150 Top Business Leaders Back Biden's Covid Plan

150 Top Business Leaders Back Biden's Covid Plan

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Plus, more trouble for Neera Tanden
Wednesday, February 24, 2021

More Than 150 Top Business Leaders Back Biden's Covid Rescue Plan in Letter to Lawmakers

As Democrats press ahead with plans to pass a $1.9 trillion Covid relief package by a process that would bypass the need for Republican support, more than 150 CEOs of large American companies are urging bipartisan backing for the plan.

The latest: House Majority Leader Steny Hoyer (D-MD) announced Tuesday night that Democrats plan to pass their relief bill through the lower chamber on Friday. “The American people strongly support this bill, and we are moving swiftly to see it enacted into law,” he said on Twitter. On the Senate side, lawmakers are awaiting a ruling from the parliamentarian, Elizabeth MacDonough, as to whether an increase in the federal minimum wage to $15 an hour can be included in the package under rules governing the special budget reconciliation process being used. A ruling is reportedly expected as early as Wednesday evening.

CEOs back Biden’s plan:
More than 150 top executives of large companies across a number of industries voiced support for the $1.9 trillion rescue package in a letter to lawmakers Wednesday. "Previous federal relief measures have been essential, but more must be done to put the country on a trajectory for a strong, durable recovery," the executives said in the letter first reported by CNN. "Congress should act swiftly and on a bipartisan basis to authorize a stimulus and relief package along the lines of the Biden-Harris administration's proposed American Rescue Plan."

The most notable signatories include some heavyweights from the worlds of finance and technology: Goldman Sachs CEO David Solomon, BlackRock CEO Larry Fink, Morgan Stanley’s James Gorman, Google’s Sundar Pichai and Blackstone’s Steve Schwarzman, who CNBC notes had previously backed former President Donald Trump. The CEOs of AT&T, Comcast, Intel, Mastercard, Visa and Well Fargo were also among those signing, as were the chief executives of American Airlines, JetBlue and United Airlines.

The Business Roundtable, a CEO group, wrote a separate letter on Tuesday supporting “the swift enactment of additional COVID-19 rescue legislation” focused on public health needs and targeted aid to individuals and small businesses, but urging lawmakers to set aside the minimum wage increase for future legislation.

American public also supports the Biden plan:
A new Politico/Morning Consult poll adds to the number of surveys showing that a sizable majority of Americans, including Republicans, say they favor the Biden rescue package. The poll finds that 76% say they support the legislation, including 52% who “strongly” support it. Just 17% say they oppose it. More than seven in 10 independents and some 60% of Republicans say they back the Biden plan. (Other polls have found less than majority support among Republicans.)

Why it matters: The letter from top business leaders gives Biden and Democrats more ammunition as they argue that their relief package is appropriately sized to meet the Covid crisis. Republicans have criticized the size and specifics of the Democratic bill, and it appears than no GOP lawmakers will support the plan.

Tanden Votes Postponed in Latest Sign of Trouble for Biden’s Budget Nominee

Two Senate committees abruptly delayed planned votes Wednesday on Neera Tanden’s imperiled nomination to head the Office of Management and Budget, underscoring the difficulty President Biden’s pick faces in being confirmed.

The Senate Homeland Security and Governmental Affairs Committee and the Senate Budget Committee both postponed scheduled votes on Tanden’s nomination. Sen. Joe Manchin (D-WV) announced last week he would vote against Tanden, and a number of centrist Republicans have also said they will not back her, citing her history of mean partisan tweets, leaving it unclear if she can get the 50 votes required for confirmation.

“We are postponing the business meeting because members need more time to consider the nominee,” a Democratic aide on the Homeland Security committee said. “The president deserves to have a team in place that he wants, and we’re going to work with our members to figure out the best path forward."

The White House is still publicly backing Tanden.

"As the president repeated yesterday, we're fighting for her nomination and she and our team remain in close contact and close touch with senators and key constituency groups," White House Press Secretary Jen Psaki told reporters at her press briefing. “There’s one nominee to lead the budget department, her name is Neera Tanden, and that’s who we’re continuing to fight for.”

White House Chief of Staff Ron Klain, a friend of Tanden's, reportedly has been working the phones trying to find a Republican to back Tanden, without success.

The White House has reportedly also started considering other candidates for the job, with some lawmakers pushing for Shalanda Young, the former staff director for the House Appropriations Committee who Biden nominated last month to be deputy director of the budget office.

The bottom line:
“[T]he political reality is that the votes to push her through an evenly divided Senate do not appear to exist,” CNN reports. “Tanden stands a chance if she wins the support of moderate Democratic Sen. Kyrsten Sinema of Arizona and Republican Sen. Lisa Murkowski of Alaska, but it is far from clear that will happen.”

Fed Chair: Could Take Years to Hit Inflation Target

In his second day of testimony before Congress this week, Federal Reserve Chair Jerome Powell told lawmakers that he is not worried about a persistent rise in inflation anytime soon.

“We live in a time where there is significant disinflationary pressures around the world and where essentially all major advanced economy’s central banks have struggled to get to 2%,” Powell told the House Financial Services Committee Wednesday.

Significant slack in the labor market plays a key role in the dynamic, Powell said, explaining that “our policy is accommodative because unemployment is high and the labor market is far from maximum employment.”

While some asset prices have risen recently, including those for cars and some types of technology, the increases are likely temporary, Powell said. “That doesn’t necessarily lead to inflation because inflation is a process that repeats itself year over year over year,” he told the committee.

If short-term inflation does spike in the spring as the service economy reopens and consumers start spending down their ample savings, Powell assured lawmakers that the Fed has “the tools to deal with it.”

A goal, not a worry: Powell reiterated that the Fed’s goal is to push inflation up to its 2% target range, something the central bank has been unable to do for decades. “I’m confident that we can and that we will, and we are committed to using our tools to achieving that,” he said. “We believe we can do it, we believe we will do it.”

A team effort: Other Fed leaders expressed dovish stances on inflation Wednesday. Fed Vice Chair Richard Clarida told the American Chamber of Commerce in Australia that while the outlook is improving, “it will take some time for economic activity and employment to return to levels that prevailed at the business cycle peak reached last February.” In the meantime, the Fed will maintain policies that are intended to push inflation “above 2 percent for some time," Clarida said.

Speaking to an economics class at Harvard University, Fed Governor Lael Brainard said that “the economy remains far from our goals in terms of both employment and inflation, and it will take some time to achieve substantial further progress,” which would likely depend upon widespread vaccination distribution. “Inflation remains very low, and although various measures of inflation expectations have picked up recently, they remain within their recent historical ranges,” she said. “I will carefully monitor inflation expectations, it will be important to see a sustained improvement in actual inflation to meet our average inflation goal,” she added.

Why it matters: The Fed chief once again is providing Democrats with a powerful defense against charges that their proposed $1.9 trillion Covid-19 relief bill will spark a destructive increase in inflation.

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