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    Businesses Push Biden to Develop China Trade Policy

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    Seven months into a new administration, companies want the White House to drop tariffs on Chinese goods and provide clarity about a critical trade relationship.WASHINGTON — More than seven months into the Biden administration, American businesses say they are growing increasingly frustrated by the White House’s approach to China, with confrontational policies imposed during the Trump era still in place and President Biden offering little clarity about economic engagement with the world’s second-largest economy.The relationship between the two economic superpowers remains deeply fractured. American import duties still exist on roughly $360 billion worth of Chinese goods, and almost all of the exemptions that shielded more than 2,000 products from those tariffs have expired. A thicket of export controls and bans are still in place, leaving U.S. technology giants such as Qualcomm, Intel and Google in the lurch over how to approach the Chinese market and offering little hope that the decoupling of the world’s two largest economies will be reversed anytime soon.To the dismay of some American business leaders, Mr. Biden has amplified some of the Trump administration’s punitive moves. In July, the Biden administration expanded the list of Chinese officials under sanctions by the United States for their role in undermining Hong Kong’s democratic institutions. In June, the president issued an executive order adding more Chinese companies to a prohibition on American investments in Chinese firms that have links to the country’s military or that sell surveillance technology used to repress dissent or religious minorities.Yet Mr. Biden and his top advisers have yet to elucidate how they view economic relations with Beijing, saying they will make the administration’s approach known once a broad review of China trade policy concludes. But the review has stretched on for months with no public timeline for its conclusion.As a result, businesses are lobbying heavily for the tariffs to be removed, which would make it easier for them to rely on factories in China instead of making investments in the United States or elsewhere. And they want assurances that they can do business with a financially important market.“There has been frustration for the business community at the lack of concrete China economic policy,” said Charles Freeman, the senior vice president for Asia at the U.S. Chamber of Commerce. “It’s not as if this crowd came in without any experience or any preconceived thinking about China.”The future of the U.S. trade relationship with China is one of the biggest global economic questions confronting Mr. Biden and his advisers. China has thrown huge resources behind its economic ambitions and plans to dominate cutting-edge industries like artificial intelligence and robotics by providing government subsidies to Chinese firms and using other tactics, including espionage. While the Trump administration signed an initial trade deal with China that included purchase commitments for agricultural and other goods, the agreement failed to address a number of major concerns, including China’s state-owned enterprises and industrial subsidies.During his White House bid, Mr. Biden assailed President Donald J. Trump over his trade war and promised to enlist allies to counter China over its trade practices. Since taking office, Mr. Biden has resolved a longstanding trade spat with the European Union and persuaded European officials to adopt a more assertive trade policy toward China this year. And he has pitched his infrastructure plan as a way to counter Beijing, saying it would “put us in a position to win the global competition with China in the upcoming years.”But the administration has said little about whether it intends to restart economic talks and address outstanding issues, including tariffs. At times, officials have offered somewhat discordant views.Treasury Secretary Janet L. Yellen told The New York Times this summer that tariffs had harmed American consumers, but she has also warned that Chinese subsidies for exporters pose a challenge for the United States. The United States trade representative, Katherine Tai, has described the tariffs as providing leverage..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-uf1ume{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;}.css-wxi1cx{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}Asked on Wednesday about the administration’s review of the tariffs, Jen Psaki, the White House press secretary, said, “I don’t have any timeline for you on when that review will be completed.”Business impatience with the administration’s approach is mounting. Corporate leaders say they need clarity about whether American companies will be able to do business with China, which is one of the biggest and fastest-growing markets. Business groups say their members are being put at a competitive disadvantage by the tariffs, which have raised costs for American importers.“We should be doing everything we can to increase China’s use and dependence on American technology products,” Patrick Gelsinger, the chief executive of Intel, said in an interview last week. The administration is “struggling to lay out a framework for how they have a policy-driven engagement with China,” he said.“To me, just saying, ‘Let’s be tough on China,’ that’s not a policy, that’s a campaign slogan,” he added. “It’s time to get to the real work of having a real policy of trade relationships and engagement around business exports and technology with China.”In early August, a group of influential U.S. business groups sent a letter to Ms. Yellen and Ms. Tai urging the administration to restart trade talks with China and cut tariffs on imported Chinese goods.“The main kind of dilemma that companies face right now is just uncertainty,” said Craig Allen, the president of the U.S.-China Business Council, which organized the letter. “Will the tariffs remain in place? Are they in place in perpetuity? What is the exclusion process to request an exemption from the tariffs? Nobody knows.”Mr. Allen said his group had organized the letter because it wanted to make sure that businesses’ views, in addition to those of labor and environmental groups, would be taken into account during the Biden administration’s China review.“Many find it ironic that the Biden administration is following so closely the playbook laid down by the Trump administration on China,” he said.Other organizations that signed the letter included the U.S. Chamber of Commerce and the Business Roundtable as well as groups representing sectors of the economy with close business ties to China, such as the Pharmaceutical Research and Manufacturers of America, the Semiconductor Industry Association and the American Farm Bureau Federation.“We’re now dealing with all these other supply chain disruption issues that are costing companies millions of dollars,” said Jonathan Gold, the vice president for supply chain and customs policy at the National Retail Federation, which also signed the letter and represents a sector that has become heavily dependent on imports from China. “To have the tariffs on top of that is difficult for planning purposes.”On Tuesday, the National Association of Manufacturers sent a letter to the Biden administration urging it to “act as quickly as possible to finalize and publicize” a China strategy.Businesses of all sizes have been waiting for Mr. Biden to change course from Mr. Trump’s trade policies. Arnold Kamler, the chief executive of Kent International, a bicycle wholesaler and manufacturer, said the 25 percent tariffs on bicycle imports from China had been a major drain on the cash flow of his business, forcing him to borrow more from his bank. For the last two years, he has been passing on the cost of the additional import duties to retailers.“Honestly, we were hopeful that the Biden administration would realize that the trade war didn’t work,” Mr. Kamler said.Katherine Tai, the U.S. trade representative, has refrained from offering a preview of what steps the Biden administration may seek to take in the coming months.Pete Marovich for The New York TimesAdding to the impatience is that a vast majority of the exclusions to the China tariffs that were granted under the Trump administration have now expired, and the Biden administration has not created a process to allow companies to seek new exclusions.Lawmakers from both parties have written to the Biden administration urging it to restart the exclusion process, and the Senate included a provision to reinstate expired exclusions and set up a process for granting new ones as part of a legislative package to bolster competitiveness with China that passed in June. The Senate provision has been met with resistance in the House, according to a House Democratic aide, so the two chambers may wind up at odds over whether to address tariff exclusions as part of a final China package.Robert E. Lighthizer, who was Mr. Trump’s trade representative and negotiated the trade deal with China, said in an interview that lobbyists were trying to weaken the executive branch’s power to impose tariffs.“People working for China and Chinese importers want to get rid of the last tool that Biden and subsequent presidents will have to deal with Chinese unfair trade practices,” Mr. Lighthizer said.Business groups are not uniformly in favor of lifting tariffs. The National Council of Textile Organizations, which represents the American textile industry, wants the administration to keep tariffs on finished apparel and home textile products from China.“We have been pretty strong in our message to the administration saying please continue this approach on getting tough on China,” said Kimberly Glas, the textile group’s president and chief executive.Any decision on rolling back tariffs could also have domestic political implications in the United States, where a tough-on-China mentality has permeated both major parties. Any steps by the Biden administration to roll back Trump-era policies toward Beijing could be seized on by political opponents seeking to paint Mr. Biden as insufficiently tough on China at a time when the country is engaged in a rapid military buildup.Scott Paul, the president of the Alliance for American Manufacturing, a trade group that represents the United Steelworkers and some domestic manufacturers, noted that concern about China on both economic and national security grounds was “one of the few issues that unites Democrats and Republicans these days.”“A dismantling of the tariffs has no upside for Joe Biden,” he said. “At a time when you’re trying to build up U.S. capacity in key industries, it would invite a flood of Chinese imports to just overwhelm that.”The Biden administration has said little about its tariff plans or how it will address China’s failure to meet its commitments under the Trump trade deal. China has not fulfilled its purchase commitments, according to Chad P. Bown, a senior fellow at the Peterson Institute for International Economics who has tracked China’s purchases of U.S. goods. But Chinese economists contend that Beijing has been sincere in wanting to meet its promises, and that the pandemic has affected demand in China.When asked about the administration’s review of China trade policy, Ms. Tai has responded by saying she was aware that “time is of the essence.” However, she has refrained from offering a preview of what steps the administration may seek to take.“In terms of how we need to approach this trade relationship,” Ms. Tai said at a virtual event last week, “we need to approach it with deliberation.”Keith Bradsher More

