The Supreme Court is slated to hear oral arguments tomorrow on President Joe Biden’s halted plan to forgive hundreds of billions of dollars in student debt for millions of Americans. And the president is scheduled to meet separately with House and Senate Democrats later this week as the White House prepares to release its budget blueprint for fiscal year 2024 on March 9, kicking off the next round of fighting over federal spending and the debt limit.
Here's what else we’re tracking.
Biden Ramps Up Pressure on Republicans
President Joe Biden took aim at Republicans Monday, again accusing GOP lawmakers of threatening the stability of the U.S. economy as they look for ways to negotiate unspecified spending cuts in exchange for raising the debt ceiling. “Republicans on the Hill are trying to hold the economy hostage,” he tweeted, adding that they “just won’t say what for.”
Returning to a theme the White House has been hammering for weeks, Biden charged Republicans with wanting to gut Medicaid and the Affordable Care Act, in addition to Social Security and Medicare. “It’s not just your social security that may hang in the balance — it’s your health care, too,” the president said, referring to the plan we told you about last week from former OMB director Russell Vought that would slash trillions of dollars from the federal budget, including from health care programs.
Expect to hear more about the burgeoning showdown over the debt ceiling later this week as Biden meets with Democratic lawmakers to hash out plans for the coming year. The president will discuss health care on Tuesday at an event in Virginia Beach before meeting with House Democrats at a retreat in Baltimore on Wednesday, and then with Senate Democrats on Thursday.
A White House official told Punchbowl News that in his meetings with lawmakers, Biden will “highlight that congressional Republicans are now threatening to trigger a catastrophic default if they are unable to take health coverage away from millions of families.” He will also “reiterate his promise to release his budget to the American public, and call on Republicans to do the same.”
Yellen Says Soft Landing Still on Track
During a surprise visit to Kyiv, Ukraine, on Monday, Treasury Secretary Janet Yellen said that while inflation is still too high, she thinks the Federal Reserve can bring it under control without causing a painful recession.
“I would say, ‘So far, so good,’” Yellen told CNN. “Obviously there are risks, and the global situation we face is very uncertain. There can be shocks from it. But look, inflation still is too high, but generally if you look over the last year, inflation has been coming down. And I know the Fed is committed to continuing the process of bringing it down to more normal levels, and I believe they’ll be successful with it.”
Yellen, who announced an economic and budgetary assistance package for Ukraine totaling $1.25 billion, also repeated a warning for lawmakers as they wrangle over how to raise the debt ceiling.
“Congress has to stand up and say they’re committed to having the government pay the bills that are due,” she said.
Noting that the U.S. maintains the world’s reserve currency while operating “the deepest most liquid financial markets where Treasuries are the ultimate safe asset,” Yellen said it would be “inconceivable” for the U.S. to default on its debt. “It’s utterly essential to preserve that to avoid economic and financial catastrophe,” she said.
Recession delayed? A new survey from the National Association for Business Economics finds that 58% of professional forecasters think there will be a recession this year, but there is less agreement than there was just a few months ago about when the recession might start.
In December, about half of the forecasters who expected to see a recession thought the economy would turn down by the end of March, but now only a quarter think so. About one-third of the analysts said a recession would start between April and June, while 20% expect it to happen in late summer.
Overall, there is considerable divergence in expectations for how the economy will perform this year. “Panelists’ views are split regarding how high the Federal Reserve may raise interest rates, how long rates might stay at the peak, when cuts would begin, and what would signal the central bank’s actions on each of these fronts,” said Dana M. Peterson, chief economist at The Conference Board who oversaw the survey. “Respondents are also highly concerned but divided in their opinions regarding the consequences of other matters that might affect the U.S. economy, including the impact of China’s reopening on global inflation and the looming debt ceiling.”
Quote of the Day
“I was a school teacher, taught for nine years — high school — then I had my first child, and two years later I had twins. And so if I can get through that, believe me, I can get through writing this bill.”
– Rep. Kay Granger (R-TX), chair of the House Appropriations Committee, in a Politico profile describing the challenges she will face in drafting and trying to pass annual spending bills in a chamber led by fractious Republicans. Politico’s Jennifer Scholtes and Caitlin Emma write that the Appropriations Committee gavel has become “as much a political burden as a gift thanks to Congress’ endless partisan wars over government funding” — a dynamic that will be even more difficult to navigate in this Congress thanks to the composition of the Republican conference and the concessions made by Speaker Kevin McCarthy (R-CA) to a group of conservatives in his party.
