Biden Previews His 'Next Major Initiative'

Biden Previews His 'Next Major Initiative'

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Plus, the ‘Super Bowl of tax reform’
Thursday, March 25, 2021

5 Key Takeaways From Biden’s First Presidential News Conference

President Joe Biden’s first news conference in office covered a range of topics, including the migrant surge at the southern U.S. border, GOP efforts to restrict voting rights, foreign relations with China and North Korea and the timetable for withdrawal of U.S. troops from Afghanistan.

But Biden also made clear that his next priority is the massive, two-part jobs and infrastructure bill that he said he will announce in more detail on Friday, and he made news on other fronts as well. Here are five key takeaways from Thursday’s turn in front of the news media:

A new goal for vaccinations: Biden opened his remarks by announcing a new target for Covid-19 vaccinations of 200 million shots administered in his first 100 days in office. The administration reached its previous goal of 100 million shots last week, and Biden said the new benchmark was "ambitious," but given that the news conference came on Biden’s 65th day as president and that the country is now averaging about 2.5 million doses a day, the target should be reachable.

In what could be seen as a sign of how much progress has been made in the fight against Covid, Biden didn’t get asked one question about his pandemic response during the hour-long press conference. That could also be a sign of the news media’s Covid fatigue and limited attention span, given that new cases are still averaging nearly 60,000 a day and deaths are still averaging more than 1,000 a day, according to the Centers for Disease Control and Prevention, which warned this week that case rates are increasing slightly.

A focus on the infrastructure package: Biden said his "next major initiative" will be "to rebuild the infrastructure, both physical and technological infrastructure in this country so we can compete and create significant numbers of really good paying jobs." He said he will announce more details Friday at an event in Pittsburgh.

That proposal reportedly will be broken into two parts, one centered on infrastructure and clean energy and the other focused on domestic priorities including education, paid leave and child care. The plan is expected to call for some $3 trillion in spending, paid for in part by tax increases on corporations and the wealthy. "I want to change the paradigm. We start to reward work, not just wealth," Biden said Thursday.

Biden’s plan is sure to face sharp pushback from Republicans, who have already dismissed the idea of raising taxes.

Bracing for budget battles: Biden on Thursday derided the GOP’s fiscal approach. "When the federal budget is saving people’s lives, they don’t think it’s such a good idea," he said, contrasting that to what he called GOP support for "feathering the nest of the wealthiest Americans."

In answering a question on relations with Beijing, Biden also reiterated his call for government investment in science and research as a way to compete with China. "Back in the ‘60s we used to invest a little over 2% of our entire GDP in pure research and investment in science. Today it’s 0.7%. I’m going to change that." Biden said the country must pursue investments in medical research on cancer, Alzheimer’s disease and diabetes in addition to research on artificial intelligence, quantum computing and biotechnology.

Support for filibuster reform: Biden, who served in the Senate for 36 years, said the filibuster is "being abused in a gigantic way" and that he "strongly supports" a return to a talking filibuster, which would require senators to stay on the floor to block legislation instead of just raising more painless procedural objections. He also indicated that he might support going further.

"We’re going to get a lot done, and if we have to, if there’s complete lockdown and chaos as a consequence of the filibuster, then we’ll have to go beyond what I’m talking about," he said.

Biden also said he agreed that the filibuster is a "relic of the Jim Crow era," but he didn’t specify what other changes he might support.

The future of the filibuster could be key to Biden’s hopes to advancing major elements of his agenda, and Biden likely doesn’t have the Democratic votes he would need to eliminate the filibuster completely, leaving him trying to pressure Republicans into backing an agenda that he emphasizes has wide public backing.

"Here’s the deal: I think my Republican colleagues are going to have to determine whether or not we want to work together or decide that the way in which they want to proceed is to just decide to divide the country, to continue the politics of division," he said.

Biden expects to run for a second term: Biden is 78, the oldest president to take office, and there had been talk during the campaign that he might step aside after one term. He told reporters Thursday that he expects to run again in 2024, and that he expects Vice President Kamala Harris to again be on the ticket. Asked who he thinks he’ll be running against, Biden said he doesn’t think about it and has no idea: "I have no idea whether there will be a Republican Party. Do you?"

Quote of the Day

"I'm sure of one thing: It’s going to be enormous."

– Sen. Joe Manchin (D-WV), indicating Wednesday that he supports a large infrastructure package. Manchin also said that Congress should do "everything we possibly can" to pay for the new spending and that there should be "adjustments" to the 2017 Republican tax law, including an increase in the corporate rate from 21% to 25% or higher. Manchin also criticized Republican resistance to tax hikes as part of the infrastructure negotiations. "Where do they think it's going to come from?" he asked. "How are you going to fix America?"

