United States Politics and Government

More stories

  • 100 Shares99 Views

    in Economy

    Biden’s Reluctant Approach to Free Trade Draws Backlash

    by

    A law intended to bolster clean energy manufacturing has ignited debate over whether the U.S. should work to break down international trade barriers — or keep them intact to protect American workers.WASHINGTON — Since President Biden came into office two years ago, the United States has declined to pursue new comprehensive free-trade agreements with other countries, arguing that most Americans have turned against the kind of pacts that promote global commerce but that also help to send factory jobs overseas.But in recent months, with the rollout of a sweeping climate bill intended to bolster clean energy manufacturing, the lack of free-trade agreements with some of America’s closest allies has suddenly become a major headache for the administration.The dispute, which centers on which countries can receive benefits under the Inflation Reduction Act, has caused significant rifts with foreign governments and drawn blowback from Congress. And it is helping to reignite a debate over whether the United States should be working to break down trade barriers with other countries — or keep them intact in an attempt to protect American workers.The law as written offers tax credits for electric vehicles that are built in North America or that are made with battery minerals from the United States and countries with which it has a free-trade agreement.Those provisions have angered allies in Europe and elsewhere that, despite close ties with America, do not actually have free-trade agreements with the United States. They have complained that companies in their countries would be put at a disadvantage to U.S. firms that can receive the subsidies. To soothe relations, the Biden administration has developed a complicated workaround, in which it is signing limited new trade deals with Japan and the European Union.But that solution has vexed lawmakers of both parties, who say that these agreements are not valid and that the administration needs to ask Congress to approve the kind of free-trade agreement the law envisions.“It’s a fix,” said Edward Alden, a senior fellow at the Council on Foreign Relations who specializes in trade, adding that they were not free-trade agreements “by any reasonable definition of the term.”The World Trade Organization defines a free-trade agreement as covering “substantially all trade” between countries. In the United States, such broad agreements need the approval of Congress, though the executive branch has the authority to negotiate much narrower agreements.Administration officials argue that because the Inflation Reduction Act does not define the term “free-trade agreement,” these narrower pacts are allowed. But in hearings before the House and the Senate last month, lawmakers criticized the administration for bypassing Congress in making these agreements.Some lawmakers argued for more traditional free-trade deals, while others voiced support for new deals with higher labor and environmental standards, like the North American agreement Congress approved in 2020.In hearings, Katherine Tai, the U.S. trade representative, highlighted efforts to raise global labor standards and decarbonize industries, and said she and her colleagues were “writing a new story on trade.”Mariam Zuhaib/Associated PressIn her opening statement at the hearings, Katherine Tai, the United States trade representative, set out a vision for a trade policy that was different from those of previous administrations, focused more on defending American workers from unfair foreign competition than opening up global markets. Ms. Tai said she and her colleagues were “writing a new story on trade” that would put working families first and reflect the interests of a wider cross section of Americans.Speaking before the Senate on Thursday, Ms. Tai said she remained “open minded” about doing more trade agreements if they would help address the challenges the country has today.The Biden administration has long insisted that past approaches to trade policy — in which other countries gained access to the U.S. market through low or zero tariffs — ended up hurting American workers and enriching multinational companies, which simply moved U.S. jobs and factories overseas. In contrast, Biden officials have pledged to strengthen the economy and to make the country more competitive with China by expanding the country’s infrastructure and manufacturing, rather than negotiating new trade deals.The administration is currently negotiating trade frameworks for the Indo-Pacific region and the Americas, and is engaging in trade talks with Taiwan, Kenya and other governments. But, to the dissatisfaction of some lawmakers in both parties, none of these agreements are expected to involve significantly opening up foreign markets by lowering tariffs, as more traditional trade deals have done..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.Representative Adrian Smith, a Nebraska Republican who leads the House Ways and Means trade subcommittee, said in the hearing that he was concerned the United States had “lost momentum on trade” even as China continued to aggressively broaden its own partnerships.“I cannot express strongly enough,” he added, “that the administration cannot just come up with new definitions of what a trade agreement is for some reason, and certainly not to give handouts for electric vehicles.”“You have to appreciate that we live in a very different world,” Ms. Tai responded. She said the Biden administration sought to adapt its policies to respond “to the world we’re living in, and not the world that we want to live in.”Part of the pressure stems from the fact that other countries — including China — are continuing to pursue more traditional trade deals that lower their tariffs with trading partners, giving their companies an advantage over businesses based elsewhere. On Friday, British officials announced that they had reached an agreement to join a Pacific trade pact that, despite being devised by the Obama administration, does not include the United States.Membership in the so-called Comprehensive and Progressive Agreement for Trans-Pacific Partnership will allow Britain to export products tariff-free to 11 other countries. With the inclusion of Britain, the pact will represent 15 percent of the global economy, British officials said.Jake Colvin, the president of the National Foreign Trade Council, a U.S. group that lobbies on behalf of major multinational companies, called the news “a stark reminder that the world isn’t waiting for the United States.”“While we congratulate the U.K. government for being part of this massive agreement, it’s frustrating to see America’s allies writing global rules and creating new market opportunities without the United States,” he said.Politicians of both parties have found support for free-trade agreements to be controversial in the United States in recent years. The Trans-Pacific Partnership — the original deal negotiated by the Obama administration with 11 other nations circling the Pacific Ocean — received criticism from labor unions and other progressive Democrats who said it would ship jobs overseas. Hillary Clinton opposed it as a candidate in the 2016 presidential election.As president, Donald J. Trump also criticized the deal and officially withdrew the United States from it in 2017. He also scrapped a negotiation over a comprehensive trade deal the Obama administration had been carrying out with the European Union.The Biden administration is trying to reach trade frameworks for the Indo-Pacific region and the Americas, but none of these agreements are expected to involve significantly opening up foreign markets by lowering tariffs.Coley Brown for The New York TimesMr. Trump went on to sign a series of limited trade deals with Japan and China without congressional approval. He also oversaw an update to the North American Free Trade Agreement that was ratified by Congress, which he named the U.S.-Mexico-Canada Agreement.Democrats also came to support that deal after adding significant protections for workers and the environment.Some trade experts have speculated that the Biden administration will try to build on the success of the U.S.M.C.A. by adding more nations to the pact, or by applying its terms to negotiations elsewhere. But so far, the Biden administration has not announced any such plans.Two top Democratic lawmakers focused on trade issued a statement last week criticizing the limited agreement the Biden administration had signed with Japan and urging officials to try to replicate the success of the U.S.M.C.A. by working with Congress to draft new deals with enforceable environmental and labor protections.“U.S.M.C.A. is a prime example of what’s possible when the executive and Congress collaborate, and its enforcement mechanisms should be the floor for future agreements,” Representative Richard E. Neal of Massachusetts, the top Democrat on the Ways and Means Committee, and Senator Ron Wyden, a Democrat of Oregon who leads the Finance Committee, said in the statement.Republicans have also been split over how aggressively to pursue new free-trade agreements. More traditional free-traders — like those from agricultural states that depend on exporting goods overseas — have been at odds with a growing populist contingent that favors industrial policy and trade barriers to protect American workers.Still, Kelly Ann Shaw, a partner with Hogan Lovells in Washington and a former economic adviser to the Trump administration, said that “the amount of inaction by the administration is doing a lot to unify Republicans” around pursuing more free-trade deals.“If you would ask me two years ago, I would have thought that Republicans were more split on this issue than they really are,” she said. “But it’s pretty clear that we’re losing out on opportunities by sitting on our hands and doing nothing.” More

