Manchin, Joe III

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    Democrats’ Divide: Should Obama-Era Economic Ideas Prevail in 2021?

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    A more traditional view is competing against a newer approach that has become mainstream among economists.Over the last dozen years, there has been a sea change in how economists view many crucial questions related to deficits, public debt and the long-term payoffs of social spending.Most Democratic elected officials have embraced this new thinking, and it permeates the Biden domestic agenda. But a handful of Democrats are unpersuaded, holding to a view that was more widespread in the early Obama years, focusing on the risks of debt and spending.That tension, and how it resolves itself — or doesn’t — will be central to the evolution of the Biden presidency and American economic policy for years to come. On the surface, there is a clash between lawmakers with different political instincts. But there is also a clash over whether a more traditional view will prevail over a newer approach that has become mainstream among economists — especially those who lean left, but with some acceptance among center-right thinkers.“I just don’t want our society to move to an entitlement society,” Senator Joe Manchin of West Virginia has said. T.J. Kirkpatrick for The New York TimesIn the older view, it is irresponsible to increase long-term budget deficits because it will curtail private investment and risk a fiscal crisis. Social policies should be seen as a zero-sum trade-off between alleviating poverty and encouraging work. And any major new spending should be coupled with enough revenue-raising measures that the number-crunchers at the Congressional Budget Office conclude the numbers will balance over the next 10 years.This was the approach that the Obama administration and congressional Democrats took in passing the Affordable Care Act, a process made lengthier and more complex by these self-imposed constraints.But since those days, the intellectual ground has shifted in important ways.For one, long-term interest rates have fallen precipitously, even as very large budget deficits have become the norm. That implies the United States can maintain higher public debt than once seemed possible without excessively constraining private investment or facing excessive interest costs.“The long-term downward move in interest rates is the most important macroeconomic development that has occurred over the last couple of decades,” said Karen Dynan, a former official at the Federal Reserve and at the Obama Treasury Department who now teaches at Harvard. (One of her classes is on the economic crises of the 21st century, including a unit on the evolution in thinking they have prompted.)“Lower rates make deficit-financed spending less costly in budget terms and lowers the economic cost, because you can think of lower rates as a signal that the private sector has less demand for that money,” Professor Dynan sad.During the early Obama years, there was extensive discussion, including from some Democrats, that a loss of confidence in America’s debts could cause a fiscal crisis. The experience of the last decade has offered reassurance that in a nation like the United States, with a credible and competent central bank, such an event is unlikely.Republican legislators like Jeff Sessions and Paul Ryan, back, led the charge against spending in 2011 during the Obama era. Michael Reynolds/European Pressphoto Agency“I would have worried 10 years ago that as debt rose to 100 percent or more of G.D.P., folks lending to the U.S. government would start to feel differently about it, and the answer is that they don’t,” said Wendy Edelberg, a former chief economist of the C.B.O. who is now director of the Hamilton Project at the Brookings Institution. “I personally feel like I’ve learned a lot more in the last decade about how monetary and fiscal policy interact, especially in a crisis.”As evidence: The federal government, with extensive help from the Federal Reserve, launched a multitrillion dollar response to the pandemic despite coming into the crisis with an elevated public debt. Rather than spur a crisis of confidence in U.S. government bonds, their values have surged.The evolution in thinking is hardly universal, with some more conservative economists pointing to the risks that conditions could change.“Any economic policy that begins with the premise, ‘Let’s just assume interest rates stay below 2008 levels forever,’ is extraordinarily hubristic and naïve,” said Brian Riedl, a senior fellow at the Manhattan Institute. “Particularly because there is no backup plan if they are wrong and rates ever do revert to pre-2008 levels. At that point, the policies driving the debt will be nearly impossible to reverse, and we could face a severe fiscal crisis.”That is very much the argument that Senator Joe Manchin has made in holding up the party’s social spending bill, seeking to lower its total cost and seek offsetting revenue increases that would reduce the deficit.“While my fellow Democrats will disagree, I believe that spending trillions more dollars not only ignores present economic reality, but makes it certain that America will be fiscally weakened when it faces a future recession or national emergency,” Senator Manchin wrote in a commentary for The Wall Street Journal last month.The national debt clock in New York in August 2020. Amr Alfiky/The New York TimesA similar shift has taken place in how many economists view the potential long-term economic benefits of certain forms of social welfare spending.Not long ago, research into the trade-offs of welfare spending tended to focus on narrow questions like how much a given benefit might discourage people from working. In the last few decades, researchers have used novel statistical techniques (including those that won a Nobel Prize last week) and rich new sources of data to try to determine what long-term benefits they might offer to the overall economy.Take, for example, spending that keeps children well-fed and out of poverty, such as school lunch programs and assistance payments to low-income parents. These appear to have long-lasting benefits for future employment and earning power — creating supply-side benefits, or increasing the economy’s overall potential.