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    U.S. Backs Global Minimum Tax of at Least 15% to Curb Profit Shifting Overseas

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    The Biden administration wants other countries to back a minimum tax as part of its plan to raise the U.S. corporate tax rate to 28 percent from 21 percent.The Biden administration proposed a global tax on multinational corporations of at least 15 percent in the latest round of international tax negotiations, Treasury Department officials said on Thursday, as the U.S. looks to reach a deal with countries that fear hiking their rates will deter investment. More

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    Amid Economic Turmoil, Biden Stays Focused on Longer Term

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    The president’s advisers are pushing their most detailed argument yet for the long-term benefits of a $4 trillion agenda to remake the American economy.WASHINGTON — President Biden and his economic team on Thursday made their most detailed case yet for trillions of dollars in new federal spending to rebuild public investment in workers, research and physical infrastructure, focusing on long-term ingredients of economic growth and equality as the current recovery from recession showed signs of distress.The president’s aides published what amounted to a deeper economic backbone for the argument that Mr. Biden is making publicly and privately to sell his plans to lawmakers, including the message he conveyed to a group of Republican senators he invited to the White House on Thursday to discuss an infrastructure package centered on roads, bridges, transit and broadband.That meeting ended with encouraging words from both sides. Republicans said Mr. Biden invited the senators, who had previously offered a nearly $570 billion, narrowly focused package, to return with an updated offer, including how to pay for new spending.Senator Shelley Moore Capito of West Virginia, who is leading the Republicans’ negotiations, said lawmakers would prepare an updated offer for the president to review by early next week, including a more detailed list of the kinds of projects they would be willing to fund and a set of proposals to cover the costs. The senators said they expected Mr. Biden would then respond with a counteroffer.“I made it clear that this was not a stagnant offer from us,” Ms. Capito said. “He made it clear that he is serious in wanting to pursue this.”She said Republican senators were open to raising the overall top-line price tag of their offer, which is a fraction of the new spending the president proposed. She also suggested that Republicans would be willing to cut a deal with Mr. Biden even if he decided to pursue a more progressive package, including priorities beyond traditional infrastructure, with only Democratic votes. Other senators predicted the sides would know by Memorial Day whether they could reach a deal.“It’s in nobody’s interest to draw this out beyond the time when you think it’s workable,” said Senator Roy Blunt, Republican of Missouri. “But I certainly left there thinking there’s a workable agreement to be had if we want to stretch a little both ways.”Shortly before the meeting, the White House Council of Economic Advisers posted a document to its website that cast Mr. Biden’s $4 trillion economic agenda as a way to correct decades of tax-cutting policies that had failed to bolster the middle class. In its place, the administration is pushing a rebuilding of public investment, like infrastructure, research and education, as the best way to fuel economic growth and improve families’ lives.The so-called issue brief reflects the administration’s longer-term thinking on economic policy when conservatives have ramped up criticism of the president over slowing job growth and accelerating inflation.Administration officials express confidence that recent price surges in used cars, airfare and other sectors of the economy will prove temporary, and that job growth will speed up again as more working-aged Americans are vaccinated against Covid-19 and regain access to child care during work hours. They say Mr. Biden’s $1.9 trillion economic aid package, which he signed in March, will lift job growth in the coming months, noting that new claims for unemployment fell to a pandemic-era low on Thursday.The officials also said it was appropriate for the president to look past the current crisis and push efforts to strengthen the economy long term.The two halves of Mr. Biden’s $4 trillion agenda, the American Jobs Plan and the American Families Plan, are premised on the economy returning to a low unemployment rate where essentially every American who wants to work is able to find a job, Cecilia Rouse, the chair of the Council of Economic Advisers, said in an interview.“The American Rescue Plan was rescue,” Dr. Rouse said. “It was meant as stimulus as we work through this hopefully once-in-a-century, if not longer, pandemic. The American Jobs Plan, American Families Plan are saying, look, that’s behind us, but we knew going into the pandemic that there were structural problems in our country and in our economy.”Mr. Biden’s plans would raise taxes on high earners and corporations to fund new federal spending on physical infrastructure, care for children and older Americans, expanded access to education, an accelerated transition to low-carbon energy and more.Those efforts “reflect the empirical evidence that a strong economy depends on a solid foundation of public investment, and that investments in workers, families and communities can pay off for decades to come,” Mr. Biden’s advisers wrote. “These plans are not emergency legislation; they address longstanding challenges.”The five-page brief focuses on arguments about what drives productivity, wage growth, innovation and equity in the economy. The issues predate the coronavirus recession and