bright silver lining for Elkhart, Ind.The city, renowned as the capital of recreational vehicle production, had a surge in demand as cooped-up families took to the highways and avoided hotels. The cluster of manufacturers enjoyed record profits, and workers benefited as well: The metropolitan area’s unemployment rate sank to 1 percent in late 2021, and average weekly wages jumped 35 percent from their level in early 2020.That frenzy, however, has turned to a chill. Dealers, who stocked up on as many trailers and vans as they could, have been discounting them to clear their lots — and new orders have dried up. The area has lost nearly 7,000 manufacturing jobs over the past year, and unemployment is now above the national average. Thor Industries, which owns a wide portfolio of RV brands, saw its sales tumble 39.4 percent from the quarter a year ago.“In 2022, manufacturers overproduced, and you’re seeing some of the impact of that from the staffing standpoint,” said Chris Stager, chief executive of the Economic Development Corporation of Elkhart County. He foresees new projects propelled by recent federal energy and infrastructure legislation, but rising interest rates are taking a toll in the meantime.“It’s not bad, but it’s not what it was,” Mr. Stager said.That’s manufacturing in America in 2023.Factory construction is proceeding more rapidly than at any time in recent memory, heralding what may be a resurgence in domestic production powered by a move away from long, fragile supply chains and by the infusion of billions of dollars in public investment.At the same time, after an extraordinary boom fed by cooped-up consumers, manufacturing is suffering something of a hangover as retailers burn through bloated inventories. Inflation-fighting efforts by the Federal Reserve, which is expected to announce another interest-rate increase on Wednesday, have squelched big-ticket purchases. New orders have been declining since last summer, and a widely followed index of purchasing activity has been downbeat for six months.Working on sponge rubber automotive HVAC drain seals at Colonial.Whitten Sabbatini for The New York TimesManufacturing employment bounced back quickly after the pandemic — which is unusual for recessions — but has contracted for two months. While layoffs in the industry remain low, job openings and hires have sunk from recent highs.“It’s not one of these really concerning plunges, where we’re shedding a bunch of manufacturing jobs, but it seems kind of stalled,” said Scott Paul, president of the Alliance for American Manufacturing. “And I think the longer that lasts, the harder it’s going to be to rev things up.”A bigger question for the American economy is whether this heralds a broader downturn, since cooling demand for goods usually signifies that consumers are feeling financially strained. “Manufacturing is always at the forefront of the recession,” notes Barbara Denham, a senior economist at Oxford Economics.To understand the current slump, it’s important to dissect the manufacturing moment from which America is emerging.For example: Those new manufacturing jobs weren’t all for people making steel coils and oak cabinets. The production of consumable items — including food, beverages, and pharmaceuticals — represented an outsize portion of the job growth from 2020 through 2022. But it tends to pay less well, requires less training and has fewer unions than heavy manufacturing in airplanes and automobiles. And it can disappear more quickly as demand returns to normal.Factory employment bounced back, but is now leveling off Number of manufacturing jobs as a percentage of the total in February 2020

