Much of the world’s polysilicon, used to make solar panels, comes from Xinjiang, where the United States has accused China of committing genocide through its repression of Uyghurs.The White House announced steps on Thursday 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. More
The world’s largest asset manager was central to the pandemic crisis response. Emails and calendar records underscore that critical role.As Federal Reserve Chair Jerome H. Powell and Treasury Secretary Steven Mnuchin scrambled to save faltering markets at the start of the pandemic last year, America’s top economic officials were in near-constant contact with a Wall Street executive whose firm stood to benefit financially from the rescue. More
As Democrats pursue both bipartisan infrastructure negotiations and a catch-all economic package, old divisions persist on how to fund the spending.WASHINGTON — President Biden’s ambitions for a large-scale investment in the nation’s aging public works system along with other parts of his economic agenda hinge on what has always been the most difficult problem for lawmakers: agreeing on how to pay for the spending.That question has sent a group of centrist senators scrounging to find creative ways to cover nearly $600 billion in new spending that they want to include as part of a potential compromise plan to invest in roads, broadband internet, electric utilities and other federal infrastructure projects.The White House and Republicans have ruled out entire categories of potential ways to raise revenues. The impasse has become the subject of increasingly urgent talks between a large group of Senate Democrats, Republicans, White House officials and, at times, the president himself.Among the ideas that senators have discussed in recent days are repurposing unspent coronavirus relief funds, increasing enforcement by the I.R.S. and establishing user fees for drivers, including indexing the gas tax to inflation.Mr. Biden dispatched aides to Capitol Hill on Tuesday for discussions that his press secretary, Jen Psaki, said yielded progress but no agreement. Top White House officials are set to meet on Wednesday evening with Senator Chuck Schumer of New York, the majority leader, and Speaker Nancy Pelosi of California. Those discussions will center on infrastructure negotiations as well as a separate effort to move a large chunk of the president’s $4 trillion economic agenda through the Senate without any Republican votes using a procedural mechanism known as reconciliation.Among those expected to attend the meeting are Brian Deese, the director of the National Economic Council; Steve Ricchetti, a top adviser to Mr. Biden; Louisa Terrell, the director of the White House Office of Legislative Affairs; Shalanda Young, the acting director of the Office of Management and Budget, and Susan E. Rice, who leads the White House Domestic Policy Council, according to an official familiar with the plans.Democratic leaders in Congress are preparing to move a sweeping, multitrillion-dollar bill through the reconciliation process to avoid the need for Republican votes and approve spending on physical infrastructure, education, emissions reduction, child care, paid leave, antipoverty efforts and more. But centrist Democrats in the Senate — along with Mr. Biden — have said repeatedly that they want to strike a deal with Republicans on what would be a pared-down version of the president’s plan to rebuild roads, bridges and other infrastructure projects.The bipartisan group has not reached public agreement on how to finance the spending. Moderates in both parties insist that any deal be paid for with new revenues. Mr. Biden has offered $4 trillion in potential revenue sources, all concentrated on increasing the tax burden on businesses and high earners. Republicans have countered with hundreds of billions of their own, including increased taxes for drivers and repurposing previously borrowed money from the $1.9 trillion Covid relief bill that Mr. Biden signed into law this year.The senators who spearheaded the original framework spent much of Tuesday huddling with Mr. Deese, Mr. Ricchetti and Ms. Terrell to iron out the details of an outline to provide for $1.2 trillion over eight years, of which $579 billion is new funding, and how to finance it.“These things are always complicated and tough,” said Senator Rob Portman, Republican of Ohio, as he left the Capitol on Tuesday. “We’re getting there. We’re moving in the right direction.”Both sides did not appear to have enough common ground to formally announce how they would fund the plan. Shuttling across the Capitol for hourslong meetings scheduled around votes, the five Democrats and five Republicans declined to offer specifics beyond their prevailing optimism and plans to continue discussions.