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    Covid Aid Programs Spur Record Drop in Poverty

    WASHINGTON — The huge increase in government aid prompted by the coronavirus pandemic will cut poverty nearly in half this year from prepandemic levels and push the share of Americans in poverty to the lowest level on record, according to the most comprehensive analysis yet of a vast but temporary expansion of the safety net.The number of poor Americans is expected to fall by nearly 20 million from 2018 levels, a decline of almost 45 percent. The country has never cut poverty so much in such a short period of time, and the development is especially notable since it defies economic headwinds — the economy has nearly seven million fewer jobs than it did before the pandemic.The extraordinary reduction in poverty has come at extraordinary cost, with annual spending on major programs projected to rise fourfold to more than $1 trillion. Yet without further expensive new measures, millions of families may find the escape from poverty brief. The three programs that cut poverty most — stimulus checks, increased food stamps and expanded unemployment insurance — have ended or are scheduled to soon revert to their prepandemic size.While poverty has fallen most among children, its retreat is remarkably broad: It has dropped among Americans who are white, Black, Latino and Asian, and among Americans of every age group and residents of every state.Poverty Rates Have Fallen for Every Demographic Group More

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    A Look at What’s in the Bipartisan Infrastructure Deal

    The White House and bipartisan lawmakers have agreed on a package that would provide funding for roads, bridges and other physical infrastructure.After weeks of debate and discussion, the White House and a bipartisan group of senators said on Wednesday that they had reached agreement on an infrastructure bill.The $1 trillion package is far smaller than the $2.3 trillion plan that President Biden had originally proposed and would provide about $550 billion in new federal money for public transit, roads, bridges, water and other physical projects over the next five years, according to a White House fact sheet. That money would be cobbled together through a range of measures, including “repurposing” stimulus funds already approved by Congress, selling public spectrum and recouping federal unemployment funds from states that ended more generous pandemic benefits early.Although Mr. Biden conceded that “neither side got everything they wanted,” he said the deal would create new union jobs and make significant investments in public transit.“This deal signals to the world that our democracy can function, deliver and do big things,” Mr. Biden said in a statement. “As we did with the transcontinental railroad and the interstate highway, we will once again transform America and propel us into the future.”Lawmakers have yet to release legislative text of the bill, and although the Senate voted to advance it in an initial vote on Wednesday evening, it still faces several hurdles. But if enacted, the package would mark a significant step toward repairing the nation’s crumbling infrastructure and preparing it for the 21st century.Here is a look at the bipartisan group’s agreement for the final package.Funding for roads and bridgesThe package provides $110 billion in new funding for roads, bridges and other major projects. The funds would be used to repair and rebuild with a “focus on climate change mitigation,” according to the White House.That funding would only begin to chip away at some of the nation’s pressing infrastructure needs, transportation experts say. The most recent estimate by the American Society of Civil Engineers found that the nation’s roads and bridges have a $786 billion backlog of needed repairs.Highway and pedestrian safety programs would receive $11 billion under the deal. Traffic deaths, which have increased during the pandemic, have taken a particular toll on people of color, according to a recent analysis from the Governors Highway Safety Association. Traffic fatalities among Black people jumped 23 percent in 2020 from the year before, according to the National Highway Traffic Safety Administration. In comparison, traffic fatalities among white people increased 4 percent during the same time period.The deal also includes funding dedicated to “reconnecting communities” by removing freeways or other past infrastructure projects that ran through Black neighborhoods and other communities of color. Although Mr. Biden originally proposed investing $20 billion in the new program, the latest deal includes only $1 billion.Investments in public transitPublic buses, subways and trains would receive $39 billion in new funding, which would be used to repair aging infrastructure and modernize and expand transit service across the country.While the amount of new funding for public transit was scaled back from a June proposal, which included $49 billion, the Biden administration said it would be the largest federal investment in public transit in history.Yet the funds might not be enough to fully modernize the country’s public transit system. According to a report from the American Society of Civil Engineers, there is a $176 billion backlog for transit investments.Big investments in rail and freight linesThe deal would inject $66 billion in rail to address Amtrak’s maintenance backlog, along with upgrading the high-traffic Northeast corridor from Washington to Boston (a route frequented by East Coast lawmakers). It would also expand rail service outside the Northeast and mid-Atlantic.Mr. Biden frequently points to his connection to Amtrak, which began in the 1970s, when he would travel home from Washington to Delaware every night to care for his two sons while serving in the Senate. The new funding would be the largest investment in passenger rail since Amtrak was created 50 years