Biden Rejects GOP’s Latest Offer on Infrastructure

By Yuval Rosenberg

Biden Rejects Republicans’ Latest Offer on Infrastructure

Republicans led by Sen. Shelley Moore Capito (R-WV) on
Friday upped their infrastructure offer by about $50 billion, but
President Biden said it’s still not enough, according to the White
House. The two sides agreed to speak again on Monday.

"Senator Capito conveyed to the president a new offer from
her group which consisted of an about $50 billion increase in
spending across a number of infrastructure programs," White House
Press Secretary Jen Psaki said in a statement. "The president
expressed his gratitude for her effort and goodwill, but also
indicated that the current offer did not meet his objectives to
grow the economy, tackle the climate crisis, and create new jobs.
He indicated to Senator Capito that he would continue to engage a
number of senators in both parties in the hopes of achieving a more
substantial package."

Republicans had previously presented a $928 billion
infrastructure package that included $257 billion in new spending.
Biden, who initially proposed a wide-ranging $2.25 billion plan,
had scaled back his offer to $1.7 trillion and, in a meeting with
Capito earlier this week, reportedly insisted on $1 trillion in new
spending. If the latest GOP offer increased the new spending by the
roughly $50 billion cited by the White House, it would still leave
the two sides nearly $700 billion apart.

Manchin not ready for Democrats to go it alone:
Biden is continuing the talks in the face of increasing pressure
from some Democratic lawmakers and progressive activists to move
ahead without GOP support. Some analysts have suggested that the
ongoing negotiations are, at least to some degree, a prolonged act
of political theater aimed at eventually securing the backing of
Sen. Joe Manchin (D-WV) for a Democratic infrastructure package.
Manchin, a key vote in the evenly divided Senate, has been
outspoken about his desire for bipartisanship — and he said again
Thursday that he doesn’t believe Democrats should try to pass
legislation on their own.

In interviews with CNN and NBC News, Manchin said he wants
bipartisan talks to continue and believes they can yield results.
"We need to do something in a bipartisan way," Manchin told
CNN. "These [talks] take time. I know everyone is in a
hurry right now. If anyone understands the process it’s President
Joe Biden. … I hope his staff understands it also. ... We've got to
work together, and that takes a lot of time and energy and
patience."

Any effort to pass an infrastructure package using the special
process called budget reconciliation would require unity among all
50 Senate Democrats, meaning that Manchin’s objection could
threaten the prospects for passage.

Manchin said his push for bipartisanship also applied to voting
rights legislation being considered. He added that he would not
bend to pressure from fellow Democrats who want to move ahead on
infrastructure without Republicans and have pressed to change the
Senate’s filibuster rules, which now require 60 votes to advance
most legislation.

The pressure to strike a bipartisan deal may also have been
ratcheted up by a ruling from the Senate parliamentarian last week
that effectively means that Democrats will only be able to use the
reconciliation process one more time this year. "Aides say there’s
now more pressure on Biden to cut a deal with Senate Republicans on
a scaled-down infrastructure package because that would allow for
more spending in a reconciliation package with priorities that are
unlikely to get GOP support," The Hill’s Alexander Bolton
reports.

Progressives ramp up the pressure: Still, some other
Democratic lawmakers are increasingly urging Biden to cut off talks
with Capito or warning that the president may give up too much in
trying to win over Republicans — and could lose needed Democratic
votes in the process.

"If what we’ve read is true, I would have a very difficult time
voting yes on this bill—$2 trillion was already the compromise,"
Rep. Jamaal Bowman (D- NY) said Thursday, according to
The Wall Street Journal. "President Biden can’t
expect us to vote for an infrastructure deal dictated by the
Republican Party."

And Sen. Sheldon Whitehouse (D-RI)
tweeted earlier this week: "Best case: shrunk
infrastructure bill w no serious climate stuff; Rs get bipartisan
cred. Worst case: delay for nothing. Either way: climate to the
curb."

What’s next: Psaki told reporters that the White House is
keeping a "range of pathways" open on the infrastructure package
and pointed to the transportation bill moving through the House
Committee on Transportation and Infrastructure. Biden also spoke
with Rep. Peter DeFazio (D-OR), the Transportation and
Infrastructure Committee chairman, on Friday afternoon. DeFazio on
Friday introduced a five-year, $547 billion surface transportation

reauthorization bill called the INVEST in America
Act that includes $343 billion for roads, bridges and safety
improvements, $109 billion for transit and $95 billion for
passenger and freight rail projects.

The package, which will be debated by DeFazio’s panel next
Wednesday, comes after the Senate Environment and Public Works
Committee unanimously advanced a $304 billion reauthorization bill
that lawmakers have suggested could form the basis for an
infrastructure deal.

Hiring Picks Up, but Pace of Recovery Disappoints

The U.S. economy added 559,000 jobs in May, the Bureau of Labor
Statistics announced Friday in a report
that managed to be both reassuring and disappointing at the same
time.