“Pay-fors,” Senator Bill Cassidy of Louisiana, one of the Republicans negotiating the agreement, said when asked what the remaining stumbling blocks were. “Anytime you’re coming up with $579 billion, you’ve got to figure out how to do it.”Mr. Biden has pledged to not raise taxes on the middle class, including at the gasoline pump. Senate Republicans refuse to increase tax rates for businesses and high earners. Both sides have dug in, to the surprise of some business leaders and other lobbyists in Washington.White House officials have shifted in recent weeks to pressing Republicans to support one of Mr. Biden’s proposals that would not amount to an increase in tax rates: a plan to spend tens of billions of dollars on increased enforcement by the I.R.S. The administration says such a plan would collect hundreds of billions of dollars from high earners and corporations that owe, but do not pay, their fair share of taxes. Republicans say they are concerned about the scope of the provision, but they have continued to discuss it in private meetings.“I would say we’ve put a lot of different options on pay-fors on the table,” Ms. Psaki told reporters on Tuesday. “And our view is: There’s a fundamental question right now. Are Republicans, members of Congress, do they believe that rich people should have to pay the taxes they owe, or should we increase the cost of travelers who are just trying to make it to work? That’s the basic question here. So we’ll see if they can make progress on that exact point.”Senator Kyrsten Sinema, Democrat of Arizona, is among the group of centrists that reached a tentative agreement on a framework for an infrastructure plan this month.Erin Schaff/The New York TimesLawmakers expressed optimism that a deal could be reached this week, but they acknowledged the division over raising revenues. “It’s always the hard part of an infrastructure package,” said Senator Shelley Moore Capito, Republican of West Virginia, who unsuccessfully tried to negotiate an even narrower package with Mr. Biden.“There’s a pretty good dividing line sometimes between Republicans and Democrats — certainly is on taxes,” she added. “But the president’s taken any kind of user fee off the table — which is traditionally where you pay for these things — so that just makes it extra hard.”Neil Bradley, the executive vice president and chief policy officer at the U.S. Chamber of Commerce, said on Tuesday that he expected any final deal to include some money from Mr. Biden’s plans to increase I.R.S. enforcement.He said he expected a final deal to have some pay-for surprises. “I suspect they’re going to have some creative ones that we don’t know about yet,” Mr. Bradley said.The debate over how to finance Mr. Biden’s economic agenda will also extend to any package that lawmakers seek to push through using reconciliation, which could be as much as $6 trillion. Senator Bernie Sanders, the Vermont independent who chairs the Senate Budget Committee, has asked Democrats on the panel to outline their priorities for the package as he aims to pass a budget blueprint to start the process by July.“I think the priorities that the president has established, that we have established, are solid,” Mr. Sanders said in an interview as he described his strategy. “But, you know, we’re going to have to make sure that we end up with numbers that 50 members can agree on.”He added that his intention was to pay for new initiatives — like child care subsidies and health care expansion — through “progressive taxation,” including raising taxes on the wealthy and corporations. But he did not extend that to one-off spending like road or bridge repairs or improving water systems, saying, “it is not necessary to pay for, in my view, one-time capital improvements in the infrastructure.”In an early indication of what Mr. Sanders called an effort to “soothe the edges,” he said he was open to relaxing a $10,000 cap on how much taxpayers can deduct in state and local taxes.Several Democrats, particularly lawmakers representing New York and California, have warned that they might not support any changes to the tax code that do not address that provision. A draft budget document circulated by staff on Capitol Hill and obtained by The New York Times appeared to include funds for a partial repeal of the state and local tax deduction, which could mean eliminating the cap for all but the highest earners, or raising the level of the cap. There were few details about how those funds would be distributed, and lawmakers and aides cautioned that the plan was in flux.“I have a problem with extremely wealthy people being able to get the complete deduction,” Mr. Sanders said. “I think that’s an issue we’ll have to work on.”Cecilia Kang More