“If we give people more resources when they’re young, they can eat better and do better in school, and this could have lasting impacts,” said Hilary Hoynes, a professor at the University of California, Berkeley, and an author of extensive research along these lines. “It doesn’t seem like such a crazy thing to assert, but we had no evidence on that 15 years ago.”This is part of the thinking beneath major elements of Democratic legislation under consideration, including universal preschool and an extension of a child tax credit. Professor Hoynes said she had received many calls from congressional staff members in the last few years seeking to understand the emerging evidence.Senator Manchin, meanwhile, has said, “I just don’t want our society to move to an entitlement society,” suggesting he is focused on the ways these benefits might create a near-term disincentive to work.Beyond the intraparty divide over the risk of deficits and the benefits of social spending, there is a simmering debate over how the costs of the bill should be offset. Centrist Democrats insist upon provisions that raise money so as to keep the programs from raising the deficit, but it’s less clear what that means in practice.During the passage of the Affordable Care Act, that meant a very specific thing — achieving a “score” from the C.B.O. attesting that by its best estimates, the legislation would have a neutral to positive effect on cumulative deficits.This scoring incentivizes an odd gaming of the system, including programs that phase in or out, and revenue-raising measures that are backloaded to avoid near-term pain while making the numbers balance. It also inserts a false precision into the legislative process — as if anyone knows what economic growth and federal revenue will be a decade down the road.“I very much worry that there’s going to be some absurd emphasis on the C.B.O. score, whether it is slightly on one side of zero or the other side of zero,” Ms. Edelberg said. “This is a really important package that will change people’s lives, and that should be the guiding principle. The 10-year window is arbitrary. Aiming for deficit neutrality is arbitrary — it’s arbitrariness on top of arbitrariness.”The Biden agenda, in other words, could depend on just how much the entire range of Democrats in Congress view the strategies and instincts of the Obama years as a model to follow or a cautionary tale. More

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    Biden’s Plans Raise Questions About What U.S. Can or Cannot Afford to Do

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    Democrats are debating whether doing nothing will cost more than doing something to deal with climate change, education, child care, prescription drugs and more.WASHINGTON — As lawmakers debate how much to spend on President Biden’s sprawling domestic agenda, they are really arguing about a seemingly simple issue: affordability.Can a country already running huge deficits afford the scope of spending that the president envisions? Or, conversely, can it afford to wait to address large social, environmental and economic problems that will accrue costs for years to come?It is a stealth battle over the fiscal future at a time when few lawmakers in either party have prioritized addressing debt and deficits. Each side believes its approach would put the nation’s finances on a more sustainable path by generating the strongest, most durable economic growth possible.The debate has shaped a discussion among lawmakers about what to prioritize as they scale back Mr. Biden’s initial proposal to dedicate $3.5 trillion over 10 years to programs and tax cuts that would curb greenhouse gas emissions, make child care more affordable, expand access to college and lower prescription drug prices, among other priorities. The smaller bill under discussion could increase the total amount of government spending on all current programs by about 1.5 percent to 2.5 percent over the next decade, depending on its size and components. Mr. Biden has proposed fully paying for this with a series of tax increases on businesses and the wealthy — including raising the corporate tax rate, increasing taxes on multinational corporations and cracking down on wealthy people who evade taxes — along with reducing government spending on prescription drugs for older Americans.As the negotiations continue, Democrats are considering cutting back or jettisoning programs to shave hundreds of billions of dollars off the final price to get it to a number that can pass the House and Senate along party lines. One key part of Mr. Biden’s climate agenda — a program to rapidly replace coal- and gas-fired power plants with wind, solar and nuclear energy — is likely to be dropped from the bill because of objections from a coal-state senator: Joe Manchin III, Democrat of West Virginia.The discussions have focused attention on Washington’s longstanding practice of using budgetary gimmicks to make programs appear to be paid for when they are not, as well as opening a new sort of discussion about what affordable really means.The debate about what the United States can afford used to be pegged to its growing budget deficits and warnings that the government, which spends much more than it brings in, could saddle future generations with mountains of debt, sluggish economic growth, runaway inflation and enormous tax hikes. But those concerns receded after no such crisis materialized. The country experienced tepid inflation and low borrowing costs for a decade after the 2008 financial crisis, despite increased borrowing for economic stimulus under President Barack Obama and for tax cuts under President Donald J. Trump.In its place is a new debate, one focused on the long-term costs and benefits of the government’s spending decisions.Many Democrats fear the United States cannot afford to wait to curb climate change, help more women enter the work force and invest in feeding and educating its most vulnerable children. In their view, failing to invest in those issues means the country risks incurring painful costs that will slow economic growth.