Biden Insists He Can Do More With Less In The Economy

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President Biden and his team have entered the “do more with less” phase of their economic agenda, dictated by the political realities of a closely divided Congress.

American Business Plan It included $330 billion of new spending, which Mr. Biden announced in March. management promised It would replace every lead-drinking pipe in America, connect every home to high-speed internet, and build 500,000 charging stations for electric cars and trucks.

compromise agreement that Mr. Biden hit with centrist senators White House officials insist that all these targets will be met last month, despite Mr Biden spending only 40 percent of what he originally proposed for broadband, electric vehicles and water infrastructure.

Biden’s aides say they’ve found creative ways to flex the federal dollar, often by leveraging private investment, to protect their most important goals for the president’s economic program. But they had to trash other goals as a result, and Mr. Biden is now fast-tracking another potentially difficult round of reconciliation in the second half of his agenda, pushed by the moderates in his own party known as the Families of America. Plan.

In a speech Wednesday, Mr. Biden gave no hint that he was shrinking his ambitions.

“It’s time we need to think bigger and act bolder,” said Mr Biden at a community college in suburban Chicago, his final stop on a tour to garner support for his agenda.

Using sweeping rhetoric, the president compared his ambitions to those of former President Ronald Reagan, who presided over an economic boom during his eight-year tenure.

“Ronald Reagan was telling us it was an American morning,” said in 1984, referring to a re-election campaign ad that boasted that it was “morning in America” ​​because of Mr. Reagan’s policies.

“This is going to be an American century,” Mr. Biden said.

But first, there will have to be a compromise. The coming negotiations will challenge Mr. Biden’s broad vision of overhauling the American economy, with new and costly government interventions to lift advanced industries and train and support the workers of the future. His goal in the coming weeks will be to fit as much of this agenda as possible into a double bill, which he is unlikely to spend as much as he wants, depending on the choices his economic legacy himself and congress leaders make.

Biden will continue to prioritize major and unifying national goals, including extending the extended tax credit for parents, creating America’s first federally funded paid leave program for workers, and guaranteeing an additional four years of public education. through preschool and community college.

“The president is fully committed to fulfilling the full goal of his business plan and family plan,” said Brian Deese, director of the White House National Economic Council, in an interview, describing the bipartisan infrastructure deal as “one.” Historic investment.”

“But,” added Mr Deese, “I think the President has made it clear that he understands the nature of the legislative process – that at the end of the day, nobody gets everything they want.”

To reach a $579 billion consensus framework with a group of five Republican senators, Mr. Biden agreed to drop all plans for the first half of his agenda, his business plan, including housing and home health care. It also lost about a third of its proposed spending in areas such as roads, bridges and broadband.

Some of these discarded items could resurface in a second economic package that Mr. Biden is negotiating: his plan to combine as much as possible the remainder of the president’s $4 trillion agenda into a bill passed entirely by Democrats. This bill could include housing and healthcare, as well as Mr. Biden’s recommendations for childcare, education and poverty, as well as some additional efforts to reduce emissions that cause climate change.

However, not all of the money deducted will end in this bill.

Mr. Biden promised Senate negotiators that he would not press for additional spending on the partisan bill in certain areas, such as broadband and water pipes, that were covered in the bilateral agreement. Centrist Democrats in the Senate, Joe Manchin III of West Virginia and Montana’s Jon Tester will likely only accept some of the spending programs Mr. Biden proposed in his partisan law, largely because they oppose parts of Mr. Biden’s taxation schemes to offset the cost of tax companies and high-income earners. new spend

Mr. Biden has repeatedly said he must make tough choices about physical infrastructure and settle for a deal that falls far short of his ambitions. But he cited the bilateral agreement as the country’s biggest increase in infrastructure spending since President Dwight D. Eisenhower created the interstate highway system, claiming it would create “millions” of new jobs – without providing any White House estimates to back it up. – and will achieve many of the same goals as the original plan, much more expensive.

In some cases, Mr. Biden has narrowed his ambitions to focus on the highest priorities of his agenda – such as removing lead pipes. poisons children and hinders their academic development. Administration officials say the bipartisan agreement will allow far fewer countries to handle road maintenance jobs than Mr. Biden’s plan would have. The administration also agreed to reduce funding for the relief effort. communities of color interrupted by past infrastructure effortsLike the Black neighborhoods of New Orleans and Syracuse, from $20 billion on Mr. Biden’s plan to $1 billion on the bipartisan bill.

In other areas, the White House overhauled its entire financing approach to try to protect its goals.

The American Business Plan would have spent $174 billion helping the US support a rapid acceleration in electric vehicle production and use, including 500,000 charging stations, a favorite talking point that harks back to Biden’s presidential campaign.

The bipartisan agreement includes less than a tenth of the spending on electric vehicles, which many Republicans say does not fit electric vehicles. traditional infrastructure definition. White House officials say there is $7.5 billion in a federal grant agreement to build charging stations across the country, and another $7.5 billion in a new financing vehicle that will create loans and public-private partnerships to support the charging stations.

Some liberal groups blew the switch. Varshini Prakash, executive director of the Sunrise Movement, and Alexandra Rojas, executive director of the Justice Democrats, said in a joint statement that Mr. Biden’s business plan is “already based on Biden’s reconciliation with the progressive Democrats after the 2020 primaries.”

“We cannot afford to dilute the policies any further,” they added.

The settlement plan similarly cuts Mr. Biden’s proposed broadband funding from $100 billion to $65 billion. Citing the Federal Communications Commission’s estimates, aides say there will still be enough money for a high-speed internet connection to every home in the country. Richmond Federal Reserve Bank, although they acknowledge that the effort may take longer than expected in Mr. Biden’s original plan.

Some outside experts say the money won’t be enough to get to the toughest cable houses in the country. “Digital alone does not bridge the gap,” said Adie Tomer, member of the Brookings Metropolitan Policy Program, which leads the Metropolitan Infrastructure Initiative.

It may be harder for Mr. Biden to gain efficiency from his family plan, which includes $1.8 trillion in spending and tax breaks focused on what management officials call “human infrastructure.” The plan includes federal funding for workers to take paid leave to care for themselves or a family member, universal kindergarten for 3- and 4-year-olds, two years of free community college, and an extended tax credit for parents. It meant tackling child poverty.

If Mr. Biden has to cut those spending to appease the Democratic centrists, he will face tough choices. It can completely eliminate or reduce access to certain efforts – for example, by guaranteeing free kindergarten only to children from low and middle income families.

Also, including the child poverty effort, Washington may have a well-established path when it comes to the tax credits in its plan: Mr. Biden’s legislation can only create or extend these credits for a year or two, then count on a future. Congress to make them permanent.

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