ago, according to the administration, and would come as the agency tries to significantly expand its service nationwide by 2035.Clean water initiativesThe package would invest $55 billion in clean drinking water, which would be enough to replace all of the nation’s lead pipes and service lines. While Congress banned lead water pipes three decades ago, more than 10 million older ones remain, resulting in unsafe lead levels in cities and towns across the country.Beefing up electric vehiclesTo address the effects of climate change, the deal would invest $7.5 billion in building out the nation’s network of electric vehicle charging stations, which could help entice more drivers to switch to such cars by getting rid of so-called charger deserts. The package would also expand America’s fleet of electric school buses by investing $2.5 billion in zero-emission buses.Funding the investmentsHow to pay for the spending has been one of the most contentious areas, with Republicans opposed to Mr. Biden’s plan to raise taxes and empower the I.R.S. to help pay for the package. Instead, the bipartisan group has agreed on a series of so-called pay-fors that largely repurpose already-approved funds, rely on accounting changes to raise funds and, in some cases, assume the projects will ultimately pay for themselves.The biggest funding source is $205 billion that the group says will come from “repurposing of certain Covid relief dollars.” The government has approved trillions in pandemic stimulus funds, and much, but not all, of it has been allocated. The proposal does not specify which money will be repurposed, but Republicans have pushed for the Treasury Department to take back funds from the $350 billion that Democrats approved in March to help states, local governments and tribes deal with pandemic-related costs.Another $53 billion is assumed to come from states that ended more generous federal unemployment benefits early and return that money to the Treasury Department. An additional $28 billion is pegged to requiring more robust reporting around cryptocurrencies, and $56 billion is presumed to come from economic growth “resulting from a 33 percent return on investment in these long-term infrastructure projects.” More

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    The chairman of a House coronavirus subcommittee vows to investigate eviction practices by corporate landlords.

    Just days before the federal moratorium on evictions is set to expire, lawmakers scrutinized the actions of corporate landlords that have filed tens of thousands of actions seeking the removal of tenants during the pandemic.Representative James E. Clyburn, the chairman of the House Select Subcommittee on the Coronavirus Crisis, said the hearing was the opening salvo of an investigation into what he called “unjustified eviction practices” by some large landlords. Mr. Clyburn, Democrat of South Carolina, said he was disturbed by reports that some large property owners had moved to evict renters for failing to pay rent, even as the government works to distribute tens of billions of dollars in emergency rental assistance funds.Last week Mr. Clyburn sent letters to four corporate landlords that he said were particularly aggressive in going after lower-income tenants and Black and Latino renters. “Evictions by corporate landlords have been widespread in minority communities,” he said.Representatives for those landlords did not speak at the hearing, but several housing advocates did.Jim Baker, the executive director of the Private Equity Stakeholder Project, a nonprofit that has been tracking eviction filings in a handful of large counties, said that corporate landlords, rather than so-called mom-and-pop landlords, had accounted for the majority of eviction filings. Corporate landlords had filed at least 75,000 evictions across the half-dozen large counties the group has tracked since the Centers for Disease Control and Prevention imposed a nationwide eviction moratorium in September, Mr. Baker said.The moratorium is credited with cutting the number of eviction actions filed by landlords roughly in half, according to the Eviction Lab at Princeton University.But the effects have been mixed: State and local courts have been divided on the details of the moratorium, with some ruling that landlords could file eviction actions for nonpayment of rent and were prohibited only from removing such tenants. Other courts have permitted evictions if they are for violations of a housing complex’s rules and regulations.With the moratorium expiring this week, housing advocates estimate that roughly 11 million adult renters are vulnerable to being evicted because they are behind on their rent. Nearly a half-million people are behind in New York City alone, according to an analysis of census data by the National Equity Atlas, a research group associated with the University of Southern California.Housing advocates fear there will be a rush of eviction filings once the moratorium ends. Some are concerned about how slow the federal government has been to dole out roughly $45 billion in federal rental assistance. A little over $1.5 billion has been paid out nationwide, the Treasury Department said last week.Emily A. Benfer, a professor at Wake Forest University who specializes in health and housing law, said in an interview that the relief had been slow to trickle out partly because many local governments had had to build rental assistance programs from scratch. The process for applying can be cumbersome because of language and technology barriers, she added.Diane Yentel, the president of the National Low Income Housing Coalition, told the subcommittee that Congress should consider extending the moratorium to allow more time for the emergency rental money to be disbursed. She said some states had allocated less than 5 percent of the money they had gotten from the federal government.Republicans on the subcommittee criticized the C.D.C. moratorium, calling it an unconstitutional power grab that imposed financial hardships on landlords. Joel Griffith, a researcher with the Heritage Foundation, a conservative policy group, said the moratorium “eroded private property rights” and interfered with the ability of local courts to enforce local housing laws.The committee has asked the corporate landlords to respond to Mr. Clyburn’s letter by Aug. 3. More

