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    Vast Expansion in Aid Kept Food Insecurity From Growing Last Year

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    Despite the economic downturn, government figures for 2020 show no overall rise in hunger of the sort typical in past recessions. But some groups still suffered.As 20 million jobs vanished at the start of the coronavirus pandemic and traffic jams formed outside food banks, many experts warned that the twin crises of unemployment and disease would produce soaring rates of hunger.But huge expansions of government aid followed, and data released on Wednesday suggests the extraordinary spending achieved a major goal: Despite shuttered businesses and schools, food insecurity remained unchanged from prepandemic levels. That result defied past experience, when recessions caused food hardship to spike.“This is huge news — it shows you how much of a buffer we had from an expanded safety net,” said Elaine Waxman, who researches hunger at the Urban Institute in Washington. “There was no scenario in March of 2020 where I thought food insecurity would stay flat for the year. The fact that it did is extraordinary.”The government found that 10.5 percent of American households were food insecure, meaning that at some point in the year, they had difficulty providing enough food to all members of the home because of a lack of money. It also found that 3.9 percent experienced “very low food security,” meaning the lack of resources caused them to reduce their food intake. That was statistically unchanged from the previous year.Food insecurity did rise among some groups, including households with children, households with Black Americans and households in the South. The gap between Black and white households, which was already large, widened further, with 21.7 percent of Black households experiencing food insecurity, compared with 7.1 percent of white households. That is a gap of 14.6 percentage points, up from 11.2 points in 2019, before the pandemic struck.Black households suffered disproportionately from job losses and school closings during the pandemic and had fewer assets with which to buffer a crisis.Still, the overall pattern — of hunger constrained — contrasted sharply with the country’s experience during 2008, when nearly 13 million additional Americans became food insecure at the start of the Great Recession. Last year, 38.3 million Americans lacked food security, a level far below the 50.2 million Americans in that situation at the recession’s peak.As President Biden pushes a $3.5 trillion plan to further expand the safety net over Republican opposition, the report on Wednesday from the Agriculture Department provided fodder for both sides. Supporters said it showed the value of increased aid, while critics said the unchanged rates of food hardship showed that further spending was not necessary.The aid expansions reflected in Wednesday’s report occurred early in the pandemic last year. They include the first round of stimulus checks and expanded unemployment benefits, which passed with support from both parties and President Donald J. Trump.Several large rounds of aid followed, most recently in a $1.9 trillion spending package in March that President Biden championed. It included a program of monthly payments to most families with children that Democrats hope to make permanent..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}“A lot of us warned that those further expansions were unnecessary and this provides additional support that that was true,” said Angela Rachidi, a hunger expert at the American Enterprise Institute. She said that progressives were pushing a narrative of exaggerated hardship to justify continued spending increases.In an economic crisis, food is often the first expense that a family with money troubles will cut. Unpaid rents risk eviction, but grocery purchases can be incrementally reduced and meals stretched.Though poverty and food insecurity are related, they are not synonymous. The poorer a household is, the more likely it is to experience food insecurity, but most of those suffering from food insecurity are not poor.Among households disclosing their incomes, 34 percent were poor while 32 percent had incomes greater than 185 percent of the poverty line (about $26,000 for a family of four), according to an analysis by Craig Gundersen, an economist at Baylor University.“There are a lot of Americans in precarious situations,” Mr. Gundersen said. “People are working, but one car repair or sick kid can send them into food insecurity.”The remarkable images of food lines at the pandemic’s start cast a spotlight on food hardship, while the large expansion of aid that followed turned the United States into a laboratory for antihunger policy. Among the lessons learned during the pandemic, researchers said the new report supported at least four.As aid rose, food insecurity fell.The relationship between higher spending and lower hardship may sound obvious. But some social problems prove difficult to address through federal aid. Congress has approved about $46 billion in emergency rental relief, but only a small portion has reached families in need.Wednesday’s report added to a growing body of research showing the opposite: that aid has led to quick reductions in food hardship. “This is not an intractable problem,” Mr. Gundersen said.Last year, the Brookings Institution found that a summer program that replaced school meals with electronic benefit cards led to substantial reductions in child hunger.Likewise, researchers at the University of Michigan, analyzing Census Bureau surveys, found the 2021 stimulus checks brought immediate reductions in food hardship. Most recently, a study by researchers at Columbia University found the same pattern after the introduction of the child tax credit in July, but only among households with children — the group eligible for the monthly payments.