Happy Thursday! We’ll be back in your inbox after the July 4 holiday. Here’s what’s happening.
Supreme Court Delivers a ‘Devastating’ Blow to Biden’s Climate Agenda
The Supreme Court on Thursday limited the Environmental Protection Agency’s ability to curb power plant emissions, delivering a blow to the Biden administration efforts to combat climate change.
In one of the final opinions of the court’s 2021-22 term, the six conservative justices ruled that Congress had not clearly given the agency the authority to broadly regulate carbon emissions from power plants.
"Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible ‘solution to the crisis of the day,’" Chief Justice John Roberts wrote in the majority decision. "But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme … . A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body."
Republicans hailed the ruling as a victory against administrative bureaucracy while Democrats and environmentalists warned that it would have dire environmental and public health implications. President Joe Biden called the ruling "another devastating decision that aims to take our country backwards," adding: "While this decision risks damaging our nation’s ability to keep our air clean and combat climate change, I will not relent in using my lawful authorities to protect public health and tackle the climate crisis."
Here’s a rundown of some reactions:
Senate Majority Leader Chuck Schumer (D-NY): "The consequences of this decision will ripple across the entire federal government, from the regulation of food and drugs to our nation’s health care system, all of which will put American lives at risk, making it all the more imperative that Democrats soon pass meaningful legislation to address the climate crisis." Mr. Schumer declared in a statement.
Senate Minority Leader Mitch McConnell (R-KY): "[T]he Court has undone illegal regulations issued by the EPA without any clear congressional authorization and confirmed that only the people’s representatives in Congress – not unelected, unaccountable bureaucrats – may write our nation’s laws. … The ruling also pushes back against the overbearing administrative state, which Democrats have expanded dramatically in recent years. The Constitution states clearly that the lawmaking process lies with the people and their elected representatives, not with opaque federal agencies. I am glad the Supreme Court affirmed this fact and hope other overeager bureaucrats take notice."
Rep. Frank Pallone (D-NJ), chair of the House Energy and Commerce Committee: "Today’s decision makes a mockery of the clear separation of powers outlined in our Constitution and subverts decades of settled law. The Clean Air Act is emphatically clear that EPA has both the authority and the obligation to protect public health and regulate dangerous air pollution like greenhouse gases. The Supreme Court’s blatant dismissal of the will of Congress is an alarming display of hubris, the consequences of which will be felt far beyond this case."
Sen. Shelley Moore Capito of West Virginia, the top Republican on the Senate Environment and Public Works Committee: "If Congress had intended to give EPA such sweeping authority to transform an entire sector of our economy, Congress would have done so explicitly. Today’s decision by the Supreme Court is welcome news and further proves that EPA overstepped its authority by imposing enormously burdensome regulations on states to reconfigure our electric grid despite Congress’s rejection."
Sen. Ron Wyden (D-OR), chair of the Senate Finance Committee: "The Republicans on the Supreme Court are not going to allow any meaningful administration efforts to combat climate change. It’s crystal clear. The only way to tackle this problem is through congressional action, which is why it’s so important that Congress pas our clean energy tax credit package."
The bottom line: "The Supreme Court’s ruling inevitably pushes the EPA to get creative, but the likely effect will be to push even more responsibility for cutting emissions to the states — where most of the action has been," Bloomberg columnist Liam Denning writes. "Some states are doing yeoman’s work, but a fragmented approach means higher costs and slower progress."
Household Spending Cools as Slowdown Worries Mount
Spending by U.S. households slowed in May, the Commerce Department announced Thursday, as purchases of goods and services fell by 0.4% in real terms.
Separately, the personal consumption expenditures price index — which the Federal Reserve relies on to target inflation — rose by 0.6% from a month earlier, and by 6.3% over the last year.
The core personal consumption expenditures index, which excludes volatile food and fuel prices, increased by 0.3% in May relative to the month before, and by 4.7% over the last 12 months, the smallest annual increase since November.
Taken together, the numbers suggest that while inflation may be peaking, it remains elevated and price increases continue to eat away at consumer purchasing power, raising the odds of an economic slowdown in the coming months.
"Today’s details on monthly spending figures shows a much weaker profile for spending in the first five months of the year and sets us up for weaker growth in the second quarter than the data would have suggested just 48 hours ago," Wells Fargo economists Tim Quinlan and Shannon Seery wrote in a note.
