Schumer’s Trillion-Dollar Gamble

By Yuval Rosenberg

Chuck Schumer’s Trillion-Dollar
Gamble

President Joe Biden’s economic agenda may be hanging in the
balance this week as Senate Majority Leader Chuck Schumer (D-NY)
looks to force a test vote on a bipartisan infrastructure bill that
is still being negotiated.

Schumer is gambling, looking to advance both the infrastructure
bill and a $3.5 trillion budget resolution that Democrats will try
to pass without Republican votes and get it all done ahead of a
scheduled August recess. “The hardball move,” Punchbowl News
reports, “is meant to test whether Republicans who say they want
bipartisanship mean it — but also to strong-arm his own
ideologically diverse caucus into line on the massive,
Democrats-only reconciliation bill.”

Senate Republicans are warning that if Schumer presses ahead
with his deadline, the vote will fail. Sen. Susan Collins
(R-ME), a member of the bipartisan group negotiating the
legislation,
said there is “no way” they can finish pulling
crafting the bill by Wednesday.

A $100 billion hole: Negotiators are still scrambling to
finalize the bipartisan infrastructure bill, trying to fill a $100
billion hole in the plan’s financing now that a proposal to beef up
IRS collection of unpaid taxes has been pulled from the
package.

They are reportedly considering reversing a Trump-era
policy that seeks to eliminate rebates drug companies give to
pharmacy benefit managers in Medicare Part D. The rule has yet to
be implemented, but the Congressional Budget Office estimated in
2019 that it would increase federal Medicare spending by $177
billion over a decade, meaning that reversing or delaying it could
be a source of savings. Including the provision in the
infrastructure deal means that Democrats wouldn’t be able to use it
in their bill, though.

The bipartisan negotiators reportedly also still have
differences across nearly every category in the bill, ranging from
roads and transit to water and power.

Senate Republicans are insisting that they won’t vote to begin
debate on the “Bipartisan Infrastructure Framework” if the text
isn’t ready, arguing that Schumer is unnecessarily rushing them.
“We need to see the bill before voting to go to it. I think that’s
pretty easily understood,” Minority Leader Mitch McConnell (R-KY)

told reporters Monday. Republicans will also be
looking for an official estimate of the fiscal impact of the
legislation from the Congressional Budget Office.

Democrats, meanwhile, worry that the GOP is trying to drag out
the process and make it harder to pass the separate $3.5 trillion
spending package. And they point out that Republicans have in the
past supported opening debate on legislation that was still not
final, including the Endless Frontier Act just last month.
Republicans say the infrastructure package is far more substantial
than that bill, which was aimed at improving competitiveness with
China.

Biden on Monday called for lawmakers to unite behind the
infrastructure framework. “We shook hands on it,” he said, pushing
back against fears that additional government spending would worsen
inflation by arguing that his economic agenda would help to lower
prices and create jobs.

“If we make a prudent, multi-year investments in better roads,
bridges, transit systems, and high-speed Internet, and a modern,
resilient electric grid, here’s what will happen: It breaks up the
bottlenecks in our economy,” Biden said. “Goods get to consumers
more rapidly and less expensively. Small businesses create and
innovate much more seamlessly. If we increase the availability of
quality, affordable childcare, eldercare, paid leave, more people
will enter the workforce. These steps will enhance our productivity
— raising wages without raising prices.”

Why it matters: A failed vote this week wouldn’t
necessarily signal doom for the infrastructure package, but it
could throw off Democrats’ timeline for the infrastructure
legislation — and risks alienating Republicans in the bipartisan
group.

What’s next: Schumer was expected to file cloture Monday
evening on the infrastructure bill, setting up the Wednesday vote.
The bipartisan group, which continued talks over the weekend, was
also expected to meet again Monday night.

The Covid Recession Officially Lasted Just 2 Months, the
Shortest on Record

The recession caused by the Covid-19 pandemic ended in April
2020, the National Bureau of Economic Research’s Business Cycle
Dating Committee said Monday.

