More stories

  • in

    To Juice the Economy, Biden Bets on the Poor

    #masthead-section-label, #masthead-bar-one { display: none }The Jobs CrisisCurrent Unemployment RateWhen the Checks Run OutThe Economy in 9 ChartsThe First 6 MonthsAdvertisementContinue reading the main storySupported byContinue reading the main storynews analysisTo Juice the Economy, Biden Bets on the PoorMr. Biden’s bottom-up $1.9 trillion aid package is a sharp reversal from the tax cut bill that was President Donald J. Trump’s first big legislative victory.Volunteers distributing food on Monday in Warren, Mich. President Biden’s economic relief plan overwhelmingly helps low earners and the middle class and is more focused on people than on businesses.Credit…Elaine Cromie for The New York TimesPublished More

  • in

    Biden Presses Economic Aid Plan, Rejecting Inflation Fears

    #masthead-section-label, #masthead-bar-one { display: none }The Jobs CrisisCurrent Unemployment RateWhen the Checks Run OutThe Economy in 9 ChartsThe First 6 MonthsAdvertisementContinue reading the main storySupported byContinue reading the main storyBiden Presses Economic Aid Plan, Rejecting Inflation FearsDespite a better-than-expected jobs report, administration officials stressed that millions of workers still needed help from a proposed $1.9 trillion stimulus package.President Biden continued to press his case for his stimulus plan on Friday after a stronger-than-expected jobs report.Credit…Al Drago for The New York TimesJim Tankersley and March 5, 2021, 6:58 p.m. ETWASHINGTON — With a $1.9 trillion economic aid package on the brink of passing Congress and the pace of vaccinations picking up, some economists, Republican lawmakers and Wall Street traders are increasingly raising a counterintuitive concern: that the economy, still emerging from its precipitous pandemic-induced drop, could be on a path toward overheating.The Biden administration rejected that argument again on Friday. Despite a stronger-than-expected jobs report, the president and his aides said there was still a long way to go to ensure the benefits of the recovery flow to workers hardest hit by the pandemic, who are predominantly people of color.Passing President Biden’s recovery plan, they said, remains essential to a full and equitable recovery.“Black workers are still facing an economic crisis,” Janelle Jones, the chief economist at the Labor Department, said in an interview. “We cannot talk about recovery and taking our foot off the gas while these workers are still facing economic devastation.”For those workers, Ms. Jones said, “It really matters what we do in the next two weeks.”But some Republicans, saying the economy no longer needs an injection of nearly $2 trillion in borrowed money, continued to urge Democrats to pare back the stimulus package, which Senate Democrats have modified slightly in recent days.On Wall Street, there were signs this week that investors are beginning to believe that such a large package could spur some resurgence in inflation, though there is little to suggest that markets anticipate a return to the dangerous levels of the 1970s, as a few prominent economists have warned.Mr. Biden continued to press his case for the full $1.9 trillion plan in afternoon events at the White House, meeting with top economic advisers and then hosting a round-table discussion to build support for the plan.“Today’s jobs report shows that the American Rescue Plan is urgently needed,” the president told reporters before the start of the meeting with aides. He said the jobs gains in February were likely because of a $900 billion relief bill Congress and President Donald J. Trump approved in December, and he warned that without more assistance, further gains “are going to be slow.”“We can’t go one step forward and two steps backward,” Mr. Biden said.In the Senate, lawmakers began voting on a flurry of amendments to the bill, which could pass as soon as Saturday. Democrats huddled to find agreement on last-minute tweaks to the legislation to appease centrists in their caucus.Republicans on Capitol Hill have locked arms against the bill. Some senators say their opposition comes, in part, from fears that Mr. Biden’s plan would pour too much money into a recovery that is accelerating on its own.The Biden plan “risks overheating an already recovering economy,” Senator Rob Portman, Republican of Ohio, said this week on the Senate floor, “leading to higher inflation, hurting middle-class families and threatening long-term growth.”Mr. Portman cited inflation concerns voiced in recent weeks by the Harvard economist Lawrence H. Summers, a Treasury secretary under President Bill Clinton and top economic aide to President Barack Obama. In an email this week to reporters, an aide to Senator Mitch McConnell of Kentucky, the Republican leader, highlighted reports of rising fears of American inflation among top British officials.Mr. Biden has ambitious ideas for other big programs this year, including a major infrastructure package, further fueling concerns about economic overheating. The administration insists those plans would not be inflationary because they would be offset by tax increases on the wealthy and corporations, but some economists and Democrats say they could end up being at least partly financed by deficit spending.Inflation expectations have climbed gradually since the November election, and moved up slightly after a strong jobs report on Friday. Even so, commonly cited measures show that investors are penciling in price gains just a bit above 2 percent in coming years. That is consistent with the Fed’s stated goals, and not the kind of destabilizing, runaway price gains that the economy experienced a generation ago.A closed restaurant in Phoenix this week. The president and his aides said there was still a long way to go to ensure the benefits of the recovery flow to workers hardest hit by the pandemic.Credit…Juan Arredondo for The New York TimesStill, the fact that investors are expecting growth to surge this year has mattered for markets.Bond yields have been climbing since the start of 2021, as investors anticipate a little more inflation and a rapid economic bounceback. That adjustment has caused stock prices to drop in recent weeks. Higher interest rates make it more expensive for companies to borrow and can attract money away from the stock market.As investors look for a pickup in growth and slightly faster price increases, watchers of the Federal Reserve have begun to expect that it might begin to slow its big bond purchases, which it has been using to bolster growth, and raise interest rates sooner than had been anticipated.The central bank has promised to leave interest rates near zero until the economy has achieved full employment and inflation is above 2 percent and expected to stay there for some time. If markets expect the economy to reach those goals sooner rather than later, that could be seen as an expression of optimism.“If you look at why they’re moving up, it’s to do with expectations of a return to more normal levels, more mandate-consistent levels of inflation, higher growth, an opening economy,” Jerome H. Powell, the Fed chair, said of rates during a recent congressional testimony.But markets are forward-looking: The economy has a long way to go before it will be back to full strength. Administration officials have vowed not to be distracted by improvements in high-profile numbers, like overall job growth, and instead keep pouring fuel on the recovery until historically disadvantaged groups have regained jobs, income and the benefits of other measures of economic progress.Job gains last month came in above economists’ forecasts, but it would take more than two years of hiring at the current level to return the labor market to its employment level in early 2020.In addition, while all demographic groups continue to feel economic pain, the fallout has not been evenly spread. Employment for Black workers remains nearly 8 percent below its prepandemic level, while employment for white workers is down about 5 percent. Black workers tend to lose jobs heavily during recessions, then gain them back only after a long stretch of job growth.Ms. Jones, the labor department economist, said the administration was determined to accelerate the recovery for marginalized workers, noting that Black workers, in particular, took years longer to recover from the 2008 financial crisis — a delay that left lasting scars on those households.“Nothing about the state of the world means that Black workers have to face a large amount of labor market slack,” she said. “We can choose the benchmark that we actually want to restore the economy to.”People waiting last month at a food bank in Pflugerville, Texas. The Biden administration says its stimulus package is still necessary to accelerate the recovery for marginalized workers.Credit…Ilana Panich-Linsman for The New York TimesBut even some economists who have favored substantial government spending in the past, most prominently Mr. Summers and Olivier Blanchard of the Peterson Institute for International Economics, have warned that Congress risks overdoing it by pouring so much money into the economy at a time when it is already healing.Mr. Blanchard posted on Twitter on Friday morning, comparing the big fiscal package with a snake swallowing an elephant: “The snake was too ambitious. The elephant will pass, but maybe with some damage.”Mr. Summers warned in a recent opinion piece in The Washington Post that the Biden package is going to pump far more money into the economy than it is missing, arguing that the monthly amount “is at least three times the size of the output shortfall.”One major concern is that as the government pushes money into an economy that does not need so much support, too many dollars will end up chasing too few goods and services.Fed officials do not believe that big spending is going to fundamentally change the way consumers and businesses think about prices. Inflation has been low for decades, and businesses often report that they have little pricing power in a world where technology and globalization makes competition fierce.Inflation is likely to jump temporarily this year as economic data rebounds from its very low readings last year and people spend their savings on missed vacations and restaurant dinners. But Fed officials have said there is little to suggest that such an increase would last.“I think it’s a constructive thing for people to point out potential risks,” Mr. Powell said this week during a question-and-answer session. “But I do think it’s more likely that what happens in the next year or so is going to amount to prices moving up but not staying up — and certainly not staying up to the point where they would move inflation expectations materially above 2 percent.”AdvertisementContinue reading the main story More