On the positive side, job growth in May was significantly
stronger than it was a month earlier, and the unemployment rate
dropped three-tenths of a point to 5.8%, the lowest level since
March 2020. The jobs numbers are moving in the right direction,
increasing confidence that the economic recovery from the Covid-19
pandemic is gathering momentum.

Job growth was weaker than expected, though, with many
economists hoping to see more than 670,000 jobs added in May. And
the labor participation rate was little changed, suggesting that
millions of workers remained on the sidelines last month, despite
growing demand that is beginning to show up in significant wage
increases.

"On the surface, yes, the jobs numbers were strong, a half
million jobs is obviously a good thing, but given where we are in
the economy, all else equal it could have been stronger," economist
Michelle Meyer of Bank of America told Bloomberg News. "The fact
that it wasn’t is likely a function in large part to supply
constraints and labor shortages."

White House takes credit: Speaking to reporters in
Delaware, President Joe Biden was quick to link the solid jobs
growth to his policies, including a major push for vaccinations,
enhance unemployment benefits and direct relief payments for
millions of Americans, which he said have boosted the recovery.

"[W]e have now created over 2 million jobs in total since I took
office — more jobs than have ever been created in the first four
months of any presidency in modern history, triple the rate of my
predecessor, eight times the rate of President Reagan," Biden said.
"No other major economy in the world is growing as fast as ours,"
he added. "None of this success is an accident; it isn’t luck."

At the same time, the economy faces a number of hurdles,
including a lack of childcare for workers and the long-running
problem of wage inequality. "These challenges are also reflected in
our jobs data, and they are why the American Jobs Plan and the
American Families Plan are so important," Secretary of Labor Marty
Walsh said. "We need to invest in our workforce and our communities
to achieve an inclusive recovery and a competitive economy."

Republicans will disagree: Still, the strength of the
report could work against the president’s push for more long-term
spending on infrastructure and social welfare programs. "[T]he
faster pace of job creation will offer a window for Republicans to
say that the federal government does not need to spend a great deal
more than the trillions of dollars already pumped into the economy
since the virus swept through the country with startling speed last
March," Politico’s Ben White and Rebecca Rainey
wrote.

The bottom line: The economy is growing but the pace is
disappointing, and although there are clear improvements, there are
also signs that we have a long way to go before returning to
anything like normal conditions in the labor market.

"[T]he economy still remains 10 million jobs short of its
pre-pandemic trend,"
wrote economist and former Obama administration
official Jason Furman. "At May’s pace of job growth it will take
until August 2023 to close the jobs gap, and maintaining the May
pace will be difficult as the lower hanging fruit of reopening is
picked."

Biden Changes His Tune on Jobless Benefits

The $300 per week supplemental unemployment benefits being paid
by the federal government through Labor Day have become
increasingly controversial, with a growing number of Republicans
and business-friendly interest groups calling for an early end to
the program, blaming the payments for the sluggish jobs
recovery.

Twenty-five states, all led by Republican governors, have
announced they will end the program early, starting as soon as this
month. And on Friday, several GOP lawmakers alluded to the enhanced
benefits as they sought to blame Democrats for the lackluster jobs
report. "Biden policies are disincentivizing work & harming our
recovery," Republican Rep. Darin LaHood (IL) tweeted, echoing an
oft-heard complaint that generous unemployment benefits, part of
the $1.9 trillion Covid relief act signed into law in March, are
allowing people to stay out of the labor market.

Some economists dispute the notion that the enhanced
unemployment benefits are the main factor in disappointing job
growth, though most agree that they have played at least a minor
role. "[T]he idea that unemployment benefits are serving as a
barrier to re-entry in the labor market suffered a major blow" in
the May jobs report, Joseph Brusuelas, chief economist at the
consulting firm RSM,
wrote Friday. "Job gains of 292,000 in the leisure
and hospitality sector in May and 1.24 million over the first five
months of the year imply that such arguments are not tethered to
empirical reality and have more to do with the politics of the
Biden administration’s first year than an objective assessment of
the data."

Still, the repeated criticism of the enhanced benefits
appears to have had an effect on Democrats, some of whom had hoped
to extend the payments or even make them a permanent feature of the
unemployment system. On Friday, the president said for the first
time that he thinks the program should expire on schedule, marking
a shift in the administration’s attitude toward the benefits. The
extra money "helped people who lost their jobs through no fault of
their own, and who still may be in the process of getting
vaccinated. But it's going to expire in 90 days," he said, adding
that it "makes sense it expires in 90 days."

Quote of the Day

"Raising taxes is always a bit risky politically. So even
though there’s polling showing that taxing the rich is popular, I’d
bet quite a few of them just aren’t convinced."

– Caroline Behringer, a Democratic strategist and former
senior House aide, in a
Politico piece detailing some concerns among
Democrats about President Biden’s proposed tax hikes.

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