“We now have definitive evidence that food hardship is responsive to government aid,” said H. Luke Shaefer, a University of Michigan researcher who studied the stimulus checks. “The effect is crystal clear.”While Wednesday’s report was based on data collected in December 2020, Mr. Shaefer said other surveys showed hardship had continued to fall. “We could potentially be at the lowest level of food insecurity ever recorded, because of the government transfers,” he said.Schools play a vital role.Before the pandemic, school meals accounted for as much as 7 percent of economic resources among low-income households, according to one study.Max Whittaker for The New York TimesWhile food insecurity fell overall, it rose among households with children — to 7.6 percent last year, from 6.5 percent in 2019. One likely explanation is the widespread closure of schools, a reminder that they play a large, if often overlooked, role in delivering food aid.Before the pandemic, Judith Bartfeld, a researcher at the University of Wisconsin, found that school meals account for as much as 7 percent of economic resources among low-income households. That financial contribution approached the impact of the Supplemental Nutrition Assistance Program, or SNAP, the main federal antihunger program, which provided more than 10 percent of household resources but is larger and more visible.“One of the big lessons from the pandemic is the critical role that school meals play as part of the nutrition safety net,” Ms. Bartfeld said. “The value of school meals became transparent when the meals disappeared.”School closures may have also increased food hardship indirectly, by making it hard for parents to return to work.Among the pandemic-era programs is one that replaced the value of lost school meals with electronic benefit cards. Research found it reduced food hardship, though many states issued the aid after significant delays. Congress extended the program during the summers of 2020 and 2021, and the Biden administration wants to make the summer electronic benefit program permanent, to combat the rise in hunger that typically comes with the closure of schools.Most states participated in the summer program this year with the significant exception of Florida, where Gov. Ron DeSantis, a Republican, has declined without explanation to seek the $820 million the state could receive in federal aid.The gaps between Black and white Americans are large.The longstanding disparities in food insecurity between Black and white households had been narrowing in recent years. But last year, they widened again. Though the share of white households suffering food insecurity fell by 0.8 percentage points, it rose by 1.6 points in Hispanic households and by 2.6 points in Black households.One reason may be the nature of the recession, which disproportionately hurt Black workers, many of them in low-wage service jobs. It is also possible that Black and Latino families faced greater barriers than whites families in gaining access to government aid.A third potential explanation may be that Black families entered the recession with far fewer assets than white households and less access to credit, both of which can buffer food hardships.“This is the most disturbing part of the story,” said Ms. Waxman, the Urban Institute researcher. “Whatever we did wasn’t enough to support Black families during this period.”Charity plays an important but limited role.The crisis thrust the United States’ unusual network of private food banks into the spotlight. Able to respond more quickly than the government, they played a highly visible role in emergency aid. Feeding America, the national association of food banks, reported a 44 percent increase in meals served.But food banks are often among the first groups to call for expansions of government aid, arguing they can only complement the much larger public programs. Feeding American said SNAP, formerly known as food stamps, provides about nine times as many meals as food banks. The San Antonio Food Bank is among the places where lines stretched for miles in the spring of 2020. It went from feeding 60,000 people a week in early March to 120,000 in late April. It is still feeding about 90,000.But Eric Cooper, who runs the group, said the crisis reinforced both the fragility of the average household and the limited role that private charities can play.“It was the federal expansions that pulled people out of our parking lots and into grocery stores, which is where people should get their food,” he said. “We’re so small — the safety net is much larger.” More

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    How Biden Got the Infrastructure Deal Trump Couldn’t

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    The early success of the deal vindicated the president’s faith in bipartisanship. If he can keep it on track, it will help affirm the rationale for his presidency.WASHINGTON — President Biden’s success at propelling an infrastructure deal past its first major hurdle this week was a vindication of his faith in bipartisanship and a repudiation of the slash-and-burn politics of his immediate predecessor, President Donald J. Trump, who tried and failed to block it.Having campaigned as the anti-Trump — an insider who regarded compromise as a virtue, rather than a missed opportunity to crush a rival — Mr. Biden has held up the promise of a broad infrastructure accord not just as a policy priority but as a test of the fundamental rationale for his presidency.His success or failure at keeping the bill on track will go a long way to determining his legacy, and it could be the president’s best chance to deliver on his bet that he can unite lawmakers across the political aisle to solve big problems, even at a time of intense polarization.