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    Rising Rents Threaten to Prop Up Inflation

    Officials at the Federal Reserve and White House thought fast price gains would pass. Rent increases could make it a slow fade.Kaitlin Cindrich is facing a $200 monthly increase in rent this August if she and her husband can renew their apartment lease in Provo, Utah. That 25 percent jump is not something she expected, and the 21-year-old fears she may have to skip doctor appointments for her autoimmune disease to keep up with the payments.Still, she acknowledges there isn’t much choice but to pay more. “We are hoping to stay because everything is so expensive right now that I would be paying the same whether I’m here or somewhere else,” Ms. Cindrich said.The rental market, which slumped during the pandemic, has snapped back more quickly than many economists predicted, and renters across the country are facing sticker shock. When the pandemic hit, many people who lost their jobs discontinued their apartment leases to live with parents or roommates temporarily. Others fled big cities out of health concerns. Apartments went empty, and landlords began offering incentives, such as a free month, to entice tenants.Now, as people move out on their own again or return to cities and office jobs, and as existing renters find they can’t afford to buy a home in a booming housing market, demand for apartments and single-family rentals is rebounding — and even looking hot in some places. Rents last month rose 7 percent nationally from a year earlier, Zillow data shows. While that was measured against a weak June 2020, the gain was also a robust 1.8 percent from May.“After a year, jobs are coming back strongly, and this is recreating the housing demand for rental units and occupancy is rising,” said Lawrence Yun, chief economist at the National Association of Realtors.If rents continue to take off, it could be bad news both for those seeking housing and for the nation’s inflation outlook. Rental costs play an outsize role in the Consumer Price Index, so a meaningful rise in them could help keep that closely watched government price gauge, which has picked up sharply, higher for longer. Rents are only about half as important to the Federal Reserve’s preferred Personal Consumption Expenditures inflation index, but a long bout of high C.P.I. inflation may influence consumers’ expectations for future price gains, which could in turn quicken them.Consumer prices jumped a rapid 5.4 percent in the year through June, but much of the increase was tied back to the economy’s reopening from the pandemic. Policymakers at the Fed and White House have maintained that today’s strong price pressures should fade as the economy gets back to normal, as one-off problems pushing up used car prices are resolved and as a spike in demand that’s elevating furniture and washing machine costs begins to abate.Yet that’s where housing costs could kick in. Measures of rent and what’s called “owners’ equivalent rent” — which uses rental data to try to put a price on how much owners would pay for their housing if they hadn’t bought a home — make up nearly one-third of the Consumer Price Index. Both tend to move slowly, but are defying expectations that they would take time to bounce back.“We’re seeing owners’ equivalent rent move up fairly sharply already,” said Alan Detmeister, an economist at UBS and a former Fed staff official. “I expect it’s going to get worse later this year and into early next.”He and other economists said it was too early to tell to what extent, and for how long, rents would prop up overall prices.“I do think we’ll see some upside from rents, and that will offset some of the declines in goods categories,” said Michelle Meyer, head of U.S. economics at Bank of America. But the “only way” that rents rise enough to keep inflation uncomfortably high, she added, is “if wages are persistently higher.”How much landlords can charge hinges on how much tenants can afford. Lower-paid workers are seeing strong pay gains, but many economists expect those to fade as the economy gets through reopening.Another key factor, Mr. Yun said, is whether “homebuilders are being active to supply new homes and apartments to match up with this rise in rent.”Data do suggest that a substantial new supply of apartments should be on the way this year, but it’s unclear whether they will match up with the demand in location and timing.For now, the rental experience diverges across markets. Rents have appreciated rapidly in places like Boise, Idaho; Spokane, Wash.; and Phoenix, while big cities on the coasts have lagged, based on Zillow data. Rents in New York City and San Francisco are recovering quickly but remain cheaper than two years ago.In New York, “the rental market was crushed,” said Jonathan Miller, chief executive of Miller Samuel, a local real estate appraisal firm. But the pace of new leases over the past three months, with tales of bidding wars, is turning that around. Mr. Miller expects rents to fully recover as companies bring workers back to the office this autumn, pulling them back from far-flung remote work locations, he said.