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    Social Security is projected to be insolvent a year earlier than previously forecast.

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    The financial outlook for Social Security is eroding more quickly than previously expected, as the coronavirus pandemic has drained government revenues and put additional strain on one of the nation’s most important social safety net programs. The overall finances for Medicare, however, are expected to hold steady, though the health program is still forecast to face financial pressure in the coming years.Annual government reports released on Tuesday on the solvency of the programs underscored the questions about their long-term viability at a time when a wave of baby boomers are retiring and the economy faces ongoing uncertainty as variants of the coronavirus surge. The United States economy already faces soaring federal debt levels in the coming decades, but both Democrats and Republicans have been wary of making significant structural reforms to the popular programs.“Having strong Social Security and Medicare programs is essential in order to ensure a secure retirement for all Americans, especially for our most vulnerable populations,” Treasury Secretary Janet L. Yellen said in a statement. “The Biden-Harris administration is committed to safeguarding these programs and ensuring they continue to deliver economic security and health care to older Americans.”Senior administration officials said that the long-term effects of the pandemic on the programs are unclear. The actuaries were forced to make assumptions about how long Covid would continue to cause unusual patterns of hospitalizations and deaths and whether it would contribute to long-term disabilities among survivors.The Social Security Old-Age and Survivors Insurance Trust Fund will now be depleted in 2033, a year earlier than previously projected, according to the report. At that time, the trust fund will run out of reserves and the program will be insolvent, with new tax revenues failing to cover scheduled payments. The report estimated that 76 percent of scheduled benefits will be able to be paid out unless Congress changes the rules to allow full payouts..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-uf1ume{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;}.css-wxi1cx{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}The Disability Insurance Trust Fund is now expected to be depleted by 2057, which is eight years earlier than previously thought, at which time 91 percent of benefits will be paid.Medicare’s finances are effectively holding steady. While tax revenue for the Medicare program did decline as a result of the Covid-related recession, Medicare also ended up spending less money than usual last year, as people avoided elective care.Medicare’s hospital trust fund is projected to be unable to pay all of its bills beginning in 2026. This estimate is similar to those from Medicare’s trustees in recent years. Fixing that gap now could be achieved by increasing the Medicare payroll tax rate from 2.9 percent to 3.67 percent or by reducing Medicare spending by 16 percent each year, the report notes.But the report highlighted that the official estimate may be unrealistically optimistic. If certain policies set to expire in the next 10 years are extended, or if other expected policy changes occur, the projections would look substantially more worrying.Long term, the actuaries said they did not think Covid-19 itself would have substantial influence on Medicare spending on hospital care. On the one hand, the death of many vulnerable, older Americans from the virus may reduce future spending they would otherwise have received. On the other, the actuaries expect that some people may have additional health care needs from the syndrome known as long Covid..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-16ed7iq{width:100%;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-box-pack:center;-webkit-justify-content:center;-ms-flex-pack:center;justify-content:center;padding:10px 0;background-color:white;}.css-pmm6ed{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;}.css-pmm6ed > :not(:first-child){margin-left:5px;}.css-5gimkt{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:0.8125rem;font-weight:700;-webkit-letter-spacing:0.03em;-moz-letter-spacing:0.03em;-ms-letter-spacing:0.03em;letter-spacing:0.03em;text-transform:uppercase;color:#333;}.css-5gimkt:after{content:’Collapse’;}.css-rdoyk0{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-eb027h{max-height:5000px;-webkit-transition:max-height 0.5s ease;transition:max-height 0.5s ease;}.css-6mllg9{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;position:relative;opacity:0;}.css-6mllg9:before{content:”;background-image:linear-gradient(180deg,transparent,#ffffff);background-image:-webkit-linear-gradient(270deg,rgba(255,255,255,0),#ffffff);height:80px;width:100%;position:absolute;bottom:0px;pointer-events:none;}.css-uf1ume{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;}.css-wxi1cx{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}The actuaries declined to make any estimates on the effect of Aduhelm, a very expensive Alzheimer’s treatment that was recently approved by the Food and Drug Administration. The report said that officials were waiting for Medicare to issue guidance on how the drug will be covered before making any calculations. The drug could represent tens of billions of dollars in spending each year.Democrats in Congress are considering a host of changes to the Medicare program, such as adding new benefits, including coverage for dental, hearing and vision care. While these changes are expected to influence Medicare’s overall finances, none of them are likely to have major effects on the trust fund, which covers only hospital care.“Medicare trust fund solvency is an incredibly important, longstanding issue, and we are committed to working with Congress to continue building a vibrant, equitable, and sustainable Medicare program,” said Chiquita Brooks-LaSure, the administrator for the Centers for Medicare and Medicaid Services. More

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    The Economy Is Booming but Far From Normal, Posing a Challenge for Biden