“President Biden ran on the message that we need to bring people together to meet the challenges facing our country and deliver results for working families,” Mike Donilon, a senior adviser to the president, wrote in a memo the White House released on Thursday, as senior officials crowed about the significance of the accord. “And the American people embraced that message. While a lot of pundits have doubted bipartisanship was even possible, the American people have been very clear it is what they want.”That may be the case, but the vote on Wednesday that paved the way for the Senate to consider the bipartisan infrastructure plan was no guarantee that the effort would succeed. The measure still has several hurdles to clear, including anger from progressives in the House who are upset at the concessions Mr. Biden made to court Republicans, and skepticism from G.O.P. lawmakers who could still balk at a bill Mr. Trump has repeatedly panned.For now, though, Mr. Biden has managed to do what Mr. Trump repeatedly promised but never could pull off: move forward on a big-spending, bipartisan deal to rebuild American roads, bridges, water pipes and more. He did so with the support of 17 Republicans during a week marked by bitter partisan disputes in Congress over mask-wearing and the Jan. 6 attack on the Capitol.Mr. Biden had pursued centrist Republicans and Democrats for months in hopes of forging an agreement to lift federal spending on roads, bridges, water pipes, broadband internet and other physical infrastructure. In recent weeks, aides said, he requested multiple daily briefings on negotiations, personally directed administration strategy on policy trade-offs and frequently phoned moderates from both parties to keep the pressure on for a final deal.The resulting agreement, which would pour $550 billion in new funding into physical infrastructure projects, is another step toward securing the next plank of Mr. Biden’s $4 trillion economic agenda. The White House has called it the largest infrastructure investment since the creation of the interstate highway system in the 1950s, and Democrats hope it comes with a much larger bill to invest in child care, affordable housing, higher education, programs to tackle climate change and more.The Infrastructure Plan: What’s In and What’s OutComparing the infrastructure plan President Biden proposed in March with the one the Senate may take up soon.Whether the president can see the deal all the way through could determine how much of his agenda to overhaul American capitalism and rebuild the middle class actually becomes law. Some moderate Democrats in the Senate have conditioned their support for any larger, partisan legislation on first completing a bipartisan infrastructure bill.The bipartisan agreement is loaded with the first tranche of Mr. Biden’s policy priorities. Administration officials say the deal, if signed into law, would replace every lead drinking water pipe in the country, repair potholed roads and crumbling bridges, further build out a national network of charging stations for electric vehicles and give every American access to high-speed internet.Mr. Biden would have liked to go much further in all those areas. But he trimmed his ambitions to win Republican support, keep centrist Democrats happy and practice the sort of compromise he has long preached on the campaign trail.Mr. Biden was motivated to run for president, in part, by a belief that Washington had lost its ability to find common ground and faith that it was possible to revive the spirit of bipartisanship that he cherished in his 36-year Senate career.That belief was tested in recent weeks, after Mr. Biden announced the framework of an agreement on infrastructure with a bipartisan group of senators at the White House in June. Lawmakers struggled to fill in the policy details. Interest groups pressured Democrats to spend more and Republicans to drop a large revenue source for the original deal, a plan to step up I.R.S. enforcement to catch tax cheats. An early test vote on the measure failed in the Senate.In the waning moments, another source of pressure emerged: Mr. Trump, who continues to push the lie that the election was stolen from him, and to influence many Republican members of Congress.As a candidate in 2016, Mr. Trump had promised to push a large infrastructure bill — larger, he claimed, than his Democratic rival Hillary Clinton. He doubled down on that promise as president-elect and talked it up often as president. But he never came close to delivering on it, and “Infrastructure Week” became a running joke in Washington, encapsulating the Trump administration’s penchant for veering off message and how a goal both parties ostensibly agreed upon could never seem to be reached.As Mr. Biden pushed toward a deal in recent weeks with a group of Republican and Democratic negotiators in the Senate — including Senator Mitt Romney, Republican of Utah, a longtime foil of Mr. Trump’s — the former president blasted out news releases, urging his party to walk away.“Hard to believe our Senate Republicans are dealing with the radical left Democrats in making a so-called bipartisan bill on ‘infrastructure,’ with our negotiators headed up by super RINO Mitt Romney,” Mr. Trump wrote in a Wednesday statement, referring to the Utah senator with the acronym for Republican in name only. “This will be a victory for the Biden administration and Democrats, and will be heavily used in the 2022 election. It is a loser for the U.S.A., a terrible deal, and makes the Republicans look weak, foolish and dumb.”Soon after, the agreement moved forward in the Senate. Seventeen Republicans voted to take it up, including the Republican leader, Mitch McConnell of Kentucky, who has taken pains to distance himself from Mr. Trump in recent months. It was not clear whether the minority leader, who has previously said he was “100 percent focused” on stopping Mr. Biden’s agenda, would ultimately support the bill.Still, Mr. Biden — who once brokered deals with Mr. McConnell — was personally invested in pursuing a compromise, administration officials said, calling upon his experience as a deal-maker in the Senate.