“There’s going to be another wave,” he added. “We’re just past peak Zoom.”Data from Apartment List, a listing site, confirms the trend visible in the Zillow numbers: So far in 2021, rental prices nationally have grown 9.2 percent, compared with the 2 to 3 percent that is typical from January to June. According to the most recent data available, prices were higher than economists at Apartment List would have expected had prepandemic trends persisted.Movers in New York City last summer. “In the short run, prices are going to continue to soar,” said Igor Popov, an economist at Apartment List.OK McCausland for The New York Times“In the short run, prices are going to continue to soar, because occupancy rates are sky high right now,” said Igor Popov, an economist at Apartment List. He said that price gains should moderate as supply increased, but that it was unclear when that would happen.In the meantime, the hot housing market should keep rental demand strong.“Rents are a trailing spouse to house price appreciation,” said Nela Richardson, chief economist at the employment data provider ADP, who previously worked at the real estate company Redfin. “You have a housing market that is chronically undersupplied, and has been for a decade. That isn’t going away.”Higher rental costs can have a big impact on people’s lives. Christine Gitau, 23, of Homewood, Ala., is going back to live with her parents because she can’t afford the $100 increase to renew her lease on the $530-a-month apartment she started renting last July.“I’m very frustrated, angry and stressed because of the rent hike,” Ms. Gitau said.Ms. Cindrich in Provo, a full-time student at Brigham Young University, worries she will have to apply for more student loans to pay for her apartment or cut expenses in other areas.“I have a severe autoimmune disease, and I spend hundreds of dollars each month on medication,” she said. “The rent hike probably means I might not be able to go to my monthly doctor appointments.”That human impact makes rising rent a political challenge, especially when the Biden administration is already fending off attacks from Republicans over the burst in inflation.Administration officials say they are watching housing prices and their effects on inflation. They continue to insist that most of the price pressures in the economy are temporary.The officials, and President Biden himself, have also pushed for additional spending measures that would over time increase the supply of housing and, the officials say, hold down rental increases, spikes in housing prices and inflationary pressure.Mr. Biden’s $4 trillion economic agenda includes $213 billion to help jump-start more affordable housing. Those efforts were not included in the bipartisan infrastructure agreement that he struck with centrist lawmakers, but they could end up, at least in part, in a go-it-alone spending bill that Democrats plan to push this summer in Congress.Even if they succeed, those efforts would take years to bear fruit.Some, like Dr. Popov, expect recent gains to moderate on their own this year. Others said bigger increases might lay ahead: Many consumers are flush with cash from government stimulus checks, and the Fed’s cheap-borrowing policies are heating up the housing market.“There’s a tremendous amount of stimulus, and I think that has potential to create upward pressure on rent prices,” Mr. Miller, the appraisal executive, said. More

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    Senators and Biden Aides Struggle to Save Bipartisan Infrastructure Deal

    A looming deadline and a last-minute need for a new revenue source are complicating a deal that was announced nearly a month ago.WASHINGTON — Congressional negotiators and the Biden administration tried on Monday to salvage a nearly $600 billion bipartisan agreement to invest in roads, water pipes and other physical infrastructure, after Republicans rejected a key component to pay for the plan and resisted Democratic plans for an initial procedural vote on Wednesday.Senators and administration officials are still working to hammer out the details of the deal, including how to ensure that a plan to finance it will secure 60 votes for Senate passage. White House officials expressed confidence on Monday that the agreement could be finalized. But its fate was uncertain.Mr. Biden is pushing his economic agenda in parts. The bipartisan agreement is meant to be Step 1 — with a much larger, Democratic bill to follow. But weeks after their announcement of a deal, the bipartisan group has not released legislative text or received external confirmation that it is fully financed. A top negotiator said over the weekend that the group jettisoned a key plan included in the deal that would have raised revenue by giving the I.R.S. more power to catch tax cheats.Republicans have come under pressure to oppose that funding method from conservative anti-tax groups, who say it would empower auditors to harass business owners and political targets. Democrats say the increased enforcement would target large corporations and people who earn more than $400,000 — and note that improved tax enforcement has been a bipartisan goal of administrations dating back decades.Still, on Monday evening Senator Chuck Schumer of New York, the majority leader, set up a procedural vote to begin moving toward debate on the bipartisan deal, even without the text of the plan, on Wednesday. Mr. Schumer said that if senators agreed to consider infrastructure legislation, he would move to bring up either the bipartisan deal, should one materialize this week, or a series of individual infrastructure bills that have been approved on a bipartisan basis by Senate committees.The plan was an effort to force negotiators to move toward finalizing details and a critical mass of Republicans to commit to advancing the deal, with Democrats eager to advance the legislation before the Senate leaves for its August recess. Mr. Schumer said he had support from the five main Democratic negotiators involved in talks.“It is not a deadline to determine every final detail of the bill,” he said. A vote of support on Wednesday, he added, would signal that “the Senate is ready to begin debating and amending a bipartisan infrastructure bill.”On Monday, Mr. Biden pushed for passage of the agreement during remarks at the White House, where he promoted his administration’s economic progress. But administration officials made clear later in the day that their patience for the finalization of the bipartisan agreement was running thin.