“We can’t afford not to do these kinds of investments,” David Kamin, a deputy director of the White House National Economic Council, said in an interview.Take climate change: The Democratic think tank Third Way estimates that if Congress passes an aggressive plan to reduce greenhouse gas emissions, U.S. companies will invest an additional $1.3 trillion in the construction and deployment of low-emission energy like wind and solar power and energy-efficient technologies over the next decade, and $10 trillion by 2050. White House officials say that if the country fails to reduce emissions, the federal government will face mounting costs for relief and other aid to victims of climate-related disasters like wildfires and hurricanes.“Those are the table stakes for the reconciliation and infrastructure debate,” said Josh Freed, the senior vice president for climate and energy at Third Way. “It’s why we think the cost of inaction, from an economic perspective, is so enormous.”But to some centrist Democrats, who have expressed deep reservations about spending $2 trillion on a bill to advance Mr. Biden’s plans, “affordable” still means what it did in decades past: not adding to the federal debt. The budget deficit has swelled in recent years, reaching $1 trillion in 2019 from additional spending and tax cuts that did not pay for themselves, before topping $3 trillion last year amid record spending to combat the coronavirus pandemic.Mr. Manchin says he fears too much additional spending would feed rising inflation, which could push up borrowing costs and make it harder for the country to manage its budget deficit. He has made clear that he would like the final bill to raise more revenue than it spends in order to reduce future deficits and the threat of a debt crisis. Mr. Biden says his proposals would help fight inflation by reducing the cost of child care, housing, education and more.A few economists agree with Mr. Manchin, warning that even fully offsetting spending and tax cuts could fuel inflation. Michael R. Strain, a centrist economist at the conservative American Enterprise Institute who supported many of the pandemic spending programs, said in an interview this year that additional spending that stoked consumer demand would “exacerbate pre-existing inflationary pressures.”President Biden visited the Capitol Child Development Center in Hartford, Conn., on Friday. He has warned that if Congress does not act to invest in children, the United States will face slower economic growth for generations to come.Sarahbeth Maney/The New York TimesRepublicans, who have vowed to fight any version of the spending bill, argue that the national economy cannot afford the burden of taxes on high earners and businesses that Democrats have proposed to help offset their plans. They say the increases will chill growth when the recovery from the pandemic recession remains fragile.“The tax hikes are going to slow growth, flatten out wages and both drive U.S. jobs overseas and hammer small businesses,” said Representative Kevin Brady of Texas, the top Republican on the Ways and Means Committee. “There will be a significant economic price to all this spending.”U.S. Inflation & Supply Chain ProblemsCard 1 of 6Covid’s impact on supply continues. More

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    Funding Fight Threatens Plan to Pump Billions Into Affordable Housing

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    A federal voucher program is at risk of being sharply scaled back as the White House seeks to slash its social policy package to appease two centrist senators.SAN FRANCISCO — Audrey Sylve, a retired bus driver, has spent 13 agonizing years on a waiting list for a federal voucher that would help cover rent for an apartment in one of America’s most expensive housing markets.This summer it seemed that help was finally on the way.In late July, congressional Democrats introduced a $322 billion plan to bolster low-income housing programs as part of the $3.5 trillion social spending plan embraced by President Biden. At its center is a $200 billion infusion of aid for the country’s poorest tenants, which would allow another 750,000 households to participate in a program that currently serves two million families.Affordable-housing advocates saw it as a once-in-a-generation windfall that would allow local governments to move thousands of low-income tenants like Ms. Sylve, 72, off waiting lists and to expand aid to families at the highest risk of homelessness.But optimism has given way to anxiety. Low-income housing, and the voucher program in particular, are among those most at risk of being sharply scaled back as the White House seeks to slash the package to accommodate the demands of two centrist Democrats, Senators Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona, according to several people involved in the talks.Congressional negotiators are seeking to cut the overall size of the 10-year package, in coordination with the White House, to between $1.9 trillion and $2.3 trillion. Housing is just one of several high-price priorities on the chopping block in the negotiations.Yet proponents say no other proposal is likely to have as immediate an effect on the lives of the country’s most vulnerable as the increase in rental assistance because it addresses a foundational problem: securing an affordable place to live when rents everywhere are outpacing earnings.