  • in

    Biden Gains Two Key Economic Advisers

    AdvertisementContinue reading the main storySupported byContinue reading the main storyBiden Gains Two Key Economic AdvisersThe Senate confirmed Gina Raimondo as President Biden’s commerce secretary and Cecilia Rouse as the head of the Council of Economic Advisers.Gina Raimondo, left, brings experience as Rhode Island governor and a venture capitalist to her role as commerce secretary, and Cecilia Rouse, a Princeton economist, has previously been a member of the council she is about to lead.Credit…Kriston Jae Bethel for The New York TimesAna Swanson and March 2, 2021, 7:11 p.m. ETWASHINGTON — The Senate confirmed two key members of President Biden’s economic team on Tuesday, ushering in Gina Raimondo, the governor of Rhode Island and a former venture capitalist, as the next secretary of commerce, and Cecilia Rouse, a Princeton University economist, as chair of the White House Council of Economic Advisers.Dr. Rouse will become the first Black chair of the economic council in its 75-year history. She was approved by a vote of 95 to 4.Ms. Raimondo was confirmed 84 to 15. A moderate Democrat with a background in the financial industry, Ms. Raimondo is expected to leverage her private- and public-sector experience to oversee a sprawling bureaucracy that is charged with both promoting and regulating American business.Under Ms. Raimondo, the Commerce Department is likely to play a crucial role in several of Mr. Biden’s policy efforts, including spurring the American economy, building out rural broadband and other infrastructure, and leading America’s technology competition with China. The department also carries out the census and oversees American fisheries, weather monitoring, telecommunications standards and economic data gathering, among other activities.Senator Maria Cantwell, Democrat of Washington, said that she thought Ms. Raimondo’s private-sector experience would help her facilitate new investments and create jobs in the United States, and that she was “counting on Governor Raimondo to help us with our export economy.”Ms. Cantwell also said she believed Ms. Raimondo would be a departure from President Donald J. Trump’s commerce secretary, Wilbur Ross. “I think he and the president spent a lot more time shaking their fists at the world community than engaging them on policies that were really going to help markets and help us move forward with getting our products in the door,” she said.A graduate of Yale and Oxford, Ms. Raimondo was a founding employee at Village Ventures, an investment firm backed by Bain Capital. She also co-founded her own venture capital firm, Point Judith Capital, before being elected treasurer and then governor of Rhode Island.The first female governor of the state, she was known for introducing a centrist agenda that included training programs, fewer regulations and reduced taxes for businesses. She also led a restructuring of the state’s pension programs, clashing with unions in the process.Ms. Raimondo drew criticism from some Republicans in her nomination hearing in January, when she declined to commit to keeping certain restrictions in place on the exports that could be sent to the Chinese telecom firm Huawei, which many American lawmakers see as a threat to national security.Speaking on the Senate floor on Tuesday, Senator Ted Cruz, Republican of Texas, denounced those remarks and urged his colleagues to vote against Ms. Raimondo. “There has been a rush to embrace the worst elements of the Chinese Communist Party in the Biden administration. And that includes Governor Raimondo,” he said.Under Mr. Trump, the Commerce Department played an outsize role in trade policy, levying tariffs on imported aluminum and steel for national security reasons, investigating additional tariffs on cars and placing a variety of curbs on technology exports to China.Ms. Raimondo and other Biden administration officials have not clarified whether they will keep those restrictions, saying they will first carry out a comprehensive review of their effects.Dr. Rouse is the dean of the Princeton School of Public and International Affairs, and a former member of the council under President Barack Obama. Her academic research has focused on education, discrimination and the forces that hold some people back in the American economy. She won widespread praise from Republicans and Democrats alike in her confirmation hearing, with senators voting unanimously to send her nomination from the Banking Committee to the full Senate.She will assume her post amid an economic and public health crisis from the coronavirus pandemic, and in the waning days of congressional debate on a $1.9 trillion economic aid package that Mr. Biden has made his first major legislative priority.But in interviews and her hearing testimony, Dr. Rouse has made clear that she sees a larger set of priorities as council chair: overhauling the inner workings of the federal government to promote racial and gender equity in the economy.“As deeply distressing as this pandemic and economic fallout have been,” she said in her hearing, “it is also an opportunity to rebuild the economy better than it was before — making it work for everyone by increasing the availability of fulfilling jobs and leaving no one vulnerable to falling through the cracks.”One of her initiatives will be to audit the ways in which the government collects and reports economic data, in order to break it down by race, gender and other demographic variables to improve the government’s ability to target economic policies to help historically disadvantaged groups.“We want to design policies that will be economically effective,” Dr. Rouse said in an interview this year. Asked how she would judge effectiveness, she replied, “It’s by keeping our eye on this ball, and asking ourselves, every time we look at a policy: What are the racial and ethnic impacts?”AdvertisementContinue reading the main story More