recovery, and Democrats in particular have pledged for years to address them.The brief begins by attacking the “old orthodoxy” of tax-cutting policies by presidents and Congress, including the 2017 tax cut passed by Republicans under President Donald J. Trump. A driving rationale behind that law was an effort to encourage more investment by private companies, bolstering what economists call the nation’s capital stock. The brief faults those policies for not producing the rapid gains in economic growth that champions of those policies promised, and it says that raising taxes on high earners “will help ensure that the gains from economic growth are more broadly shared.”Republicans continue to insist that tax cuts, particularly for businesses, are the key to economic competitiveness and middle-class prosperity. They have refused to negotiate any changes to their party’s signature 2017 tax law as part of an infrastructure agreement, even as they concede some need for a limited version of the new public investments Mr. Biden is calling for.Republicans used the meeting on Thursday to reiterate that they would be unwilling to raise corporate or personal taxes lowered by their 2017 law. Instead, they pitched the president on the use of zero-interest loans and public-private partnerships, in addition to existing gasoline taxes and other government savings.Mr. Biden would raise taxes to reverse what his economic team calls the federal government’s underinvestment in policies that help educate children and adults, facilitate the development of new technologies and industries and support parents so they are able to work and earn more. His team cites the wave of quickly developed coronavirus vaccines from Pfizer and Moderna, which grew out of publicly funded research, as an example of public investments yielding private-sector innovation.“Those started with ideas that were funded by the public sector decades ago,” Dr. Rouse said. “And then the private sector built on top of that, so it’s really, the private sector needs to work with the public sector. We are all very grateful that the public sector was willing to take that risk, and it didn’t pay off right away.”“In many ways, the federal government should be patient,” she said. “We are a kind of entity, we should be patient. So I’m not saying we have to wait a million years for something to pay off, but we don’t need to have the kind of immediate payoff that a private company might need to see.”That argument is in many ways a departure from how administrations typically pitch economic policies during a crisis. There is no focus in the brief on immediate job creation or a quick bump in economic growth.Weeks after Mr. Biden detailed both halves of his plan, the administration has offered no projections about the effects of his policies on jobs or growth. Instead, Dr. Rouse and other administration officials cited forecasts by the Moody’s Analytics economist Mark Zandi, which are among the more favorable outside analyses of the president’s agenda.Administration officials say there is no need for their economic team to produce such forecasts. Congressional Republicans have repeatedly called for the White House to produce an estimate of how many jobs would be created by Mr. Biden’s plans. More

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    Biden Defends Unemployment Benefits, Provided Workers Accept Job Offers

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    The president’s comments and a raft of policy announcements were a pushback to Republican criticism of his economic plan after a disappointing jobs report on Friday.WASHINGTON — President Biden ordered the Labor Department on Monday to ensure that unemployed Americans cannot draw enhanced federal jobless benefits if they turn down a suitable job offer, even as he rejected claims by Republicans that his weekly unemployment bonus is undermining efforts to get millions of Americans back to work.Stung from a weekend of criticism over a disappointing April jobs report, Mr. Biden struck a defiant tone, seeking to make clear that he expects workers to return to jobs if they are available, while defending his signature economic policy effort thus far and blaming corporate America, in part, for not doing more to entice people to go back to work.The president told reporters at the White House that child care constraints, school closures and fears of contracting the coronavirus had hindered job creation last month, and he challenged companies to help workers gain access to vaccines and to raise their pay.“The last Congress, before I became president, gave businesses over $1.4 trillion in Covid relief,” Mr. Biden said. “Congress may have approved that money, but let’s be clear: The money came from the American people, and it went from the American people to American businesses, many of them big businesses, to help them get through this pandemic and keep their doors open.”He added, “My expectation is that, as our economy comes back, these companies will provide fair wages and safe work environments.” He said that if they did, “they’ll find plenty of workers, and we’re all going to come out of this together better than before.”Mr. Biden also promised more relief was working its way into the economy through measures created by the $1.9 trillion “American Rescue Plan” that the president signed into law in March. That includes help for child care providers and aid for state and local governments that Treasury Department officials began to make available on Monday.His defense of the stimulus funds and his administration’s handling of the economy comes as Mr. Biden is trying to win support for even more federal spending, including a $2.3 trillion jobs proposal centered on physical infrastructure.Republicans have already criticized Mr. Biden for the disappointing jobs numbers and have suggested he is wreaking havoc with the economic recovery. In particular, they blamed a provision in his rescue plan that extended a $300-per-week federal supplement for unemployed Americans. They say those benefits are depressing hiring by discouraging Americans from returning to work.An aide to Senator Mitch McConnell of Kentucky, the Republican leader, emailed reporters on Monday, accusing Mr. Biden of placing “handcuffs” on the recovery by extending the jobless benefits.Senator Ben Sasse, Republican of Nebraska, said on Monday that Mr. Biden was “all over the place” on the issue.