“We believe it’s time to move forward with this vote — with congressional action,” Jen Psaki, the White House press secretary, said at a news briefing. Asked what the administration’s backup plan was if the plan failed to clear the test vote, Ms. Psaki demurred.“We’re not quite there yet,” she said. “There is a lot of good work that’s happened. Two days is a lifetime in Washington, so I don’t think we’re going to make predictions of the death of the infrastructure package.”Republican leaders said they wanted to see legislative text before voting on a deal.“We need to see the bill before voting to go to it. I think that’s pretty easily understood,” Senator Mitch McConnell of Kentucky, the Republican leader, told reporters on Monday. “I think we need to see the bill before we decide whether or not to vote for it.”Democrats have argued that negotiators have had nearly a month to iron out the details and that the Senate has previously taken procedural votes without finalized bill text — including when Mr. McConnell led his caucus in a failed attempt to repeal and replace the Affordable Care Act in 2017.The biggest sticking point remains how to pay for the plan. The I.R.S. plan was estimated to bring in more than $100 billion in new tax revenue over a decade.It is unclear what the group will turn to as a substitute. White House officials and the 10 core Senate negotiators — five Democrats and five Republicans — were working on Monday to find a new revenue source.Senator Rob Portman, Republican of Ohio and a key negotiator, floated the prospect on Sunday of undoing a Trump-era rule that changes the way drug companies can offer discounts to health plans for Medicare patients as an option. The Congressional Budget Office estimated in 2019 that it would cost $177 billion over 10 years, and the rule has not yet been implemented.Ms. Psaki told reporters that the administration is “open to alternatives, very open to alternatives from this end.”“But we’ll let those conversations happen privately and be supportive of them from our end,” she said.Senators were expected to virtually meet Monday evening as they continued to haggle over the details. The group met for more than two hours Sunday evening.“I think we need to see the bill before we decide whether or not to vote for it,” Senator Mitch McConnell, the Republican leader, told reporters on Monday.Stefani Reynolds for The New York TimesMr. Biden continued to push on Monday for legislative action, casting his economic policies, along with vaccination efforts, as a critical driver of accelerating growth. He promised that his remaining agenda items would help Americans work more and earn more money while restraining price increases, pushing back on a critique from Republicans.Administration officials and Mr. Biden say the Democrats’ $3.5 trillion plan — the larger bill that would follow the bipartisan infrastructure bill — will dampen price pressures by increasing productivity. The president said the proposals would free up Americans to work more through subsidized child care, national paid leave and other measures, as well as improve the efficiency of the economy.The spending “won’t increase inflation,” Mr. Biden said. “It will take the pressure off inflation.”He also said he had faith in the independent Federal Reserve and its chair, Jerome H. Powell, to manage the situation. The Fed is responsible for maintaining both price stability and maximum employment.“As I made clear to Chairman Powell of the Federal Reserve when we met recently, the Fed is independent. It should take whatever steps it deems necessary to support a strong, durable economic recovery,” Mr. Biden said. “But whatever different views some might have on current price increases, we should be united on one thing: passage of the bipartisan infrastructure framework, which we shook hands on — we shook hands on.”Mr. Biden used more of the speech to push for the $3.5 trillion plan, which Democrats aim to pursue without Republican support through a process known as budget reconciliation, which bypasses a Senate filibuster.In describing the varied social and environmental initiatives he hopes to include in the plan, the president repeatedly stressed the need for government action as a means to raising living standards and creating jobs.That plan contains the bulk of Mr. Biden’s $4 trillion economic agenda that is not included in the bipartisan bill, like expanding educational access, building more affordable and energy-efficient housing, incentivizing low-carbon energy through tax credits and a wide range of other social programs meant to invest in workers.Republicans have also amplified concerns about inflation since Democrats pushed through a $1.9 trillion pandemic relief bill in March. In a letter to his conference this week, Representative Kevin McCarthy of California, the Republican leader, said that “prices on everything from gas to groceries are skyrocketing,” and he vowed that “we will continue to hold Democrats to account for their reckless handling of the economy.”Mr. Biden’s economic team has said repeatedly that inflation increases are largely a product of the pandemic and will fade in the months or years to come.Mr. Biden dismissed a question from a reporter after the speech about the potential for unchecked inflation, which he said no serious economist foresaw.Margot Sanger-Katz More

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    Yellen Says China Trade Deal Has ‘Hurt American Consumers’

    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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    Democrats Roll Out $3.5 Trillion Budget to Fulfill Biden’s Broad Agenda