  • 138 Shares189 Views

    in Economy

    Top Economist Leaves White House, and an Economy Not Yet ‘Normal’

    by

    Cecilia Rouse says lingering effects of the coronavirus pandemic continue to haunt the recovery from recession — and drag on Americans’ optimism for the economy.WASHINGTON — Cecilia Rouse, the chair of the White House Council of Economic Advisers, stepped down on Friday to return to teaching at Princeton University. As a going-away present fit for an economist, her staff presented her with a chart showing every previous chair of the council, ranked by the number of jobs created during their tenure.Dr. Rouse’s name tops the list. In the two years since she was confirmed to be President Biden’s top economist, becoming the first Black chair of the council, the U.S. economy has created more than 11 million jobs. While that is a record for any presidential administration, it is also a direct result of the unusual circumstances of the fast-moving pandemic recession, which temporarily kicked millions of people out of the labor force before a swift recovery added back most of those jobs.As Dr. Rouse acknowledged in an interview this week, all that job growth has yet to restore a full sense of economic normality. Inflation remains much higher than normal. Consumers are pessimistic. The economy and the people who live and work in it, she said, are still to some degree stuck in the grip of the coronavirus pandemic.That phenomenon has scrambled markets like commercial real estate, Dr. Rouse said, exacerbated price growth and most likely hurt productivity across the economy by encouraging remote work. She said she believed in-person work was more likely to produce innovation that stokes economic growth.The effects have lingered longer than she initially expected.“We still have Covid with us,” Dr. Rouse said in her office at the Eisenhower Executive Office Building. “It is still impacting decisions that we’re making, whether it’s on our personal side, economic decisions.”She later added, “Sometimes I, in this course of the last few years, I wished my Ph.D. was in psychology.”In a wide-ranging interview reflecting on her time at the council, Dr. Rouse defended the Biden administration’s policy choices in responding to the pandemic and to deeper problems in the economy. She also repeatedly emphasized the need for “humility” in evaluating decisions that had been made in response to a wide range of possible risks.She did not directly answer questions about whether she agreed with previous chairs of the council who have argued that direct payments to lower-income Americans included in that legislation helped to inflame an inflation rate that hit a 40-year high last summer.But Dr. Rouse said the plan was an appropriate “insurance policy” in 2021 against the possibility of a double-dip recession. At the time, job growth had slowed and new waves of the coronavirus were colliding with a vaccine rollout that officials hoped would stabilize the economy but were unsure of.She also said that American workers were better off in their current situation — with low unemployment and strong job growth but higher-than-normal price growth — than they would have been if the economy had fallen back into recession and millions of people had been thrown out of work, potentially hurting their ability to find jobs in the future..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.“I believe workers are better off today than they would have been had the federal government not intervened,” Dr. Rouse said. “But you know, some of this will depend on how long we have inflation with us. Because inflation is costly.” Asked when she expected it to return to more normal levels, she replied, “Hopefully by the end of the year.”Fiscal hawks have criticized Mr. Biden for signing a rescue plan that was not offset by spending cuts or tax increases and thus added to the national debt. Dr. Rouse said the plan “may well have” paid for itself in fiscal terms. She explained that possibility in terms of the debt the government incurred to finance the plan, offset by the consumer and business activity generated by the plan’s provisions that sent money to people, which increased gross domestic product.“If we hadn’t really provided that kind of support, G.D.P. would have been much smaller,” she said. “So the federal government might have spent less and so the debt might have been smaller, but G.D.P. might have been much smaller as well.”Previous administrations have claimed their policies will “pay for themselves” by spurring economic growth and higher tax revenues. Those include the tax cuts signed by President Donald J. Trump in 2017, which his administration said would pay for themselves, but which independent evidence showed added trillions to the national debt.Dr. Rouse repeatedly said in the interview that future researchers would have the final say on the impact of Mr. Biden’s policies — particularly on inflation. She and her staff were part of a modeling effort in early 2021 that concluded that even with Mr. Biden’s $1.9 trillion injection into the economy, there was little chance of prices rising so quickly that the Federal Reserve would not be able to control inflation.“I would say that we were all working under uncertainty,” she said on Thursday, when asked about those models. “I think time will tell as to whether that was the right move.”A labor economist at Princeton, Dr. Rouse pledged in the White House to advance Mr. Biden’s efforts to promote racial equity in the economy and American society. That included improving the data the federal government collects on economic outcomes by race and ethnicity.Asked about that work, Dr. Rouse pointed to new data from the Bureau of Labor Statistics that breaks out monthly job figures for Native Americans, along with a handful of other new efforts. “It’s a slow process,” she said.Mr. Biden praised Dr. Rouse and her role in helping to navigate the economic challenges of his administration in a statement issued by the White House on Friday. “No matter the challenge, Cecilia provided insightful analysis, assessed problems in a new way and insisted that we examine the accumulation of evidence in drawing conclusions,” he said. More