“He wants to go after folks who are gaming the system, but he’s denying the reality that his policies are making the situation worse, so he’s trying to make struggling businesses the boogeymen,” Mr. Sasse said in a news release. “Here’s the deal: Bad federal policy is making unemployment pay more than work, and millions of jobs aren’t getting filled.”Mr. Biden said on Monday that his administration would make clear that any worker who turned down a suitable job offer, with rare exceptions for health fears related to the virus, would lose access to unemployment benefits.To ensure those rules are being followed, the Labor Department will work with states to reinstate work search requirements. Those rules, which require that anyone collecting unemployment benefits provide proof that they are actively searching for work, were suspended during the pandemic.Twenty-nine states have already reinstated them, and the Labor Department will “work with the remaining states, as health and safety conditions allow, to put in place appropriate work search requirements as the economy continues to rebound, vaccinations increase, and the pandemic is brought under control,” White House officials said in a fact sheet.The president also pointed to new guidance issued Monday by the Treasury Department that will help state, local and tribal governments gain access to more than $350 billion in relief funds made available by the American Rescue Plan. He said that money would help speed hiring and economic growth.“With this funding, communities hit hard by Covid-19 will able to return to a semblance of normalcy,” the Treasury secretary, Janet L. Yellen, said in a statement on Monday on the relief funds.Erin Scott for The New York TimesThe details of how the Treasury Department will disburse those funds, which can be spent on pandemic-related costs, have been eagerly awaited by states, cities, territories and tribal governments that are expected to receive money. But several Republican-led states and the Biden administration are in a legal confrontation over whether states can cut taxes after taking relief money and using it to solidify their budgets.A fact sheet accompanying the announcement about the distribution on Monday made clear that the relief money could not be used to subsidize tax cuts directly or indirectly, which could discourage some states from accepting funds.“The American Rescue Plan ensures that funds needed to provide vital services and support public employees, small businesses and families struggling to make it through the pandemic are not used to fund reductions in net tax revenue,” the Treasury Department said. “If the funds provided have been used to offset tax cuts, the amount used for this purpose must be paid back to the Treasury.”The Treasury Department also issued detailed guidance to states explaining how it would determine if the money was being used properly and in which cases the relief funds could be recouped. If a state does cut taxes, it will have to demonstrate to the Treasury Department that it offset that lost revenue with spending cuts or another source of revenue that does not include the fiscal recovery funds. If the state cannot do that, the department can claw back that amount of money.“This process ensures fiscal recovery funds are used in a manner consistent with the statute’s defined eligible uses and the offset provision’s limitation on these eligible uses, while avoiding undue interference with state and territory decisions regarding tax and spending policies,” the guidance said.Treasury and White House officials made clear that they would scrutinize how the funds were being used to ensure that state budgets were not being gamed to violate the intent of the law. A new recovery office at the Treasury Department will coordinate with states to help determine if their policies are in line with conditions set forth in the law.The relief money also cannot be paid into state pension funds to reduce unfunded liabilities.A White House official would not comment on whether initiatives like Montana’s return-to-work bonuses could be funded using relief money. States and cities are being given broad discretion on how they can use the money, which is intended to replace public sector revenue that was lost during the pandemic; to provide extra pay for essential workers; and to be invested in sewer, water and broadband infrastructure.The Treasury Department’s directive is unlikely to put the legal fight over whether states can cut taxes to rest. Mark Brnovich, the attorney general of Arizona, which is suing the Biden administration, said that Treasury Secretary Janet L. Yellen’s guidance failed to clarify the matter.“Arizona should not be put in a position of losing billions of dollars because the federal government wants to commandeer states’ tax policies,” Mr. Brnovich said.The allocation of the funds is also likely to be a contentious matter as the money starts to flow. Some states have complained that states that managed the pandemic well are essentially being penalized because the formula for awarding aid is based on state unemployment rates.The Treasury Department said on Monday that the states that were hardest hit economically by the pandemic would also get their money faster.Local governments will generally receive half of the money this month and the rest next year. But states that currently have a net increase in unemployment of more than two percentage points since February 2020 will get the funds in a lump sum right away.Officials also said Monday that the administration would issue new guidelines meant to speed money from the recovery act to help child care centers reopen, and that the Labor Department would highlight a program that allows some unemployed workers to accept offers of part-time jobs without losing access to the federally supplemented benefits.Mr. Biden said that the efforts would help the economy recover — and that the rebound from recession remained on track.“Let’s be clear: Our economic plan is working,” he said. But he said recovery would not always prove to be easy or even. “Some months will exceed expectations,” he said, “others will fall short.” More

