Joe Biden's Secretive Economic Brain Trust
Joe Biden’s economic brain trust is shrouded in secrecy, write Jim Tankersley and Thomas Kaplan at The New York Times:
"Some broad contours have become clear. Mr. Biden plays down concerns about the deficit during this recession, aides say, and he has begun soliciting ambitious plans to bridge the gap in earnings and wealth between black and white Americans. His regular briefings are by a small group of liberal economists and others with roots in the Obama White House and Hillary Clinton’s 2016 campaign. And he sees the economic recovery as his foremost duty if he wins the presidency."
"Yet the details of the policymaking process are closely held. Mr. Biden is now seeking input from more than 100 left-leaning economists and other researchers, but there is little clarity on who has true influence. The Biden campaign recently formed an economic policy committee, which includes these outside experts, and imposed strict rules to ensure their public silence. A three-page document, sent last month ahead of the committee’s first online meeting, warned participants not to circulate email from committee leaders or refer to ‘the candidate or to the campaign’ in documents."
Campaign officials refused requests from the Times for details about Biden’s roster of economic advisers, but they confirmed that the presumptive Democratic presidential nominee gets regular briefings from at least three establishment liberal economists: Jared Bernstein, Ben Harris and Heather Boushey.
Why it matters: Biden’s campaign has said that, faced with a pandemic-driven recession, he is casting a wide net for bold ideas that can spur growth and address the persistent economic challenges facing the nation. In doing so, the former vice president, seen as a moderate, also faces pressure to veer left and, as the Times puts it, "embrace a bolder agenda of taxing the rich and spending heavily on social programs."
The secrecy surrounding his advisers also may raise some ethical questions. "It is unethical to formally advise a candidate and publicly advocate the candidate’s views while concealing that relationship," Kevin Hassett, an economic adviser to President Trump who worked on other GOP presidential campaigns, told the Times.
Read the full story at The New York Times.
Small Business Aid Program Still Has $130 Billion
The federal program designed to keep small businesses afloat during the coronavirus pandemic still has billions of dollars available to lend, and officials think a good chunk of the money could go unclaimed.
Congress has made about $660 billion available to small businesses for loans and grants through the Paycheck Protection Program. The first round of funding of $349 billion was snapped up quickly, with the program running out of money in less than two weeks. But the second round of $310 billion has been claimed far more slowly, and as of Tuesday there was still more than $130 billion left in the PPP fund.
Worries about the rules: Designed to help small businesses keep their employees on the payroll, the PPP was rushed out the door by lawmakers as the economy imploded in March, and participants have complained about what they see as overly restrictive rules, as well as uncertainty about who will qualify to have their loans converted into grants. Those issues, along with a public outcry over publicly traded companies benefiting from the program in the first few weeks, pushed some borrowers to return their money.
Treasury Secretary Steven Mnuchin told a Senate panel Wednesday that roughly $12 billion had been returned. On some days last month, more money was returned to the program than was lent out, The New York Times reported. The returns leave the total of approved loans at about $511 billion.
New rules could help: Congress passed a law that eases some of the regulations in the PPP, including an extension of the time period for using the loans to 24 weeks, up from the original eight weeks. Borrowers also now have more flexibility on how to use the borrowed money, with more spending on overhead rather than labor costs, and still qualify to have their loans forgiven. Mnuchin said he expects the relaxed rules to help bring more small business owners into the program and accelerate the distribution of the loans.
But it may be too late: Many small business owners have already decided that the program — which has provided loans to more than 4.5 million companies — is too much of a risk, possibly saddling them with loans that would need to be repaid even if business conditions remain depressed. Given the chaotic rollout of the program, and the instability of its rules and requirements, it’s likely that billions of dollars will remain in the PPP when the government stops processing applications after June 30.
Trump Admin Won’t Release Data on Small Biz Loans
Reversing an earlier commitment to release information on aid provided to small business owners, the Trump administration said Wednesday that it will not disclose the names or dollar amounts of loans made through the Paycheck Protection Program.
Appearing before the Senate Committee on Small Business and Entrepreneurship, Treasury Secretary Steven Mnuchin said he believes the data is "proprietary information, and in many cases for sole proprietors and small businesses, it is confidential information." Releasing the data could harm participants, Mnuchin said.
Critics worry that the lack of transparency could make it harder to identify fraud and abuse within the $660 billion program, which approved loans rapidly, with less vetting and oversight than usual.
"Clearly, this is meant to prevent some entities from being embarrassed, or being revealed," Steve Ellis of the advocacy group Taxpayers for Common Sense told The Washington Post. "Nobody forced them to take the money, and it was already set up so that they could return it with no questions asked. And they were told that this information would be made public when they applied for the loan."
Unemployment Claims Climb Past 44 Million
Another 1.5 million people filed for unemployment benefits last week, the Department of Labor announced Thursday, bringing the 12-week total for first-time claims to more than 44 million.