  • 138 Shares199 Views

    in Economy

    Former Starbucks CEO Howard Schultz Spars With Democrats at Senate Hearing

    by

    Howard Schultz faced rancor from Senate Democrats at a hearing where he chafed at “propaganda that is floating around” about company labor practices.Howard Schultz was the star witness, but the hearing revealed almost as much about the party in power as it did about the longtime Starbucks chief executive.When Mr. Schultz appeared Wednesday before the Senate Committee on Health, Education, Labor and Pensions, at a session titled “No Company Is Above the Law: The Need to End Illegal Union Busting at Starbucks,” he encountered a Democratic Party much changed since some of his earlier trips to Washington.In 1994, President Bill Clinton invited Mr. Schultz to the White House for a private briefing on the company’s health care benefits. Two years later, the president praised Starbucks when introducing Mr. Schultz at a conference on corporate responsibility. At the time, Bernie Sanders was a backbencher in the House of Representatives.On Wednesday, Mr. Sanders, now chairman of the Senate committee, appeared to regard Mr. Schultz with something bordering on disdain.Before a question, Mr. Sanders, a Vermont independent who caucuses with the Democrats, felt the need to remind Mr. Schultz that federal law prohibits a witness from “knowingly and willfully making” a false statement relevant to an inquiry. The chairman then asked him if he had participated in decisions to fire or discipline workers involved in a union campaign. (Mr. Schultz said he had not.)Mr. Sanders noted that an administrative law judge had found “egregious and widespread misconduct” by Starbucks in its response to the campaign, in which nearly 300 of the roughly 9,300 corporate-owned stores in the United States have voted to unionize. And he chided Mr. Schultz for what he said was the company’s “calculated and intentional efforts to stall, to stall and to stall” rather than bargain with the union in good faith.Senator Bernie Sanders accused Starbucks of “calculated and intentional efforts to stall, to stall and to stall” in contract talks.Kenny Holston/The New York TimesThe hearing was held on the same day Starbucks reported that its shareholders had backed a proposal asking the company to commission an independent assessment of its practices as they relate to worker rights, including the right to bargain collectively and to form a union without interference.Though the proposal is nonbinding, the 52 percent vote in its favor suggests unease among investors over Starbucks’s response to the union campaign.Mr. Schultz, who recently ended his third tour as the company’s chief executive and remains a board member and major shareholder, seemed as mystified as anyone by his personal change of fortune in the capital. He chafed at what he described as “the propaganda that is floating around” the hearing and told Senator Bob Casey, Democrat of Pennsylvania, that “I take offense with you categorizing me or Starbucks as a union-buster.”When another Democrat, Senator Patty Murray of Washington — the home state of Starbucks — said she had heard from constituents about “widespread anti-union efforts,” Mr. Schultz reminded her that they had known each other for years and that she had “many times actually talked about Starbucks as a model employer.”He responded to Mr. Sanders’s accusation that Starbucks was not bargaining in good faith by noting that the company had met with the union over 85 times. (The union points out that most of these sessions ended within 15 minutes; Starbucks says this is because union members sought to take part remotely.) And he denied that Starbucks had broken the law; it has appealed the rulings against it.Aside from the accusations of labor law violations, the question at the heart of the hearing was: Can chief executives be trusted to treat their workers fairly?Mr. Schultz’s answer was an emphatic yes, at least in his case. He highlighted the company’s wide-ranging benefits — not just health care, including for part-time employees, but stock grants, paid sick leave, paid parental leave and free tuition at Arizona State University. He said that the average wage for hourly workers at Starbucks was $17.50, and that total compensation, including benefits, approached $27 an hour.“My vision for Starbucks Coffee Company has always been steeped in humanity, respect and shared success,” he said near the outset of the hearing.Some attending the hearing wore T-shirts signaling their support for the Starbucks union.Kenny Holston/The New York TimesRepublicans on the committee were quick to agree. Senator Rand Paul of Kentucky called Starbucks an “extraordinary tale of a company that started out of nothing and employs tens of thousands of people all making great wages.”Senator Mitt Romney of Utah, a former chief executive, said it was “somewhat rich that you’re being grilled by people who have never had the opportunity to create a single job.” He suggested that while a union might be necessary at companies “that are not good employers,” that was not the case at Starbucks.Democrats’ response came at two levels of elevation. First, they said the company was excluding unionized stores from the benefits that Starbucks had introduced since the union campaign began, such as faster accrual of sick leave and a credit-card tipping option for customers, showing that its commitment to such benefits was tenuous.The National Labor Relations Board has issued complaints calling the denial of benefits to union stores an attempt to discourage workers from organizing. Mr. Schultz said at the hearing that the company couldn’t offer the new benefits at union stores because the law said it must bargain over them first; legal experts have cast doubt on that interpretation.More broadly, Democrats argued that unions acted as a corrective to a basic power imbalance between workers and management. A company might treat workers generously under one chief executive, then harshly under another. Only a union can ensure that the favorable treatment persists, said Senator Edward J. Markey of Massachusetts.Yet in illustrating how far the politics of labor have changed in Washington in recent decades, there was perhaps no better bellwether than Senator John Hickenlooper of Colorado, a former business owner and self-described “extreme moderate.”Mr. Hickenlooper conducted himself more respectfully and deferentially than most of his Democratic colleagues, applauding Mr. Schultz for “creating one of the most successful brands in American history” and declaring that “you know more about economics than I will ever know.” But in his questioning he aligned himself squarely with his party, pointing out that the rise of inequality in recent decades had coincided with the weakening of unions.“I certainly respect the desire to be directly connected with all your employees,” he told Mr. Schultz. “But in many ways that right to organize, and that opportunity for people to be part of a union, is a crucial building block for the middle class and, I think, gave this country stability.” More