    Source: Bureau of Labor StatisticsBy The New York TimesThe pandemic-era manufacturing boom also didn’t happen equally in all places. States like Nevada, Arizona, Florida and Texas surged far above their prepandemic baselines, while longtime manufacturing centers — Michigan, Illinois, New York and Ohio — have not fully bounced back. That imbalance reflects recent migration trends, as people have moved out of urban areas for more space, more sunshine and a lower cost of living.The factory construction underway is poised to further reshape the geography of American manufacturing, with the largest increases in investment happening in the Mountain West.LaDon Byars, who runs Colonial Diversified Polymer Products, said reinforcing domestic supply chains would be worth the effort.Whitten Sabbatini for The New York TimesAll that new building is propelled by several factors. Former President Donald J. Trump’s trade war raised the cost of importing from China and other countries, while the pandemic snarled ports and idled suppliers, hurting manufacturers who depended on far-flung sourcing networks.In recent months, the war in Ukraine — for which the United States has furnished more than $36 billion in weaponry — has generated more long-term contracts for defense manufacturers, mostly restricted to domestic production.Steve Macias, a co-owner of a small machine shop in Phoenix, said orders from the semiconductor industry have slowed as the demand for home electronics crested. But in the past few weeks, he has been busy serving military clients — because the Defense Department has been getting planes and ships back into fighting shape, as well as refilling empty stores of munitions.“There was a lot of deferred maintenance,” Mr. Macias said. “So you’ve got two things going on — this kind of catch-up, and this war that broke out that nobody was really anticipating.”Finally, over the last two years the passage of three major bills — the Infrastructure Investment and Jobs Act, the Bipartisan Infrastructure Law and the CHIPS and Science Act — made available hundreds of billions of dollars for the production of items like semiconductors, solar panels, wind turbines and bridge spans. Private funders have rushed to capitalize on the opportunity, even if much of it is still in the planning stages.“A lot of manufacturers are reacting to what they see as a lot of long-term structural factors in their industry,” said Adam Ozimek, chief economist at the Economic Innovation Group, an entrepreneurship-focused think tank. “They’re seeing more demand for domestic production long term. That’s a bet on the future. It’s going to take a while to really translate to employment.”Even when it does, however, that investment might not yield as many jobs as factories with similar levels of output did in the past.Freshly built production lines tend to be more automated and more efficient than those designed in the 1950s and ’60s — which they need to be, to compete with the lower cost of labor overseas. And some companies are adding robots to their plants, given the difficulty of attracting and retaining enough skilled workers to replace those retiring. The median age of workers in manufacturing is two years older than the national median.“These facilities are desperate to try to get the work force,” said Mark Farris, chief executive of the Greenville Area Development Corporation in Greenville, S.C. “And instead, I think they’re convincing the officers of the company, ‘Let’s think about robotics, let’s think about 3-D printing, the technology investment that would take the place of those workers we cannot find.’”Employers’ ferocious need for factory workers is easingManufacturing job openings surged in 2021, but have receded.

    Bureau of Labor StatisticsBy The New York TimesFor businesses that depend on industries related to fossil fuels, the ramp-up in federal investment may just be enough to keep them afloat even as demand shifts to clean energy.Automobile manufacturers are important clients, and Ms. Byars is encouraged as federally funded projects are required to find their parts and raw materials in the United States.Whitten Sabbatini for The New York TimesLaDon Byars runs Colonial Diversified Polymer Products, which employs about 75 people in western Tennessee. The company has survived many cycles of outsourcing and offshoring, making molded rubber products like gaskets and mats for a variety of customers. Automobile manufacturers are important clients, and Ms. Byars knows that demand for parts that go into cars with internal combustion engines will start to wane.She has been encouraged, however, by the number of solicitations she has received as a result of rules that require federally funded projects to find their parts and raw materials in the United States, rather than overseas. It may be difficult and impede progress at first, but she thinks reinforcing domestic supply chains will work out better in the end, just like building new roads.“It takes a while before they get that intersection through — it’s a mess and traffic is backed up,” Ms. Byars said. “And then when they finally open it up, everything works so much smoother and better, and you don’t have the long delays. We might not even see the impact of not being dependent on other countries, and not having the supply chain disruptions, but I do think that’s what the long-term best interest for the American people is.” More