The U.S. trade representative called for stronger worker protections in trade policy as the administration looks to curb the negative impact of globalization.Katherine Tai, the United States trade representative, emphasized in a speech on Thursday that America is focused on protecting workers through trade policy and that it would try to push trading partners to lift wages, allow collective bargaining and end forced labor practices.The speech, Ms. Tai’s first significant policy address, highlighted the Biden administration’s goal of re-empowering workers and minimizing the negative effects of globalization, which has encouraged companies to move jobs and factories offshore in search of cheaper labor and materials.Less clear is how the administration will, in practice, accomplish those goals.“For a very long time, our trade policies have been shaped by folks who are used to looking at the macro picture — big economic sectors,” Ms. Tai said in an interview ahead of the speech, which she delivered at an A.F.L.-C.I.O. town hall. “We’ve lost sight of the impact of these policies, the really real and direct impact they can have on regular people’s lives, and on our workers’ livelihoods.”Ms. Tai, who spoke from prepared remarks, portrayed the administration’s push as trying to correct for decades of trade policy that put company profits ahead of workers and helped erode worker power in the United States.“A worker-centered trade policy means addressing the damage that U.S. workers and industries have sustained from competing with trading partners that do not allow workers to exercise their internationally recognized labor rights,” she said. “This includes standing up against worker abuse and promoting and supporting those rights that move us toward dignified work and shared prosperity: the right to organize and to collectively bargain.”Ms. Tai emphasized that the United States is already enforcing worker protections in the new North American trade agreement and trying to curb forced labor in the fishing industry at the World Trade Organization.On Wednesday, the Biden administration made its second request in a month for Mexico to review whether workers at two separate auto facilities were being denied the collective bargaining rights that were agreed to under the terms of the United States-Mexico-Canada Agreement.“These enforcement actions matter,” Ms. Tai said in her speech, noting the aim is to “protect the rights of workers, particularly those in low-wage industries who are vulnerable to exploitation.”Last month, the administration submitted a proposal to the World Trade Organization aimed at curbing “harmful subsidies to fishing activities that may be associated with the use of forced labor, such as illegal, unreported, and unregulated fishing.”Still, it remains to be seen how — or whether — the United States will effectively push for stronger labor standards outside of North America. Ms. Tai’s speech did not say directly how the administration would try and encourage some of its biggest trading partners, like China, to adjust trade practices.Asked what the plans are for other continents, Ms. Tai said, “In every direction that we have opportunities to formulate trade policies, we see opportunities to bring this worker-centered spirit to our work.”When it comes to China, she suggested that the goal was to work with other countries that have economic structures similar to the United States’, pairing with allies to “put ourselves on stronger competitive footing, to compete for the industries of the future.” More
The wide margin of support reflected a sense of urgency among lawmakers in both parties about shoring up the technological and industrial capacity of the United States to counter Beijing.WASHINGTON — The Senate overwhelmingly passed legislation on Tuesday that would pour nearly a quarter-trillion dollars over the next five years into scientific research and development to bolster competitiveness against China. More
A swath of recommendations calls for more investments, new supply chains and less reliance on other countries for crucial goods.WASHINGTON — The Biden administration on Tuesday planned to issue a swath of actions and recommendations meant to address supply chain disruptions caused by the coronavirus pandemic and decrease reliance on other countries for crucial goods by increasing domestic production capacity. More
The Treasury secretary worked with finance ministers from the G7 to win support for a global minimum tax. But selling the idea to Republican lawmakers will not be easy.Treasury Secretary Janet L. Yellen secured a landmark international tax agreement over the weekend, one that has eluded the United States for nearly a decade. But with a narrowly divided Congress and resistance from Republicans and business groups mounting, closing the deal at home may be an even bigger challenge.The Biden administration is counting on more than $3 trillion in tax increases on corporations and wealthy Americans to help pay for its ambitious jobs and infrastructure proposals. Republicans have expressed opposition to any rise in taxes and have warned that President Biden’s big spending plans are fueling inflation and will deter business investment. Business groups have complained that higher taxes pose a threat to the economic recovery and will put American companies at a competitive disadvantage.Persuading members of the Group of 7 advanced economies to agree on Saturday to a global minimum tax of at least 15 percent was intended to help the Biden administration win support for its U.S. tax increases. If enacted, the global minimum tax would require that companies pay at least a 15 percent tax on income, regardless of where they are based, making it less advantageous to relocate operations to countries with lower tax rates.In an interview on Sunday, Ms. Yellen acknowledged the legislative challenge ahead and defended the Biden administration’s plans to raise taxes on corporations. She stood behind Mr. Biden’s proposal to raise the corporate tax rate in the United States to 28 percent from 21 percent.