Officially running from March 2020 to April 2020, the two-month
Covid recession is the shortest on record. The economy reached a
peak in February 2020, NBER said, with the recession beginning the
following month as Covid drove shutdowns all over the country.
After hitting its lowest point with respect to job losses and
output in April, the economy began to recover, which the NBER says
marked the end of this atypical recession.

“The recent downturn had different characteristics and dynamics
than prior recessions,” the NBER said in a
statement, noting that most recessions last at
least a few months. “Nonetheless, the committee concluded that the
unprecedented magnitude of the decline in employment and
production, and its broad reach across the entire economy,
warranted the designation of this episode as a recession, even
though the downturn was briefer than earlier contractions.”

That doesn’t mean that all was well from the end of the
recession forward, of course. Instead, the ruling about the end of
the recession simply reflects the not necessarily obvious way
economists measure these things.

“If someone falls down a ten-foot hole, an economist would say
the person is in recession,” Forbes’ Bill Conerly
writes. “When the unlucky person gets up and takes
one step upward, the economist says the person is out of recession.
Everyone else sees the person is nine feet down a ten-foot
hole.”

Biden touts economy: President Biden talked up the state
of the economy Monday in remarks at the White House. “Our economy’s
come a long way over the last six months. We can’t slow down now,"
he said.

“Folks, it turns out capitalism is alive and very well,” Biden
added. “We’re making serious progress to ensure that it works the
way it’s supposed to work, for the good of the American people. For
all those predictions of gloom and doom six months in, here’s where
we stand. Record growth, record job creation, workers getting
hard-earned breaks.”

Speaking as stocks were sliding on Wall Street, Biden also
addressed growing concerns about inflation. “My administration
understands that if we were to ever experience unchecked inflation
over the long-term, that would pose a real challenge to our
economy,” he said. “So while we’re confident, that isn’t what we’re
seeing today. We’re going to remain vigilant about any response
that is needed.”

Biden and Infrastructure Plans Win Positive
Reviews in New Poll

A poll released Monday suggests that most Americans are
generally in agreement with President Biden’s upbeat assessment of
how things are going in the U.S.

More than half of Americans, 52%, say they feel “hopeful” about
the next year, with another 15% saying they are “excited,”
according to a
CBS News/You Gov survey. Not everyone is on board
though, with 40% saying they are “scared” and 23% saying they are
“angry.” (Respondents could choose more than one answer.)

One major concern is Covid-19. While most say the effort to
combat the virus is going well, 62% of respondents report that they
are concerned about the delta variant that is rapidly spreading in
the U.S. Those who are fully vaccinated are more concerned (72%)
than those who are not (48%). Overall, Biden wins strong support
for how the country is dealing with Covid, with 64% saying that the
fight against the virus is going well, up from 35% in January.

With respect to the economy, opinions are close to evenly split,
with 45% of respondents saying economic conditions are good and 47%
saying they are bad. The partisan differences are pronounced, with
68% of Democrats responding positively on the economy, but only 24%
of Republicans doing so.

On personal finances, 60% say their own financial situation is
good, and 33% say it’s bad. Income levels matter, though, with more
people earning over $50,000 reporting good conditions than those
earning less.

The expanded child tax credit — a Biden initiative that provides
payments of as much as $300 per child to millions of families
starting this month — receives positive reviews, with a slim
majority (51%) of parents with children under the age of 18 saying
it will help their families. About 31% of such parents say it will
not help their families, while 18% say they’re not sure.

Biden’s infrastructure proposal receives stronger support, with
59% of respondents saying they approve, versus 41% saying they do
not. Spending on traditional infrastructure is particularly
popular, with 87% approving more federal spending on building and
repairing roads and bridges. Other less traditional elements of the
president’s infrastructure plan appear to be popular as well, with
73% of respondents expressing support for spending more to expand
rural broadband, and 71% saying they support more spending on child
and elder care.

The survey of 2,238 U.S. adult residents was conducted from July
14 to July 17.

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