  • 113 Shares129 Views

    in Economy

    Biden Highlights Economic Investments Ahead of Expected 2024 Announcement

    by

    The president has warned that a strong economy could be weakened under Republican leadership, a point he and a host of advisers will make at 20 events across the country in the coming weeks.DURHAM, N.C. — President Biden visited North Carolina on Tuesday and said Republicans would undermine his administration’s gains on American manufacturing, as the president began to sharpen his political message ahead of an expected re-election announcement.Mr. Biden spoke at Wolfspeed, a semiconductor manufacturer that recently announced a $5 billion investment to expand operations in the state, a move that would create about 1,800 jobs, according to the White House. The company, based in North Carolina, has deals to supply the material to General Motors, among other buyers.But Mr. Biden’s visit was less about semiconductors than it was about making an argument that he sees as key to a re-election bid — essentially, that the American economy has recovered since the coronavirus pandemic, his administration has helped keep it strong and Republican policies would undo that progress.“I’ve got news for you and for MAGA Republicans in Congress: Not on my watch,” Mr. Biden said, referring to the far-right wing of the party that is loyal to former President Donald J. Trump.The White House has argued for months that Mr. Biden has presided over a steady economy and strong job growth, but the data presents a more complicated reality: The high pace of job creation is undercut by a continued deceleration in wage increases, and there are growing concerns that the Federal Reserve may move to raise interest rates. The Biden administration has also tried to assuage fears of instability after the collapse of Silicon Valley Bank this month.Mr. Biden’s visit to North Carolina was the start of three weeks of related events to be held across the country by the president and Vice President Kamala Harris, plus their spouses and a host of cabinet officials. The group plans to visit 20 states and will highlight investments in American manufacturing, supply chains and job-creation efforts, according to a summary of efforts sent by the White House.During his trip to Durham, Mr. Biden highlighted legislation passed last year, including the CHIPS and Science Act, which contains $52 billion in subsidies and tax credits for companies that manufacture chips in the United States. More than half of the amount is dedicated to helping companies build facilities for making, assembling and packaging some of the world’s more advanced chips. In his remarks, the president said that over $435 billion had been invested in American companies since he took office.“America’s coming back,” Mr. Biden said, standing beside Gina Raimondo, the commerce secretary, who traveled with him to Durham. “We are determined to lead the world in manufacturing semiconductors.”Ms. Raimondo, who is expected to participate in the tour over the coming weeks, told a crowd gathered at Wolfspeed that the pandemic had “opened all of our eyes” to the importance of maintaining the global supply chain and protecting competitive advantages in technology.“The truth of it is the United States was for a long time a manufacturing powerhouse,” she said. “Still is, but for a long time we took our eye off the ball, and we watched manufacturing leave our shores in search of cheap labor in Asia.”.css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.The president spoke directly to people he said might feel “left behind” by technological changes, but said his administration would focus on programs that could train workers to produce technological projects without a college degree. Mr. Biden said the “vast majority” of jobs created by Wolfspeed would not require college degrees and could pay around $80,000.Events like the one held on Tuesday will provide Mr. Biden and his surrogates with an opportunity to hone his argument against Republicans.At the same time, a collision course looms in Washington over the debt ceiling.On Tuesday, Speaker Kevin McCarthy, Republican of California, wrote a letter urging the president to negotiate on the federal debt limit. “With each passing day,” Mr. McCarthy wrote, “I am incredibly concerned that you are putting an already fragile economy in jeopardy by insisting upon your extreme position of refusing to negotiate any meaningful changes to out-of-control government spending.”Mr. Biden has said he will refuse to negotiate on the debt limit, pointing out that Republicans voted to raise the ceiling several times under his predecessor, Mr. Trump.“It’s time for Republicans to stop playing games, pass a clean debt ceiling bill and quit threatening our economic recovery,” Karine Jean-Pierre said in a statement responding to Mr. McCarthy’s letter.In his own letter sent on Tuesday evening, Mr. Biden urged Mr. McCarthy and congressional Republicans to present a full budget proposal before Congress leaves for Easter recess.The president and his advisers have signaled that the situation would be worse under Republican leadership, a point he underscored in North Carolina. The White House says that companies have made $16 billion in private sector investment commitments since Mr. Biden took office, a development they have attributed to corporations taking advantage of tax breaks and federal funding that bolsters innovation.Mr. Biden has argued that the flow of money would be at stake if Republicans tried to repeal policies passed under his administration, including the Inflation Reduction Act. He has also said that individual Americans are at risk of losing access to lower health care, energy and internet costs that are provided for in the bills that were passed by a Democratic-majority Congress.“We’re not going to let them undo all the progress,” Mr. Biden said. More