“We think it’s a fair way to collect revenues,” Ms. Yellen said on her flight back to the United States from London after attending two days of meetings with G7 finance ministers. “I honestly don’t think there’s going to be a significant impact on corporate investment.”Ms. Yellen played down the relationship between tax rates and business spending, arguing that the $1.5 trillion tax cuts that Republicans passed in 2017 did little to lift American investment. She said that the changes to the international tax code would ultimately be beneficial to U.S. firms and that even those who face higher taxes, such as Amazon, Facebook and Google, would gain from the additional certainty about their tax bills.But the fate of Mr. Biden’s proposals is not certain, and Ms. Yellen now faces the task of convincing lawmakers that large tax and spending increases will not hinder the economic recovery.Mr. Biden has been negotiating with Republican lawmakers and has expressed a willingness to narrow the scope of his tax and spending plans to rebuild the nation’s roads and bridges. The president has offered to drop his proposal to raise the corporate rate to 28 percent to secure bipartisan support, though White House officials expect to try to push that higher rate through in a separate legislative vehicle that can pass without any Republican support.Ms. Yellen acknowledged that compromise on the corporate tax rate might be necessary and said that she hoped for a bipartisan infrastructure agreement. Republicans are resisting any changes to the 2017 tax law, which cut the corporate tax rate to 21 percent.It is unclear if Republicans will support the international tax agreement, particularly a decision to impose a new tax on big, multinational corporations — even if they have no physical presence in the countries where they sell those services. That part of the agreement was offered by the United States to put to rest a fight with European countries over their digital services taxes that would hit large American technology companies.Some lawmakers have already criticized the idea as ceding taxing authority to other governments, and many business groups were still absorbing the agreement over the weekend. Ms. Yellen believes that the concept will not cost the United States much in terms of lost tax revenue. However, the fact that European countries are not dropping their digital services taxes until a deal is fully enacted has already been criticized by top Republicans in the House and Senate given it could take four years for the agreement to be put in place.If the Biden administration cannot shepherd the tax legislation through Congress, the agreement on the global minimum tax — and a separate deal that was reached on Saturday on a system for taxing large companies based on where their goods and services are sold — will be for naught. Negotiators are hoping to broaden the agreement to more countries at the Group of 20 meetings in Italy next month and then finalize a pact in October. Then countries, including the United States, will have to change their laws accordingly.The G7 summit was Ms. Yellen’s first trip abroad as Mr. Biden’s top economic diplomat. In London, Ms. Yellen received praise from her counterparts for restoring American leadership and for the Biden administration’s embrace of multilateralism after four years of President Donald J. Trump’s “America First” policies.The Treasury secretary described the job as more grueling than her previous role as chair of the Federal Reserve, pointing to the scale of the relief programs that she is overseeing and the department’s vast portfolio. An economist who has focused for years on monetary policy, Ms. Yellen is now in charge of sanctions policy, tax policy, overseeing regulators and dealing regularly with Congress.Beyond the tax negotiations, Ms. Yellen is grappling with the sensitive question of inflation and whether the president’s policies are going to stoke higher prices for a sustained period. Businesses in the United States have expressed growing concern about rising prices, along with a shortage of commodities, and a lack of available workers.Ms. Yellen maintained that she believed rising prices were a short-term issue related to the reopening of the economy and snarled supply chains. Still, the chance of a sustained jump in prices remains a concern that she is tracking closely.To determine if inflation is more than a temporary matter, Ms. Yellen is monitoring two key metrics: inflation expectations and wage increases for low-paid workers. Rising pay for the lowest-wage workers could potentially lead to “an inflationary trend” if there is broad excess demand for workers in the labor market, she warned.