  • in

    Warren Revives Wealth Tax, Citing Pandemic Inequalities

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesRisk Near YouVaccine RolloutNew Variants TrackerAdvertisementContinue reading the main storySupported byContinue reading the main storyWarren Revives Wealth Tax, Citing Pandemic InequalitiesA tax on the net worth of America’s wealthiest individuals remains popular with voters, but has yet to be embraced by President Biden.Senator Elizabeth Warren plans to introduce legislation Monday that would apply a 2 percent tax to individual net worth above $50 million, and an additional 1 percent surcharge above $1 billion.Credit…Anna Moneymaker for The New York TimesMarch 1, 2021Updated 3:49 p.m. ETWASHINGTON — Senator Elizabeth Warren, Democrat of Massachusetts, introduced legislation on Monday that would tax the net worth of the wealthiest people in America, a proposal aimed at persuading President Biden and other Democrats to fund sweeping new federal spending programs by taxing the richest Americans.Ms. Warren’s wealth tax would apply a 2 percent tax to individual net worth — including the value of stocks, houses, boats and anything else a person owns, after subtracting out any debts — above $50 million. It would add an additional 1 percent surcharge for net worth above $1 billion. It is co-sponsored in the House by two Democratic representatives, Pramila Jayapal of Washington, who leads the Congressional Progressive Caucus, and Brendan F. Boyle of Pennsylvania, a moderate.The proposal, which mirrors the plan Ms. Warren unveiled while seeking the 2020 presidential nomination, is not among the top revenue-raisers that Democratic leaders are considering to help offset Mr. Biden’s campaign proposals to spend trillions of dollars on infrastructure, education, child care, clean energy deployment, health care and other domestic initiatives. Unlike Ms. Warren, Mr. Biden pointedly did not endorse a wealth tax in the 2020 Democratic presidential primaries.But Ms. Warren is pushing colleagues to pursue such a plan, which has gained popularity with the public as the richest Americans reap huge gains while 10 million Americans remain out of work as a result of the pandemic.Polls have consistently shown Ms. Warren’s proposal winning the support of more than three in five Americans, including a majority of Republican voters.“A wealth tax is popular among voters on both sides for good reason: because they understand the system is rigged to benefit the wealthy and large corporations,” Ms. Warren said. “As Congress develops additional plans to help our economy, the wealth tax should be at the top of the list to help pay for these plans because of the huge amounts of revenue it would generate.”She said she was confident that “lawmakers will catch up to the overwhelming majority of Americans who are demanding more fairness, more change, and who believe it’s time for a wealth tax.”The Coronavirus Outbreak More