  • 100 Shares99 Views

    in Economy

    As Infrastructure Money Lands, the Job Dividends Begin

    by

    It has never exactly been boom times for the archaeology profession, but this past year comes close — thanks to Congress.Kim Redman runs Alpine Archaeological Consultants, a firm that searches for historically or culturally valuable artifacts in the path of construction — an essential step for federally assisted projects. For decades, she has hired temporary workers (affectionately known as “shovel bums”) to comb the ground.These days, she’s bringing on as many full-timers as she can, as billions of dollars in infrastructure appropriations make their way down through the states.“If you’re going to build a road, we’re at the beginning of the process,” Ms. Redman said. “The opportunities in archaeology are immense right now — everybody’s trying to hire so we can meet the demand.”Archaeologists are on the leading edge of a wave of jobs that will result from $1.2 trillion in direct government spending from the 2021 Infrastructure Investment and Jobs Act. Two subsequent initiatives — $370 billion in incentives and grants for lower-emissions energy projects provided by the Inflation Reduction Act, and $53 billion in subsidies for semiconductor manufacturing funded by the CHIPS Act — are expected to leverage tens of billions more in private capital.An archaeological crew excavating an Ancestral Pueblo pit house in southwestern Colorado in advance of a highway project.Rand Greubel/Alpine Archaeological ConsultantsThe primary purpose of the three laws isn’t to stimulate the economy; they are mainly intended to combat climate change, rebuild infrastructure and reduce dependence on foreign semiconductors. But they will affect the labor market, including a reallocation of workers across sectors.The funding comes as the economy is decelerating, and it may avert a sharper dip in employment brought on by the Federal Reserve’s attempts to contain inflation by raising interest rates. The construction industry, in particular, has been buffeted by a slowdown in new-home sales and stagnant demand for new offices.“By spring or summer, the job market will basically go flat,” said Mark Zandi, chief economist for Moody’s Analytics. “The infrastructure spending won’t kick in until late 2023, going into 2024. It feels like the handoff here could be reasonably graceful.”Nevertheless, the exact number of jobs produced by the three pieces of legislation is uncertain and may be difficult to notice in the aggregate.The State of Jobs in the United StatesEconomists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.Noncompete Agreements: A sweeping proposal by the Federal Trade Commission would block companies from limiting their employees’ ability to work for a rival.Retirees: About 3.5 million people are missing from the U.S. labor force. A large number of them, roughly two million, have simply retired.Switching Jobs: A hallmark of the pandemic era has been the surge in employee turnover. The wave of job-switching may be taking a toll on productivity.Delivery Workers: Food app services are warning that a proposed wage increase for New York City workers could mean higher delivery costs.The only jobs that are possible to count precisely are those created directly by the federal government. The Office of Personnel Management, which set up a handy filter for jobs associated with the infrastructure law, aims to hire 7,000 people by the end of September.The Taiwan Semiconductor Manufacturing Company, one of the largest chip-makers in the world, is planning to expand and upgrade a factory in Arizona.Adriana Zehbrauskas for The New York TimesThe actual number, of course, is larger. Dr. Zandi’s analysis of the infrastructure law found that it would add nearly 360,000 jobs by the end of this year, and 660,000 jobs at its peak employment impact at the end of 2025. He does not expect the Inflation Reduction Act to affect employment significantly, given its lower public expenditure.A group at the University of Massachusetts Amherst disagreed, forecasting the Inflation Reduction Act’s impact at 900,000 additional people employed on average each year for a decade. Betony Jones, director of energy jobs at the Department of Energy, thinks the number could be even higher because the bill includes incentives for domestic sourcing of materials that may create more jobs along the supply chain than traditional economic models account for.“It will change those assumptions in significant ways,” Ms. Jones said.But a number of mitigating forces make that number less powerful than it appears.Some of the jobs already exist, for example, since much of the money will go to extend tax credits that would have expired. The estimate includes jobs that are supported by infrastructure workers’ wages, from hairdressers to plumbers.It’s also a gross number, not accounting for the employment that the Inflation Reduction Act could subtract through the taxes it imposes on corporations, or the fossil fuel jobs that might disappear as renewable energy capacity increases. And plenty of the new infrastructure jobs will be filled by people who might otherwise be working in other sectors, especially if they’re better paid.At the same time, inflation has made construction materials more expensive, decreasing the purchasing power of public agencies. For the first portion of money from the infrastructure law, which was allocated to states by a formula in the first half of 2022, that largely meant salvaging large projects already underway that might otherwise have been stymied by rising costs.For all of those reasons, said Alec Phillips, chief political economist for Goldman Sachs, the infusions of cash haven’t increased his payroll employment projections for the coming year.The archaeological