“We don’t want a situation of prolonged excess demand in the economy that leads to wage and price pressures that build and become endemic,” Ms. Yellen said. “Looking at wage increases, you can have a wage price spiral, so you need to be careful.”She added: “I do not see that happening now.”At the G7 meeting, Ms. Yellen raised eyebrows when she said that inflation could remain higher for the rest of the year, with rates around 3 percent. However, in the interview, she said that the comment was misinterpreted. She said that she expected inflation rates to be elevated for the next few months but then settle down to be consistent with the 2 percent rate that is the Federal Reserve’s long-term target.“I don’t see any evidence that inflation expectations are getting out of control,” Ms. Yellen said.Critics have suggested that the Biden administration’s extension of pandemic unemployment insurance is fueling the labor shortage by encouraging workers to stay at home and collect generous benefits. At least 20 states have moved to cut off benefits early to encourage people to go back to work.Ms. Yellen said the difference in how states were handling jobless benefits could shed new light on the dynamic, but that she still saw no evidence that the supplement was slowing job creation. She pointed to a lack of child care and positions that were permanently lost because of the pandemic as the more probable reason that employers in some sectors were struggling to find staff.“We wanted to support people,” Ms. Yellen said. “This isn’t something that should be in place forever.”Although the economy is improving, Ms. Yellen said that seven million jobs that were lost since the pandemic still had not been restored. Some of them might never come back.“We’re not in a tight labor market at this point,” she said. More
As Republicans blame enhanced unemployment insurance for slower-than-expected job gains, the White House stresses that the benefit will expire in September as planned.With fresh data showing that American employers added jobs at a decent but unexceptional pace in May, President Biden on Friday emphasized that his administration would not try to extend enhanced unemployment benefits that Republicans have criticized as a key factor in fueling a labor shortage.The extent to which the extra $300 in weekly jobless benefits may be keeping workers sidelined is unclear. Some economists say insufficient child care and health concerns may be the main drivers behind Americans not seeking jobs, while unemployment insurance and other pandemic-era policies are giving people the financial flexibility to choose to remain out of work.But the pace of hiring has been somewhat disappointing in recent months, and business complaints about worker shortages abound. The U.S. added 559,000 jobs in May, a solid number but one that fell short of analyst expectations of 675,000 jobs. The prior month was a more significant miss: Just 278,000 jobs were added at a time when analysts were expecting a million.The Biden administration on Friday celebrated the May job gains as a sign that the labor market is healing from the pandemic downturn and that its policies are working. But White House officials indicated they would not try to renew the enhanced jobless benefits, which expire in September, saying they were meant to be temporary.“It’s going to expire in 90 days,” Mr. Biden said, speaking in Rehoboth Beach, Del. “That makes sense.”At least 25 states have already moved to end the extra $300 beginning this month, a decision that Jen Psaki, the White House press secretary, said on Friday was completely within their purview. While the administration views the benefit as an “extra helping hand” for workers, some governors disagree and “that’s OK,” she said.“Every governor is going to make their own decision,” she said.The White House’s move to de-emphasize the benefit, which Democrats included in the $1.9 trillion economic relief bill that passed in March, risks angering progressives. But it could also help to shift the narrative toward the broader set of priorities the Biden administration hopes to pass in the months ahead, including a huge infrastructure plan.“This is progress — historic progress,” Mr. Biden said. “Progress that’s pulling our economy out of the worst crisis it’s been in in 100 years.”He added that the recovery was not going to be smooth — “we’re going to hit some bumps along the way” — and that further support that bolsters the economy for the longer term was needed.