“Biden and his team was willing to patiently work together with Republicans, and Trump and his team were not willing to do that with Democrats,” said Senator Tim Kaine, Democrat of Virginia. He added, “I give tremendous credit to the senators who’ve done this, but I will have to say, an ingredient that is necessary is a White House that really wants to do it, that will reach out across the aisle and will stay at the table.”Mr. Biden also dispatched top legislative aides and members of his Cabinet to reach out to lawmakers in both parties. Senator Kevin Cramer, Republican of North Dakota, said he received repeated calls from Jennifer Granholm, the secretary of energy, and legislative staff members — “always very gently and respectfully” — to discuss the emerging deal and “take my temperature” before he voted to advance the measure.Multiple senators said the president and his team spent hours with them in person on Capitol Hill and on the phone hashing out the details of the legislation, including thorny disagreements over how to finance billions of dollars in new spending.“Joe’s experience in the Senate paid dividends in the presidency,” said Senator Jon Tester, Democrat of Montana, one of the 10 Senate negotiators. “Joe’s willingness to compromise made a huge difference.”Mr. Trump and his team never put in a similar effort. They waited a year into his presidency to release an infrastructure plan, which many lawmakers quickly dismissed as unserious. As talks were about to get underway, he blew them up in a blast of anger at Democrats. His legislative team never put real muscle into finding a deal on the issue, or even into trying to ram through a partisan plan, as it did with his signature tax cuts in 2017.The former president was similarly disengaged in his effort to stop Mr. Biden’s bipartisan agreement. While Mr. Trump fired off news releases grousing about the talks, Mr. Biden hosted members of Congress in the Oval Office more than a dozen times in recent weeks. Home in Delaware last weekend, he repeatedly dialed up negotiators to talk on the phone.Even in a gridlocked Washington, that sort of effort can still be the art of the deal.Emily Cochrane More

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    Yellen Says China Trade Deal Has ‘Hurt American Consumers’

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    The Treasury secretary said an agreement made by the Trump administration, which remains under review, had failed to address fundamental problems between the two countries.WASHINGTON — Treasury Secretary Janet L. Yellen has cast doubt on the merits of the trade agreement between the United States and China, arguing that it has failed to address the most pressing disputes between the world’s two largest economies and warning that the tariffs that remain in place have harmed American consumers.Ms. Yellen’s comments, in an interview with The New York Times this week, come as the Biden administration is seven months into an extensive review of America’s economic relationship with China. The review must answer the central question of what to do about the deal that former President Donald J. Trump signed in early 2020 that included Chinese commitments to buy American products and change its trade practices.Tariffs that remain on $360 billion of Chinese imports are hanging in the balance, and the Biden administration has said little about the deal’s fate. Trump administration officials tried to create tariffs that would shelter key American industries like car making and aircraft manufacturing from what they described as subsidized Chinese exports.But Ms. Yellen questioned whether the tariffs had been well designed. “My own personal view is that tariffs were not put in place on China in a way that was very thoughtful with respect to where there are problems and what is the U.S. interest,” she said at the conclusion of a weeklong trip to Europe.President Biden has not moved to roll back the tariffs, but Ms. Yellen suggested that they were not helping the economy.“Tariffs are taxes on consumers. In some cases it seems to me what we did hurt American consumers, and the type of deal that the prior administration negotiated really didn’t address in many ways the fundamental problems we have with China,” she said.But reaching any new deal could be hard given rising tensions between the two countries on other issues. The Biden administration warned U.S. businesses in Hong Kong on Friday about the risks of doing business there, including the possibility of electronic surveillance and the surrender of customer data to the authorities.Chinese officials would welcome any unilateral American move to dismantle tariffs, according to two people involved in Chinese policymaking. But China is not willing to halt its broad industrial subsidies in exchange for a tariff deal, they said.Xi Jinping, China’s top leader, has sought technological self-reliance for his country and the creation of millions of well-paid jobs through government assistance to Chinese manufacturers of electric cars, commercial aircraft, semiconductors and other products.It might be possible to make some adjustments at the margins of these policies, but China is not willing to abandon its ambitions, said both people, who spoke on the condition of anonymity because they were not authorized to discuss the issue publicly.Academic experts in China share the government’s skepticism that any quick deal can be achieved.