  • 138 Shares99 Views

    in Economy

    Lawmakers Rebuke Biden for Bypassing Congress in Trade Deal With Japan

    by

    A statement from two Democrats called the Biden administration’s deal “unacceptable,” saying it should have been made available to Congress and the public for review.WASHINGTON — Lawmakers on Tuesday issued a sharp rebuke of a limited trade deal the Biden administration reached with Japan, saying that it should have been made available to Congress and the public for review and that it lacked important protections for the environment and workers.In a statement viewed by The New York Times, Representative Richard E. Neal of Massachusetts, the Democratic ranking member of the Ways and Means Committee, and Senator Ron Wyden, Democrat of Oregon and the chairman of the Finance Committee, called the agreement “unacceptable.”“Without enforceable environmental or labor protections, the administration abandons worker-centric trade policy and jeopardizes our climate work by opening the door for another environmental catastrophe,” wrote the lawmakers, who are the two most powerful Democrats in Congress on trade issues.“Agreements should be developed transparently and made available to the public for meaningful review well before signing,” they added, “not after the ink is already dry.”The Biden administration announced late Monday that it had reached an agreement with Japan over supplies of critical minerals like lithium, cobalt and nickel, which are used to make car batteries. The agreement provides a potential workaround for the Biden administration in its disagreement with allies over the terms of the Inflation Reduction Act, which invests $370 billion to transition the United States to cleaner cars and energy sources.That law has angered some allies who were excluded from its benefits, which include generous tax incentives for companies that make electric vehicles in North America or source material for batteries from the United States or countries with which it has a free-trade agreement. That category does not include Japan or European Union countries.But because the Inflation Reduction Act does not technically define what constitutes a free-trade agreement, U.S. officials have found what they believe to be a workaround. They are arguing that countries will be able to meet the requirement by signing a more limited trade deal instead. The Treasury Department is expected to issue a proposed rule this week clarifying the provisions of the law..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.A fact sheet distributed late Monday by the Office of the United States Trade Representative said that the United States and Japan had promised to encourage higher labor and environmental standards for minerals that power electric vehicles. The parties also promised to promote more efficient use of resources and confer on how they review investments from foreign entities in the sector, among other pledges.In a call with reporters on Monday, a senior official said the Biden administration had consulted with Congress and received input from lawmakers. But the official said the administration had the authority to negotiate limited agreements without submitting them to Congress for approval.Katherine Tai, the United States trade representative, had been expected to sign the agreement on Tuesday.“It’s clear this agreement is one of convenience,” Mr. Neal and Mr. Wyden said in the statement. “As we warned Ambassador Tai last week, the administration does not have the authority to unilaterally enter into free trade agreements.”Administration officials have argued that key members of Congress always intended U.S. allies to be included in the law’s benefits. But other lawmakers have also criticized the Biden administration for sidestepping Congress’s authority over new trade deals, a tactic that the Trump administration also frequently used.In a statement on Tuesday, Representative Jason Smith, Republican of Missouri and the chairman of the Ways and Means Committee, said the agreement with Japan did not shift critical mineral supply chains from China.“Equally shameful is the fact that the Biden administration is distorting the plain text of U.S. law to write as many green corporate welfare checks as possible,” Mr. Smith said. “The administration has not been transparent with the American people and has ignored major concerns raised by Congress, including failing to provide an analysis of the effects this agreement would have on American workers.”Representative Dan Kildee, Democrat of Michigan, said on Tuesday that the administration was taking the wrong approach with the deal.“I believe the administration must come to Congress if they want to enter new free trade pacts,” he said in a statement. More