“I’m all for funding early childhood education, child care and the expansion of health care with education, but we cannot be successful with any of that unless people have safe and secure housing,” said Representative Maxine Waters, a California Democrat who leads the House Financial Services Committee, which drafted the original plan.Supporters of the expansion say every penny is required to begin addressing a crisis that threatens to undermine recent gains in the fight to reduce poverty. They fear it will be elbowed aside by other programs, such as universal child care, that enjoy broader political support because they benefit middle-class, and not just poor, people.“Better health care or increased educational access doesn’t do much for families sleeping in their car or under a bridge, or for the millions more on the verge,” said Diane Yentel, president of the National Low Income Housing Coalition, which is pressuring the White House to fund the program as it was drafted. “There are no ‘savings’ to be had here.”The financial services industry, which puts together the complex public-private financing packages used to build most affordable developments, has already factored in a significantly scaled-back congressional compromise.“Much of the proposed $400 billion in housing-related grants and tax subsidies is likely to be cut from the reconciliation bill,” analysts from Goldman Sachs wrote in an email last week. That figure bundled the $332 billion package, which also includes increases for public housing authorities and an affordable housing construction fund, with a smaller package of tax breaks in the bill.White House officials say they have made no decisions. Ms Waters and her counterpart in the Senate, Sherrod Brown, a Democrat of Ohio, said they would not accept any deal that cut the housing plan more than any other proposal.“We’re not going to scale back. We’re not going to lose our way on this,” Mr. Brown, chairman of the Banking Committee, said in an interview. “And we’re not going to compromise the mission of transforming the fight on poverty.”The White House is looking for ways to win support for its package from Senators Kyrsten Sinema and Joe Manchin III.Stefani Reynolds for The New York TimesOver the past two decades, the federal government has stopped bankrolling construction of government-run public housing projects. Instead, it has shifted resources to voucher programs, which bridge the financial gap between what a poor tenant can afford to pay and what a landlord might reasonably expect to get on the open market.Demand far outstrips supply: One recent study found that the federal government has provided funding for only a quarter of the vouchers needed to help house eligible families — and many housing authorities have simply stopped taking names to avoid leaving tenants in the lurch.Even if the voucher increase somehow makes it past Mr. Manchin and Ms. Sinema, it would represent only a down payment on an enormous unmet need for housing aid exacerbated by rocketing real estate values in most major cities.California’s estimated share of the new aid would bankroll only a fraction of the new vouchers needed to meet the demand, said Matthew Schwartz, president of the California Housing Partnership, a nonprofit that works with community groups to finance low-income housing projects.But it would be a significant improvement, Mr. Schwartz said, particularly on top of a $22 billion affordable-housing plan that Gov. Gavin Newsom signed into law this summer.Joseph Villarreal, executive director of the housing authority of Contra Costa County, outside San Francisco, is less concerned about the future than fulfilling the promises he has made in the past. He saw the new cash in personal terms, as a way to fulfill a commitment more than a decade in arrears.“It would be horrible if any, much less the majority, if this voucher money gets cut from the proposal,” he said.Mr. Villarreal’s organization, which serves as a pass-through for federal funding, maintains 51 separate waiting lists for the vouchers — some for specific developments, others for targeted demographic groups, with 47,000 families in limbo. “It weighs on me,” he said of the lists.Ms. Sylve, who said she was scraping by on a small pension and Social Security, was one of 6,000 chosen from 40,000 qualified Contra Costa County applicants in a lottery to be added to the slow-moving queue for the program, which is still known by its historical name, Section 8.A few years ago she was told that a voucher was about to become available, but that fell through, and she has spent much of the past 13 years hopping from apartment to apartment. Last spring, Ms. Sylve moved in with her daughter across the bay in San Francisco, because the neighborhood around her apartment had become too dangerous.“They give you hope, and that’s the hardest part,” Ms. Sylve said. “But you keep hoping, year after year after year.”A survey of 44 large housing authorities across the country conducted by the Center on Budget and Policy Priorities, a left-leaning Washington think tank, painted a grim picture of the voucher program. A total of 737,000 people were on waiting lists, and 32 of the authorities are refusing to take new applications, with a few exceptions for particularly vulnerable populations.The situation on the West Coast was especially dire, with eight times as many people lingering on waiting lists as receiving aid in San Diego, where the list has topped 108,000. Long waiting lists are also a staple in Washington, Philadelphia, Houston, Honolulu, Little Rock, Ark., and New York, which closed its list years ago.Will Fischer, director for housing policy for the center, said bolstering the voucher program was the most important single move the federal government could make to address the homelessness crisis.“Look, the public housing money is urgently needed — but it would be for existing units, for families who already have a place to live,” he said. “And most of the other funding in the proposal actually serves people a little bit higher up the income scale.”Representative Ritchie Torres, a Bronx Democrat whose district is among the poorest in the country, said housing always seemed to be listed as the third, fourth or fifth priority of many liberal lawmakers.When House Democrats peppered Mr. Biden with questions about the social spending package at a meeting in the Capitol this month, Mr. Torres — a former chairman of the New York City Council housing committee — was stunned when he realized no one had asked the president about rental aid, and spoke up.Mr. Biden responded by promising he would “protect” housing, without elaborating, Mr. Torres said. 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    Biden Calls Republicans 'Reckless' Over the Debt Limit Increase