“Even if we go back to the negotiating table, it will be tough to reach an agreement,” said George Yu, a trade economist at Renmin University in Beijing.The Trump administration also sought, without success, to persuade Chinese officials to abandon heavy subsidies for high-tech industries. Robert E. Lighthizer, Mr. Trump’s trade representative, ended up imposing tariffs aimed at preventing subsidized Chinese companies from driving American companies out of business.Getting China to Buy American MadeThe United States and China named last year’s pact the Phase 1 agreement, and promised to negotiate a second phase. But that never happened.The tariffs have played a particularly large role in the auto industry.In response to Mr. Trump’s 25 percent tariff on imported gasoline-powered and electric cars from China, American automakers like Ford Motor have abandoned plans to import inexpensive cars from their Chinese factories. Chinese automakers like Guangzhou Auto have also shelved plans to enter the American market.Chinese car exports have surged this spring as new factories come into production, many of them built with extensive subsidies. But the inexpensive Chinese cars have mainly gone elsewhere in Asia and to Europe, even as car prices in the United States have climbed.Ms. Yellen did not specifically address automotive tariffs.The first phase of the trade deal included a requirement for a high-level review this summer. The agreement requires China to stop forcing foreign firms to transfer their technology to Chinese companies doing business there.Phase 1 also included a Chinese pledge to buy an additional $200 billion of American goods and services through the end of this year. The agreement was intended to make sure that China did not retaliate for American tariffs by discouraging Chinese companies from buying American goods.Although China has resumed large-scale purchases of U.S. goods since the countries’ trade war, neither the overall value of these purchases nor the composition of purchases has met the Trump administration’s hopes.China fell short of its commitments by 40 percent last year and is off by more than 30 percent so far this year, said Chad P. Bown of the Peterson Institute for International Economics, who has been tracking the purchases. The pace of agricultural purchases has picked up, but China is not buying enough cars, airplanes or other products made in the United States to meet its obligations.China also pledged in the Phase 1 agreement that its purchases of American goods would continue rising from 2022 through 2025.Biden’s Blended ApproachThe Biden administration is cognizant that all of these purchase requirements have frustrated American allies who feel that the agreement has cost them sales.One reason China is not eager to reopen potentially acrimonious negotiations over American tariffs and Chinese subsidies is that the Phase 1 agreement has transformed trade relations between the two countries, said the people familiar with Chinese economic policymaking. Trade has gone from being one of their biggest sources of friction to becoming one of the least contentious areas of their relationship.Under Mr. Biden, the United States has maintained pressure on China and in some respects stepped it up, focusing on concerns about its humanitarian record that Mr. Trump usually overlooked.In March, the Biden administration placed sanctions on top Chinese officials as part of an effort with Britain, Canada and the European Union to punish Beijing for human rights abuses against the largely Muslim Uyghur minority group.In June, the White House took steps to crack down on forced labor in the supply chain for solar panels in the Chinese region of Xinjiang, including a ban on imports from a silicon producer there. It also set aside a dispute with Europe over aircraft subsidies for Boeing and Airbus in June so that the United States could more effectively corral allies to counter China’s ambitions to dominate key industries.China has also been accelerating the pace of “decoupling” from the United States, directing its technology companies to avoid initial public offerings in the United States and list in Hong Kong instead. That has been a big blow to Wall Street firms that have reaped large advisory fees from Chinese companies listing their shares in the United States.Katherine Tai, the U.S. trade representative, has said little so far about the Phase 1 agreement, preferring to emphasize that the administration is still developing its policy toward China.Pete Marovich for The New York TimesThe Treasury Department, with its close ties to Wall Street, has long been much more wary of antagonizing China than the Office of the United States Trade Representative, a separate cabinet agency that oversees trade policy. Katherine Tai, Mr. Biden’s trade representative, has said little so far about the Phase 1 agreement, preferring to emphasize instead that the administration is still developing its policy toward China.Ms. Yellen’s official meetings with her Chinese counterparts have so far been sparse. The Treasury Department announced last month that she had held a virtual call with Liu He, China’s vice premier. They discussed the economic recovery and areas of cooperation, and Ms. Yellen raised concerns about China’s human rights record.She expressed those concerns publicly during a speech in Brussels this week, telling European finance ministers that they should work together to counter “China’s unfair economic practices, malign behavior and human rights abuses.”The comment made waves within the Chinese government. A spokesman for China’s Ministry of Foreign Affairs, Zhao Lijian, said that “China categorically rejects” Ms. Yellen’s remarks and described them as a smear.The Biden administration has won praise for maintaining a hawkish stance toward China without the provocative approach of the Trump administration, which destabilized the global economy with tariffs and a trade war.“Joe Biden has done what he said he would do — he has collected the allies and got them aligned in a similar manner on similar issues in a way that greatly strengthens America’s position vis a vis China,” said Craig Allen, president of the US-China Business Council.Michael Pillsbury, the Hudson Institute scholar who was one of Mr. Trump’s top China advisers, said the Biden administration’s approach to China was shaping up to be tougher and “more effective” than Mr. Trump’s because Mr. Biden’s aides were united in their view that the United States cannot successfully confront China alone.The big question is what comes next.Mr. Bown, of the Peterson Institute, said the Biden administration’s review of the China trade policy was taking so long most likely because the Trump administration had made so many sweeping and sometimes conflicting actions that it was a complicated portfolio to inherit. There are also complex political calculations to be made when it comes to removing the tariffs.