    “We’re going to get a lot done,” President Biden said, as Senate Democrats began drafting the details on a social and environmental bill that could yield transformative change.WASHINGTON — President Biden and congressional Democrats vowed on Wednesday to push through a $3.5 trillion budget blueprint to vastly expand social and environmental programs by extending the reach of education and health care, taxing the rich and tackling the warming of the planet.The legislation is still far from reality, but the details that top Democrats have coalesced around are far-reaching. Prekindergarten would be universal for all 3- and 4-year-olds, two years of community college would be free, utilities would be required to produce a set amount of clean energy, and prescription drug prices would be lowered. Medicare benefits would be expanded, and green cards would be extended to some undocumented immigrants.At a closed-door luncheon in the Capitol, Mr. Biden rallied Democrats and the independents aligned with them to embrace the plan, which would require every single one of their votes to move forward over united Republican opposition. But crucial moderate lawmakers had yet to say whether they would accept the proposal, with a majority of policy details left to resolve.Mr. Biden’s message to the senators on Wednesday, said Senator Richard Blumenthal of Connecticut, was “be unified, strong, big and courageous.”Senate Democratic leaders have said they aim to pass both the budget blueprint and a narrower, bipartisan infrastructure plan that is still being written before the chamber leaves for the August recess — a complex and politically tricky task in a 50-50 Senate. The narrowly divided House would also have to pass the budget blueprint before both chambers begin tackling the detailed legislation.Speaker Nancy Pelosi, who must ultimately get the package through the House, embraced the deal, telling Democrats in a letter on Wednesday, “This budget agreement is a victory for the American people, making historic, once-in-a-generation progress for families across the nation.”The outline includes large swaths of Mr. Biden’s $4 trillion economic agenda. It wraps in every major category from his American Families Plan, including investments in child care, paid leave and education, and expanded tax credits that this week will begin providing a monthly check to most families with children.“I think we’re going to get a lot done,” Mr. Biden told reporters as he left his first in-person lunch with the Democratic caucus as president.Nodding to budget constraints, party leaders conceded that many of the programs included in their plan — including the tax credits — could be temporary, leaving a future Congress to decide whether to extend them further.The proposal also includes some measures that go beyond what Mr. Biden has called for, like expanding Medicare to cover dental, vision and hearing benefits. Democratic leaders left it to the Senate Finance Committee to decide whether to include reducing the eligibility age for Medicare to 60, a priority of Senator Bernie Sanders of Vermont, the Budget Committee chairman.The resolution would also create what would effectively be a tax on imports from countries with high levels of greenhouse gas emissions. That could violate Mr. Biden’s pledge not to raise taxes on Americans earning less than $400,000 a year if the tax is imposed on products that typical consumers buy, such as electronics from China.Democrats on Mr. Sanders’s committee must produce a budget resolution in the coming days that includes so-called reconciliation instructions to other Senate committees, which in turn will draft legislation detailing how the $3.5 trillion would be spent — and how taxes would be raised to pay for it.That would pave the way for Democrats to produce a reconciliation bill this fall that would be shielded from a filibuster, allowing them to circumvent Republican opposition but requiring all 50 of their members — and a majority in the narrowly divided House — to pass it.“In some cases, it doesn’t provide all the funding that I would like to do right now,” Mr. Sanders said. “But given the fact that we have 50 members, and that compromises have got to be made, I think this is a very, very significant step forward.”He added: “If you’re asking me at the end of the day, do I think we’re going to pass this? I do.”A neighborhood in Austin, Texas, where many homes have solar panels. The blueprint of the legislation includes clean energy provisions and other social programs.Tamir Kalifa for The New York TimesAt the private lunch, Senator Chuck Schumer of New York, the majority leader, outlined the proposal and the directives it would lay out.Democrats included the creation of a civilian climate corps to add jobs to address climate change and conservation, and to provide for child care, home care and housing investments. They are also expected to try to include a path to citizenship for some undocumented immigrants and address labor protections.Democrats would also extend expanded subsidies for Americans buying health insurance through the Affordable Care Act that were included in the broad pandemic aid law that Mr. Biden signed this year.Huge investments would go to renewable energy and a transformed electrical system to move the U.S. economy away from oil, natural gas and coal to wind, solar and other renewable sources. The budget blueprint is to include a clean energy standard, which would mandate the production of electricity driven by renewable sources and bolster tax incentives for the purchase of electric cars and trucks.To fully finance the bill, it is expected to include higher taxes on overseas corporate activities to alleviate incentives for sending profits overseas, higher capital gains rates for the wealthy, higher taxes on large inheritances and stronger tax law enforcement.Senator Ron Wyden of Oregon, the chairman of the Finance Committee, said on Wednesday that he was also preparing to overhaul a deduction for companies not organized as corporations, like many small businesses and law firms — created by the 2017 Republican tax law — in order to cut taxes from small businesses but raise additional revenues from wealthy business owners.Specific provisions will have to pass muster with the strict budgetary rules that govern the reconciliation process, which require that provisions affect spending and taxation, not just lay out new policies. The Senate parliamentarian could force Democrats to overhaul or outright jettison the clean energy standard, the provision that climate activists and many scientists most desire, as well as the immigration and labor provisions, among others.Moderate Democrats, who had balked at a progressive push to spend as much as $6 trillion on Mr. Biden’s entire economic agenda, largely declined to weigh in on the blueprint until they saw detailed legislation, saying they needed to evaluate more than an overall spending number.