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    The president warned Republicans “not to use procedural tricks to block us from doing the job.”President Biden said Americans could see the implications as early as this week if Senate Democrats were not able to vote to increase the debt limit.Doug Mills/The New York TimesWASHINGTON — President Biden excoriated Republicans on Monday for blocking his party’s efforts to raise the debt ceiling weeks before a projected government default, calling their tactics “reckless” and “disgraceful” and warning they risked causing “a self-inflicted wound that takes our economy over a cliff.”Mr. Biden, trying to convey the risks to everyday Americans, warned that they could see the effects as early as this week if Senate Democrats were not able to vote to raise the debt limit. That cap dictates the amount of money the government can borrow to fulfill its financial obligations, including paying Social Security checks, salaries for military personnel and other bills.“As soon as this week, your savings and your pocketbook could be directly impacted by this Republican stunt,” Mr. Biden said, cautioning that a failed vote could rattle financial markets, sending stock prices lower and interest rates higher. “A meteor is headed for our economy.”Despite Mr. Biden’s attempts to blame Republicans for the impasse, Democrats are increasingly confronting the possibility that they may need to raise the debt limit through the one legislative path that Republicans have left open: a process known as budget reconciliation that bypasses a Senate filibuster. Mr. Biden and Democratic leaders have chafed at that approach, saying Republicans bear a share of responsibility for Washington’s ongoing budget deficits and must at least allow an up-or-down vote, as has been the case under previous presidents.Investors in U.S. government debt are already getting spooked: Yields for certain Treasury bonds that could be affected by a default spiked on Monday, as investors demanded higher interest payments to offset the risk.The Treasury Department has warned the United States will run out of money to pay all its bills by Oct. 18 if the borrowing cap is not raised, a situation that could force the government into default and wreak havoc on an American economy already shaken by the coronavirus.The dire stakes of the debt limit impasse add a level of seriousness to what has become a perennial exercise of political brinkmanship in Washington. Mr. Biden and congressional Democrats say Republicans are putting the entire economy at risk by blocking a Senate vote that would raise the debt limit with just Democrat support. Republicans, who have allowed such votes to occur in the past, have twice blocked Democrats from taking up a bill and are trying to force the party to use reconciliation, which is a more complicated process that could take a week or more to come together.On Monday, the president said that he could not guarantee the limit would be raised.“That’s up to Mitch McConnell,” Mr. Biden said, referencing the senator of Kentucky and minority leader. “I don’t believe it. But can I guarantee it? If I could, I would, but I can’t.”The president’s remarks escalated a showdown with Mr. McConnell, who on Monday sent a letter to Mr. Biden stating that he would not relent in using the filibuster to prevent a Senate vote and that the onus was on Democrats to find a solution.Senator Mitch McConnell, the minority leader, sent a letter to Mr. Biden stating that the onus was on Democrats to find a solution to the debt-limit problem.T.J. Kirkpatrick for The New York Times“I respectfully submit that it is time for you to engage directly with congressional Democrats on this matter,” Mr. McConnell wrote in a letter to Mr. Biden. “Your lieutenants in Congress must understand that you do not want your unified Democratic government to sleepwalk toward an avoidable catastrophe when they have had nearly three months’ notice to do their job.”Democratic leaders in the Senate, along with Mr. Biden, have bristled at Mr. McConnell’s stance, saying Republicans bear responsibility for having approved spending that now requires more government borrowing, and have no right to stand in the way of a Senate vote.“Why? Why are we doing this?” Senator Richard J. Durbin of Illinois, the No. 2 Senate Democrat, said on Monday. “Because McConnell wants to make a point.”Senator Jon Tester, Democrat of Montana, visibly frustrated, said the brinkmanship “speaks to how broken this country is.”“I mean it’s crazy — we’re offering a way to do it, where he doesn’t have to have any members vote for it, and he said that’s not good enough,” Mr. Tester said. “It’s got to be on this piece of legislation or we’re out.”Senator Chuck Schumer of New York, the majority leader, told Democrats that a bill that would raise the debt limit would need to reach Mr. Biden’s desk within days, not weeks, and threatened to hold members in Washington over the weekend and cancel an upcoming recess to do it.