crew at a prehistoric campsite in the Colorado Rockies. Archaeologists are on the leading edge of a wave of jobs that will be created from federal infrastructure spending.Rand Greubel/Alpine Archaeological Consultants“This is not happening in a vacuum,” Mr. Phillips said. “Once you go through all those factors, it’s one of those things that wouldn’t influence our employment forecast all that much.”Nonetheless, the industry-level impact will be significant. The nation will need more people working in construction and manufacturing in the next few years — even if they come from other professions or, ideally, the ranks of people who aren’t working.That has given organized labor a rare opportunity to expand. In a policy reversal, the infrastructure law allows federally funded transportation projects to require hiring from the local community, which can aid union organizing. The Biden administration also issued an executive order in early 2022 favoring collective bargaining agreements with unions.The infrastructure law includes $42.5 billion for expanding broadband access — part of about $100 billion provided across several measures — and the agency running the program expects work on the cables and cellphone towers to start in 2024. The Government Accountability Office estimated that 23,000 more people would be needed when deployment peaked. The Communications Workers of America, a union that represents about 130,000 telecommunications workers, said that members had often left for other occupations as industry conditions deteriorated and that many would come back for the right salary and benefits.“There’s a lot of people sitting on the sidelines,” said Nell Geiser, the union’s research director. “They are not willing to take what’s on offer.”It’s clear, however, that new workers will be needed to meet the demand.A piece of an adobe wall from an Ancestral Pueblo pit house that has the 1,200-year-old handprint of a builder.Kristin Braga Wright for The New York TimesA reconstructed pot, found during excavation of an Ancestral Pueblo hamlet in Colorado, being prepared for curation.Kristin Braga Wright for The New York TimesThat’s why unions are gearing up training programs and recruiting apprentices, or even “preapprentices,” some directly out of high school or prison — times when people sometimes struggle to find work.Mike Hellstrom, Eastern regional manager of the Laborers’ International Union of North America, said the union’s apprenticeship applications had been snapped up within minutes of release. His region — New York, New Jersey, Delaware and Puerto Rico — stands to get $45 billion just from the infrastructure law.“It’s going to be a really unique time of our lives of being construction workers and watching this building boom we’re about to come into,” Mr. Hellstrom said.Recognizing the need for new workers, the infrastructure law in particular allows state agencies enormous flexibility in using funds for work force development. So far, they’ve been slow to take advantage of it. One reason: You can train people, but if you’re not able to compensate them competitively because of limits set by the state legislature, they’ll go somewhere else.“I think the biggest challenge for state departments of transportation on the work force side are what wages they’re able to pay,” said Jim Tymon, executive director for the American Association of State Highway and Transportation Officials. “That really isn’t tied to the federal dollars as much as it is to the restrictions that each individual state has because of their government employee pay scales.”Partly for that reason, as has long been the case, much of the work will be awarded to construction firms, which have more flexibility to offer higher wages. Their capacity isn’t infinite, however. Already, the wave of impending business has prompted concerns that some projects may not attract enough bids to ensure competition.President Biden was in Kentucky this month to highlight funding for infrastructure projects, including building and rehabilitating bridges.Pete Marovich for The New York TimesThat may not be a problem for huge undertakings, like a $935 million award to rebuild two locks on the upper Ohio River, a project that the Army Corps of Engineers expects to directly support 8,900 jobs. But it can prove more difficult for smaller jurisdictions that may lack the staff to solicit bids.Emily Feenstra, chief policy and external affairs officer for the American Society of Civil Engineers, said more coordination would be needed to ensure that all the money that Congress allocated was spent.“On that smaller scale, it’s almost like matchmaking — finding the firm, finding the agency and seeing where the needs are,” she said.All of that is good news for people doing the work, like Roger Oberdier, 33, who was hired at Alpine Archaeological Consultants in October. He was happy to find a staff position after picking up jobs all over the country and is applying to Ph.D. programs to advance his career, in which he plans to specialize in zooarchaeology (which means a lot of digging up butchered animals).And the increasing demand for talent affects the whole field. Even friends who don’t want permanent jobs are doing pretty well, hopscotching the country looking for evidence of ancient human activity, Mr. Oberdier said. Job websites like archaeologyfieldwork.com are stacked with listings at pay rates significantly higher than they were in previous years.“Right now, the job market is in favor of the job seeker,” Mr. Oberdier said. “My friends who are committed shovel bums — who never want to sit in an office and write a report, they just want to travel the world and hike to new places and be the first person to see something in 10,000 years — they are taking the jobs they want right now.” More