Let the ‘Super Bowl of Tax Reform’ Begin!

Newly installed as chair of the powerful Senate Budget Committee, Sen. Bernie Sanders (I-VT) released two proposals Thursday that would increase taxes on the wealthy and corporations.

One proposal would restore the corporate tax rate to 35%, up from the 21% rate imposed by the 2017 GOP tax overhaul, while seeking to deter businesses from moving profits offshore.

The other proposal takes aim at concentrated wealth by raising the estate tax to 45% for estates worth between $3.5 million and $10 million, with the tax rate rising to 65% for estates worth more than $1 billion. The current estate tax tops out at 40%, with the first $23.4 million exempted for couples — a structure that eliminates the tax for all but a few thousand estates.

At a hearing Thursday dedicated to "Ending a Rigged Tax Code: The Need To Make the Wealthiest People and Largest Corporations Pay Their Fair Share of Taxes," Sanders highlighted what he said were the structural problems with the tax system he is trying to fix. "We have a tax code which enables the very, very richest people in America and the largest corporations to avoid paying their share of taxes," Sanders said. "That has got to change."

Why now: The hearing and the proposals come as Democrats turn their attention to strengthening the economy and expanding the social safety net in the wake of the Covid-19 pandemic. "The focus on redistributing wealth comes amid concerns about a recovery from the coronavirus-fueled economic crash that has boosted the highest earners more than the working class," CNBC’s Jacob Pramuk wrote. "Democrats plan to pursue mammoth bills not only to bolster the country’s infrastructure and combat climate change but also to shore up the social safety net with expanded paid leave and pre-K programs."

But Democrats face a difficult path to overhaul the tax system. Senate Minority Leader Mitch McConnell (R-KY) recently reiterated his long-standing opposition to tax increases of any kind, and the Budget Committee’s ranking member, Sen. Lindsey Graham (R-SC), took the same tack Thursday while arguing that the tax cuts provided by the 2017 GOP tax law were a great success.

Let the game begin: Graham’s stance during the hearing jibes with the messaging being amplified by an alliance of conservative, anti-tax groups — part of what CNBC referred to as a "Super Bowl of tax reform" that will play out in the coming months.

Tim Phillips of Americans for Prosperity, a conservative group backed by billionaire Charles Koch, provided a taste of that anti-tax message as it relates to the latest effort to raise taxes. "The Tax Cuts and Jobs Act was a tremendous win for the American people and helped them keep more of what they earn to put towards their families, businesses, and communities," Phillips told CNBC. "Clawing back those cuts or adding on new taxes would worsen our already devastated economy, hurt workers’ wages, crush small businesses, and ultimately wouldn’t come close to paying for the partisan wish lists President Biden and congressional leaders are proposing."

In the end, given Vice President Kamala Harris’s tie-breaking power and a growing willingness to go it alone, Republicans may not be able to stop Democrats from passing a set of tax reforms, though they would still have to resolve numerous internal differences over issues that include the top income tax rate and the size of infrastructure spending.

Even so, conservatives plan to make the process as difficult and unproductive as possible. "Our plans are a full court press to make it the most expensive vote," anti-tax crusader Grover Norquist told CNBC. "You want to make it so expensive politically so people will reduce the size and scope of the legislation."

Jobless Claims Hit Pandemic Low

New applications for unemployment benefits fell to the lowest level since the Covid-19 pandemic began, the Labor Department reported Thursday. Initial claims in state jobless programs fell by nearly 100,000 from last week, down to 684,000. Another 242,000 people applied for Pandemic Unemployment Assistance, the temporary federal program that provides benefits to self-employed and gig workers.

The report shows that the economy is "on the right path," economist Jennifer Lee of BMO Capital Markets told Bloomberg, though she added that she will be more impressed once initial claims fall below 300,000 per week.

Still a long way to go: Although the drop below 1 million total weekly fillings is a good sign, job losses remain at historic levels more than a year after the onset of the pandemic.

Joseph Brusuelas, chief economist at the consulting firm RSM, provided some perspective on the scale of the current problem: "Initial Claims: at 684K it’s still roughly 3 times what one would consider acceptable."

Noting that "millions of Americans have been jobless for a year," The Washington Post’s Erica Long highlighted another grim statistic in the report: "There are now more Americans on long-term unemployment (5.6 million on [Pandemic Emergency Unemployment Compensation]) than there are on regular state unemployment aid (4.5 million)."

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