“It’s politically toxic to be seen to be weak on China, so you’re going to need to have your ducks in a row in terms of your economic arguments,” Mr. Bown said.Despite the recent animosity, the United States was able to help coax China into joining the global tax agreement that Ms. Yellen has been helping to broker. The Biden administration believes that China wants to be part of the multilateral system and that fully severing ties between the two countries would not be healthy for the global economy.“I think we should maintain economic integration in terms of trade and capital flows and technology where we can,” Ms. Yellen said, adding that the relationship must balance security requirements. “Clearly, national security considerations have to be very carefully evaluated and we may have to take actions where, when it comes to Chinese investment in the United States or other supply chain issues, where we really see a national security need.”Alan Rappeport reported from Washington, and Keith Bradsher from Beijing. More

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    U.S. and Europe Look for Tariff Cease-Fire as Biden Heads Overseas

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    The Biden administration is trying to ease trade tension with allies, in part to help counter China.WASHINGTON — The United States and the European Union are working toward an agreement that would settle long-running disputes over aircraft subsidies and metals tariffs that set off a trade war during the Trump administration as President Biden looks to re-engage with traditional American allies.The two sides are hoping to reach an agreement by mid-July with a goal of lifting tariffs that both governments have placed on each other’s goods by Dec. 1, according to a joint statement that is being drafted before the U.S.-E.U. summit that Mr. Biden will attend in Brussels next week.Resolving trade tensions with Europe and other allies is a key goal of the Biden administration, which is trying to repair relationships that fractured under President Donald J. Trump, whose provocative approach to trade policy included punishing tariffs. Mr. Biden and other administration officials have said they want to rebuild those relationships, in part so that the United States can work with allies to counter China and Russia.The joint statement suggested an eagerness on both sides of the Atlantic to end a trade fight that has resulted in tariffs on a wide range of goods — including American peanut butter, orange juice and whiskey as well as levies on European wine and cheese.“We commit to make every effort possible to find comprehensive and durable solutions to our trade disputes and to avoid further retaliatory measures burdening trans-Atlantic trade,” the document said.The draft was reported earlier by Bloomberg News.The desire to reach an agreement came as Mr. Biden departed on Wednesday for a summit meeting in Britain with the leaders of the Group of 7 nations, his first international trip as president.As he boarded Air Force One, he indicated that his priority was to mend relations with his counterparts.“Strengthening the alliance and make it clear to Putin and to China that Europe and the United States are tight, and the G7 is going to move,” Mr. Biden said of his goals for the trip.Discussions about easing tariffs come at a critical time for the global economy as countries emerge from the pandemic. Widespread shortages of commodities because of supply chain bottlenecks and growing consumer demand have been pushing up prices and causing concern among policymakers.In March, the United States and European Union agreed to temporarily suspend tariffs on billions of dollars of each other’s aircraft, wine, food and other products as both sides try to find a negotiated settlement to a dispute over the two leading airplane manufacturers.The World Trade Organization had authorized both the United States and Europe to impose tariffs on each other as part of two parallel disputes, which began almost two decades ago, over subsidies the governments have given to Airbus and Boeing. The European Union had imposed tariffs on about $4 billion of American products, while the United States levied tariffs on $7.5 billion of European goods.The two governments are also trying to resolve a fight over the steel and aluminum tariffs that Mr. Trump imposed in 2018. The 25 percent tariffs on imports of European steel and 10 percent on aluminum spurred retaliation from Europe, which imposed similar duties on American products like bourbon, orange juice, jeans and motorcycles.The negotiations come as the United States is broadly reviewing its trade policy with a new focus on multilateralism.Last week, the Biden administration suspended retaliatory tariffs on European countries in response to digital services taxes that they have imposed as negotiations over a broader tax agreement play out.As part of the effort to deepen ties, the United States and European Union plan to establish a trade and technology council to help expand investment and prevent new disputes from emerging. It will also focus on strengthening supply chains for critical technology such as semiconductors, which have been in short supply in the last year.The alliance represents another tool the administration intends to use to push back against China’s growing economic influence, which Mr. Biden has repeatedly referred to as a threat to the United States. While the president has so far steered clear of hitting China with new tariffs, he has yet to remove the levies Mr. Trump imposed on $360 billion worth of Chinese goods. Last week, the administration barred Americans from investing in Chinese companies linked to the country’s military or engaged in selling surveillance technology used to repress dissent or religious minorities.The draft document says, “We intend to closely consult and cooperate on the full range of issues in the framework of our respective similar multifaceted approaches to China.”The U.S.-E.U. summit will take place next Tuesday.Matina Stevis-Gridneff More