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    Biden Administration Will Begin Disbursing $350 Billion in State and Local Aid

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    States and cities are being given broad discretion on how they can use the money, which is intended to replace public sector revenue, provide extra pay for essential workers, and invest in sewer, water and broadband.The Biden administration will begin sending $350 billion in aid to state and local governments this month, a significant step in its effort to shore up segments of the economy that have been hardest hit by the pandemic, White House and Treasury officials said on Monday. More

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    To Build Support for Infrastructure Plan, Biden Offers His Own Take on ‘Bipartisan’

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    President Biden’s $2 trillion infrastructure proposal is a test of his belief that he can generate popular backing across the country as Republicans seek to block him on Capitol Hill.WASHINGTON — President Biden’s attempt to muscle through a $2 trillion plan to rebuild the country’s infrastructure — along with the tax increases to pay for it — will be a defining test of his belief that bipartisan support for his proposals can overwhelm traditional Republican objections in Congress.Instead of paring back his ambitions in an effort to limit opposition from Republicans in the Senate or appease moderate Democrats in the House, Mr. Biden and his allies on Capitol Hill are barreling ahead with unapologetically bold, expensive measures, betting that they can build bipartisanship from voters nationwide rather than from elected officials in Washington.Senator Mitch McConnell of Kentucky, the Republican leader, and other members of his party are working to brand the bill as a liberal wish list of wasteful spending and a money grab from a Democratic administration that will drag down the economy with tax hikes.But Mr. Biden is predicting that the broad appeal of wider roads, faster internet, high-speed trains, ubiquitous charging stations for electric cars, shiny new airport terminals and upgraded water pipes will undercut the expected barrage of ideological attacks that are already coming from Republican lawmakers, business groups, anti-tax activists and President Donald J. Trump.In his first cabinet meeting at the White House on Thursday, Mr. Biden directed several of his top officials to travel the country during the next several weeks to sell the benefits of the infrastructure spending. Jen Psaki, the White House press secretary, also told reporters that the president would host Democrats and Republicans in the Oval Office to discuss the plan and their ideas.“I hope and believe the American people will join this effort — Democrats, Republicans and independents,” Mr. Biden said in Pittsburgh on Wednesday as he formally announced his plan. He compared it to the popularity of the nearly $1.9 trillion pandemic relief bill that passed last month, saying, “If you live in a town with a Republican mayor, a Republican county executive or a Republican governor, ask them how many would rather get rid of the plan.”But generating sustained support for the proposal is shaping up to be a major challenge for the White House. The business lobby is preparing to wage a full-scale campaign against the tax increases in the president’s plan, with influential groups like the Business Roundtable and the U.S. Chamber of Commerce warning lawmakers against raising taxes as the United States emerges from a deep economic crisis caused by the coronavirus pandemic.But across the country, some local Republican officials are already embracing the prospect of millions of dollars in new infrastructure spending flowing into their communities, even as they are careful to express concern about new taxes.The president is betting that the broad appeal of wider roads, faster internet, high-speed trains, charging stations for electric cars, new airport terminals and upgraded water pipes will undercut the expected ideological attacks from Republicans.Todd Heisler/The New York TimesIn Fresno, Calif., Mayor Jerry Dyer said the president’s proposals, if passed into law, would allow the city to accelerate plans for a high-speed rail station linking it to job centers in the Bay Area. He said the city had struggled to electrify its fleet of buses and provide robust internet, especially to poorer communities.“These dollars are going to be welcomed in terms of repairing a lot of our infrastructure,” said Mr. Dyer, a Republican. He said he was concerned about the effects of higher taxes on businesses but added that he hoped the issue would be worked out in Washington.“There’s no question the need is there,” he said.Mayor John Giles of Mesa, Ariz., called the president’s proposal “a very good thing” for his city. With the money, Mesa could upgrade a 1970s-era airport tower, widen roads, extend broadband and expand a regional light rail network. He said he was disappointed by the Republican opposition in Congress.