Some economists now think growth will be notably slower in the April to June period. "If the trend continues, we should expect spending volume in June to decline further, adding more downside risks to our 2.5% growth forecast for gross domestic product in the second quarter," wrote Tuan Nguyen of the consulting firm RSM.
Some economists are slashing their forecasts for economic growth. Analysts at Morgan Stanley reduced their estimate for GDP growth in the second quarter to an annualized rate of 0.3%, down from the 2.0% they predicted just a few days ago. Forecasters at the Federal Reserve Bank of Atlanta are now predicting a decrease of 0.1% in Q2, which, if accurate, would mean two quarters of negative growth in a row — an occurrence that sometimes is used to define a recession.
Even without a downturn — and there are plenty of economists who think the economy is strong enough to avoid falling into a recession anytime soon — some analysts are questioning the Fed’s aggressive stance on inflation, given the signs of cooling. "Core PCE inflation now at 4.7% year on year, and has decelerated three months running," Ryan Avent of The Economist wrote Thursday. "It's obviously not where the Fed wants it to be, but it sure does make the move to panicky 75 [basis point] hikes look ill advised."
Quote of the Day
"As long as it takes, so Russia cannot in fact defeat Ukraine and move beyond Ukraine."
— President Joe Biden, in response to a question about how long high gas prices might last.
Number of the Day: $3.2 Billion
The Biden administration on Wednesday announced it has agreed to pay $3.2 billion for another 105 million doses of the Covid-19 vaccine made by Pfizer and BioNTech ahead of a vaccination campaign planned for the fall. The deal includes the option to buy an additional 195 million doses. It comes after a Food and Drug Administration panel recommended that booster shots be updated to target Omicron variants in addition to the original coronavirus strain. The Department of Health and Human Services said that the U.S. has procured and delivered more than 750 million doses of Covid-19 vaccine over the past 18 months.
- Biden’s Never-Ending Inflation Nightmare – Politico
- US Will Face High Gas Prices ‘as Long as It Takes,’ Biden Says – Bloomberg
- Polls Find Majority of Americans Say Country Is Heading in Wrong Direction – CNN
- Consumer Spending Growth Slows in May, as Higher Prices Weigh on the Economy – Washington Post
- Economists Sour on US Outlook After Spending Stumbles – Bloomberg
- Congressional Climate Hawks Demand Action After ‘Alarming’ Supreme Court Decision – The Hill
- Biden: Additional $800M for Ukraine Coming ‘In The Next Few Days’ – Defense One
- Ketanji Brown Jackson Becomes First Black Female Supreme Court Justice – New York Times
- Supreme Court Lets N.Y. Vaccine Mandate Stand Without Religious Exemption – Washington Post
- A Hearing Aid Oligopoly Is Trying to Strangle Cheap Over-the-Counter Competitors – The New Republic
- Hospitals Must Say How Much They Charge for Hundreds of Procedures. Here's Why Many Don't – USA Today
Views and Analysis
- The Supreme Court Just Made Climate Change More Expensive – Mark Gilbert and Mark Gongloff, Bloomberg
- The Supreme Court Just Upended Environmental Law at the Worst Possible Moment – Richard Lazarus, The Washington Post
- Supreme Court Has Taken Control of Climate Policy – Noah Feldman, Bloomberg
- A Health-Care Cliff Could Leave Millions Uninsured – Bloomberg Editors
- How to Fight Inflation – David Dayen and Lee Harris, The American Prospect
- Six Ways to Fight Inflation – Committee for a Responsible Federal Budget
- Small Businesses Are Flashing a Recession Warning Signal – Jonathan Levin, Bloomberg
- Marginal Tax Rates and Economic Opportunity – Cristina Enache, Tax Foundation
- How the Supreme Court Ruling Will Gut the EPA's Ability to Fight the Climate Crisis – Ella Nilsen, CNN
- The Supreme Court Ends a Disastrous Term by Gutting Climate Change Rules – Washington Post Editorial Board
- Biden Must Declare a Public Health Emergency for Abortion — Immediately – Nancy Northup, Washington Post
- Americans Need to Get Better at Taking Sick Days – Christine Emba, Washington Post