While weekly initial claims have maintained a downward trend over the last 10 weeks, the latest number is still more than twice the pre-pandemic record high of 695,000 set in 1982.
The report also suggests that some workers have begun to return to their jobs, with the total number of people receiving unemployment benefits dropping to 20.9 million, down from a revised 21.3 million the week before. Still, that number is stunningly high relative to previous recessions.
Federal Reserve head Jerome Powell recently said that the economic recovery was likely to be sluggish and stretch well into next year. On Wednesday the Fed estimated an unemployment rate of 9.3% at the end of 2020.
States Sue 26 Generic Drugmakers, Alleging ‘Multibillion-Dollar Fraud’
A coalition of attorneys general from nearly every state filed a massive lawsuit Wednesday charging 26 generic drug companies and 10 executives of conspiring to reduce competition and raise prices. The lawsuit by 46 states, four territories and the District of Columbia is the third in an ongoing antitrust investigation. It accuses the manufacturers of secretly agreeing to fix prices of more than 80 prescription creams, ointments and tablets from at least 2009 through early 2016.
Brand names of some of the drugs allegedly involved in the schemes include Dilantin, an anti-seizure medicine; Lotrimin AF Cream, an antifungal; and Ritalin, a treatment for attention deficit disorder.
"These generic drug manufacturers perpetrated a multibillion-dollar fraud on the American public so systemic that it has touched nearly every single consumer of topical products," Connecticut Attorney General William Tong said in a statement. "Through phone calls, text messages, emails, corporate conventions, and cozy dinner parties, generic pharmaceutical executives were in constant communication, colluding to fix prices and restrain competition as though it were a standard course of business. But they knew what they were doing was wrong, and they took steps to evade accountability, using code words and warning each other to avoid email and detection."
Tong said the plaintiffs’ case is built on evidence from cooperating witnesses, phone records, notes and a database of more than 20 million documents and call records "that paint an undeniable picture of the largest domestic corporate cartel in our nation’s history."
Health insurer Cigna filed its own lawsuit this week, alleging that price fixing by the companies led to "overcharges" and has caused "significant harm" to the nation’s health care system.
A number of the major drugmakers named in the suit denied have unlawful conduct or price fixing. A Novartis subsidiary named in the new suit agreed in March to pay $195 million to settle price-fixing and other charges "The individual instances of misconduct at the core of the resolution we reached with the U.S. Department of Justice in March do not support the vast, systemic conspiracy the States allege," Novartis said Wednesday. "We take seriously our compliance with antitrust laws, and we will continue to defend ourselves in this matter."
Number of the Day: $26,003,751,512,344.91
The national debt topped $26 trillion this week, according to Treasury Department data. Debt held by the public is now approaching $21 trillion.
House Will Vote on Obamacare Changes, Infrastructure
The House will vote the week of June 29 on a massive infrastructure package and a bill meant to improve the Affordable Care Act, Democratic Majority Leader Steny Hoyer reportedly said Thursday.
The House is now in recess but will return on June 25, a week earlier than previously planned, to take up a police reform package. It will then turn to legislation to lower costs under the Affordable Care Act and a $494 billion infrastructure package.
"We're going to meet on the Affordable Care Act, trying to bring the costs of premiums and co-pays and deductibles in the Affordable Care Act down to a place where people can in fact afford them," Hoyer said during a webinar hosted by the law firm Baker Hostetler, according to The Hill.
Both measures have little chance of passing the GOP-controlled Senate.
- The Fed and Treasury Are Now on the Same Page on Our Recovery. Congress Should Follow Suit – Washington Post Editorial Board
- We Can’t Keep the Economy Closed Forever – Henry Olsen, Washington Post
- Once Again, We’re Living Through the Three Stages of Hooverism – Greg Sargent, Washington Post
- Pandemic Unemployment Insurance Is Expiring Soon. This Economist Has a Fix for It – Dylan Matthews, Vox
- Why Joe Biden Should Look to His Left – Sean McElwee, New York Times
- If We Want Better Policing, We’re Going to Have to Spend More, Not Less – Megan McArdle, Washington Post
- What Defunding the Police Really Looks Like – Christine M. Cole and Charles H. Ramsey, Washington Post
- When It Works to ‘Defund the Police’ – Nicholas Kristof, New York Times
- 'Defund the Police' Is Not a Serious — or a Safe — Solution – James M. Casey, The Hill
- Child Care Is Still the Missing Ingredient for a Fast Economic Recovery – Sarah D. Wire, Los Angeles Times
- No, 'Blue States' Do Not Bail Out 'Red States' – Skip Estes, The Hill
- The Post-Pandemic Social Contract – Dani Rodrik and Stefanie Stantcheva, Project Syndicate