  • in

    Republicans Pitch Biden on Smaller Aid Plan as Democrats Prepare to Act Alone

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskVaccine InformationWuhan, One Year LaterAdvertisementContinue reading the main storySupported byContinue reading the main storyRepublicans Pitch Biden on Smaller Aid Plan as Democrats Prepare to Act AloneThe president met at the White House with Republican senators seeking a much smaller stimulus plan, but congressional Democrats pressed forward to force through his $1.9 trillion measure, if necessary.President Biden and Vice President Kamala Harris met with Republican senators on Monday about a stimulus plan.Credit…Doug Mills/The New York TimesLuke Broadwater and Feb. 1, 2021Updated 7:43 p.m. ETWASHINGTON — A coalition of 10 Republican senators took a stimulus counterproposal to the White House on Monday evening, urging President Biden to scale back his ambitions for a sweeping $1.9 trillion pandemic aid package in favor of a plan less than one-third the size that they argued could garner the bipartisan consensus the new president has said he is seeking.Their outline, which came as Democrats prepared to push forward on Mr. Biden’s plan with or without Republican backing, amounted to a test of whether the president would opt to pursue a scaled-back measure that could fulfill his pledge to foster broad compromise, or use his majority in Congress to reach for a more robust relief effort enacted over stiff Republican opposition.Mr. Biden appeared eager to signal an openness to negotiating, telling Senator Susan Collins, Republican of Maine and the leader of the group, that he was “anxious” to hear what the senators had to say as they chatted in the Oval Office before the meeting began, and spending two hours behind closed doors in what both sides described as a cordial and productive session.“I wouldn’t say that we came together on a package tonight,” Ms. Collins told reporters as she left. But she called the discussion “excellent” and said Mr. Biden and the senators had agreed to continue their talks. And she said Republicans appreciated that Mr. Biden had devoted his first Oval Office meeting as president to “a frank and very useful discussion” with them.“All of us are concerned about struggling families, teetering small businesses, an overwhelmed health care system, getting vaccines out and into people’s arms, and strengthening our economy and addressing the public health crisis that we face,” Ms. Collins said.Even so, Mr. Biden’s advisers have made clear that the president has little enthusiasm for significantly cutting back on the rescue measure he has proposed. And there was scant evidence, for now, that any Democrats were seriously considering embracing a proposal as limited as the one the Republicans have laid out.“The risk is not that it is too big, this package,” Jen Psaki, the White House press secretary, said before the meeting. “The risk is that it is too small. That remains his view.”Republicans outlined the plan as the Congressional Budget Office projected that the American economy would return to its pre-pandemic size by the middle of this year, even if Congress did not approve any more federal aid for the recovery, but that it would be years before everyone thrown off the job by the pandemic would be able to return to work.The rosier-than-expected projections were likely to inject even more debate into the discussions over the stimulus measure, emboldening Republicans who have pushed Mr. Biden to scale back his plan. But they also indicated that there was little risk that another substantial package of federal aid could “overheat” the economy, and reflected the prolonged difficulties of shaking off the virus and returning to full levels of economic activity.The Republicans’ $618 billion proposal would include many of the same elements as Mr. Biden’s plan, with $160 billion for vaccine distribution and development, coronavirus testing and the production of personal protective equipment; $20 billion to help schools reopen; more relief for small businesses; and additional aid to individuals. But it differs in ways large and small, omitting a federal minimum wage increase or direct aid to states and cities.It would slash the direct payments to Americans, providing $1,000 instead of $1,400 and limiting them to the lowest income earners, excluding individuals who earned more than $50,000. It would also pare back federal jobless aid, which is set to lapse in March, setting weekly payments at $300 through June instead of $400 through September.On Capitol Hill, top Democrats said they were worried a smaller package would not adequately meet the needs of struggling Americans.“This proposal is an insult to the millions of workers and families struggling to survive this crisis,” Senator Ron Wyden, Democrat of Oregon and the incoming Finance Committee chairman, said of the Republican plan. “A bill that sets up yet another cliff for jobless workers in a few short months is a nonstarter.”Hours before Mr. Biden sat down with the Republicans, Democratic leaders began laying the groundwork to move forward on their own, if necessary, with the president’s $1.9 trillion plan through a process known as budget reconciliation, which would allow it to bypass any Republican filibuster with a mere majority vote.Speaker Nancy Pelosi and Senator Chuck Schumer of New York, the majority leader, filed a joint budget resolution to begin the process, with plans for votes in the Senate by week’s end.The Coronavirus Outbreak More