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    High inflation, ghostly downtowns and a resurgent virus have rattled consumers and created new obstacles as the president tries to push his broader economic agenda.The American economy is growing at its fastest clip in a quarter-century, yet it remains far from normal, with some workers and small-business owners facing increasingly tough times while others thrive. That divergence poses a challenge to President Biden, who has promoted the nation’s economic recovery as a selling point in his quest to win support for a multitrillion-dollar spending agenda that could cement his legacy. A summer that many business owners and consumers had hoped would bring a return to prepandemic activity has delivered waves of disappointment in key areas. Restaurants are short on staff and long on wait times. Prices have spiked for food, gasoline and many services. Shoppers are struggling to find used cars. Retailers are struggling to hire. Beach towns are jammed with tourists, but office towers in major cities remain ghost towns on weekdays, with the promised return of workers delayed by a resurgent coronavirus.The University of Michigan’s Consumer Sentiment Index suffered one of its largest monthly losses in 40 years in August, driven by the rapidly spreading Delta variant and high inflation. The survey’s chief economist, Richard Curtin, said the drop also reflected “an emotional response, from dashed hopes that the pandemic would soon end and lives could return to normal.”Mr. Biden and his advisers are confident that many of those issues will improve in the fall. They expect hiring to continue at a strong pace or even accelerate, fattening worker paychecks and powering consumer spending. They remain hopeful that a reinvigorated labor market will take the place of the fading stimulus from the president’s $1.9 trillion economic aid bill signed in the spring, and that the latest wave of the virus will not dampen growth significantly.On Friday, they released new projections forecasting that growth will hit 7.1 percent this year after adjusting for inflation, its highest rate since 1983.“Our perspective is one of looking at an economy that is growing at historic rates,” Brian Deese, the director of Mr. Biden’s National Economic Council, said in an interview.But there is mounting evidence that the coming months of the recovery could be more halting and chaotic than administration officials predict, potentially imperiling millions of left-behind workers as their federal support runs dry.Private forecasters have pared back growth expectations for the end of the year, citing drags on spending from the spread of the Delta variant and from the nationwide expiration of enhanced unemployment benefits next Monday. Emerging research suggests the end of those benefits might not immediately drive Americans back to the work force to fill the record level of open jobs nationwide.“People will be surprised at how much the economy decelerates over the next year as the stimulus boost fades,” said Jim O’Sullivan, the chief U.S. macrostrategist for TD Securities.Administration officials do acknowledge some potential hurdles. Some big-city downtowns may never return to their prepandemic realities, and the economy will not be fully “normal” until the virus is fully under control. They stress that increasing the nation’s vaccination rate is the most important economic policy the administration can pursue to accelerate growth and lift consumer confidence, which has slumped this summer..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-uf1ume{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;}.css-wxi1cx{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}“I don’t want to put a timeline on this,” said Cecilia Rouse, the chair of the White House Council of Economic Advisers. “We won’t feel totally completely normal until we have, whether we want to call it herd immunity or a greater fraction or percentage of the American population is vaccinated.”“As we conquer the virus,” she said, “we will regain normalcy.”The hospitality sector still employs millions fewer people than it did in February 2020.Gabriela Bhaskar/The New York TimesThe construction sector has regained most of the jobs lost early in the pandemic. Alyssa Schukar for The New York TimesThe economy’s rebound this year has been stronger than almost anyone predicted last winter, a result of the initial wave of vaccinations and the boost from Mr. Biden’s stimulus bill. Gross domestic product returned to its prepandemic level last spring, and retail sales have soared far beyond their pre-Covid path. Yet the recovery remains uneven and rattled by a rare set of economic crosswinds. In some sectors, consumer demand remains depressed. In others, spending is high but supply constraints — whether for materials or workers or both — are pushing up prices.For instance, the construction sector has regained most of the jobs lost early in the pandemic, and other industries, such as warehousing, have actually grown. But restaurants and hotels still employ millions fewer people than they did in February 2020. The result: There are more college graduates working in the United States today than when the pandemic began, but five million fewer workers without a college degree.Compounding the problem, employment in the biggest cities fell further than in smaller cities and rural areas, and it has rebounded more slowly. Employment among workers without a college degree living in the biggest cities is down more than 5 percent since February 2020, compared with about 2 percent for workers without a college degree in other parts of the country.Even as millions of people remain out of work, businesses across the country are struggling to fill a record number of job openings. Many businesses have blamed expanded unemployment benefits for the labor shortage. If they are right, a flood of workers should be returning to the job market when the benefits end after Labor Day. But recent research has suggested that the benefits are playing at most a small role in keeping people out of the work force. That suggests that other factors are holding potential workers back, such as health concerns and child care issues, which might not ease quickly.The Michigan sentiment data and the fade-out of stimulus benefits suggest consumers may be set to pull back spending further. But other data shows Americans increased their savings during the pandemic, in part by banking previous rounds of government support, and could draw on those funds to maintain spending for months to come.Administration officials hope to buck up consumers and workers by pushing Congress to pass the two halves of Mr. Biden’s longer-term economic agenda: a bipartisan infrastructure bill and a larger spending bill that could extend expanded tax credits for parents, subsidize child care and reduce prescription drug costs, among other initiatives.“Our hope is that the new normal coming out of this crisis is not simply a return to the status quo and the economy, which was one that was not working for most working families,” Mr. Deese said.The virus remains the biggest wild card for the outlook. There is little evidence in government data that the spread of the Delta variant has suppressed spending in retail stores. But air travel, as measured by the number of people screened at airport security checkpoints, has tailed off in recent days after returning to about 80 percent of where it was during the same week in 2019.Restaurant bookings on OpenTable, which had nearly returned to normal in June and July, are back down to 10 percent below their prepandemic level. Data from Homebase, which provides time-management software to small businesses, shows a sharp decline in the number of hours worked at restaurants and entertainment venues.Restaurant bookings on OpenTable, which had nearly returned to normal in June and July, are back down to 10 percent below their prepandemic level.Karsten Moran for The New York TimesAir travel has tailed off in recent days after returning to about 80 percent of its prepandemic level this summer.Stefani Reynolds for The New York TimesThe variant is already casting a shadow over the new school year, with some schools, including a middle school in Fredericksburg, Va., temporarily returning to virtual learning amid new outbreaks.Urban downtowns, once hopeful for a fall rebound in activity, are bracing for prolonged delays in white-collar workers returning to their offices.“Our No. 1 job is to get office workers back — that’s the driver of the downtown,” said Paul Levy, the president and chief executive of the Center City District, a local business-development group in Philadelphia.Mr. Levy’s group estimates that 30 percent of downtown office workers have returned so far to Philadelphia. It had been expecting that number to hit 75 to 80 percent after Labor Day, and had built an advertising campaign around the idea that the fall would mark a milestone in the return to normalcy. But now major employers such as Comcast have delayed their return dates, worrying business owners.Yehuda Sichel signed a lease for Huda, his gourmet sandwich shop in Philadelphia, on Feb. 29, 2020 — two weeks before the pandemic sent virtually his entire prospective customer base home indefinitely.He made it through the pandemic winter with takeout orders, holiday meal kits and some creativity. A short-rib special on a snow day when many other restaurants were closed helped him make payroll during a particularly grim period. Last spring, business began to improve, and Mr. Sichel invested in new equipment and a new kitchen floor in hopes of a surge in business once office workers returned. Now he doubts he will see one.“September was supposed to be this huge boom,” he said. “Now, September is going to be fine. I’m sure we’ll see a little bump, but not the doubling in business that I was hoping for.” More

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    Supreme Court Ends Biden’s Eviction Moratorium