  • 125 Shares119 Views

    in Economy

    Biden Hopes to Amplify Contrast With Republicans on Economic Policy

    by

    Visiting Syracuse, N.Y., which has benefited from recent legislation, the president will point to his administration’s efforts to lower costs for families.WASHINGTON — President Biden will travel to Syracuse, N.Y., on Thursday to highlight investments in semiconductor manufacturing and make a last-ditch attempt to win over voters on inflation, the economic issue that is dragging on Democrats ahead of the midterm elections.At a time when polls show that voters disapprove of the president’s handling of rising prices and trust Republicans more on the issue, Mr. Biden will seek to frame the elections as a choice between his administration’s ongoing efforts to lower costs for families and Republican aspirations to cut taxes for corporations and the wealthy — which could fuel even higher inflation — and other plans that Mr. Biden says would raise health care and electricity costs.Senior administration officials told reporters on Wednesday afternoon that Mr. Biden would use his trip to celebrate the chip maker Micron’s announcement this month that it would spend up to $100 billion to build a manufacturing complex in the Syracuse region over the next 20 years, creating up to 50,000 jobs in the process. Company officials said that investment was enabled by a bipartisan advanced manufacturing bill that Mr. Biden championed and signed into law earlier this year.The administration officials said the area exemplified a community benefiting from Mr. Biden’s economic policies, which have also included a bipartisan infrastructure bill approved in 2021 and the Inflation Reduction Act, signed late this summer, which raises taxes on corporations, seeks to reduce prescription drug costs for seniors and invests hundreds of billions of dollars into new energy technologies to reduce the fossil fuel emissions driving climate change.They also said it was the right backdrop for Mr. Biden to amplify the contrast he has sought to draw with Republicans on inflation. Republican candidates have campaigned on rolling back some of the tax increases Mr. Biden imposed to fund his agenda, extending business and individual tax cuts passed by Republicans in 2017 that are set to expire in the coming years, reducing federal regulations on energy development and other business and repealing the Inflation Reduction Act.The State of the 2022 Midterm ElectionsElection Day is Tuesday, Nov. 8.Bracing for a Red Wave: Republicans were already favored to flip the House. Now they are looking to run up the score by vying for seats in deep-blue states.Pennsylvania Senate Race: Lt. Gov. John Fetterman and Mehmet Oz clashed in one of the most closely watched debates of the midterm campaign. Here are five takeaways.Polling Analysis: If these poll results keep up, everything from a Democratic hold in the Senate and a narrow House majority to a total G.O.P. rout becomes imaginable, writes Nate Cohn, The Times’s chief political analyst.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.In a memo released by the White House on Thursday morning, officials sought to frame those Republican proposals as potential fuel for further inflation, posing a risk to families struggling with high prices. “Their economic plan will raise costs and make inflation worse,” administration officials wrote.The memo suggests that among his other attacks in Syracuse, Mr. Biden will hit Republicans for what he says is an effort to raise costs for student borrowers. Several Republican-led states have sued to stop his plan to forgive up to $20,000 in student loan debt for qualifying individuals.Mr. Biden has struggled in recent weeks to persuade voters to view inflation as an issue that shows the contrasts between him and Republicans, rather than a referendum on his presidency and policies.Polls suggest the economy and rapid price growth, which touched a 40-year high this year, are top of mind for voters as they determine control of the House and Senate. Nearly half of all registered voters in a New York Times/Siena College poll this month named economic issues or inflation as the most important issue facing the country, dwarfing other issues in the survey, like abortion. Other polls have shown voters trust Republicans more than Mr. Biden and his party to handle inflation.Through the start of this month, Republican candidates had spent nearly $150 million on inflation-themed television ads across the country this election cycle, according to data from AdImpact. Those ads blame Democratic policies under Mr. Biden, including the $1.9 trillion economic relief package he signed in 2021, for inflation; economists generally agree that the spending helped fuel some price growth but disagree on how much.Mr. Biden previewed his renewed attacks on Republicans on Wednesday evening, in a trio of virtual fund-raisers for Democratic members of Congress. In each one, Mr. Biden focused almost exclusively on economic issues, championing the laws he has signed and warning that Republicans would seek to roll them back.The president criticized Republicans for promoting what he called “mega-MAGA trickle-down economics,” and he said the tax cuts Republicans support risk creating turmoil in financial markets. He drew a direct parallel between the Republican proposals and the tax cuts for high earners in Britain pushed by former Prime Minister Liz Truss, which prompted a harsh backlash in financial markets that led Ms. Truss to resign after a brief tenure.“You read about what happened in England recently, and the last prime minister, she wanted to cut taxes for the superwealthy — it caused economic chaos in the country,” Mr. Biden said. “Well, that’s what they did last time, and they want to do it again.” 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