  • in

    Effort to Include $15 Minimum Wage in Relief Bill Poses Test for Democrats

    #masthead-section-label, #masthead-bar-one { display: none }The New WashingtonLatest UpdatesExpanding Health CoverageBiden’s CabinetPandemic ResponseAdvertisementContinue reading the main storySupported byContinue reading the main storyEffort to Include $15 Minimum Wage in Relief Bill Poses Test for DemocratsThe measure will test their willingness and ability to use procedural maneuvers to shepherd big policy goals past entrenched Republican opposition in an evenly divided Senate.Senator Bernie Sanders is mounting an aggressive push for the minimum wage as he prepares to take control of the Senate Budget Committee.Credit…Pool photo by Graeme JenningsJan. 31, 2021, 7:04 p.m. ETWASHINGTON — As Senator Bernie Sanders, the Vermont independent, prepares to take control of the Senate Budget Committee, he is mounting an aggressive campaign ahead of what will be one of his first tests as chairman: securing the support needed to increase the federal minimum wage to $15 an hour by 2025 in a pandemic relief package.Whether he succeeds will not only affect the jobs and wages of millions of American workers, but also help define the limits of Democrats’ willingness and ability to use procedural maneuvers to shepherd major policy proposals past entrenched Republican opposition in an evenly divided Senate.President Biden and top Democratic leaders have repeatedly said their first choice is to pass Mr. Biden’s sweeping $1.9 trillion stimulus proposal with bipartisan support. But Republicans are already balking at the scope of the proposal, and raising the minimum wage to $15 is a particularly contentious part of the bill, a progressive priority that draws intense opposition from many Republicans.So Democrats are barreling toward using a fast-track process known as budget reconciliation to avoid the 60-vote threshold typically needed to overcome a filibuster and approve legislation. That would allow them to pass the measure with no Republican support and Vice President Kamala Harris casting the tiebreaking vote. Both chambers are expected to vote on a budget resolution — a measure that will formally direct committees in the House and the Senate to begin drafting the relief package, kicking off the reconciliation process — in the coming days.Mr. Sanders argued in an interview that Democrats clinched control of the White House and the Senate in part by promising sweeping policy changes and additional pandemic relief, and that not supporting the full legislation would betray their voters and undermine faith in the party’s governing.“If that is the case, if that is what we do, we will surely be a minority in two years,” Mr. Sanders said. “We have to keep the promises that we made.”But Republicans have said that failing to compromise would jeopardize future bipartisan negotiations for a president who has repeatedly called for unity, with a group of 10 Republican senators moving to unveil their own $600 billion proposal as early as Monday in an effort to negotiate with the administration.And the minimum wage poses a particularly polarizing test: Including it in the package would be an aggressive use of reconciliation, one some lawmakers fear will not be allowed by the Senate parliamentarian. That could force Democrats into even more contentious tactics if they want the minimum wage to pass, setting up a battle between a priority championed by liberals like Mr. Sanders and the further fraying of Senate norms.“Minimum wage is probably the most controversial of those proposals,” Mr. Sanders acknowledged. “I’m sure every Democratic senator will have some problem with some aspect of reconciliation, I do, others do — I am absolutely confident that people will support our new president and do everything we can to help the working families of this country.”Other lawmakers, including some Republicans, have argued that the pandemic relief package should be scaled down, with items like the minimum wage provision left for another legislative battle later in the year. Most House Republicans voted against a stand-alone minimum wage bill in 2019, pointing to a Congressional Budget Office report that estimated the provision would put an estimated 1.3 million Americans out of work. Senate Republicans, in control of the chamber, did not take it up.“That’s an agenda item for the administration, so be it,” Senator Lisa Murkowski, Republican of Alaska, told reporters. “Should it be included as part of a Covid relief package? I think it takes the focus off the priority, which is what is the immediate need today.”“Hey,” she added, “you get the keys to the car now. And so let’s get some legislation done, but you don’t need to think that you need to get it all in one package.”Senator Lindsey Graham, Republican of South Carolina, bluntly told reporters in January that “we’re not going to do a $15 minimum wage in it” and that Mr. Biden was better off reaching out to Capitol Hill and negotiating a compromise.Mr. Sanders and Democrats have argued that with jobless benefits set to begin expiring in mid-March, there is little time to win over their Republican counterparts, who embarked on similar reconciliation efforts in 2017 to repeal portions of the Affordable Care Act and pass a sweeping tax overhaul.But to secure the first increase in the federal minimum wage since 2009, even under reconciliation Mr. Sanders and liberal Democrats can afford to lose little, if any, support from the rest of the caucus.Several lawmakers, including Representative John Yarmuth of Kentucky, the chairman of the House Budget Committee, have voiced skepticism that the minimum wage provision can prevail through the rules of the reconciliation process, which imposes strict parameters to prevent the process from being abused. Under the so-called Byrd Rule, Democrats cannot include any measure that affects the Social Security program, increases the deficit after a certain period of time set in the budget resolution or does not change revenues or spending.The decision on whether the provision can be included in the reconciliation package lies with the Senate parliamentarian. Ms. Harris could ultimately overrule the parliamentarian — something that has not been done since 1975 — and Mr. Sanders declined to say whether a rejection of the minimum wage provision would prompt Democrats to do so.“Our first task is to get the ruling of the parliamentarian,” he said. “That’s what I would like to see and that’s what we are focused on right now.”Some Democrats, including Mr. Yarmuth, have signed on instead to stand-alone legislation for the minimum wage increase as another avenue for approval, but one that would require Republican support. Cedric Richmond, a top White House adviser, argued that “the minimum wage has been expanded or increased during times of crisis before” but declined to say whether it should be part of the coronavirus package or a stand-alone bill.Mr. Sanders pointed to two new studies, shown to The New York Times ahead of their publication, that argue that the minimum wage would have a direct impact on the federal budget, opening a door to using reconciliation. In a new paper, Michael Reich, a professor of economics and labor economist at the University of California, Berkeley, estimated that approval of the minimum wage would have a positive effect of $65.4 billion per year largely because of increases to payroll and income tax revenue.“It seems to me that it has pretty substantial budgetary impacts,” Mr. Reich, who has long studied the effects of minimum wage, said of the provision in an interview, adding that he had been conservative in his estimate.Another report, produced by three economists at the Economic Policy Institute, a liberal think tank and a longtime advocate for increasing the minimum wage, found that there would be “significant and direct effects” on the federal budget by increasing payroll tax revenue by $7 billion to $13.9 billion and reducing expenditures on public assistance programs by $13.4 billion to $31 billion.“This is a sizable chunk of money, no matter how you look at it,” said David Cooper, who wrote the report with Ben Zipperer and Josh Bivens. They determined that increased revenue would prevent many workers and their families from qualifying for assistance programs, reducing expenses.But it remains uncertain whether that evidence will be enough to clear the parameters of the Byrd Rule, given that those effects could be ruled “merely incidental.” The Congressional Budget Office, one of the arbiters of the budget effects, found during the last Congress that there would be minimal impact based on the wages of some federal employees.But Mr. Sanders, pressed on whether Democrats had the votes in an evenly divided Senate to move forward with the minimum wage provision, declared that there were “50 votes to pass reconciliation, including minimum wage, yes.”“In totality, what Democrats are saying,” he said, is “we’ve got to support the president, we’ve got to address the crises facing working families and we’re going to pass reconciliation.”Jim Tankersley More