“We’ve got to get more meat on the bones for me,” Senator Jon Tester, Democrat of Montana, told reporters, though he added that he would ultimately vote for the budget blueprint. “I’ve got to get more information on what’s in it.”The size of the package could be shaped by the success or failure of the bipartisan infrastructure plan, which would devote nearly $600 billion in new spending to roads, bridges, tunnels, transit and broadband. The group of lawmakers negotiating that package has yet to release legislative text as they haggle over the details of how to structure and pay for the plan.“I want to be able to tell people in South Carolina: I’m for this, I’m not for that,” said Senator Lindsey Graham of South Carolina, the top Republican on the Senate Budget Committee.Stefani Reynolds for The New York TimesIf Republicans cannot deliver enough votes to move the package past a filibuster, Democrats could simply fold physical infrastructure spending into their reconciliation plan and take away any chance for Republicans to shape it, said Senator Rob Portman, Republican of Ohio and one of the negotiators of the bipartisan bill.“If we don’t pass infrastructure, they’re going to put even more infrastructure in than we have and worse policies,” said Mr. Portman, who fielded skepticism from his colleagues at a private Republican lunch on Tuesday. Some Republicans had hoped that a bipartisan accord on physical infrastructure projects would siphon momentum from a multitrillion-dollar reconciliation package. Instead, it appears very much on track, and it may intensify the pressure on Republicans to come to terms on a bipartisan package, even if they fiercely oppose the rest of the Democrats’ agenda.“I want to be able to tell people in South Carolina: I’m for this, I’m not for that,” said Senator Lindsey Graham of South Carolina, the top Republican on the Budget Committee and a peripheral presence in the bipartisan talks.He added that the lengthy floor debate over the blueprint would allow Republicans to “ferociously attack it, to have amendments that draw the distinctions between the parties, to scream to high heaven that this is not infrastructure.”Senator Joe Manchin III of West Virginia, a moderate Democrat, said he looked “forward to reviewing this agreement” but was also interested in how the programs would be financed.Sarahbeth Maney/The New York TimesSenator Joe Manchin III of West Virginia, the centrist Democrat whose support might be determinative, told reporters after lunch with the president that he had concerns about some of the climate language. But he did not rule out supporting the budget proposal or the subsequent package. Senator Kyrsten Sinema, Democrat of Arizona and another key moderate, also hung back on Wednesday.Still, the $3.5 trillion package had plenty in it to appeal to senior Democrats who were eager to use it to advance their longtime priorities. For Senator Patty Murray of Washington, the chairwoman of the Health, Education, Labor and Pensions Committee, it was an extension of a more generous child tax credit, as well as subsidies for child care, prekindergarten and paid family leave.For Mr. Sanders, it was the Medicare and climate provisions.“Finally, we are going to have America in the position of leading the world in combating climate change,” he said.Mr. Tester said the need for school construction was so high that trillions could go to that alone.“The plan is a strong first step,” said Senator Elizabeth Warren, Democrat of Massachusetts, adding that she was focused on funding universal child care. “We’re slicing up the money now to find the right ways to make that happen.”The budget measure is expected to include language prohibiting tax increases on small businesses, farms and people making less than $400,000, fulfilling a promise Mr. Biden has maintained throughout the negotiations. Asked on Wednesday whether the proposed carbon tariff would violate that pledge, Mr. Wyden replied, “We’ve not heard that argument.”Lisa Friedman More

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    Democrats Propose $3.5 Trillion Budget to Advance with Infrastructure Deal

    The measure, which would include money to address climate change, expand Medicare and fulfill other Democratic priorities, is intended to deliver on President Biden’s economic proposal.WASHINGTON — Top Democrats announced on Tuesday evening that they had reached agreement on an expansive $3.5 trillion budget blueprint, including plans to pour money into addressing climate change and expanding Medicare among an array of other Democratic priorities, that they plan to advance alongside a bipartisan infrastructure deal.Combined with nearly $600 billion in new spending on physical infrastructure contained in the bipartisan plan, which omits many of Democrats’ highest ambitions, the measure is intended to deliver on President Biden’s $4 trillion economic proposal. The budget blueprint, expected to be dominated by spending, tax increases and programs that Republicans oppose, would pave the way for a Democrats-only bill that leaders plan to push through