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    The ruling followed political and legal maneuvering by the administration to retain protections for tenants. It puts hundreds of thousands at risk of being put out of their homes.WASHINGTON — The Supreme Court on Thursday rejected the Biden administration’s latest moratorium on evictions, ending a political and legal dispute during a public health crisis in which the administration’s shifting positions had subjected it to criticism from adversaries and allies alike.The court issued an eight-page majority opinion, an unusual move in a ruling on an application for emergency relief, where terse orders are more common. The court’s three liberal justices dissented.The decision puts hundreds of thousands of tenants at risk of losing shelter, while the administration struggles to speed the flow of billions of dollars in federal funding to people who are behind in rent because of the coronavirus pandemic and its associated economic hardship. Only about $5.1 billion of the $46.5 billion in aid had been disbursed by the end of July, according to figures released on Wednesday, as bureaucratic delays at the state and local levels snarled payouts.The majority opinion, which was unsigned, said the Centers for Disease Control and Prevention had exceeded its authority.“The C.D.C. has imposed a nationwide moratorium on evictions in reliance on a decades-old statute that authorizes it to implement measures like fumigation and pest extermination,” the opinion said. “It strains credulity to believe that this statute grants the C.D.C. the sweeping authority that it asserts.”Justice Stephen G. Breyer, writing for the three dissenting justices, faulted the court for its haste during a public health crisis.“These questions call for considered decision-making, informed by full briefing and argument,” he wrote. “Their answers impact the health of millions. We should not set aside the C.D.C.’s eviction moratorium in this summary proceeding.”The majority said the issues were fully considered and straightforward. “It is indisputable that the public has a strong interest in combating the spread of the Covid-19 Delta variant,” the opinion said. “But our system does not permit agencies to act unlawfully even in pursuit of desirable ends.”“If a federally imposed eviction moratorium is to continue,” the opinion said, “Congress must specifically authorize it.”In dissent, Justice Breyer wrote that “the public interest is not favored by the spread of disease or a court’s second-guessing of the C.D.C.’s judgment.”The Biden administration and other moratorium proponents predicted that the decision would set off a wave of dire consequences.“As a result of this ruling, families will face the painful impact of evictions, and communities across the country will face greater risk of exposure to Covid-19,” Jen Psaki, the White House press secretary, said in a statement.The ruling also renewed pressure on congressional Democrats to try to extend the freeze over the opposition of Republicans.“Tonight, the Supreme Court failed to protect the 11 million households across our country from violent eviction in the middle of a deadly global pandemic,” said Representative Cori Bush, a Missouri Democrat who slept on the steps of the Capitol this month to protest the expiration of the previous moratorium. “We already know who is going to bear the brunt of this disastrous decision: Black and brown communities, and especially Black women.”But landlords, who have said the moratoriums saddled them with billions of dollars in debt, hailed the move.“The government must move past failed policies and begin to seriously address the nation’s debt tsunami, which is crippling both renters and housing providers alike,” said Bob Pinnegar, the president of the National Apartment Association, a trade association representing large landlords.It will most likely take a while for the backlog of eviction cases in many states to result in the displacement of renters. But tenant groups in the South, where fast-track evictions are common, are bracing for the worst.In recent days, Mr. Biden’s team has been mapping out strategies to deal with the likely loss of the moratorium, with a plan to focus its efforts on a handful of states — including South Carolina, Tennessee, Georgia and Ohio — that have large backlogs of unpaid rent and few statewide protections for tenants.The administration had at first concluded that a Supreme Court ruling in June had effectively forbidden it from imposing a new moratorium after an earlier one expired at the end of July. While the administration had prevailed in that ruling by a 5-to-4 vote, one member of the majority, Justice Brett M. Kavanaugh, wrote that he believed the moratorium to be unlawful and that he had cast his vote to temporarily sustain it only to allow an orderly transition. He would not support a further extension without “clear and specific congressional authorization (via new legislation),” he wrote.Congress did not act. But after political pressure from Democrats, a surge in the pandemic and new consideration of the legal issues, the administration on Aug. 3 issued the moratorium that was the subject of the new ruling.The administration’s legal maneuvering might have failed, but it bought some time for tenants threatened with eviction. In unusually candid remarks this month, President Biden said that was part of his calculus in deciding to proceed with the new moratorium, which was set to expire Oct. 3.Congress declared a moratorium on evictions at the beginning of the coronavirus pandemic, but it lapsed in July 2020. The C.D.C. then issued a series of its own moratoriums, saying that they were justified by the need to address the pandemic and authorized by a 1944 law. People unable to pay rent, the agency said, should not be forced to crowd in with relatives or seek refuge in homeless shelters, spreading the virus.The last moratorium — which was put in place by the C.D.C. in September and expired on July 31 after being extended several times by Congress and Mr. Biden — was effective at achieving its goal, reducing by about half the number of eviction cases that normally would have been filed since last fall, according to an analysis of filings by the Eviction Lab at Princeton University.The challengers in the current case — landlords, real estate companies and trade associations led by the Alabama Association of Realtors — argued that the moratorium was not authorized by the law the agency relied on, the Public Health Service Act of 1944.That law, the challengers wrote, was concerned with quarantines and inspections to stop the spread of disease and did not bestow on the agency “the unqualified power to take any measure imaginable to stop the spread of communicable disease — whether eviction moratoria, worship limits, nationwide lockdowns, school closures or vaccine mandates.”The C.D.C. responded that the moratorium was authorized by the 1944 law. Evictions would accelerate the spread of the coronavirus, the agency said, by forcing people “to move, often into close quarters in new shared housing settings with friends or family, or congregate settings such as homeless shelters.”The moratorium, the administration told the justices, was broadly similar to quarantine. “It would be strange to hold that the government may combat infection by prohibiting the tenant from leaving his home,” its brief said, “but not by prohibiting the landlord from throwing him out.”The case was complicated by congressional action in December, when lawmakers briefly extended the C.D.C.’s moratorium through the end of January in an appropriations measure. When Congress took no further action, the agency again imposed moratoriums under the 1944 law.In its Supreme Court brief, the government argued that it was significant that Congress had embraced the agency’s action, if only briefly.The central legal question in the case was whether the agency was entitled to act on its own. In June, with the earlier moratorium about to expire, the court voted 5 to 4 in favor of the administration, allowing that measure to stand.But that victory was distinctly provisional. Justice Kavanaugh, who voted with the majority, wrote that he had cast his vote reluctantly and had taken account of the then-impending expiration of the earlier moratorium.“The Centers for Disease Control and Prevention exceeded its existing statutory authority by issuing a nationwide eviction moratorium,” Justice Kavanaugh wrote. “Because the C.D.C. plans to end the moratorium in only a few weeks, on July 31, and because those few weeks will allow for additional and more orderly distribution of the congressionally appropriated rental assistance funds, I vote at this time to deny the application” that had been filed by the challengers.The other members of the court did not give reasons for their votes in the June ruling. But four of them — Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett — voted to lift the earlier moratorium. Taken together with Justice Kavanaugh’s statement, that distinctly suggested that a majority of the justices would not look favorably on another extension unless it came from Congress.The Biden administration initially seemed to share that understanding, urging Congress to act and saying it did not have the unilateral power to impose a further moratorium through executive action. When Congress failed to enact legislation addressing the issue, the moratorium expired.Under pressure from Speaker Nancy Pelosi and other Democrats and wary of the rise of the Delta variant, the administration reversed course a few days later.The new moratorium was not identical to the earlier one, which had applied nationwide. It was instead tailored to counties where Covid-19 was strongest, a category that currently covers some 90 percent of counties in the United States.Mr. Biden was frank in discussing his reasoning, saying the new measure faced long odds but would buy tenants some time.“The bulk of the constitutional scholarship says that it’s not likely to pass constitutional muster,” he said on Aug. 3. “But there are several key scholars who think that it may — and it’s worth the effort.”Many states and localities, including New York and California, have extended their own moratoriums, providing another layer of protection for some renters. In some places, judges, aware of the potential for large numbers of people to be put out on the street even as the pandemic intensifies again, have said they would slow-walk cases and make greater use of eviction diversion programs. More

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    Biden, Needing a Win, Enters a Sprint for His Economic Agenda