  • in

    Ghosts of 2009 Drive Democrats’ Push for Robust Crisis Response

    #masthead-section-label, #masthead-bar-one { display: none }The New WashingtonLatest UpdatesExpanding Health CoverageBiden’s CabinetPandemic ResponseAdvertisementContinue reading the main storySupported byContinue reading the main storyNews AnalysisGhosts of 2009 Drive Democrats’ Push for Robust Crisis ResponseIn their quest for Republican backing, Democrats say they missed opportunities in 2009 for a stronger response to the Great Recession. They are determined not to repeat the mistake.Senator Chuck Schumer of New York, the new majority leader, at the Capitol on Wednesday. “We should have learned the lesson of 2008 and 2009, when Congress was too timid and constrained in its response to the financial crisis,” he said last week.Credit…Oliver Contreras for The New York TimesJan. 31, 2021Updated 5:27 p.m. ETWASHINGTON — Ten Republican senators asked President Biden on Sunday to drastically scale back his $1.9 trillion pandemic aid bill, offering a $600 billion alternative that they said could pass quickly with bipartisan support.But their proposal met a tepid reception from Democrats, who are preparing this week to move forward with their own sweeping package — even if it means eventually cutting Republicans out of the process. Haunted by what they see as their miscalculations in 2009, the last time they controlled the government and faced an economic crisis, the White House and top Democrats are determined to move quickly this time on their stimulus plan, and reluctant to pare it back or make significant changes that would dilute it with no certainty of bringing Republicans on board.“The dangers of undershooting our response are far greater than overshooting,” said Senator Chuck Schumer, Democrat of New York and the new majority leader. “We should have learned the lesson of 2008 and 2009, when Congress was too timid and constrained in its response to the financial crisis.”Their strategy can be traced to 12 years ago, when Barack Obama became president, Democrats controlled both houses of Congress, and they tackled both an economic rescue package and a sweeping health care overhaul.In retrospect, in the quest to win Republican backing for both, Democrats say, they settled for too small an economic stimulus and extended talks on the health care measure for too long. That view was driving the party’s unenthusiastic response on Sunday to the new offer from the Senate Republicans who asked for a meeting with Mr. Biden to lay out a substantially smaller stimulus proposal. In a letter, the 10 senators — notably enough to defeat a filibuster — said their priorities aligned with Mr. Biden’s on crucial areas such as vaccine distribution.But members of the group made clear in interviews on Sunday that their plan amounted to less than a third of Mr. Biden’s proposal. Democrats said they would review it, but would insist on a comprehensive legislative response.While talks with Republicans are expected to continue, Democrats are set this week to put in motion a budget process known as reconciliation that is not subject to a filibuster, allowing them to push through pandemic legislation on their own if no bipartisan agreement emerges.That possibility has Republicans squawking that Democrats are abandoning their bipartisan pledge without giving it a chance and warning that the effort will poison their ability to reach bipartisan deals. The objection ignores the fact that when they controlled Congress, Republicans rolled over Democrats in January 2017 and began their own reconciliation process even before Donald J. Trump was sworn in as president, paving the way for the enactment of a $1.5 trillion tax package that was muscled through without a single Democratic vote.“We’re giving an opportunity to come together on important and timely legislation, so why wouldn’t you do that rather than trying to move it through with reconciliation and having a fully partisan product?” asked Senator Lisa Murkowski, Republican of Alaska and one of the signers of the new letter.While they have yet to roll out their plan, members of the group said it would omit Democrats’ proposal for a federal minimum wage increase and scale back direct stimulus payments to individuals, excluding Americans earning more than $50,000 a year or families with a combined income exceeding $100,000.“Let’s focus on those who are struggling,” Senator Rob Portman, Republican of Ohio, said on the CNN program “State of the Union” on Sunday.But to Democrats, the scars from 2009 cut deep. First, they believe they were too accommodating to Republicans, who called for restraint in providing stimulus for the economy. Then Democrats saw themselves as sandbagged by Republicans who engaged in prolonged negotiations over health care before pulling the plug entirely, opposing legislation that they had helped draft and inflaming a partisan fight that cost Democrats dearly in the 2010 midterm elections.This time, Democrats say the new aid must be robust and delivered quickly. They do not intend to allow Republicans to dictate the timing nor the reach of the legislation.“I’m not going to let Republican senators stall for the sole purpose of stalling,” Senator Ron Wyden, Democrat of Oregon and the incoming chairman of the Senate Finance Committee, said on a conference call hosted by the advocacy group Invest in America. He added that his view grew out of his own experience serving as a junior member of the panel during the Great Recession.Mr. Biden would no doubt prefer to push his proposal through with bipartisan support to show he is able to bridge the differences between the two parties. But the White House has been adamant that it will not chop up his plan to try to secure Republican backing and that while the scope could be adjusted, the changes will not be too substantial.“We have learned from past crises that the risk is not doing too much,” Mr. Biden, who was vice president in 2009, said on Friday at the White House, striking the same theme as Mr. Schumer. “The risk is not doing enough.”Like Mr. Biden this year, Mr. Obama entered the White House in 2009 optimistic he could cooperate with Republicans, and there had been promising signs in 2008. In the face of a dire economic emergency, congressional Republicans, Democrats and George W. Bush’s administration had worked closely to approve the $700 billion Wall Street bailout. Republicans also seemed dispirited by steep election losses in November, suggesting some might be open to cooperation.But to an extent that was not immediately apparent, top Republicans in the House and Senate quickly decided that their best path to reclaiming power was to remain united against Mr. Obama’s agenda, a stance Republicans later acknowledged.As a result, the administration and Democratic leaders had to make multiple concessions to ensure the votes of three Republicans and a few moderate Democrats needed to provide the bare minimum of 60 votes to overcome deep Republican opposition to the stimulus package. That meant holding the amount to $787 billion, less than what some economists at the time said was needed, and potentially slowing the recovery.President Obama speaking about health care in 2009. Democrats say they settled for too small an economic stimulus to gain needed Republican support while also extending talks on health care for too long.Credit…Stephen Crowley/The New York TimesThen came the health care law. Democrats were determined to both expand access to affordable health insurance and to work with Republicans in doing so. They were also concerned then about repeating past mistakes, particularly the Clinton health care effort in 1994, whose spectacular collapse was attributed partly to a failure to involve Republicans from the start.While many Republicans were considered out of reach in 2009, a group of three senators influential on health care policy — Charles E. Grassley of Iowa, Mike Enzi of Wyoming and Olympia Snowe of Maine — engaged in lengthy negotiations with three Democratic counterparts, in a group that came to be known as the Gang of Six.To bring them along, Democrats proposed a market-based approach rather than the kind of government-run, single-payer program sought by many liberals. They even eschewed a limited public option to mollify Republicans and some moderate Democrats. Still, the talks dragged, and Republicans began pulling back amid a rash of raucous protests at congressional town hall events across the country.Frustrated and believing Democrats were being strung along, Mr. Obama in September 2009 summoned Mr. Grassley to the White House along with Senator Max Baucus, Democrat of Montana, who was leading the Gang of Six.Mr. Obama recounted the scene in his new memoir, writing that he had pressed Mr. Grassley on whether, “if Max took every one of your latest suggestions, could you support the bill?” Mr. Grassley was hesitant. “Are there any changes — any at all — that would get us your vote?” Mr. Obama asked, drawing what he described as an awkward silence from the Republican senator.“I guess not, Mr. President,” Mr. Grassley eventually responded.As they plunge forward this year, Democrats say they do not want to find themselves in a similar position, working with Republicans only to come up short with an insufficient response that does not draw bipartisan support.Some Democrats still hold out hope of reaching bipartisan agreement on at least some elements of the administration’s coronavirus response and say the party must make a legitimate attempt to come together with Republicans.“We ought to try to do what we can do in a bipartisan way,” Senator Joe Manchin III of West Virginia, a leading Democrat in the bipartisan talks, told reporters. He said it would then be appropriate for Mr. Schumer to use “other means to move things along” if progress could not be made.Emily Cochrane More