“It was only a few months ago that we all agreed that infrastructure was a bipartisan issue,” Mr. Giles said. “That attitude shouldn’t shift just because there’s a new administration in the White House.”But Gov. Larry Hogan of Maryland, another Republican who has called for a vast infusion of spending on infrastructure, accused Mr. Biden of using the legislation to advance $1.4 trillion in liberal programs.“It still has a lot of good things, but it also has a lot of things that have absolutely nothing to do with infrastructure,” Mr. Hogan said. “They’re like, ‘No, we just want to jam through all of our priorities.’”Mr. Biden and those closest to him understand that passage of the legislation will take place in Washington, not in Fresno or Mesa or Maryland. In announcing his plan, the president sought to cast congressional Republicans as longtime champions of infrastructure, both inviting them to negotiate and daring them to oppose his proposal.“We’ll have a good-faith negotiation with any Republican who wants to help get this done,” Mr. Biden said. “But we have to get it done.”That last line was a not-so-subtle hint about his legislative strategy. If the president cannot win backing from Republican lawmakers, Democrats appeared poised to once again use a parliamentary budget tool known as reconciliation to push through the tax and spending plan with a simple majority vote and most likely only Democratic support.At an event in his home state on Thursday, Mr. McConnell called Mr. Biden “a first-rate person” whom he liked personally. But he argued that the president was running a “bold, left-wing administration” and warned “that package that they’re putting together now, as much as we would like to address infrastructure, is not going to get support from our side.”For Mr. Biden, who spent more than three decades in the Senate, the political calculations are far different than they were 12 years ago, when a similar measure was under consideration.Senator Mitch McConnell of Kentucky, the Republican leader, warned that his conference would not support Mr. Biden’s proposal.Anna Moneymaker for The New York TimesPresident Barack Obama took office in 2009, in the middle of an economic crisis with a Senate firmly in Democratic control. Only weeks into his term, he pushed through an $825 billion stimulus bill devised to jump-start the economy — legislation that is now seen by many progressives as far too timid.Mr. Obama and his aides spent weeks feverishly negotiating with conservative Democrats and a handful of Republicans in Congress, who pressed the president to limit the size of the spending plan. Rahm Emanuel, Mr. Obama’s chief of staff at the time, said conservative Democrats like Senator Ben Nelson of Nebraska insisted that the president win Republican support.Mr. Biden appears to have taken from that experience the lesson that there are limited benefits from seeking to woo a small number of Republicans — and that the key is to sell the benefits of the plan to Americans and not get hung up on the process to pass it.“The politics was different, the policy was different, the public was different,” Mr. Emanuel said, praising Mr. Biden’s approach. Even before the president unveiled his plan, Republicans argued that Democrats were not genuinely interested in bipartisan negotiations, particularly after they pushed the pandemic relief package into law without any Republican votes.Senator Chuck Schumer of New York, the majority leader, has asked the Senate parliamentarian to offer guidance on how many times senators can pursue reconciliation this fiscal year, which several Republicans took as a sign that they were preparing to bypass the 60-vote filibuster threshold.“It is disingenuous for the president to invite Republicans to the White House and the Oval Office to discuss this when he’s made it very clear — and Democrats in Congress have made it very clear — they have no intention of working with Republicans on this package,” said Representative Kevin Brady of Texas, the top Republican on the House Ways and Means Committee.In an interview, Senator Susan Collins, Republican of Maine, said she appreciated the outreach from the administration leading up to Mr. Biden’s announcement, including multiple bipartisan briefings for lawmakers and individual conversations with cabinet officials.But Ms. Collins, a member of a bipartisan Senate group that is eager to strike compromises on a number of issues, said bipartisan negotiations would most likely falter if the administration refused to budge on the overall price tag or composition of the package.Senator Susan Collins said she appreciated the outreach from the administration leading up to Mr. Biden’s announcement.Anna Moneymaker for The New York Times“Everyone knows what bipartisanship means: It means that you get members of Congress from both parties working on and voting for important legislation,” she said, adding: “It’s not like it’s some relic of ancient times. We acted in a bipartisan manner on the most important issue last year: the pandemic.”If Democrats are already considering using reconciliation, Ms. Collins said, “that raises questions about whether there is a sincere interest in crafting a bipartisan infrastructure package.”Some Democrats have said that the proposal is not enough to address both infrastructure needs and inequities across the country, and they have counseled the White House against winnowing down a legislative package to win a handful of Republican votes.“I’m not particularly hopeful that we’re going to see a giant awakening from Republicans who decide that they want to pass an infrastructure package that actually addresses climate,” Representative Pramila Jayapal of Washington, the chairwoman of the Congressional Progressive Caucus, told reporters before Mr. Biden’s speech. More

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    Democrats Look to Smooth the Way for Biden’s Infrastructure Plan