  • 100 Shares169 Views

    in Economy

    U.S. and Japan Reach Deal on Battery Minerals

    by

    While the terms of the deal are limited, the agreement appears to provide a model for resolving recent trade spats between the United States and some of its closest allies.WASHINGTON — The United States and Japan have reached an agreement over supplies of the critical minerals used to make car batteries, a deal that will likely put to rest a contentious issue in the relationship with Japan and could be a model for resolving similar disputes with other trading partners.The agreement provides a potential workaround for the Biden administration in its disagreement not only with Japan, but with the European Union and other allies over the terms of its new climate legislation. The Inflation Reduction Act, which invests $370 billion to transition the United States to cleaner cars and energy sources, has angered some allies who were excluded from its benefits.While the scope of the agreement is limited, the Biden administration has also promoted the deal as the beginning of a new framework that the United States and its allies hope to build with like-minded countries to develop more stable supply chains for electric vehicles that do not rely as heavily on China. American officials have argued that China’s dominance of the global car battery industry, including the processing of the minerals needed to make the batteries, leaves the United States highly vulnerable.According to a fact sheet distributed by the Office of the United States Trade Representative late Monday, the United States and Japan promised to encourage higher labor and environmental standards for minerals that are key to powering electric vehicles, like lithium, cobalt and nickel. The countries said they would also promote more efficient use of resources and confer on how they reviewed investments from foreign entities in the sector, among other pledges.Katherine Tai, the United States trade representative, was expected to sign the agreement Tuesday alongside Koji Tomita, the Japanese ambassador to the United States. The United States and Europe are separately negotiating a similar agreement..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.Ms. Tai said the announcement was “proof of President Biden’s commitment to building resilient and secure supply chains.” She added that “Japan is one of our most valued trading partners, and this agreement will enable us to deepen our existing bilateral relationship.”The deal appears to be aimed at expanding certain provisions of the climate legislation, which offers generous tax incentives for electric vehicles that are built in North America or source the material for their batteries from the United States or countries with which the United States has a free-trade agreement. The United States has free-trade agreements with 20 countries but not the European Union or Japan, and foreign allies have complained that the legislation will disadvantage their companies and lure investment away from them.But since the Inflation Reduction Act does not technically define what constitutes a “free-trade agreement,” American officials have found what they believe to be a workaround. They are arguing that countries will be able to meet the requirement by signing a more limited trade deal instead. Later this week, the Treasury Department is expected to issue a proposed rule clarifying the law’s provisions.President Biden and the European Commission president, Ursula von der Leyen, announced after a meeting earlier this month that their governments were pursuing a similar deal. But European officials said that arrangement could take more time to finalize, since the European Union must submit such agreements to its member states for their approval.While the administration argued that key members of Congress always intended American allies to be included in the law’s benefits, some lawmakers have protested these arrangements, saying the Biden administration is sidestepping Congress’s authority over new trade deals.“The executive branch, in my view, has begun to embrace a go-it-alone trade policy,” Senator Ron Wyden of Oregon, the Democratic chairman of the Senate Finance Committee, said last week, as Ms. Tai testified before the committee. Congress’s role in U.S. trade policy “is black-letter law, colleagues, and it’s unacceptable to even offer the argument otherwise,” he added. More

  • 125 Shares169 Views

    in Economy

    Republicans Say Spending Is Fueling Inflation. The Fed Chair Disagrees.