  • in

    ‘We Need to Stabilize’: Big Business Breaks With Republicans

    #masthead-section-label, #masthead-bar-one { display: none }Capitol Riot FalloutInside the SiegeVisual TimelineNotable ArrestsCapitol Police in CrisisAdvertisementContinue reading the main storySupported byContinue reading the main story‘We Need to Stabilize’: Big Business Breaks With RepublicansLow taxes and light regulation made the party popular with corporate America for decades. President Trump and his supporters have frayed those bonds.After the deadly Capitol rampage by President Trump’s supporters, corporate America is flexing its political muscle like never before.Credit…Kenny Holston for The New York TimesJan. 15, 2021The longstanding alliance between big business and the Republican Party is being tested as never before.As President Trump and his allies sought to overturn the election results in recent months, chief executives condemned their efforts and called on Republicans to stop meddling with the peaceful transfer of power.Now, in the aftermath of the deadly Capitol rampage by Mr. Trump’s supporters, corporate America is turning its back on many senior Republicans, and flexing its political muscle.One major trade group called on Mr. Trump’s cabinet to consider removing him from office. Dozens of companies, from AT&T to Walmart, have said they will no longer donate to members of Congress who opposed the Electoral College certification of President-elect Joseph R. Biden Jr.And a senior House Democrat asked big banks and other financial services companies on Friday to stop processing financial transactions for people and organizations that participated in the Capitol riot.Tim Ryan, the chief executive of PWC, who said his firm was among those suspending donations to members who voted against certification, called for the country to come together. “I believe this is the best country in the world, and we can’t let all that go to hell in a handbasket,” he said. “We need to stabilize. We need certainty.”He added, “If we can’t come together, can’t stabilize, or if it got worse, it wouldn’t be good for business.”The proclamations of chief executives might not normally matter much in political discourse, and there are some who are skeptical that their motives are anything beyond self-interest. But in a fractured moment, the unified voice of the mainstream business world carries a great deal of symbolic heft.A recent study by Edelman found that the public trusts business more than nonprofit organizations, the government or the media.“This thing was a little different. I mean, we had sedition and insurrection in D.C.,” said Jamie Dimon, the chief executive of JPMorgan Chase.Credit…Sarah Silbiger/The New York Times“They’re not just the money,” said Nancy Koehn, a historian at Harvard Business School. “They’re also this collective seal of approval. They carry an enormous amount of weight, regardless of your political loyalties.”For decades, the Republicans were seen as the party of big business. Their support for low taxes and light regulation was manna to executives eager to raise profits and avoid government entanglements, and chief executives and big companies were reliable funders of Republicans up and down the ballot.Mr. Trump has frayed those bonds. Four years ago, few major chief executives supported Mr. Trump during his first campaign. And throughout his time in the White House, executives from many of the company’s biggest brands publicly sparred with the president on everything from gun control to climate change to immigration.“I can’t remember a time when the business community has spoken out so strongly in opposition to an administration on so many important issues,” said Rich Lesser, chief executive of Boston Consulting Group.“It’s not just a break with Trump but potentially with the Republican Party,” said Richard Edelman, chief executive of the global corporate communications firm Edelman. “It’s not OK what’s going on in America, and businesspeople are going to hold you to account.”Even as they objected to some of Mr. Trump’s stances, however, business leaders continued to take seats at the table, working with the Trump administration on issues including taxes and trade policy.But last week seemed to be a breaking point. Big business could evidently tolerate working with Mr. Trump despite his chauvinism, his flirtations with white nationalism and his claims of impunity, but the president’s apparent willingness to undermine democracy itself appeared to be a step too far.“This thing was a little different. I mean, we had sedition and insurrection in D.C.,” said Jamie Dimon, the chief executive of JPMorgan Chase. “No C.E.O. I know condones that in any way, shape or form. We shouldn’t have someone, you know, gassing up a mob.”The fallout has been swift. After the president exhorted his supporters to march on the Capitol, chief executives used their strongest language to date to repudiate Mr. Trump, and some of his longtime allies have walked away. Ken Langone, the billionaire co-founder of Home Depot and an ardent supporter of the president, renounced Mr. Trump, telling CNBC, “I feel betrayed.”Twitter, Facebook and YouTube have banned or suspended Mr. Trump’s accounts. Amazon, Apple and Google have cut ties with Parler, a messaging app popular among his supporters.Charles Schwab, the brokerage firm founded by a Republican who supported Mr. Trump, said it would shut down its political action committee altogether. And many companies, along with the U.S. Chamber of Commerce, have sought to punish Mr. Trump’s supporters in Congress by depriving them of crucial funds.