Congress using a process known as reconciliation, which shields it from a filibuster.To push the package — and the reconciliation bill that follows — through the evenly divided Senate, Democrats will have to hold together every member of their party and the independents aligned with them over what promises to be unified Republican opposition. It was not clear if all 50 lawmakers in the Democratic caucus, which includes centrists unafraid to break with their party like Senator Joe Manchin III of West Virginia and Senator Kyrsten Sinema of Arizona, had signed off the blueprint. The package is considerably smaller than the $6 trillion some progressives had proposed but larger than some moderates had envisioned.Mr. Biden was set to attend lunch on Wednesday with Democrats, his first in-person lunch with the caucus since taking office, to rally the party around the plan and kick off the effort to turn it into a transformative liberal package. The blueprint, and subsequent bill, will also have to clear the House, where Democrats hold a razor-thin margin.The agreement, reached among Senator Chuck Schumer of New York, the majority leader, and the 11 senators who caucus with the Democrats on the Budget Committee, came after a second consecutive day of meetings that stretched late into the evening. Louisa Terrell, Mr. Biden’s head of legislative affairs, and Brian Deese, his National Economic Council director, were also present for the meeting.“We are very proud of this plan,” Mr. Schumer said, emerging from the session flanked by the other Democrats in the corridor outside his office just off the Senate floor. “We know we have a long road to go. We’re going to get this done for the sake of making average Americans’ lives a whole lot better.”Senator Bernie Sanders of Vermont, the liberal chairman of the Budget Committee, and Senator Mark Warner of Virginia, a key moderate who is negotiating the details of the bipartisan framework, also confirmed their support for the agreement, in impassioned remarks.“This is, in our view, a pivotal moment in American history,” proclaimed Mr. Sanders, who had initially called for a package as large as $6 trillion.Details about the outline were sparse on Tuesday evening, as many of the specifics of the legislative package will be hammered out after the blueprint is adopted. Mr. Warner said the plan would be fully paid for, though Democrats did not offer specifics about how they planned to do so. Discussions of how to raise that money are expected to continue in the coming days, one aide said.“I make no illusions how challenging this is going to be,” said Mr. Warner, who made a point of thanking both the committee and the bipartisan group he had been negotiating with. “I can’t think of a more meaningful effort that we’re taking on than what we’re doing right now.”The resolution is expected to include language prohibiting tax increases on small businesses and people making less than $400,000, according to a Democratic aide familiar with the accord, who disclosed details on the condition of anonymity.Mr. Schumer said the resolution would call for an expansion of Medicare to provide money for dental, vision and hearing benefits, a priority for liberals like Mr. Sanders. It is also likely to extend a temporary provision in the president’s pandemic relief law that greatly expands subsidies for Americans purchasing health insurance through the Affordable Care Act, one of the largest health measures since the law was passed more than a decade ago.“Every major program” requested by Mr. Biden would be “funded in a robust way,” Mr. Schumer said.Democrats will now have to hammer out the terms of the budget resolution and the bipartisan infrastructure deal, which Mr. Schumer has said he hopes to pass in the Senate before the chamber leaves for the August recess. Once the resolution is passed, the caucus will then draft the legislative package, which will fund and detail their ambitious proposals — and most likely impose hefty tax increases on the rich and on corporations to pay for them.Even before the agreement was reached, committees had quietly been working on a series of proposals for the bill and discussing how to keep the bill within the confines of the strict rules that govern the reconciliation process.The Senate Finance Committee had been drafting tax provisions to help pay for the spending. They include a restructuring the international business tax code to tax overseas profits more heavily in an effort to discourage U.S. corporations from moving profits abroad. They would also collapse dozens of tax benefits aimed at energy companies — especially oil and gas firms — into three categories focused on renewable energy sources and energy efficiency.Finance Committee Democrats will now turn their attention to the individual side of the tax code, where they want to raise taxes on large inheritances and raise capital gains tax rates on the richest Americans.On the spending side, Mr. Biden, working with Mr. Sanders, wants to make prekindergarten access universal and two years of community college free to all Americans. Money is expected to be devoted to a series of climate provisions, after liberal Democrats warned that they would not support the bipartisan framework without the promise of further climate action.Democrats also want to extend tax credits that were in the pandemic recovery plan for many years to come, including a $300-per-child credit for poor and middle-income families that began this week.The bipartisan infrastructure framework is expected to total $1.2 trillion, though about half that amount is simply the expected continuation of existing federal programs. Still, the nearly $600 billion in new spending, combined with funds already approved in Mr. Biden’s pandemic relief law and the pending infrastructure plan, could be transformative, steering government largess toward poor and middle-class families in amounts not seen since the New Deal.Jonathan Weisman More