    by

    Jerome H. Powell has said that snarled supply chains, an oil shock following Russia’s invasion of Ukraine and shifts among American consumers are primarily behind rapid price growth.WASHINGTON — The chair of the Federal Reserve, Jerome H. Powell, has repeatedly undercut a central claim Republicans make as they seek sharp cuts in federal spending: Government spending is driving the nation’s still-hot inflation rate.Republican lawmakers say spending programs signed into law by President Biden are pumping too much money into the economy and fueling an annual inflation rate that was 6 percent in February — a decline from last year’s highs, but still well above historical norms. Mr. Powell disputed those claims in congressional testimony earlier this month and in a news conference on Wednesday, after the Fed announced it would once again raise interest rates in an effort to bring inflation back toward normal levels.Asked whether federal tax and spending policies were contributing to price growth, Mr. Powell pointed to a decline in federal spending from the height of the Covid-19 pandemic.“You have to look at the fiscal impulse from spending,” Mr. Powell said on Wednesday, referring to a measure of how much tax and spending policies are adding or subtracting to economic growth. “Fiscal impulse is actually not what’s driving inflation right now. It was at the beginning perhaps, but that’s not the story right now.”Instead, Mr. Powell — along with Mr. Biden and his advisers — says rapid price growth is primarily being driven by factors like snarled supply chains, an oil shock following Russia’s invasion of Ukraine and a shift among American consumers from spending money on services like travel and dining out to goods like furniture.Mr. Powell has also said the low unemployment rate was playing a role: “Some part of the high inflation that we’re experiencing is very likely related to an extremely tight labor market,” he told a House committee earlier this month.Increased consumer spending from savings could be pushing the cost of goods and services higher, White House economists said this week.Gabby Jones for The New York TimesBut the Fed chair’s position has not swayed congressional Republicans, who continue to press Mr. Biden to accept sharp spending reductions in exchange for raising the legal limit on how much the federal government can borrow.“Over the last two years, this administration’s reckless spending and failed economic policies have resulted in continued record inflation, soaring interest rates and an economy in a recessionary tailspin,” Representative Jodey C. Arrington, Republican of Texas and the chairman of the Budget Committee, said at a hearing on Thursday.Republicans have attacked Mr. Biden over inflation since he took office. They denounced the $1.9 trillion economic aid package he signed into law early in 2021 and warned it would stoke damaging inflation. Mr. Biden’s advisers largely dismissed those warnings. So did Mr. Powell and Fed officials, who were holding interest rates near zero and taking other steps at the time to stoke a faster recovery from the pandemic recession.Economists generally agree that those stimulus efforts — carried out by the Fed, by Mr. Biden and in trillions of dollars of pandemic spending signed by Mr. Trump in 2020 — helped push the inflation rate to its highest level in 40 years last year. But researchers disagree on how large that effect was, and over how to divide the blame between federal government stimulus and Fed stimulus..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.One recent model, from researchers at the Federal Reserve Bank of New York, the University of Maryland and Harvard University, estimates that about a third of the inflation from December 2019 through June 2022 was caused by fiscal stimulus measures.Much of that stimulus has already made its way through the economy. Spending on pandemic aid to people, businesses and state and local governments fell sharply over the last year, as emergency programs signed into law by Mr. Biden and former President Donald J. Trump expired. The federal budget deficit fell to about $1.4 trillion in the 2022 fiscal year from about $2.8 trillion in 2021.House Speaker Kevin McCarthy and Representative Jodey Arrington have attacked the Biden administration’s spending policies.Haiyun Jiang/The New York TimesThe Hutchins Center at the Brookings Institution in Washington estimates that in the first quarter of 2021, when Mr. Biden’s economic aid bill delivered direct payments, enhanced unemployment checks and other benefits to millions of Americans, government fiscal policy added 8 percentage points to economic growth. At the end of last year, the center estimates, declining government spending was actually reducing economic growth by 1 percentage point.Still, even Biden administration officials say some effects of Mr. Biden’s — and Mr. Trump’s — stimulus bills could still be contributing to higher prices. That’s because Americans did not immediately spend all the money they got from the government in 2020 and 2021. They saved some of it, and now, some consumers are drawing on those savings to buy things.Increased consumer spending from savings could be pushing the cost of goods and services higher, White House economists conceded this week in their annual “Economic Report of the President,” which includes summaries of the past year’s developments in the economy.“If the drawdown of excess savings, together with current income, boosted aggregate demand, it could have contributed to high inflation in 2021 and 2022,” the report says.Some liberal economists contend consumer demand is currently playing little if any role in price growth — placing the blame on supply challenges or on companies taking advantage of their market power and the economic moment to extract higher prices from consumers.High prices “are not being driven by excess demand, but are actually being driven by things like a supply chain crisis or war in Ukraine or corporate profiteering,” said Rakeen Mabud, chief economist for the Groundwork Collaborative, a liberal policy organization in Washington.Other economists, though, say Mr. Biden and Congress could help the Fed’s inflation-fighting efforts by doing even more to reduce consumer demand and cool growth, either by raising taxes or reducing spending.Mr. Biden proposed a budget this month that would cut projected budget deficits by $3 trillion over the next decade, largely by raising taxes on high earners and corporations. Republicans refuse to raise taxes but are pushing for immediate cuts in government spending on health care, antipoverty measures and more, though they have not released a formal budget proposal yet. The Republican-controlled House voted this year to repeal some tax increases Mr. Biden signed into law last year, a move that could add modestly to inflation.Republican lawmakers have pushed Mr. Powell on whether he would welcome more congressional efforts to reduce the deficit and help bring inflation down. Mr. Powell rebuffed them.“We take fiscal policy as it comes to our front door, stick it in our model along with a million other things,” he said on Wednesday. “And we have responsibility for price stability. The Federal Reserve has the responsibility for that, and nothing is going to change that.” More