Biden Will Require Chipmakers Seeking Subsidies to Provide Child Care: Report
The Biden administration is looking to use its fiscal leverage to promote its goal of expanding affordable child care. The Commerce Department is reportedly set to announce that semiconductor chip manufacturers looking to receive a portion of the $39 billion in industry subsidies passed as part of last year’s bipartisan CHIPS and Science Act will first have to ensure workers can get affordable, high-quality child care.
“Companies that receive the subsidies to build new plants will be able to use some of the government money to meet the new child care requirement,” Jim Tankersley reports at The New York Times. “They could do that in a number of ways, in consultation with Commerce officials, who will set basic guidelines but not dictate how companies ensure workers have access to care they can afford.”
Why it matters: The new requirement, Tankersley notes, “joins a growing list of administration efforts to expand the reach of Mr. Biden’s economic policies beyond their primary intent. For instance, administration officials have attached stringent labor standards and ‘Buy America’ provisions to money from a bipartisan infrastructure law.”
But the latest move also reflects the administration’s conviction that a lack of affordable child care represents a massive obstacle to any broader renaissance in domestic manufacturing and more widespread economic and job gains. "We're not doing this for the sake of putting points on the board for child care policy, but we are acknowledging that when you look at the labor market right now, one of the largest factors keeping people out of the labor market is caregiving responsibilities," Caitlin Legacki, a senior adviser at the Commerce Department, told Axios.
The bottom line: Biden had failed to get Republicans or centrist Democrats to back much of his agenda devoted to “human infrastructure” — investments in programs including guaranteed paid leave, child care, elder care, universal pre-K and free community college. The administration is now trying to take steps toward those goals as it implements its legislative successes.
- Janet Yellen Visits Ukraine and Pledges Even More U.S. Economic Aid – NPR
- House GOP Mulls Putting ‘Woke’ Earmarks on Chopping Block – Roll Call
- Emboldened by Its Majority, House GOP Turns Up Heat on Federal Workers – Washington Post
- Meet the ‘Tough as Nails’ Texan Trying to Keep the GOP in Line on Spending – Politico
- Wiping out $400 Billion in Student Debt Rests in Supreme Court's Hands – Bloomberg
- Missouri's Student Loan Corporation Could Help Doom Biden's Debt Relief Plan – NBC News
- To Tap Federal Funds, Chip Makers Will Need to Provide Child Care – New York Times
- ‘We Can’t Find People to Work’: The Newest Threat to Biden’s Climate Policies – Politico
- Why One State’s Plan to Unwind a Covid-Era Medicaid Rule Is Raising Red Flags – Politico
- Idaho Dropped Thousands From Medicaid Early in the Pandemic. Which State’s Next? – Kaiser Health News
- Transportation Department Watchdog to Audit Buttigieg’s Use of Government Jets – Washington Post
- Supreme Court to Review Constitutionality of Funding Consumer Protection Bureau – The Hill
- Career-Training Companies Scoop Up Federal Funds With Little Oversight – Washington Post
Views and Analysis
- As Their Debt Ceiling Scheme Advances, the GOP Still Has No Plan – Steve Benen, MSNBC
- Why the Fed Is Increasingly Flying Blind on the Economy – Nicole Goodkind, CNN
- Biden’s Biggest Job Now: Crush the Economic Argument – Michael Tomasky, New Republic
- Here’s How to Save Social Security—if Democrats Have the Stones to Do It – Timothy Noah, New Republic
- Big Insurance 2022: Revenues Reached $1.25 Trillion Thanks to Sucking Billions Out of the Pharmacy Supply Chain – and Taxpayers’ Pockets – Wendell Potter, Health Care Un-Covered
- Private Health Care Companies Are Eating the American Economy – Ramenda Cyrus, American Prospect
- Wyoming Shows GOP Tension Over Using Government to Combat ‘Woke’ – Aaron Blake, Washington Post
- A PPP Plan for East Palestine – Sen. J.D. Vance (R-OH), Washington Post
- US Students Need Well-Paid Teachers to Rebuild What’s Been Lost – Elisa Villanueva Beard, The Hill