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    As his poll numbers slide, the president and his aides have mounted an aggressive pitch in Congress and around the country for his spending plans on infrastructure and more.WASHINGTON — President Biden, his aides and his allies in Congress face a September sprint to secure a legislative victory that could define his early presidency.Democrats are racing the clock after party leaders in the House struck a deal this week to advance the two-track approach that Mr. Biden hopes will deliver a $4 trillion overhaul of the federal government’s role in the economy. That agreement sets up a potentially perilous vote on one part of the agenda by Sept. 27: a bipartisan deal on roads, broadband, water pipes and other physical infrastructure. It also spurred House and Senate leaders to intensify efforts to complete a larger, Democrats-only bill to fight climate change, expand educational access and invest heavily in workers and families, inside that same window.If the party’s factions can bridge their differences in time, they could deliver a signature legislative achievement for Mr. Biden, on par with the New Deal or Great Society, and fund dozens of programs for Democratic candidates and the president to campaign on in the months to come.If they fail, Mr. Biden could find both halves of his economic agenda dashed, at a time when his popularity is slumping and few if any of his other top priorities have a chance to pass Congress.The president finds himself at a perilous moment seven months into his term. His withdrawal of American troops from Afghanistan has devolved into a chaotic race to evacuate tens of thousands of people from the country by the month’s end. After throwing a July 4 party at the White House to “declare independence” from the coronavirus pandemic, he has seen the Delta variant rampage through unvaccinated populations and send hospitalizations and death rates from the virus soaring in states like Florida.Mr. Biden’s approval ratings have dipped in recent months, even on an issue that has been an early strength of his tenure: the economy, where some recent polls show more voters disapproving of his performance than approving it.The country is enjoying what will most likely be its strongest year of economic growth in a quarter century. But consumer confidence has slumped in the face of rapidly rising prices for food, gasoline and used cars, along with shortages of home appliances, medical devices and other products stemming from pandemic-fueled disruptions in the global supply chain.While unemployment has fallen to 5.4 percent, workers have not flocked back to open jobs as quickly as many economists had hoped, creating long waits in restaurants and elsewhere. Private forecasters have marked down their expectations for growth in the back half of the year, citing supply constraints and the threat from the Delta variant.White House economists still expect strong job gains through the rest of the year and a headline growth rate that far exceeds what any forecasters expected at the start of 2021, before Mr. Biden steered a $1.9 trillion stimulus plan through Congress. But the White House economic team has lowered informal internal forecasts for growth this year, citing supply constraints and possible consumer response to the renewed spread of the virus, a senior administration official said this week.Mindful of that markdown, and of what White House economists estimate will be a hefty drag on economic growth next year as stimulus spending dries up, administration officials have mounted a multiweek blitz to pressure congressional moderates and progressives to pass the spending bills that officials say could help reinvigorate the recovery — and possibly change the narrative of the president’s difficult late summer.The importance of the package to Mr. Biden was clear on Tuesday, when he pre-empted a speech on evacuation efforts in Afghanistan to laud House passage of a measure that paves the way for a series of votes on his broader agenda.For the infrastructure bill to pass, Congress must balance the desires of progressives who see a generational chance to expand government to address inequality and curb climate change and moderates who have pushed for a smaller package.Stefani Reynolds for The New York Times“We’re a step closer to truly investing in the American people, positioning our economy for long-term growth, and building an America that outcompetes the rest of the world,” the president said.Many steps remain before Mr. Biden can sign both bills into law — but his party has given itself only a few weeks to complete them. The infrastructure bill is written. But the House and Senate must agree on the spending programs, revenue increases and overall cost of the larger bill, balancing the desires of progressives who see a generational chance to expand government to address inequality and curb climate change and moderates who have pushed for a smaller package and resisted some of the tax proposals to pay for it.It is a timeline reminiscent of what Republicans set for themselves in the fall of 2017, when they rushed a nearly $2 trillion package of tax cuts to President Donald J. Trump’s desk without a single Democratic vote.Sticking to it will require sustained support from administration officials both in and out of Washington. In the first three weeks of August, Mr. Biden dispatched cabinet members to 31 states to barnstorm for the infrastructure bill and his broader economic agenda, with events in the districts of moderate and progressive members of Congress, according to internal documents obtained by The New York Times. His secretaries of transportation, labor, interior, energy, commerce and agriculture sat for dozens of local television and radio interviews to promote the bills.Even with those efforts, the initial clash over advancing the budget this week was resolved with a flurry of calls from Mr. Biden, top White House officials and senior Democrats to the competing factions in the House.Congressional leaders say they have spent months laying the groundwork so that their party can move quickly toward consensus. Speaker Nancy Pelosi of California told colleagues in a letter on Wednesday that “we have long had an eye to having the infrastructure bill on the president’s desk by the Oct. 1,” the date when many provisions in the bipartisan package are slated to go into effect.Committee leaders have been instructed to finish their work by Sept. 15, and rank-and-file lawmakers have been told to make their concerns and priorities known quickly as they maneuver through substantive policy disagreements, including whether it should be as much as $3.5 trillion and the scope of Mr. Biden’s proposed tax increases.“I’m sure everybody’s going to try their best,” said Representative John Yarmuth of Kentucky, the House Budget Committee chairman. “Some committees will have it rougher than others.”Senator Ron Wyden of Oregon, the chairman of the Senate Finance Committee, has been releasing discussion drafts of proposals to fund the $3.5 trillion budget reconciliation spending — the larger bill that Democrats plan to move without any Republican support — including raising taxes on high earners and businesses. On Wednesday, he provided granular details of a plan to increase taxes on the profits that multinational companies earn and book overseas.“I’m encouraged by where we are,” Mr. Wyden said in an interview.Democratic leaders and the White House have pushed analyses of their proposals that speak to core liberal priorities; on Wednesday, Senator Chuck Schumer of New York, the majority leader, released a report suggesting the two bills combined would “put our country on the path to meet President Biden’s climate change goals of 80 percent clean electricity and 50 percent economywide carbon emission reduction by 2030.”White House economists released a detailed report this week claiming the spending Mr. Biden supports, like universal prekindergarten and subsidized child care, would expand the productive capacity of the economy and help reduce price pressures in the future.While Republicans are not expected to get on board with the larger spending bill, they are still making their concerns known, labeling the bill socialist and a spending spree and claiming it will stoke inflation and drive jobs overseas.Mr. Biden can pass the entire agenda now with only Democratic votes, but the party’s thin majorities — including no room for even a single defection in the Senate — complicates the task. Ms. Pelosi said on Wednesday that the House would “write a bill with the Senate, because there’s no use our doing a bill that is not going to pass the Senate, in the interest of getting things done.”As part of an agreement to secure the votes needed to approve the $3.5 trillion budget blueprint on Tuesday, Ms. Pelosi gave centrist and conservative Democrats a commitment that she would only take up a reconciliation package that had the support of all 50 Senate Democrats and cleared the strict Senate rules that govern the fast-track process.“I’m not here to pass messaging bills — I’m here to pass bills that will actually become law and help the American people,” said Representative Stephanie Murphy of Florida, one of the Democrats who initially announced that she would not support advancing the budget, but ultimately joined every Democrat in advancing it.For moderates, Ms. Pelosi’s commitment served to shield them from potentially tough votes on provisions that the Senate may reject. It also signaled the political realities that could shape the final legislation. No Democrat will want to vote on a large spending bill doomed for failure. It will be Mr. Biden’s job to lead his coalition to a bill that can pass muster with moderates and progressives alike — and to convince every holdout that failure is not an option. More

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    Janet Yellen Gets a Chance to Shape the Fed, This Time From Outside