“Let me be clear about the task ahead of us: We must get a bill to the President’s desk dealing with the debt limit by the end of the week. Period. We do not have the luxury of waiting until Oct. 18,” he wrote in a “dear colleague” letter dated Monday.Mr. McConnell made clear that the Republican decision to filibuster a vote was driven by politics. He cited the votes Mr. Biden cast against raising the debt limit under former President George W. Bush, which he said “made Republicans do it ourselves.”“Bipartisanship is not a light switch that Speaker Pelosi and Leader Schumer may flip on to borrow money and flip off to spend it,” Mr. McConnell wrote. “For two and a half months, we have simply warned that since your party wishes to govern alone, it must handle the debt limit alone as well.”Administration officials and Democratic leaders note a large difference between the votes under Mr. Bush and the ones now: Democrats did not filibuster those votes, allowing Republicans to bring a bill to the floor and raise the limit on their own.With that avenue in peril, administration officials and congressional leaders are privately sifting through the party’s options if Mr. McConnell does not budge and the vote fails. If that happens, Mr. Biden could face increased pressure to get Mr. Schumer and other party leaders to use budget reconciliation.The reconciliation process would likely involve two marathons of politically charged votes that could extend for the better part of a day. Democrats say there is no guarantee that Republicans won’t drag those votes out to inflict procedural and political discomfort.Understand the U.S. Debt CeilingCard 1 of 8What is the debt limit? More

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    Biden Presses Democrats to Embrace His Economic Agenda

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    The president canceled a trip to Chicago in an attempt to salvage a pair of bills containing trillions of dollars in spending on infrastructure, education, climate change and more.WASHINGTON — President Biden and his aides mounted an all-out effort on Wednesday to salvage Mr. Biden’s economic agenda in Congress, attempting to forge even the beginnings of a compromise between moderates and progressives on a pair of bills that would spend trillions to rebuild infrastructure, expand access to education, fight climate change and more.Mr. Biden canceled a scheduled trip to Chicago, where he was planning to promote Covid-19 vaccinations, in order to continue talking with lawmakers during a critical week of deadlines in the House. One crucial holdout vote in the Senate, Kyrsten Sinema, a centrist from Arizona, was set to visit the White House on Wednesday morning, a person familiar with the meeting said.Ms. Sinema was one of the Democratic champions of a bipartisan bill, brokered by Mr. Biden, to spend more than $1 trillion over the next several years on physical infrastructure like water pipes, roads, bridges, electric vehicle charging stations and broadband internet. That bill passed the Senate this summer. It is set for a vote this week in the House. But progressive Democrats have threatened to block it unless it is coupled with a more expansive bill that contains much of the rest of Mr. Biden’s domestic agenda, like universal prekindergarten and free community college, a host of efforts to reduce greenhouse gas emissions and tax breaks for workers and families that are meant to fight poverty and boost labor force participation.Ms. Sinema and another centrist in the Senate, Joe Manchin III of West Virginia, have expressed reservations over the scope of that larger bill and balked at the $3.5 trillion price tag that Democratic leaders have attached to it. Moderates in the House and Senate, led by Ms. Sinema, have resisted many of the tax increases on high earners and corporations that Mr. Biden proposed to offset the spending and tax cuts in the bill, in order to avoid adding further to the budget deficit.Mr. Biden has thus far failed to convince Ms. Sinema and Mr. Manchin to agree publicly to a framework for how much they are willing to spend and what taxes they are willing to raise to fund the more expansive bill. If Mr. Biden cannot find a way to address their concerns, while also assuaging progressives and persuading them to support his infrastructure bill, he could see the warring factions in his party kill his entire economic agenda in the span of a few days.Some Democrats have complained this week that the president has not engaged in talks to their satisfaction, though he has cleared his schedule this week in hopes of brokering a deal. He welcomed groups of progressives and moderates to the White House last week, for example, but met with each separately, as opposed to a group negotiation session.Both Ms. Sinema and Mr. Manchin visited the White House on Tuesday, but after their meetings, neither they nor White House officials would enumerate the contours of a bill they could support.“The president felt it was constructive, felt they moved the ball forward, felt there was an agreement, that we’re at a pivotal moment,” Jen Psaki, the White House press secretary, told reporters on Tuesday, characterizing the meetings. “It’s important to continue to finalize the path forward to get the job done for the American people.”White House officials said late Tuesday that Mr. Biden remained in frequent contact with a wide range of Democrats, including phone calls with progressives, and that he would have more conversations on Wednesday. More

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    Biden Huddles With Democrats as Divisions Threaten His Agenda

