Biden Returns $2 Billion in Trump Border Wall Money to Pentagon

By Yuval Rosenberg

Will Biden Back Bipartisan Senate Infrastructure Deal?

The White House said Thursday evening that it had been briefed
on the infrastructure agreement emerging from a bipartisan group of
10 senators but had questions about the details of the deal,
leaving it unclear whether President Joe Biden will support it.
It’s also not clear whether the “compromise framework” tentatively
agreed to by five Republicans and five Democrats can garner enough
support among other lawmakers to ensure its passage.

“The president appreciates the senators’ work to advance
critical investments we need to create good jobs, prepare for our
clean energy future, and compete in the global economy,” Deputy
Press Secretary Andrew Bates said in a statement. “Questions need
to be addressed, particularly around the details of both policy and
pay-fors, among other matters. Senior White House staff and the
Jobs Cabinet will work with the Senate group in the days ahead to
get answers to those questions, as we also consult with other
members in both the House and the Senate on the path forward.”

The bipartisan deal under discussion reportedly calls for some
$974 billion in infrastructure spending over five years, with the
funding focused on "core, physical infrastructure." Extrapolated to
eight years, the total cost would come to $1.2 trillion, and the
package includes about $579 billion in new spending.

The plan would not increase taxes as Biden has proposed, but it
reportedly would repurpose unspent Covid-19 relief funds, rely on
public-private partnerships and include an option to index the gas
tax to inflation, an idea the president has opposed as a violation
of his pledge not to raise taxes on Americans making less than
$400,000 a year. “The White House has made it clear to the group of
10 senators that the indexing provision, as well as any discussion
about an electric vehicle mileage tax, would violate Biden’s red
line and that he would reject it,” The Washington Post
reported, citing a person familiar with the
negotiations.

The deal will face hurdles in Congress as well. Some Republicans
will likely object to the size of the package, while progressives
are already voicing concerns that the deal is too small and passing
legislation focused on roads, bridges and other physical
infrastructure will make it harder to pass the climate, caregiving
and education plans they say are needed. "We cannot allow climate
denial to masquerade as bipartisanship," said Sen. Ed Markey
(D-MA). "No climate, no deal."

Democrats also worry that talks on a bipartisan deal will drag
on and use up the precious few weeks they have left to pass a
package this year.

The bottom line: Congressional Democrats are working on
two tracks, with Senate Democrats preparing to proceed with a
budget process called reconciliation that would allow them to pass
legislation with 51 votes rather than 60. But plenty of obstacles
remain on both tracks.

Poll of the Day: Americans’ Priorities for Congress

Just over a third of American voters say that passing an
infrastructure spending bill should be a top priority for Congress,
according to a Morning Consult-Politico poll out this week — lower
than the share who want lawmakers to prioritize economic recovery
from the Covid-19 pandemic (55%), reduction of the federal budget
deficit (42%) or enact health care reform (41%).

While 35% call infrastructure legislation a top priority,
another 31% say it is “an important, but lower priority” and 21%
say it’s not too important or should not be done.

The poll also found that Biden’s proposal for a 15%
corporate minimum tax is the most popular option among proposed
ways to finance new infrastructure spending (see chart below).
Biden’s nearly $2.3 trillion infrastructure proposal garnered
slightly more support than the nearly $1 trillion counteroffer from
Senate Republicans, which the president rejected.

The survey of 1,990 registered voters was conducted from
June 4-7 and has a margin of error of 2 percentage
points.

Biden Returns $2 Billion in Trump Border Wall Money to
Pentagon

The Biden administration returned $2 billion to the Defense
Department that had been redirected by former President Donald
Trump to fund border wall construction in the Southwest.

The money is the unspent balance of the $3.6 billion in Pentagon
funds Trump shifted to barrier construction after declaring a
national emergency on the border with Mexico.

The $2 billion will be used as Congress originally intended, to
fund more than 60 construction projects at military installations
in the U.S. and overseas. The projects include an elementary school
in Germany for the children of U.S. military personnel, a fire and
rescue station in Florida, and a missile interceptor site in
Alaska, all of which had been put on hold after Trump redirected
the funding.

In announcing the move, the White House denounced Trump’s
handling of the border situation and accused the former president
of wasting public funds.

“Building a massive wall that spans the entire southern border
and costs American taxpayers billions of dollars is not a serious
policy solution or responsible use of federal funds,” the
administration said in a
statement. “In total, the previous administration
built 52 miles of wall where no barrier previously existed, with
some wall segments costing American taxpayers up to $46 million per
mile. The effort diverted critical resources away from military
training facilities and schools, and caused serious risks to life,
safety, and the environment. It also took attention away from
genuine security challenges, like drug smuggling and human
trafficking.”

According to CBS News, Trump’s effort to build the border
wall with Mexico ranks as one of the most expensive federal
construction projects in American history. The Trump administration
dedicated $15 billion to the project, including roughly $10 billion
taken from defense and narcotics interdiction programs.

Social Security Less Damaged by Covid Recession Than Experts
Feared

As the Covid crisis took hold in early 2020, budget experts
worried that rapidly disappearing jobs and plummeting tax receipts
would put a serious dent in Social Security’s finances. But
according to
The Wall Street Journal’s Kate Davidson Friday,
the retirement and disability system is emerging from the recession
in better shape than the experts feared.

Before the pandemic struck, the Social Security trustees
estimated that the system would exhaust its reserves by 2035. In
light of the Covid recession, the trustees updated their estimate
last fall and moved that date up by one year, to 2034.

Other projections were more pessimistic. The Bipartisan Policy
Center, for example, said the Social Security trust funds could run
dry five years early if the recession proved to be as long-lasting
and damaging as the one in 2008-2009, resulting in a 25% cut to
benefits for retirees and a 13% cut for those on disability.

Now, however, BPC estimates that the cumulative effect of the
Covid recession will be more modest, but still result in a loss of
one or two years in the lifespan of the trust funds. The Social
Security trustees are expected to release a new estimate that
incorporates the most recent economic data, as well, but have
delayed the update that typically comes in April as they gather
more information.

What happened? Jobs have rebounded much faster than the
last time around, with two-thirds of the jobs lost in the pandemic
already recovered. By comparison, it took about four years to get
to that point after 2009. In addition, claims for disability fell
in 2020, the opposite of what usually happens in a recession,
possibly due to the increased difficulty of traveling to Social
Security offices to file claims, as well as the closure of many
facilities.

The bottom line: Although there was
great risk of serious harm, the Social Security trust funds
survived the Covid crisis in better-than-expected shape. Still, the
system is facing serious long-term financial challenges, which
Congress appears to be in no hurry to address.

Chart of the Day: How Covid Changed Americans’ Spending

Boosted by record amounts of federal income support, consumer
spending in the U.S. has rebounded close to the level of its
pre-pandemic trend, but the mix of things Americans are buying has
changed significantly. According to an analysis of data from the
Bureau of Economic Analysis by economists Jason Furman and Wilson
Powell III, as of April 2021, Americans have been spending a lot
more on food and housing services, stock trades and used cars. Not
surprisingly given the nature of the pandemic, spending on
international travel and going to the movies has been down
sharply.

“Note that some of these categories are quite small and by
themselves are not macroeconomically consequential,” the authors

write, “but together they are illustrative of the
large change in spending patterns to date—and likely large ones
that are ongoing.”

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