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    House Democrats face hurdles to pushing through the president’s big spending plans, including Republican opposition and resistance from their own ranks.WASHINGTON — Senior Democrats on Monday proposed a tax increase that could partly finance President Biden’s plans to pour trillions of dollars into infrastructure and other new government programs, as party leaders weighed an aggressive strategy to force his spending proposals through Congress over unified Republican opposition.The moves were the start of a complex effort by Mr. Biden’s allies on Capitol Hill to pave the way for another huge tranche of federal spending after the $1.9 trillion stimulus package that was enacted this month. The president is set to announce this week the details of his budget, including his much-anticipated infrastructure plan.He is scheduled to travel to Pittsburgh on Wednesday to describe the first half of a “Build Back Better” proposal that aides say will include a total of $3 trillion in new spending and up to an additional $1 trillion in tax credits and other incentives.Yet with Republicans showing early opposition to such a large plan and some Democrats resisting key details, the proposals will be more difficult to enact than the pandemic aid package, which Democrats muscled through the House and Senate on party-line votes.In the House, where Mr. Biden can currently afford to lose only eight votes, Representative Tom Suozzi, Democrat of New York, warned that he would not support the president’s plan unless it eliminated a rule that prevents taxpayers from deducting more than $10,000 in local and state taxes from their federal income taxes. He is one of a handful of House Democrats who are calling on the president to repeal the provision.And in the Senate, where most major legislation requires 60 votes to advance, Senator Chuck Schumer of New York, the majority leader, was exploring an unusual maneuver that could allow Democrats to once again use reconciliation — the fast-track budget process they used for the stimulus plan — to steer his spending plans through Congress in the next few months even if Republicans are unanimously opposed.While an aide to Mr. Schumer said a final decision had not been made to pursue such a strategy, the prospect, discussed on the condition of anonymity, underscored the lengths to which Democrats were willing to go to push through Mr. Biden’s agenda.The president’s initiatives will feature money for traditional infrastructure projects like rebuilding roads, bridges and water systems; spending to advance a transition to a lower-carbon energy system, like electric vehicle charging stations and the construction of energy-efficient buildings; investments in emerging industries like advanced batteries; education efforts like free community college and universal prekindergarten; and measures to help women work and earn more, like increased support for child care.The proposals are expected to be partly offset by a wide range of tax increases on corporations and high earners.In Pittsburgh, Mr. Biden will lay out “the first of two equally critical packages to rebuild our economy and create better-paying jobs for American workers,” Jen Psaki, the White House press secretary, told reporters on Monday.“He’ll talk this week about investments we need to make in domestic manufacturing, R & D, the caregiving economy and infrastructure,” she added. “In the coming weeks, the president will lay out his vision for a second package that focuses squarely on creating economic security for the middle class through investments in child care, health care, education and other areas.”Mr. Biden’s budget office is also expected this week to release his spending request for the next fiscal year, which is separate from the infrastructure plan. White House officials said it would lay out funding levels agency by agency, so that congressional committees could begin to write appropriations bills for next year. For the first time in a decade, they will not be limited by spending caps imposed by Congress. (Lawmakers have agreed to break those caps in recent years.)That request will not include Mr. Biden’s tax plans, the officials said. The administration’s full budget will be presented to Congress this spring.For now, some Democrats are already jockeying to make sure that their proposals are part of the plan.Construction in Miami this month. Mr. Biden’s plan will include investments in traditional infrastructure projects, as well as climate change initiatives and social programs.Joe Raedle/Getty ImagesSenator Chris Van Hollen, Democrat of Maryland, and a group of liberal Democrats on Monday proposed scaling back a provision in the tax code that allows wealthy heirs to reduce what they pay on assets they inherit, known as stepped-up basis. The proposal reflects one of Mr. Biden’s campaign promises, and officials have suggested that it could be used to fund his infrastructure plans.Current law reduces the taxes that heirs owe on assets that appreciate over time. Say a person buys $1 million worth of stock, and the value of that stock rises to $10 million before the person dies. If the person sold the stock before death, she would owe taxes on a $9 million gain. But if she died first, and her heirs immediately sold the stocks she gave them, they would not owe any capital gains taxes. Under the new proposal, which exempts $1 million in gains, the heirs would owe taxes on the remaining $8 million gain.The full exemption reduces federal tax revenues by more than $40 billion a year. It was unclear on Monday how much the Democratic plan would raise in revenues to help Mr. Biden’s spending efforts.Other Democrats pushed the president to include further tax cuts in his plan.Mr. Suozzi of New York said in an interview on Monday that he would not support changes to the tax code without a full repeal of the so-called SALT cap, which limits the amount of local and state taxes that can be deducted from federal income taxes. That change largely hurt higher-income households in high-tax states like California, Maryland and New York.House Democrats passed legislation in 2019 that would have temporarily removed the cap, but it stalled in the Senate and attempts to include it in pandemic relief legislation were unsuccessful.