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    Democrats are nearing a make-or-break moment for President Biden’s agenda, with party divisions imperiling top-priority legislation and fiscal crises looming.WASHINGTON — President Biden huddled with congressional Democrats on Wednesday to try to break through a potentially devastating impasse over his multitrillion-dollar domestic agenda, toiling to bridge intraparty divisions over an ambitious social safety net bill and a major infrastructure measure as Congress raced to head off a fiscal calamity.Democrats on both ends of Pennsylvania Avenue are nearing a make-or-break moment in their bid to push through huge new policies, as an escalating fight between the progressive and moderate wings — and a multitude of other divisions within the party — threatens to sink their chances of doing so while they retain control in Washington.At the same time, even the basic functions of Congress — keeping the government from shutting down next week and from defaulting on its debt sometime next month — are in peril as Republicans refuse to support legislation that would both fund the government and increase the statutory cap on federal borrowing.The challenges are unfolding against a backdrop of mistrust and strife within Democratic ranks. Moderates are pressing for quick action on the $1 trillion bipartisan infrastructure bill; progressives are demanding approval first of a far-reaching, $3.5 trillion domestic policy plan including vast new investments in climate, education, health and social programs.Without consensus on both, Democrats, who have minuscule majorities in the House and Senate, will not have enough votes to send either to Mr. Biden’s desk. That prospect has sown alarm at the top echelons of the party.On Wednesday, John D. Podesta, who held key White House roles under Presidents Bill Clinton and Barack Obama, sent a memo to every Democrat on Capitol Hill imploring them to scale back the $3.5 trillion plan in the interest of compromise, warning that doing otherwise would risk sinking both bills and costing the party control of Congress in next year’s midterm elections.“You are either getting both bills or neither — and the prospect of neither is unconscionable,” he wrote. “It would signal a complete and utter failure of our democratic duty, and a reckless abdication of our responsibility. It would define our generation’s history and show that, when our time came, we failed, both for Americans now and in the years to come.”Mr. Biden’s long day of meetings with lawmakers reflected a recognition that “there needs to be a deeper engagement by the president” to bring Democrats together, said Jen Psaki, the White House press secretary.The president, she added, “sees his role as uniting and as working to bring together people over common agreement and on a path forward.”That path is exceedingly murky as Democrats careen toward a tangle of fiscal and political deadlines with no discernible public strategy in place, but party leaders remained publicly sanguine on Wednesday..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-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;}“We are on schedule — that’s all I will say,” Speaker Nancy Pelosi told reporters after meeting with Mr. Biden for more than an hour. “We’re calm, and everybody’s good, and our work’s almost done.”But Democrats conceded that the process was painful.“When you’ve got 50 votes and none to lose, and you’ve got three to spare in the House, there’s a lot of give and take — that’s just the way it is,” said Senator Bernie Sanders, the Vermont independent who is chairman of the Budget Committee. “It’s tough. But I think at the end of the day, we’re going to be fine.”At the crux of the stalemate is a leadership commitment to a group of moderate Democrats that the House would take up the Senate-passed bipartisan infrastructure bill by Monday. Liberal House Democrats say they will vote down the measure until their priority legislation first clears both the House and Senate.Those Democrats say the infrastructure bill, which omitted most of their top priorities including major provisions to combat climate change, cannot be separated from the $3.5 trillion package, which contains many of those elements, such as a shift to electric power. Beyond the climate portions, the social policy measure would, among many other things, extend child care and child tax credits, expand free prekindergarten and community college and fortify Medicare.But key centrists in the Senate have balked at that package, which Democrats plan to push through using a fast-track budget process known as reconciliation that shields it from a filibuster. Senators Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona both voted to begin work on a $3.5 trillion measure, but have since warned they will not support spending that much.On Wednesday, Mr. Biden urged the holdouts to specify exactly what they would support, so Democrats could coalesce behind a plan that could pass.“Find a number you’re comfortable with, based on what you believe the needs that we still have, and how we deliver to the American people,” Mr. Manchin said, describing the president’s request. “He was very straightforward in what he asked us to do.”The internal disputes are escalating just as Congress is facing urgent deadlines. Without congressional action, at 12:01 a.m. next Friday, federal funding will lapse, shutting down the government. And at some point in October, the Treasury Department will reach its statutory borrowing limit, forcing it to halt some payments to international creditors, Social Security recipients and government contractors.Amid those looming crises, Republican leaders are practically taunting Democrats, refusing to back legislation coupling a debt-limit increase and a stopgap spending measure.“Don’t play Russian roulette with the economy; step up and raise the debt ceiling,” Senator Mitch McConnell of Kentucky, the Republican leader, said on Wednesday, even as he vowed not to give Democrats a single Republican vote.Senator Mitch McConnell of Kentucky, the Republican leaders, is encouraging Democrats to raise the debt ceiling even as he tells his own caucus to vote against it.Sarahbeth Maney/The New York TimesAnd House Republicans on Wednesday urged their rank-and-file members to oppose the bipartisan infrastructure bill that they said had been “inextricably linked” to the reconciliation package.