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    Here's One Thing Missing from President Biden's Budget: Booming Growth

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    For all the administration’s focus on transformational policies, it’s not forecasting an outburst of economic potential.President Biden’s budget proposal includes billions of dollars for clean energy, education and child care — ideas being sold for their potential to increase America’s economic potential. One thing it does not include: an outright economic boom.In the assumptions that underpin the administration’s budget, economic growth is strong in 2021 and 2022 — but strong enough only to return the economy to its prepandemic trend line, not to surge above the trajectory it was on throughout the 2010s.Then in 2023, the administration expects gross domestic product, the broadest measure of economic activity, to rise at a slower 2 percent rate, then 1.8 percent a year through the mid-2020s. That is lower than the 2.3 percent average annual growth rate experienced from 2010 to 2019.The administration’s outlook is consistent with projections by other forecasters, including at the Congressional Budget Office and in the private sector. But it means that the Biden White House is not — at least not formally — expecting the kind of rip-roaring growth that characterized periods like 1983 to 1989 (with an average annual G.D.P. growth of 4.4 percent) and 1994 to 2000 (4 percent).Those two episodes coincided with much more favorable demographic trends. They also helped propel two presidents to comfortable re-elections.If the new projections were to prove accurate, it would imply two years of strong growth paired with moderate inflation as the nation recovered from the pandemic heading into the 2022 midterm elections, but then comparatively low growth in the run-up to the 2024 election.The sober estimate contrasts with the approach Mr. Biden has taken to selling his agenda publicly. The framing of his signature plans for infrastructure and family support has been that they will enable the economy to become more vibrant and productive.“There’s a broad consensus of economists left, right and center, and they agree what I’m proposing will help create millions of jobs and generate historic economic growth,” Mr. Biden said in an address to Congress in April.It is a striking contrast with the approach taken by the Trump administration — a gap between presidential styles buried on Table S-9 of the two presidents’ budgets. The Trump administration’s final prepandemic budget proposal, published in February 2020, forecast that the economy would grow around 3 percent per year throughout the 2020s.If the Trump projections materialized, by 2030 the economy would be more than 11 percent bigger than what the Biden projections envision. However, the Trump administration persistently underdelivered on growth. G.D.P. rose an average of 2.5 percent in the three nonpandemic years of his presidency. The results are weaker still if you include the contraction of the economy in 2020.A wind farm in Carbon County, Wyo. The Biden administration says investment in clean energy will help America fulfill more of its long-term potential.Benjamin Rasmussen for The New York TimesCasey B. Mulligan, a University of Chicago economist who worked in the Trump White House, said in an email that the reduced growth forecasts were similar to those that career economic staff recommended in the Trump years. “They perennially overestimated Obama-era growth and underestimated Trump nonpandemic growth,” but you couldn’t see it in the published documents in the Trump years “because normally the political appointees such as me have a say in what is published.”The Biden administration has been inclined more broadly to a strategy of underpromising and overdelivering, most notably with the rollout of vaccines.Even before the budget’s official release, its growth projections became a subject of Republican attacks. “The Obama-Biden administration famously accepted slow growth as America’s ‘new normal’ while pursuing policies that sent jobs overseas,” House Republicans on the Ways and Means Committee said in a blog post. “President Biden appears to be lowering the bar even further.”Political volleys aside, it can be easy both to overestimate the ability of government policy to move the dial on overall growth — and to underestimate how much even small gains in productivity can mean when they compound over many years.In the 1980s boom, for example, the labor force was growing much more rapidly than it is now, helped by demographic trends and a rise in women entering work. In the 1990s boom, a surge in productivity resulted in large part from innovations in information technology, unconnected to government spending.“We are a really big economy where really big forces are shaping what happens to G.D.P. growth,” said Wendy Edelberg, director of the Hamilton Project at the Brookings Institution and a former C.B.O. chief economist.Even these moderate projections by the Biden administration imply that its policies will lift growth in economic activity by a few tenths of a percent each year over a decade. This is significant when comparing it with the growth that would be expected by simply looking at demographic factors and historical averages of productivity growth. The forecast is more inherently optimistic about Mr. Biden’s policies — and their potential to increase productivity and the size of the work force — than it might seem at first glance..