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    As Jerome H. Powell nears the end of his term as Federal Reserve chair, Ms. Yellen will have a say over whether he should stay on. Many progressive Democrats want him replaced.Janet L. Yellen has dedicated most of her professional life to the Federal Reserve. She served in its highest-ranking roles, including as president of the Federal Reserve Bank of San Francisco, on its Washington-based board and as the central bank’s first female chair. When President Donald J. Trump decided to replace her in that role in 2017, she was sorely disappointed.Now, as Treasury secretary, Ms. Yellen is getting another chance to shape the future of the institution. She will be a critical voice in deciding who ought to lead the central bank in what some see as a once-in-a-generation opportunity to remake an institution that shepherds America’s economy and helps to regulate its largest banks.Jerome H. Powell’s term as chair, which began in 2018 after Mr. Trump picked him to take over for Ms. Yellen, ends in February. Slots for the vice chair and the Fed’s top bank regulator will also be up for grabs soon, and a position on the Fed’s Board of Governors is already vacant. Assuming officials leave once their leadership terms end, the Biden administration may, in quick succession, be able to appoint four of the Fed’s seven board members, powerful policymakers who have constant votes on monetary decisions and exclusive regulatory authorities.Many progressive Democrats are pushing to oust the moderate Mr. Powell and replace him with a candidate who is focused on tight financial regulation, climate change and digital money — most likely the Fed governor Lael Brainard. Mr. Powell’s supporters see him as a champion for full employment, and would like him to be retained as a sign that competent leadership is rewarded.It’s unclear where Ms. Yellen’s preferences lie, but it’s common knowledge that she was unhappy when Mr. Trump broke a tradition of reappointment in her case.Many who would like to see Mr. Powell replaced play down the role she will have in shaping President Biden’s decision. But Treasury secretaries have traditionally been central to the Fed selection process, helping to advise and guide the president toward a choice that will be welcome on both Wall Street and in the Senate, which has to confirm nominees to the Fed board.Ms. Yellen’s views will carry significant weight in the deliberations, coloring both who is considered and the ultimate outcome. Discussions over the pick are also being held among Brian Deese, director of the National Economic Council; Ron Klain, the president’s chief of staff; and Cecilia Rouse, chair of the Council of Economic Advisers, according to people familiar with the deliberations. Mr. Biden will have the final word.Conversations over who should lead the institution could stretch into October, as they have in past Fed leadership decisions. But speculation over who will win the top jobs is already rampant.The Treasury Department declined to comment.The argument for replacing Mr. Powell, a Republican who was appointed as a Fed governor by President Barack Obama, has to do with things other than traditional interest rate policy. Democrats typically say he has done a relatively good job when it comes to guiding the economy using monetary tools.Under Mr. Powell’s leadership, the Fed parried Mr. Trump’s pressure campaign to lower rates when the economic backdrop was solid, and it reacted rapidly and effectively to the economic collapse triggered by the pandemic. The Fed is also credited with averting a financial crisis early last year as key markets seized. Mr. Powell’s Fed revamped its entire policy framework last year to focus more concertedly on achieving a strong job market that extends its benefits to as many people as possible.Jerome H. Powell has been Fed chair since 2018; his term ends in February.Sarahbeth Maney/The New York TimesMs. Yellen has repeatedly praised Mr. Powell’s performance.“He’s doing extremely well,” she told The New York Times in early 2020, discussing Mr. Powell’s conduct as he came under attack from the Trump White House.But Mr. Powell has opponents among more progressive groups. He often deferred to the Fed’s vice chair — a Trump appointee — for supervision when it came to regulation, regularly voting for tweaks to bank and financial rules that chipped quietly away at postcrisis financial reforms. He has also been criticized by climate focused groups for being too slow to elevate the Fed’s role in policing environment-related finance. Climate activists plan to protest at the Fed’s annual symposium this year in Jackson, Wyo., and Mr. Powell “will be a key target,” Thanu Yakupitiyage, head of U.S. communications at 350.org, said in an email. The group is one of the protest’s key organizers.Regulation and climate are key reasons some Democrats are lining up behind Ms. Brainard, the Fed governor and another leading candidate. Ms. Brainard, who also has a good relationship with Ms. Yellen, opposed Trump administration efforts to lighten bank oversight by loudly dissenting against a spate of regulatory decisions, often releasing meticulous statements detailing where they went awry.She is seen as a powerful and effective Fed governor, one who played a key role in shaping pandemic response programs. And while they are closely aligned on monetary policy, she has distinguished herself from Mr. Powell by pushing for a bigger role for the Fed on climate issues and a more proactive stance toward developing a digital currency.She also could help to anchor a leadership team that could usher in a fresh era for the Fed, her supporters argue.Andrew Levin, a former Fed economist, is one of several people who are pushing the idea that the White House appoint Ms. Brainard as chair and Sarah Bloom Raskin, a former top Fed and Treasury official, to the central bank’s top regulatory job. Mr. Levin, now a professor of economics at Dartmouth, would also favor nominating as vice chair Lisa Cook, a professor from Michigan State University who has researched racial disparities and labor markets and has worked to improve diversity in economics.That group would be diverse, compared with the Fed’s typically white and male leadership team. The Fed has been led by a woman — Ms. Yellen — for just four of its nearly 108 years. If appointed vice chair, Ms. Cook would be the highest-ranking Black woman in its history.“It’s a package deal that should work together,” Mr. Levin said. “This administration wants to send a message that they care about all of the people who are slipping through the cracks.”Those aren’t the only names floated for key positions. William Spriggs, chief economist at the A.F.L.-C.I.O. (and himself a fan of keeping Mr. Powell in the top job), is also on some lists for the vice chair or a governor.Progressive Democrats are lining up behind Lael Brainard, a Federal Reserve governor.Cliff Owen/Associated PressProgressive groups have been talking to lawmakers, arguing that Mr. Powell should be replaced, and key Democrats are sympathetic to some of their arguments.“My concern is that over and over, he has weakened the regulation here, he has led the Fed to ease up there,” Senator Elizabeth Warren, Democrat from Massachusetts, said on Bloomberg TV this month. “We need someone who understands and uses both the monetary policy tools and the regulatory tools to keep our economy safe.”But whether such objections will kill Mr. Powell’s chances remains to be seen. Powerful Democrats attuned to the issue, such as Senator Sherrod Brown of Ohio, have not signaled definitively that they would vote against Mr. Powell were he renominated. Even if Mr. Powell is retained, fresh faces in the other key jobs could inject diversity and expertise on issues like climate and financial oversight into the Fed’s top ranks.And another argument is working in Mr. Powell’s favor: tradition.When Mr. Trump replaced Ms. Yellen, he bucked a longstanding practice in which Fed chairs were reappointed if they had done a good job, regardless of their political background. The tradition is in part a nod to the fact that the Fed is meant to be independent of partisan politics.Democrats and their allies were infuriated.The decision was “seemingly rooted in simple-minded partisanship that demanded a Republican president replace a Democratic appointee as Fed chair,” Josh Bivens, research director at the typically liberal Economic Policy Institute, wrote in a statement at the time. “This decision breaks a longstanding norm of not elevating partisanship over competence when picking Fed chairs.”Mr. Bivens, in an email last week, said that the norm “is pretty broken,” but that the decision to replace a Fed chair should still come down to whether the incumbent had done a good job. There’s a strong case for keeping Mr. Powell based on his monetary policymaking at a moment of fierce debate over the Fed’s policy direction, he thinks.Ms. Yellen remains mindful of the tradition. She reacted sadly in 2018 to Mr. Trump’s decision to replace her, saying during a CBS News interview that she had made it clear she would have stayed on and felt a “sense of disappointment.”“It is common for people to be reappointed by presidents of the opposite party,” she said. More

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    Pelosi and Yellen to Discuss Rental Assistance as Eviction Crisis Looms