“It has to be elevated as part of the conversation,” Mr. Suozzi said. “There’s a lot of different talk about going big and going bold and making significant changes to the tax code. I want to make SALT part of the conversation.”.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-k59gj9{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;width:100%;}.css-1e2usoh{font-family:inherit;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;border-top:1px solid #ccc;padding:10px 0px 10px 0px;background-color:#fff;}.css-1jz6h6z{font-family:inherit;font-weight:bold;font-size:1rem;line-height:1.5rem;text-align:left;}.css-1t412wb{box-sizing:border-box;margin:8px 15px 0px 15px;cursor:pointer;}.css-hhzar2{-webkit-transition:-webkit-transform ease 0.5s;-webkit-transition:transform ease 0.5s;transition:transform ease 0.5s;}.css-t54hv4{-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-1r2j9qz{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-e1ipqs{font-size:1rem;line-height:1.5rem;padding:0px 30px 0px 0px;}.css-e1ipqs a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;}.css-e1ipqs a:hover{-webkit-text-decoration:none;text-decoration:none;}.css-1o76pdf{visibility:show;height:100%;padding-bottom:20px;}.css-1sw9s96{visibility:hidden;height:0px;}#masthead-bar-one{display:none;}#masthead-bar-one{display:none;}.css-1cz6wm{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;font-family:’nyt-franklin’,arial,helvetica,sans-serif;text-align:left;}@media (min-width:740px){.css-1cz6wm{padding:20px;width:100%;}}.css-1cz6wm:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1cz6wm{border:none;padding:20px 0 0;border-top:1px solid #121212;}Frequently Asked Questions About the New Stimulus PackageThe stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more. Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read moreThis credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.He is among the Democrats who have requested a meeting with Mr. Biden to discuss repealing the cap, according to a letter obtained by The New York Times.“No SALT, no dice,” declared another Democrat, Representative Josh Gottheimer of New Jersey.“There’s plenty of ways, in my opinion, to raise revenue and reinstate SALT,” he said in an interview, adding that he wanted to see the full details of the proposal.Ms. Psaki said on Monday that administration officials “look forward to working with a broad coalition of members of Congress to gather their input and ideas, and determine the path forward, create good jobs and make America more competitive.”While members of both parties have said they support a major infrastructure initiative, Republicans have balked at the details of Mr. Biden’s opening bid, which includes not only sweeping investments in traditional public works but also more ambitious proposals to tackle climate change and education, and tax increases to help offset the considerable costs.“Unfortunately, it looks like this is not going to head in the direction I had hoped,” Senator Mitch McConnell of Kentucky, the minority leader, said at an event in his state. “My advice to the administration is: If you want to do an infrastructure bill, let’s do an infrastructure bill. Let’s don’t turn it into a massive effort to raise taxes on businesses and individuals.”“I’d love to do an infrastructure bill,” he added. “I’m not interested in raising taxes across the board on America. I think it will send our economy in the wrong direction.”Should Democratic lawmakers try to move Mr. Biden’s plan through the regular legislative process and overcome the 60-vote filibuster threshold, at least 10 Republicans would need to join them.But the reconciliation process allows a fiscal package included in the budget resolution to be shielded from a filibuster. Mr. Schumer has asked the Senate’s top rule-enforcer whether Democrats can revisit the budget blueprint that was approved last month to include the infrastructure plan, which would enable them to undertake a second reconciliation process before the end of the fiscal year on Sept. 30 and pass it with a simple majority.Senator Chuck Schumer of New York and other top Democrats are arguing that a key congressional law allows them to essentially redo the budget blueprint for the current fiscal year.Anna Moneymaker for The New York TimesBecause there is no precedent for passing two reconciliation packages in the same budget year with the same blueprint, Elizabeth MacDonough, the parliamentarian, will have to issue guidance on whether doing so is permissible under Senate rules.If Democrats succeed, they could potentially use the reconciliation maneuver at least two more times this calendar year to push through more of Mr. Biden’s agenda. More

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    Powell Downplays Inflation Risks as Yellen Foreshadows Future Spending