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-16ed7iq{width:100%;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-box-pack:center;-webkit-justify-content:center;-ms-flex-pack:center;justify-content:center;padding:10px 0;background-color:white;}.css-pmm6ed{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;}.css-pmm6ed > :not(:first-child){margin-left:5px;}.css-5gimkt{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:0.8125rem;font-weight:700;-webkit-letter-spacing:0.03em;-moz-letter-spacing:0.03em;-ms-letter-spacing:0.03em;letter-spacing:0.03em;text-transform:uppercase;color:#333;}.css-5gimkt:after{content:’Collapse’;}.css-rdoyk0{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-eb027h{max-height:5000px;-webkit-transition:max-height 0.5s ease;transition:max-height 0.5s ease;}.css-6mllg9{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;position:relative;opacity:0;}.css-6mllg9:before{content:”;background-image:linear-gradient(180deg,transparent,#ffffff);background-image:-webkit-linear-gradient(270deg,rgba(255,255,255,0),#ffffff);height:80px;width:100%;position:absolute;bottom:0px;pointer-events:none;}.css-1jiwgt1{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;margin-bottom:1.25rem;}.css-8o2i8v{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-8o2i8v p{margin-bottom:0;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-1rh1sk1{margin:0 auto;overflow:hidden;}.css-1rh1sk1 strong{font-weight:700;}.css-1rh1sk1 em{font-style:italic;}.css-1rh1sk1 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#ccd9e3;text-decoration-color:#ccd9e3;}.css-1rh1sk1 a:visited{color:#333;-webkit-text-decoration-color:#ccc;text-decoration-color:#ccc;}.css-1rh1sk1 a:hover{-webkit-text-decoration:none;text-decoration:none;}“Making the claim that your fiscal policies will boost growth by four-tenths of a point seems optimistic, but I can see how they could get there,” she said.Jason Furman, the Obama administration’s former top economist, said: “I think there’s a problem that people have in their head — more extravagant ideas about what economic policy can do and how quickly it can do it. When you’re talking about productivity enhancement, you’re talking about compounding that becomes a big deal for a long time.”In other words, the difference of a few tenths of a percent of G.D.P. growth might not mean much for a single year, but a gap of that size that persists for many years has a big impact on living standards.Some of the administration’s policies, by design, would focus on the very long-term impact on the nation’s economic potential. For example, additional money for community colleges might actually depress the size of the labor force, and thus G.D.P., in the short run if more adults go back to school. But it would then increase those workers’ productive potential, and thus contribution to growth, for the decades that follow.Conservatives, for their part, view the Biden agenda as likely to restrain growth, particularly once tax increases and new regulatory action go into effect. Mr. Mulligan, the Trump adviser, said he believed the Biden agenda would reduce the nation’s growth path by around 0.8 percentage points a year compared with its Trump-era trajectory. Douglas Holtz-Eakin, president of the American Action Forum, said he thought Mr. Biden’s policies could create faster growth in the short term but slower growth in the long run because of taxes and spending.The Biden White House is more optimistic about what is possible for American workers. After the post-pandemic recovery, it projects a 3.8 percent unemployment rate from 2023 on, which is a bit lower than the levels forecast by the C.B.O. (an average of 4.2 percent from 2023 to 2031) or the Fed (4 percent is the median longer-run unemployment forecast of its leaders). It’s also lower than the 4 percent post-2023 jobless rate included in the Trump budget.The administration is optimistic about the post-pandemic recovery in the job market, projecting a 3.8 percent unemployment rate from 2023 on.Hannah Beier for The New York TimesThis reflects the lessons of 2019, when the jobless rate was consistently below 4 percent without causing excessive inflation or other problems. It’s a welcome sign for anyone who thinks that running a tight labor market — a high-pressure economy, as Treasury Secretary Janet Yellen calls it — is a good thing.Forecasts, on their own, aren’t worth more than the paper on which they are printed. A bold prediction of the boom that’s coming wouldn’t mean much if it didn’t materialize. And the world described in the Biden team’s forecasts is hardly a gloomy one: Low unemployment, low inflation and steady growth is a nice combination, and one that could describe much of the period from 2016 to 2019.The question for Mr. Biden is whether that will be enough to qualify as building back better. More

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    Looking for Bipartisan Accord? Just Ask About Big Business.

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    In surveys and political discourse, Republicans are increasingly critical of corporations, but not for the reasons Democrats have long held that view.Republicans in Washington and around the country have soured on big business, joining Democrats in expressing concern that corporations wield too much influence. The shift has left corporate America with fewer allies in a tumultuous period for American society and the global economy. More

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    As Trillions Flow Out the Door, Stimulus Oversight Faces Challenges

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    A sprawling system meant to police trillions of dollars is showing signs of strain as watchdogs warn of waste, fraud and abuse.WASHINGTON — Lawmakers have unleashed more than $5 trillion in relief aid over the past year to help businesses and individuals through the pandemic downturn. But the scale of that effort is placing serious strain on a patchwork oversight network created to ferret out waste and fraud. More