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    WASHINGTON — The Biden administration on Tuesday imposed a new, 60-day federal moratorium on evictions in areas of the country ravaged by the Delta variant, a move aimed at protecting hundreds of thousands of renters at risk of being kicked out of their homes during a pandemic.The action was also intended to quell a rebellion among angry Democrats who blamed the White House for allowing a previous eviction ban to expire on Saturday — after the Democratic-controlled House was unable to muster enough votes to extend that moratorium.President Biden told reporters that the Centers for Disease Control and Prevention would seek to implement a new federal moratorium on evictions in communities across the country hardest hit by the virus.Tom Brenner for The New York TimesPresident Biden has been under intense pressure from activists and allies for the last week to protect people at risk of being driven from their homes for failing to pay their rent during the economic crisis brought on by the pandemic. The previous nationwide moratorium on evictions, which went into effect in September, expired on Saturday after the Supreme Court warned that an extension would require congressional action.The end of the rental protections has prompted a flurry of recriminations in Washington and a furious effort by the White House to find a solution that prevents working-class and impoverished Americans from being evicted from their homes on Mr. Biden’s watch as billions in aid allocated by Congress goes untapped.The Centers for Disease Control and Prevention late Tuesday announced the new order barring people from being driven out of their homes in many parts of the country, saying that “the evictions of tenants for failure to make rent or housing payments could be detrimental to public health control measures” aimed at slowing Covid-19.The order will expire on Oct. 3, the C.D.C. said, and applies to areas of the country “experiencing substantial and high levels of community transmission” of the virus. Mr. Biden, in remarks ahead of the official order, said the moratorium was expected to reach 90 percent of Americans who are renters.“This moratorium is the right thing to do to keep people in their homes and out of congregate settings where Covid-19 spreads,” Dr. Rochelle P. Walensky, the director of the C.D.C., said in a statement. “Such mass evictions and the attendant public health consequences would be very difficult to reverse.”The decision to impose a new and targeted moratorium, rather than extending the previous national ban, is aimed at sidestepping a Supreme Court ruling from late June that seemed to limit the administration’s ability to enact such policies. While the court upheld the C.D.C.’s moratorium, Justice Brett M. Kavanaugh issued a brief concurring opinion explaining that he had cast his vote reluctantly and believed the C.D.C. had “exceeded its existing statutory authority by issuing a nationwide eviction moratorium.”Mr. Biden conceded on Tuesday that the new approach might be struck down by the courts as executive overreach. But he suggested the move could help buy the administration time as it tried to get states to disburse billions of dollars of aid to help renters meet their obligations to landlords.Congress previously allocated $46.5 billion in rental assistance in two coronavirus relief packages, but only about $3 billion had been delivered to eligible households through June, according to Treasury Department data.“Whether that option will pass constitutional measure with this administration, I can’t tell you. I don’t know,” Mr. Biden said of a new moratorium. “There are a few scholars who say it will and others who say it’s not likely to. But at a minimum, by the time it gets litigated, we’ll probably give some additional time while we’re getting that $45 billion out to people who are in fact behind in rent and don’t have the money.”For days, some of Mr. Biden’s closest allies on Capitol Hill, including some of the most progressive Democrats in Congress, have been publicly and privately assailing his lack of action to help renters, accusing the president and his aides of failing to find a replacement for the eviction moratorium until it was too late.Just days before Saturday’s expiration of the ban, Mr. Biden called on Congress to pass legislation to extend it. But with the House about to leave town for a seven-week vacation and Republicans solidly opposed to an extension, progressive Democrats described the White House call as a cynical attempt to shift blame to lawmakers. The administration, for its part, feared that any unilateral move would open the White House to legal challenges that could ultimately erode Mr. Biden’s presidential powers.The expiration presented the president with a thorny choice: Side with the C.D.C. and his own lawyers, who saw an extension as a dangerous step that could limit executive authority during health crises, or heed the demands of his party’s progressive wing to take immediate action to halt what they saw as a preventable housing crisis.Under intense pressure from Speaker Nancy Pelosi and other Democrats, Mr. Biden’s team opted for an approach that would give them a chance to satisfy both camps, creating a new moratorium, based on a recent rise in infections from the Delta variant, that cited the risks associated with the movement of displaced tenants in areas where the virus is raging.But ultimately it came down to a simpler calculation: Mr. Biden could not ignore the call, led by Black Democrats, to reverse course.“Every single day that we wait, thousands of people are receiving eviction notices, and some of them are being put out on the street,” said Representative Cori Bush, Democrat of Missouri, who has been sleeping on the steps of the Capitol since the moratorium expired in a bid to pressure her party’s leadership. “People started sending me pictures of dockets, court dockets, that were all evictions. We cannot continue to sit back. We need this done today.”Ms. Pelosi and Senator Chuck Schumer, Democrat of New York and the majority leader, were briefed on Tuesday on the C.D.C.’s plan by Dr. Walensky, the agency’s director, and Xavier Becerra, the secretary of health and human services, according to a person familiar with the call. Ms. Pelosi hailed the idea of a new eviction moratorium as a victory for many Americans who were struggling because of the pandemic.“Today is a day of extraordinary relief,” she said in a statement. “Thanks to the leadership of President Biden, the imminent fear of eviction and being put out on the street has been lifted for countless families across America. Help is here!”Yet for two days it was unclear how — or whether — any help would arrive as landlords prepared to turn to housing courts to evict tenants who were behind on their rent.At a White House meeting with Mr. Biden on Friday, Ms. Pelosi and Mr. Schumer bluntly informed Mr. Biden they did not have the votes to pass an extension — and pressed him to take whatever action he could using his executive power, according to two Democratic congressional aides briefed on the meeting.On Tuesday, House Democrats summoned Treasury Secretary Janet L. Yellen to explain what the agency was doing to help struggling renters. In a private call between Democrats and Ms. Yellen, the Treasury secretary insisted that her team was using all available tools to get rental assistance money to states and to help governments distribute those funds to landlords and renters.“I thoroughly agree we need to bring every resource to bear,” Ms. Yellen said, according to a person who was on the call.The White House had been scrambling to figure out exactly what its legal options were for continuing the moratorium. On Monday, Jen Psaki, the White House press secretary, said that Mr. Biden had asked the C.D.C. on Sunday to consider extending the moratorium for 30 days, even just to high-risk states, but that the C.D.C. had “been unable to find legal authority for a new, targeted eviction moratorium.”A day later, however, the administration appeared ready to barrel through legal challenges and embrace a solution that did just that.The extension is likely to intensify a legal fight with landlord groups that have argued that the eviction ban has saddled them with debt.The National Apartment Association, which filed a lawsuit last week seeking to recoup lost rent, said the moratorium was jeopardizing the viability of the housing market. The group estimates that the apartment industry is shouldering $26.6 billion in debt as a result of the eviction ban.“The government has intruded into private property and constitutional freedoms, and we are proudly fighting to make owners whole and ensure residents’ debt is wiped from their record,” said Robert Pinnegar, the chief executive of the association.Legal experts said it was likely that the administration would face a new wave of lawsuits if the justification and structure of a new moratorium was similar to the one that had been in place.“The only logic by which this could be justified is a logic that would enable them to be able to suppress virtually any activity of any kind that they can claim might spread contagious disease,” said Ilya Somin, a law professor at George Mason University. More

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    As Infrastructure Bill Nears Key Vote, Deficit Takes Back Seat