  • 113 Shares189 Views

    in Economy

    The Path Ahead for Biden: Overcome Manchin’s Inflation Fears

    by

    A key Democrat’s decision to pull support from the president’s sprawling climate and social agenda is rooted in the scope of the bill.WASHINGTON — Senator Joe Manchin III, the West Virginia Democrat, effectively killed President Biden’s signature domestic policy bill in its current form on Sunday, saying he was convinced the spending and tax cuts in the $2.2 trillion legislation will exacerbate already hot inflation.Economic evidence strongly suggests Mr. Manchin is wrong. A host of economists and independent analyses have concluded that the bill is not economic stimulus, and that it will not pump enough money into consumer pocketbooks next year to raise prices more than a modest amount.The reason has to do with the pace at which the bill spends money and how much it raises through tax increases that are intended to pay for that spending. The legislation spends funds over a decade, allowing the taxes it raises on wealthy Americans and businesses, which will siphon money out of the economy, to help counteract the boost from spending and tax cuts.The bill also does not provide the type of direct stimulus included in the $1.9 trillion pandemic aid package Mr. Biden signed in March — and which Mr. Manchin supported. Some of its provisions would give money directly to people, like a continued expanded child tax credit, but others would fund programs that would take time to ramp up, like universal prekindergarten.Economists say the net result is likely to be at most a tenth of a percentage point or two increase in the inflation rate. That would be a relatively small effect at a time when supply chain crunches, surging global oil demand and a pandemic shift among consumers away from travel and dining out and toward durable goods have combined to raise the annual inflation rate to 6.8 percent, its fastest pace in nearly 40 years.For months, Mr. Manchin has warned the president and congressional leaders that he was uncomfortable with the breadth of what had become a $2.2 trillion bill to fight climate change, continue monthly checks to parents, establish universal prekindergarten and invest in a wide range of spending and tax cuts targeting child care, affordable housing, home health care and more. He has cited both the risks of inflation and his fear that the package could further balloon the federal budget deficit, saying several programs that are now estimated to end in a few years would likely be made permanent.Over the past week, he has insisted that the bill shrink to fit the framework of less than $2 trillion that Mr. Biden announced this fall, and that — crucially — the legislation not use budget gimmicks to artificially lower the bill’s effect on the budget deficit.In a statement on Sunday, Mr. Manchin said Democrats “continue to camouflage the real cost of the intent behind this bill.”White House officials have tried to promote the idea that the bill would reduce price pressures right away — an outcome economists have not entirely bought into. But the general economic consensus finds little evidence to suggest the bill risks exacerbating rising food, gasoline and other prices.Today’s inflationary surge stems from a confluence of factors, many of them related to the pandemic. The coronavirus has caused factories to shutter and clogged ports, disrupting the supply of goods that Americans stuck at home have wanted to buy, like electronics, televisions and home furnishings.That high demand has been fueled in part by consumers who are flush with cash after months of lockdown and repeated government payments, including stimulus checks. Research from the Federal Reserve has shown that inflation is most likely getting a temporary increase from the coronavirus relief package in March, which included $1,400 direct checks to families and generous unemployment benefits. But Mr. Biden’s social policy bill would do relatively little to spur increased consumer spending next year and not enough to offset the loss of government stimulus to the economy as pandemic aid expires.White House aides have tried to make that case to Mr. Manchin — and the public — in recent weeks, pointing to a series of analyses that have dismissed inflationary fears pegged to the bill. That includes analysis from a pair of Democratic economists who warned about rising inflation earlier this year — Harvard’s Lawrence H. Summers and Jason Furman — and from the nonpartisan Penn Wharton Budget Model at the University of Pennsylvania. All of those analyses conclude that the bill would add little or nothing to inflation in the coming year.The disconnect between economic reality and Mr. Manchin’s stated concerns has exasperated the White House, which is struggling with voter discontent toward Mr. Biden over rising prices, as well as an unyielding pandemic.In a scathing statement about Mr. Manchin on Sunday, the White House press secretary, Jen Psaki, noted that the Penn Wharton analysis found Mr. Biden’s bill “will have virtually no impact on inflation in the short term, and in the long run, the policies it includes will ease inflationary pressures.”White House officials, who along with party leaders have spent weeks trying to bring Mr. Manchin to a place of comfort with Mr. Biden’s bill, registered a sense of betrayal after the senator’s declaration.Ms. Psaki said Mr. Manchin had last week personally submitted to the president an outline for a bill “that was the same size and scope as the president’s framework, and covered many of the same priorities.” He had also promised to continue discussions toward an agreement, she said.Republicans celebrated Mr. Manchin’s statement as evidence that the bill, which Democrats were attempting to pass along party lines, was full of inflationary policies that even the president’s own party could not get behind.Biden’s ​​Social Policy and Climate Bill at a GlanceCard 1 of 7The centerpiece of Biden’s domestic agenda. More