“Republicans should not aid in this destructive process,” the office of Representative Steve Scalise of Louisiana, the No. 2 Republican, warned in a notice calling for “no” votes.On Wednesday, a bipartisan group of former Treasury secretaries wrote to congressional leaders in both parties to express a “deep sense of urgency” to raise the debt limit. Jerome H. Powell, the Federal Reserve chair, offered a similar plea in a news conference.“No one should assume that the Fed or anyone else can protect the markets and the economy, fully protect, in the event of a failure to make sure that we do pay those debts when they’re due,” he said..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-w739ur{margin:0 auto 5px;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-w739ur{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-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-16ed7iq{width:100%;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-box-pack:center;-webkit-justify-content:center;-ms-flex-pack:center;justify-content:center;padding:10px 0;background-color:white;}.css-pmm6ed{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;}.css-pmm6ed > :not(:first-child){margin-left:5px;}.css-5gimkt{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:0.8125rem;font-weight:700;-webkit-letter-spacing:0.03em;-moz-letter-spacing:0.03em;-ms-letter-spacing:0.03em;letter-spacing:0.03em;text-transform:uppercase;color:#333;}.css-5gimkt:after{content:’Collapse’;}.css-rdoyk0{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-eb027h{max-height:5000px;-webkit-transition:max-height 0.5s ease;transition:max-height 0.5s ease;}.css-6mllg9{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;position:relative;opacity:0;}.css-6mllg9:before{content:”;background-image:linear-gradient(180deg,transparent,#ffffff);background-image:-webkit-linear-gradient(270deg,rgba(255,255,255,0),#ffffff);height:80px;width:100%;position:absolute;bottom:0px;pointer-events:none;}.css-uf1ume{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;}.css-wxi1cx{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.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;}Beyond that issue, Democrats must find a way to salvage Mr. Biden’s agenda. They had hoped to emerge from Wednesday’s meeting with public commitments from key moderates including Mr. Manchin and Ms. Sinema to support a reconciliation bill, but by evening they still had no such statement from the two senators.Offering “Covid-safe” individually wrapped chocolate chip cookies bearing the presidential seal, Mr. Biden spent much of the day on Wednesday hosting groups of lawmakers in the Oval Office, beginning with Ms. Pelosi and Senator Chuck Schumer of New York, the majority leader.He met with nearly two dozen senators and House members from across the ideological range of his party, including liberal leaders and some of the moderates who played key roles in negotiating the infrastructure bill.By Monday, leaders hope to reach agreement on a total price for the reconciliation measure, which will likely fall below the $3.5 trillion budget blueprint, and an ironclad agreement on some key provisions that must be in the final package.So far, neither side is budging. Representative Alexandria Ocasio-Cortez, Democrat of New York, accused more conservative Democrats of making “impulsive and arbitrary demands,” while setting unnecessary deadlines like the Monday infrastructure vote.“The package, the investments and the programs that we have in there are rather nonnegotiable. That’s why we are kind of at this impasse,” she said, adding, “We are at a moment, and a test of political will.”Representative Stephanie Murphy, a moderate from Florida, said it would be “really disappointing and embarrassing” if the infrastructure bill failed because of opposition from progressives.After her meeting with Mr. Biden, Representative Pramila Jayapal of Washington, the chairwoman of the Congressional Progressive Caucus, said that “there isn’t a lot of trust” among Democrats, reiterating that liberals would follow through on their promise to vote against the infrastructure measure on Monday.But the list of moderate objections is long and varied. Representative Kurt Schrader of Oregon wants a bill that spends less than $1 trillion over 10 years. Representative Ed Case of Hawaii has said he will not accept phasing in or phasing out of programs and tax measures to mask their true costs if made permanent. Representative Kathleen Rice of New York objects to the get-tough approach to curb prescription drug prices.And the disputes go beyond ideological differences. Representative Tom Suozzi of New York says he will not vote for any version that does not substantially reinstate the state and local tax deduction, a crucial issue for high-tax states. Representative Alma Adams of North Carolina says she will oppose the bill if it does not include tens of billions of dollars more for historically Black colleges and minority-serving institutions.Democrats across the ideological spectrum said forging consensus would be a tall order.“We’ve got a hectic few days ahead,” Representative Josh Gottheimer, a moderate from New Jersey, said after emerging from his negotiating session with Mr. Biden and other lawmakers.Catie Edmondson More

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    Republicans Promise Counteroffer as Infrastructure Talks Falter

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    President Biden and Democrats are facing difficult decisions about how to move their infrastructure plan through Congress as bipartisan momentum flags.WASHINGTON — With bipartisan negotiations faltering, President Biden and Senate Democrats are facing difficult decisions about how to salvage their hopes of enacting a major new infrastructure package this year, and waning time to decide whether to continue pursuing compromise with Republicans or try to act on their own. More