“Now’s the time to build on the foundation we’ve laid,” Mr. Biden said.Payrolls are still 7.6 million jobs below their prepandemic level. Economic officials, including those at the Federal Reserve, had been hoping for a series of strong labor market reports this spring as vaccinations spread and the economy reopens more fully from state and local lockdowns that were meant to contain the pandemic. In April, Jerome H. Powell, the Fed chair, pointed approvingly to the March jobs report, which had shown payrolls picking up by nearly a million positions.“We want to see a string of months like that,” he said.Instead, gains have proceeded unevenly. Job openings are high and wages are rising, suggesting that at least part of the disconnect comes from labor shortages. That is surprising at a time when the unemployment rate is officially 5.8 percent, and even higher after accounting for people who have dropped out of the labor market during the pandemic.Economists say many things could be driving the worker shortage — it takes time to reopen a large economy, and there is still a pandemic — but the trend has opened a line of attack for Republicans. They blame the enhanced unemployment benefits for discouraging people from returning to work and holding back what could be a faster recovery.“Long-term unemployment is higher than when the pandemic started, and labor force participation mirrors the stagnant 1970s,” Representative Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, said in a news release. “It’s time for President Biden to abandon his attack on American jobs, his tax increases, his anti-growth regulations and his obsession with more emergency spending and endless government checks.”Republican governors across the country have in recent weeks moved to end the supplemental unemployment benefits that began under President Donald J. Trump. The idea is that doing so will prod would-be workers back into jobs.A gas station near Rehoboth Beach offers incentives for new hires. Critics of the Biden administration say enhanced unemployment benefits are discouraging people from returning to work.Alyssa Schukar for The New York TimesMany progressives disagree with that assessment. Democratic leaders in Congress cited the latest employment report as a sign that lawmakers should move to enact the rest of Mr. Biden’s plans to invest in roads, water pipes, low-emission energy deployment, home health care, paid leave and a variety of other infrastructure and social programs — but also that the government should continue to support workers who remain on the sidelines.“The American people need all the support they can get, especially Black and Hispanic communities that were among the hardest hit by the pandemic,” Representative Donald S. Beyer Jr., Democrat of Virginia and the chairman of Congress’s Joint Economic Committee, said in a news release, urging lawmakers to “step up.”Fed officials, who are in charge of setting the stage for full employment and stable prices by guiding the cost of borrowing money, are likely to interpret the May report cautiously. The acceleration in job growth was good news, but the report also offered clear evidence that the labor market remains far from healed.“I view it as a solid employment report,” Loretta J. Mester, president of the Federal Reserve Bank of Cleveland, said on CNBC following the release. “But I’d like to see further progress.”The central bank is buying $120 billion in bonds each month and holding its main policy interest rate at near-zero, policies that keep borrowing cheap and help to stoke demand. Fed officials have said they would need to see “substantial” further progress toward their two goals — maximum employment and stable inflation — before beginning to remove monetary support by scaling down their bond buying program.Ms. Mester made clear that the May report did not reach that standard.“I would like to see a little bit more on the labor market to really see that we’re on track,” she said.Officials have an even higher hurdle for lifting interest rates: They want to see a return to full employment and signs that inflation is likely to stay above 2 percent for some time.Inflation has been moving higher this year, but Fed officials have said they expect much of the pop in prices to be temporary, caused by data quirks and a temporary mismatch as the economy reopens and demand outpaces supply.While the Fed is primarily in charge of controlling inflation, the Biden administration has also been reviewing supply chain issues and hoping to address some of them.Brian Deese, the director of the White House’s National Economic Council, said the administration had identified concrete steps and a long-term strategy to make supply chains for things like semiconductors more resilient. In other areas, like housing materials, the solution may involve convening private-sector actors to figure out a possible strategy.Ms. Psaki said the White House would talk about their plans “when we have more details to share, and hopefully that will be next week.” More