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    Many Republicans are disregarding the deficit impact for the sprawling infrastructure bill, but intend to change course for looming battles on social spending and the debt ceiling.WASHINGTON — The bipartisan shrug that greeted the news that the Senate’s infrastructure bill contains $256 billion worth of deficit spending marked a new moment in the post-Trump era, one that highlighted how deficits matter only situationally to Republicans and inflation fears ebb and flow, depending on the politics of the issue.With a key test vote on the infrastructure measure expected around noon on Saturday, the Republican Party’s blasé attitude toward deficits will last only a matter of days.By early next week, with the bill likely passed, Democratic leaders will have to decide how to deal with a looming crisis: the approaching statutory limit on how much the Treasury can borrow to finance the government’s debt.They will also be pressing for Senate passage of a budget resolution intended to speed approval of $3.5 trillion in spending on health care, education, child care, immigration and other social policies, much of which would be paid for by tax increases on corporations and the wealthy.And the muffled murmurs from Republicans over infrastructure costs will give way to howls of outrage.“That will be an extraordinary debate of enormous dimension,” Senator Mitch McConnell of Kentucky, the Republican leader, predicted. “I can’t think of a single issue that underscores the difference between the two parties more than the reckless tax-and-spending spree that we’ll be dealing with here in the next week or two.”In the past, the Congressional Budget Office has loomed like the sword of Damocles over delicate legislative compromises, a nonpartisan scorekeeper whose rulings on the nation’s finances and fortunes could sink or propel hard-fought policy measures. The budget office’s prediction that successive Republican measures to replace the Affordable Care Act would cost tens of millions of Americans their health insurance effectively doomed those efforts.But the 10-year price tag the budget office put out this week for the bipartisan infrastructure bill changed no minds, even though it reported that the measure would tack a quarter trillion dollars to an already swollen sea of federal red ink. Many Republicans are beginning to regard spending on highways, bridges, rail lines and broadband the way Democrats have for years — as a long-term investment in the nation’s economic future that need not cause short-term deficit heartburn, especially when borrowing costs are at rock-bottom rates.The federal budget deficit has reached staggering proportions, driven by successive pandemic rescue packages, an economic collapse and the huge 2017 tax cut signed by President Donald J. Trump. Without counting the costs of the infrastructure or social policy bills, the C.B.O. had projected the deficit for the fiscal year that ends Sept. 30 would reach $3 trillion; the federal debt held by the public will exceed the size of the entire economy. Within 10 years, that debt is poised to equal 106 percent of the economy, the highest level in the nation’s history.Despite a resurgent coronavirus, the economy appears to be recovering. Employers added 943,000 jobs in July, the Labor Department reported Friday, and Jerome H. Powell, the Federal Reserve chair, acknowledged in late July that inflation remained a real risk in the near term“We think that some of it will fall away naturally as the process of reopening the economy moves through,” Mr. Powell said of inflation, before adding, “It could take some time.”But the federal spending of the Trump era appears to have given his party permission to put austerity in the rearview mirror, at least for some measures.In a statement on Thursday in response to the C.B.O. price tag, Senators Rob Portman, Republican of Ohio, and Kyrsten Sinema, Democrat of Arizona, the two lead negotiators on the infrastructure deal, defended the bipartisan legislation as “a historic investment in our nation’s core infrastructure needs.”That rationale reflected longstanding arguments from liberals, which Mr. Portman and Ms. Sinema decidedly are not.“Almost every state, county and private-sector organization pays for ongoing operating expenses with ongoing revenue, and pays for physical infrastructure with debt financing,” Senator Brian Schatz, Democrat of Hawaii, said on Friday. “Anything that provides value over a long period of time should be paid for over a long period of time. This isn’t some wacky new political philosophy; it’s just smart money management.”And because Democrats have vowed to pay for their social policy spending with tax increases and other measures, such as allowing Medicare to bargain for lower drug prices, that legislation will not increase the deficit, said Senator Chris Van Hollen, Democrat of Maryland and a member of the Senate Budget Committee.“We are going to be paying for the American Family Plan; we are going to offset those investments, and yet you’re going to have Republicans again shedding crocodile tears over the deficit,” he said.“There is a good faith discussion about how much spending is too much,” Treasury Secretary Janet L. Yellen said this week.Stefani Reynolds for The New York TimesTreasury Secretary Janet L. Yellen is undergoing her own reappraisal of deficit spending. In recent years, she expressed concern about the nation’s fiscal situation, even suggesting that raising taxes and cutting retirement spending would be wise. But since becoming the Treasury chief, she has espoused the view that, with interest rates at historic lows, now is the time for big spending.“There is a good faith discussion about how much spending is too much,” Ms. Yellen said during a speech in Atlanta this week. “But if we are going to make these investments, now is fiscally the most strategic time to make them.”Those arguments are hurtling toward a separate but politically connected issue: the government’s statutory borrowing limit. The official deadline to raise the debt limit came and went at the beginning of the month, forcing Ms. Yellen to employ “extraordinary measures” to keep the nation from defaulting on its debt and provoking a global economic crisis..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-16ed7iq{width:100%;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-box-pack:center;-webkit-justify-content:center;-ms-flex-pack:center;justify-content:center;padding:10px 0;background-color:white;}.css-pmm6ed{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;}.css-pmm6ed > :not(:first-child){margin-left:5px;}.css-5gimkt{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:0.8125rem;font-weight:700;-webkit-letter-spacing:0.03em;-moz-letter-spacing:0.03em;-ms-letter-spacing:0.03em;letter-spacing:0.03em;text-transform:uppercase;color:#333;}.css-5gimkt:after{content:’Collapse’;}.css-rdoyk0{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-eb027h{max-height:5000px;-webkit-transition:max-height 0.5s ease;transition:max-height 0.5s ease;}.css-6mllg9{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;position:relative;opacity:0;}.css-6mllg9:before{content:”;background-image:linear-gradient(180deg,transparent,#ffffff);background-image:-webkit-linear-gradient(270deg,rgba(255,255,255,0),#ffffff);height:80px;width:100%;position:absolute;bottom:0px;pointer-events:none;}.css-uf1ume{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;}.css-wxi1cx{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}In a letter to Congress on Monday, Ms. Yellen warned lawmakers that they needed to take action to protect the “full faith and credit of the United States” and said she was already taking steps to stave off a default.Most analysts expect that the drop-dead deadline is sometime before November.Ms. Yellen has been reminding lawmakers who are reluctant to lift the debt limit that doing so does not authorize future spending; it merely allows the government to pay for expenditures that Congress has already enacted. That includes Mr. Trump’s $1.5 trillion tax cut.Mr. McConnell has threatened to withhold all Republican votes from a debt ceiling increase, a stance that Mr. Hollen called “part of a pattern of hypocrisy.” Republicans repeatedly raised the debt ceiling during the Trump years, even after their tax cut. But they have provoked a series of crises when a Democrat is in the White House.Even some conservatives say Republican inconsistency is undermining the party’s case for fiscal rectitude.“Republicans would have much more credibility on the debt ceiling argument if they weren’t about to vote to add hundreds of billions of dollars to the deficit” on the infrastructure bill, said Brian Riedl, a senior fellow at the conservative Manhattan Institute and a former economic aide to Mr. Portman.Democrats have a decision to make in the next few days. They could add an increase in the debt ceiling to their upcoming budget resolution, ensuring that the borrowing limit could be raised without the need for any Republican votes this fall. But that option would come with political costs: to do it, Senate rules require that the provision includes a hard number for the debt ceiling increase, like $10 trillion, which Republicans would say, inaccurately, is the true cost of the social policy bill.That is very much what Republicans want.“I think the majority has to solve this — they control the House and the Senate and the White House,” Senator Roy Blunt of Missouri, a member of Republican leadership, told reporters this week.If the debt ceiling is instead raised through a separate measure, the bill could simply set a date for the next debt ceiling increase, without a dollar number. But that would take Republican votes in the Senate to break a filibuster, votes Mr. McConnell has said he will not supply.Republicans have argued that debt ceiling showdowns have long been used to force a reluctant Congress to examine the structural issues that drive up debt. The debt ceiling crisis of 2011 forced both parties to accept the Budget Control Act, which reined in spending for nearly a decade, until it lapsed under Mr. Trump.“You can’t keep increasing the debt limit over and over again without some kind of reform that starts to address the fundamental issue, and that is deficit spending that goes out as far as we can see,” Senator Steve Daines, Republican of Montana, told Punchbowl News.That argument has Democrats livid, because the debt increase they must address was largely incurred through spending by Republicans.“This is Trump tax cut debt and Covid debt,” Senator Elizabeth Warren, Democrat of Massachusetts, said. “The United States will pay its bills.”Jeanna Smialek More