  • 88 Shares149 Views

    in Economy

    Double-Barreled Economic Threat Puts Congress on Edge

    by

    Republicans and Democrats disagree over how recent bank closures should impact the debt limit stalemate, and have taken divergent lessons from past economic crises.WASHINGTON — In 2008, an imminent collapse of the banking system consumed Congress before lawmakers delivered a bailout. Three years later, a debt limit crisis enveloped Washington and led to a series of spending cuts after a dangerous brush with default and a first-ever downgrade in the nation’s credit rating.Now unease about the banking system’s stability and a stalemate over raising the debt limit are engulfing the capital simultaneously, ratcheting up an already high level of financial anxiety as two economic challenges Congress has experienced before become intertwined.“The stakes are exceptionally high when you are dealing with what amounts to a one-two punch of economic peril,” said Senator Ron Wyden, Democrat of Oregon and chairman of the Senate Finance Committee. “The messages that you send to the economy and the public with respect to banking and the full faith and credit of the United States — it doesn’t get more consequential than that.”Republicans and Democrats acknowledge it is a scary case of déjà vu times two. But they diverge sharply on how recent bank failures — and uncertainty over how Congress should respond to them, if at all — will influence the debt limit fight later this summer.At their just-concluded retreat in Florida, House Republicans took the line that shakiness in the banking system should strengthen their hand in the coming showdown over the debt limit. They argued that a Democrat-led spending spree spurred inflation, forced up interest rates and led to a precarious situation for all but the largest banks. The clear answer, to them, remains deep spending cuts, and they say they will still insist on cuts before making any move to raise the debt ceiling.Treasury Secretary Janet L. Yellen said on Tuesday that the president was willing to talk federal spending with Republicans, just not under the threat of a debt default.Pete Marovich for The New York Times“That should wake everybody up,” Speaker Kevin McCarthy, Republican of California, told reporters on Tuesday when asked about the intersection of banking stability and the debt limit. “Why are we having a crisis? Because the government spent too much and created inflation.”“I believe to get to a debt ceiling limit, you have to be spending less than we spent before,” he said.But Jerome H. Powell, the Fed chair, on Wednesday disputed the notion that spending remained the chief driver of inflation.“Spending was of course tremendously high during the pandemic,” he said at a news conference announcing an increase in interest rates. “As pandemic programs rolled off, spending actually came down.”“Fiscal impulse is actually not what’s driving inflation right now,” he said. “It was at the beginning perhaps, but that’s not the story right now.”Democrats say House Republicans are doing the exact opposite of what is required at a critical moment, even as the Fed offers assurances about the soundness of the banking system. They say the fallout from any banking instability should persuade Republicans that the last thing the economy needs is the specter of a default from a failure to raise the debt limit, which is projected to be reached as early as July without action by Congress.Senator Chuck Schumer, Democrat of New York and the majority leader, on Wednesday assailed the Republican stance as “reckless and truly clueless.”.css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.“Instead of calling for calm, House Republicans are sowing chaos by threatening a default at a time when banks need stability,” he said. “The right answer is for Republicans in the House to stop saber-rattling, drop the hostage-taking and brinkmanship and work together, work in a bipartisan way, to extend the debt ceiling without strings attached.”Other Democrats shared those sentiments, dismissing calls from some Republicans to prioritize federal payments should Congress fail to agree on a debt-limit increase. They say that approach is unworkable and default by another name.“The banking crisis highlights the importance of paying our bills on time,” said Senator Chris Van Hollen, Democrat of Maryland and a member of the Banking Committee. “We don’t want to create any more uncertainty in the financial markets and the economy. Because of what happened with the banks, it is more important than ever that Republicans don’t allow us to get close to the cliff.”“Because of what happened with the banks, it is more important than ever that Republicans don’t allow us to get close to the cliff,” said Senator Chris Van Hollen, Democrat of Maryland.Pete Marovich for The New York TimesThe 2008 and 2011 economic crises were earthshaking events on Capitol Hill. In the fall of 2008, in response to warnings from Treasury and Fed officials that the nation’s banks were about go under, Congress dove into a titanic, market-rattling debate over the $700 billion Troubled Asset Relief Program, ultimately approving a historic government intervention in the economy.Three years later, a new House Republican majority and the Obama administration took their clash over spending to the brink of financial ruin, bringing the country close to a federal default before striking a last-minute deal on spending cuts cleared the way for an increase in the debt ceiling, averting disaster.Lawmakers say they drew many lessons from those painful experiences. But the two parties did not draw the same ones.For Democrats, the 2011 experience hardened their opposition to negotiating over increasing the debt limit, confirming their belief that it should be raised without conditions since it is simply making good on spending already approved by Congress, with the support of members of both political parties. Republicans, by contrast, say that same experience persuaded them that the only way to exact real spending cuts is to use the threat of a federal debt default as leverage.The clashing approaches now have the parties again dug in over increasing the debt limit. Scant progress has been made toward finding a resolution that could avoid undermining the economy, even as the banking system exhibits signs of stress.Some Republicans say that they see the high-profile failure of the Silicon Valley Bank as an isolated incident, in contrast to the widespread fear of a total banking collapse in 2008 before Congress intervened.“This is not ’08 and ’09 when the banking industry was crazy on their asset side,” said Senator Mike Braun, Republican of Indiana. “That side of the economy I think learned its lesson.”He and other Republicans said they need to continue to push for spending reductions as part of any agreement to raise the debt limit and called on Democrats and President Biden to drop their refusal to negotiate.“This is not just a one-way street,” said Senator John Cornyn, Republican of Texas. “Hopefully Biden and the administration will get real when it comes to negotiating something, rather than saying, ‘I am not going to negotiate anything.’”In an appearance on Tuesday before the American Bankers Association, Treasury Secretary Janet L. Yellen said that the president was willing to talk federal spending with Republicans, just not with the debt limit sword held at his throat.“Having this conversation needs to happen over time and in the appropriations process and not through the threat of forcing a default,” she told members of the group. “It is essential that Congress raise the debt ceiling and that they do it promptly in order not to inflict a truly catastrophic wound on our economy and our financial system.”Republicans and Democrats credit consumer confidence for holding off economic calamity and so far preventing Congress from entering the crisis atmosphere that permeated both 2008 and 2011. But there is no guarantee that confidence can be maintained, and lawmakers warn of the possibility of cascading events should the banking system become viewed as unstable or the debt limit standoff go on too long.“It has,” warned Senator Richard Blumenthal, Democrat of Connecticut, “the makings of a perfect storm.” More