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    The nation’s two most powerful economic policy officials testified together for the first time, reviewing the state of the economic recovery.The economy is healing, the nation’s top two economic officials told lawmakers on Tuesday, but workers and businesses will need continued government support to rebound from the pandemic — and one of the officials, Jerome H. Powell, the Federal Reserve chair, batted back concerns that vigorous policy help could stoke inflation.Mr. Powell testified Tuesday before the House Financial Services committee alongside Janet L. Yellen, his predecessor at the Fed and now the Treasury secretary, in their first side-by-side appearance in their current roles. In hopes of fueling a rapid rebound in spending and hiring, the government has been spending aggressively and the Fed is keeping borrowing costs at rock bottom.That all-in approach has helped to avert the most dire potential economic outcomes, Mr. Powell told lawmakers, and it has not created grave inflation risks in the process.Asked whether President Biden’s recently passed $1.9 trillion spending package to combat the virus could cause prices to shoot higher — especially as the administration eyes plans to spend as much as $3 trillion more on an infrastructure package — Mr. Powell said the Fed did not fear a jump in inflation.“We do expect that inflation will move up over the course of this year,” he said, adding that some of the rise would be procedural as low readings from March and April of last year dropped out of the data, and part of it might be driven by a recovery in demand.“Our best view is that the effect on inflation will be neither particularly large nor persistent,” he said. And if it does pick up in a more concerning way, “we have the tools to deal with that,” he added.Ms. Yellen faced questions about President Biden’s economic relief legislation, including Treasury’s role in putting it into action, as well as the administration’s plans to propose another big spending package on infrastructure, which could be financed in part by tax increases.She was pressed by Republican lawmakers about how higher taxes would affect consumers and small businesses. “I think a package that consists of investments in people, investments in infrastructure, will help to create good jobs in the American economy,” Ms. Yellen replied, “and changes in the tax structure will help to pay for those programs.”And she argued that tax increases would be necessary to back up the package.“We do need to raise revenues in a fair way to support the spending that this economy needs to be competitive and productive,” she said.Ms. Yellen’s Treasury is in charge of executing Mr. Biden’s $1.9 trillion economic relief legislation, and has been racing to distribute $1,400 checks to millions of Americans. That is posing a test for Ms. Yellen’s team, which is not yet fully in place.Ms. Yellen pushed hard for a robust fiscal relief package. In her opening statement, she described the rescue legislation as precisely what the economy needed.“With the passage of the rescue plan, I am confident that people will reach the other side of this pandemic with the foundations of their lives intact,” Ms. Yellen said. “And I believe they will be met there by a growing economy. In fact, I think we may see a return to full employment next year.”Mr. Powell declined to weigh in on the new infrastructure idea, but he did say that the government’s broad response to the coronavirus pandemic had helped to keep a worst-case economic disaster from playing out..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-k59gj9{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;width:100%;}.css-1e2usoh{font-family:inherit;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;border-top:1px solid #ccc;padding:10px 0px 10px 0px;background-color:#fff;}.css-1jz6h6z{font-family:inherit;font-weight:bold;font-size:1rem;line-height:1.5rem;text-align:left;}.css-1t412wb{box-sizing:border-box;margin:8px 15px 0px 15px;cursor:pointer;}.css-hhzar2{-webkit-transition:-webkit-transform ease 0.5s;-webkit-transition:transform ease 0.5s;transition:transform ease 0.5s;}.css-t54hv4{-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-1r2j9qz{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-e1ipqs{font-size:1rem;line-height:1.5rem;padding:0px 30px 0px 0px;}.css-e1ipqs a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;}.css-e1ipqs a:hover{-webkit-text-decoration:none;text-decoration:none;}.css-1o76pdf{visibility:show;height:100%;padding-bottom:20px;}.css-1sw9s96{visibility:hidden;height:0px;}#masthead-bar-one{display:none;}#masthead-bar-one{display:none;}.css-1cz6wm{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;font-family:’nyt-franklin’,arial,helvetica,sans-serif;text-align:left;}@media (min-width:740px){.css-1cz6wm{padding:20px;width:100%;}}.css-1cz6wm:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1cz6wm{border:none;padding:20px 0 0;border-top:1px solid #121212;}Frequently Asked Questions About the New Stimulus PackageThe stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more. Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read moreThis credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.“While the economic fallout has been real and widespread, the worst was avoided by swift and vigorous action,” he said.Mr. Powell and Ms. Yellen faced a volley of questions on how financial regulators should deal with climate change risks. Republicans have expressed concern that the Fed’s growing attention to climate-related issues in its role as a bank overseer could end up making it harder or more expensive for carbon-heavy companies to get loans.“It’s really very early days in trying to understand what all of this means,” Mr. Powell said, noting that many large banks and large industrial companies were already thinking about and beginning to disclose how climate might affect them over time. “We have a job,” he said, “which is to ensure that the institutions we regulate are resilient to the risks that they’re running.”Separately on Tuesday, Lael Brainard, an influential Fed governor, announced that the Fed was establishing a Financial Stability Climate Committee “to identify, assess and address” climate-related risks to financial stability.The new body will approach its task in a way that “considers the potential for complex interactions across the financial system,” Ms. Brainard said, rather than just the risks to individual companies.That’s the kind of oversight some lawmakers fear.“Linking hypothetical climate scenarios to risks to the entire financial system seems to me highly speculative,” Representative Andy Barr, a Republican from Kentucky, told Mr. Powell and Ms. Yellen during the Tuesday hearing. More