“For those members of Congress that were involved in helping to incite the riot, and support the riot, there’s going to be consequences, no question about it,” said Ed Bastian, chief executive of Delta Air Lines.Senator Ted Cruz fist bumped with a House member after a joint session of Congress to confirm the Electoral College presidential votes on Jan. 6.Credit…Erin Schaff/The New York TimesA total of 147 members, or more than half of Republicans in Congress, voted to overturn the election results, including Senators Ted Cruz and Josh Hawley, and the House minority leader, Kevin McCarthy.Corporate giving represents a small but important part of overall campaign contributions. Company PACs gave $91 million to members of the House of Representatives in the last election cycle, accounting for 8 percent of that chamber’s total funds raised, according to figures compiled by the Center for Responsive Politics. In the Senate, the figure was smaller, accounting for just 3 percent of donations..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-c7gg1r{font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:0.875rem;line-height:0.875rem;margin-bottom:15px;color:#121212 !important;}@media (min-width:740px){.css-c7gg1r{font-size:0.9375rem;line-height:0.9375rem;}}.css-rqynmc{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:0.9375rem;line-height:1.25rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-rqynmc{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-rqynmc strong{font-weight:600;}.css-rqynmc em{font-style:italic;}.css-yoay6m{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;}@media (min-width:740px){.css-yoay6m{font-size:1.25rem;line-height:1.4375rem;}}.css-1dg6kl4{margin-top:5px;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;}#masthead-bar-one{display:none;}#masthead-bar-one{display:none;}.css-1cs27wo{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;}@media (min-width:740px){.css-1cs27wo{padding:20px;}}.css-1cs27wo:focus{outline:1px solid #e2e2e2;}.css-1cs27wo[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-1cs27wo[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-1cs27wo[data-truncated] .css-5gimkt:after{content:’See more’;}.css-1cs27wo[data-truncated] .css-6mllg9{opacity:1;}.css-k9atqk{margin:0 auto;overflow:hidden;}.css-k9atqk strong{font-weight:700;}.css-k9atqk em{font-style:italic;}.css-k9atqk a{color:#326891;-webkit-text-decoration:none;text-decoration:none;border-bottom:1px solid #ccd9e3;}.css-k9atqk a:visited{color:#333;-webkit-text-decoration:none;text-decoration:none;border-bottom:1px solid #ddd;}.css-k9atqk a:hover{border-bottom:none;}Capitol Riot FalloutFrom Riot to ImpeachmentThe riot inside the U.S. Capitol on Wednesday, Jan. 6, followed a rally at which President Trump made an inflammatory speech to his supporters, questioning the results of the election. Here’s a look at what happened and the ongoing fallout:As this video shows, poor planning and a restive crowd encouraged by President Trump set the stage for the riot.A two hour period was crucial to turning the rally into the riot.Several Trump administration officials, including cabinet members Betsy DeVos and Elaine Chao, announced that they were stepping down as a result of the riot.Federal prosecutors have charged more than 70 people, including some who appeared in viral photos and videos of the riot. Officials expect to eventually charge hundreds of others.The House voted to impeach the president on charges of “inciting an insurrection” that led to the rampage by his supporters.Some companies said they were only temporarily stopping their corporate giving, but executives were sending a clear message that they were fed up with Washington.“It’s just a sad time for our country,” said Chuck Robbins, the chief executive of Cisco, which is also halting donations to members who voted against certification. “At a time where we have so many challenges, the partisanship is astounding.”With political rancor worsening by the day and few politicians enjoying bipartisan support, business leaders have emerged as a uniquely potent force, the rare constituency whose pleas for stability and national unity are largely untainted by allegiance to one party or the other.“C.E.O.s have become the fourth branch of government,” said Jonathan Greenblatt, chief executive of the Anti-Defamation League, which has pressured big companies to take stands on social issues. “They’re trying to hold the country together.”Executives are confronting their newfound authority with a mix of swagger and reticence. “There’s no question that our voice is seen as more important than ever,” said Mr. Bastian of Delta, which said it was reviewing its political giving and has banned some pro-Trump protesters from its flights.But the impulse to speak out is tempered by a wariness about becoming too prescriptive. “Companies don’t want to take partisan points of view,” Mr. Dimon said. “I don’t want to tell my employees what to think.”At stake is much more than just the fortunes of Mr. Trump. With the democratic process itself appearing in jeopardy, executives are confronting broader concerns about what that might mean for the economy.“The erosion of norms and the destabilizing of democracy is bad for business,” Mr. Greenblatt said.Yet with many Republicans still aligned with Mr. Trump and more unrest on the horizon, companies may be forced to reckon with this version of the Republican Party for years to come.Cisco said it would no longer donate to members who opposed the election certification, for instance, but Mr. Robbins said that did not represent a wholesale split from Republicans. “There are plenty of members in the Republican Party who stood up and did the right thing last week that we’ll continue to support,” he said.But for those who interfered with the certification of the election, there are no signs that big business is prepared to forgive and forget. JPMorgan said it was pausing all political contributions for six months, and Mr. Dimon, who has flirted with a run for president in the past, was unsparing in his critique.“No one thought they were giving money to people who supported sedition,” he said.AdvertisementContinue reading the main story More