  • 125 Shares139 Views

    in Economy

    Biden Sells Infrastructure Improvements as a Way to Counter China

    by

    Spending on roads, broadband internet and more will help revitalize U.S. competitiveness against its top economic adversary, the president says.President Biden said the newly signed infrastructure law would help the United States counter China in the battle to dominate the 21st-century economy, as broad swaths of his agenda remained stuck in Congress.Kenny Holston for The New York TimesWASHINGTON — President Biden on Tuesday began selling his $1 trillion infrastructure law, making the case that the money would do more than rebuild roads, bridges and railways. The law, he said, would help the United States regain its competitive edge against China.“We’re about to turn things around in a big way,” Mr. Biden said in remarks at a bridge over the Pemigewasset River, in snowy New Hampshire. “For example, because of this law, next year will be the first year in 20 years that American infrastructure investment will grow faster than China’s.”The president has cast the legislation as a giant leap for the United States in its battle with China to dominate the 21st-century economy, even though it does not include the full scope of his campaign promises to pour money into research and development and provide incentives for domestic manufacturing and other initiatives.“It’s an important step, although it’s not a huge one, if one thinks about the progress China has made in building up its physical and soft infrastructure,” said Eswar S. Prasad, an economist at Cornell University who specializes in trade policy. The infrastructure law “is a good defensive measure,” he added. “But will it fundamentally alter the dynamics? Not by itself.”Even as his administration begins spending the money in the law to upgrade bridges, broadband internet, water pipes and more, broad swaths of Mr. Biden’s agenda to compete economically with the Chinese remain stuck in Congress. A bill to significantly increase federal research and development spending on advanced batteries, semiconductors and other high-tech industries — which the president was forced to drop from his initial infrastructure proposal — has cleared the Senate but not the House, though administration officials expect it to eventually pass.Mr. Biden’s additional plans to stimulate more low-emissions energy production, including hundreds of billions of dollars in tax incentives, hinge on passage of a $1.85 trillion spending bill that Democrats have yet to find consensus on. That bill also contains spending on early childhood education, child care and other support for the work force that economists say will help the United States bolster the skills and productivity of its workers.If the president can shepherd those two bills through Congress, analysts say, he could have a foundation for a U.S. industrial policy that rivals Chinese investments in manufacturing and advanced technology. If he cannot, he will still have better transportation, energy and information sectors domestically, but his efforts to counter China will be incomplete.Chinese commentators have taken notice. An editorial this month in Global Times, a popular tabloid controlled by the country’s Communist Party, called the infrastructure bill a “feeble imitation of China” and said it was “tantamount to a fairy tale” that the measure alone would revitalize U.S. competitiveness.Mr. Biden has leaned into the issue as he sells Americans on the benefits of the law. Hours before he met virtually with President Xi Jinping of China on Monday, during a signing ceremony with hundreds of attendees at the White House, Mr. Biden put the countries’ economic rivalry front and center.“I truly believe that 50 years from now,” he said, “historians are going to look back at this moment and say, ‘That’s the moment America began to win the competition of the 21st century.’”Brian Deese, the director of Mr. Biden’s National Economic Council, said in an interview that the law would increase competitiveness and productivity through a variety of spending programs.“This bill is going to be a game-changer in getting Americans to work,” Mr. Deese said.He added that it would allow people to gain access to economic opportunities through better public transportation, roads and bridges, and provide high-speed internet, which he called “the lifeblood of the 21st-century economy.”China’s large investments in its own infrastructure, and its threat to U.S. dominance in new and longstanding global industries, loomed large over the congressional negotiations that produced the law. Democratic and Republican lawmakers are more attuned than ever to Chinese spending, thanks to Mr. Biden and President Donald J. Trump, who both put competition with China at the center of their presidential campaigns last year.Understand U.S.-China RelationsCard 1 of 6A tense era in U.S.-China ties. More