With Covid relief passed, Biden prepares to stake his presidency and Democratic majorities on infrastructure

Source: CNBC

PUBLISHED WED, MAR 10 20212:52 PM EST, By Thomas Franck @TOMWFRANCK

KEY POINTS

  • With President Joe Biden’s Covid stimulus package set to become law, the White House now turns its attention to a once-in-a-generation infrastructure bill.
  • During the campaign, Biden pitched a $2 trillion plan that aims to achieve carbon-free power generation by 2035 and creates “millions” of union jobs.
  • Infrastructure is a bipartisan issue, but divisions exist between progressive Democrats and a coalition of moderates and Republicans.
  • “Do not think of the infrastructure bill as just roads and bridges. Democrats view an infrastructure bill as the ‘infrastructure’ necessary to build the economy of the future,” Raymond James told clients Monday.

With President Joe Biden’s Covid-19 stimulus package just a signature away from becoming law, the White House now turns its attention to assembling and passing a once-in-a-generation infrastructure bill.

It’s not clear what the legislation will include. Yet the new president has all but guaranteed a spectacular infrastructure overhaul as his next policy priority — and his legacy is riding on it. Democrats’ congressional majorities will also be at stake in next year’s midterm elections, which usually result in losses for a president’s party.

Even less clear is how Biden will persuade a Congress split between progressives, moderate Democrats and Republicans to back a potential recovery bill. The GOP uniformly opposed Biden’s $1.9 trillion stimulus plan.

There are even disagreements among Democrats who support a big infrastructure initiative, as labor unions and environmentalists, two key Democratic constituencies, jockey for top billing.

“The lack of specifics reflect how broad the potential issues at play are in the coming months,” Raymond James analyst Ed Mills wrote in an email on Tuesday.

During the campaign, Biden pitched a $2 trillion plan that aimed to achieve carbon-free power generation by 2035. His team said the plan would create “millions” of union jobs that pay at least $15 per hour and include billions in investments for climate-friendly infrastructure.

“Do not think of the infrastructure bill as just roads and bridges. Democrats view an infrastructure bill as the ‘infrastructure’ necessary to build the economy of the future,” Raymond James told clients Monday. “They believe that unless they deliver, they will suffer in the midterm election. Some may argue, even if they deliver, they will suffer in the midterm elections.”

The White House declined to comment on the details of its infrastructure plan and told CNBC it remains focused on finishing the coronavirus stimulus package, which Biden intends to sign this week.

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8 replies

  1. The centerpiece of President Joe Biden’s next big priority after pandemic relief, a massive transportation infrastructure package, could move through a key Senate committee by the end of May, according to its chair.

    Democratic Senator Tom Carper of Delaware, who heads the Environment and Public Works panel, said the infrastructure initiative could be signed into law as a component of Biden’s broader economic recovery plan before the end of September.

    “That’s our timetable — we’re already working on it,” Carper told reporters Wednesday. “And we’re working across the aisle.”

    The committee’s work is the first step for Biden’s soon-to-be-unveiled, longer-term economic stimulus package. The “Build Back Better” program will be the next big focus for Democrats who control the Senate and House, and will be far more expansive than the $1.9 trillion pandemic relief bill Biden plans to sign into law by the end of the week.

    https://www.bloomberg.com/news/articles/2021-03-10/u-s-infrastructure-bill-could-pass-committee-in-may-chief-says?sref=eGA8az79

  2. The Democratic chairman said he is confident that at least 10 Republicans will support the infrastructure bill, which would allow the Senate to pass it without using the budget-reconciliation process or changing the chamber’s rules.

    Carper said he and West Virginia Senator Shelley Moore Capito, the top Republican on his panel, have asked all senators to consult with governors and their state transportation departments to prepare input on their requests by March 19. The committee will then convene a series of hearings before crafting the package.

    Capito told reporters that while she and Carper are aiming for a bipartisan package in the committee, and Biden personally assured her he wants GOP support, she worries Democrats could eventually try to go it alone — as they did with the Covid-19 relief bill.

    https://www.bloomberg.com/news/articles/2021-03-10/u-s-infrastructure-bill-could-pass-committee-in-may-chief-says?sref=eGA8az79

  3. should create a lot of jobs too. Like when Hitler had the Autobahn (motorway) built in Germany in order to reduce unemployment.

  4. President Biden and his economic team are about to test whether Americans can accept a more interventionist role for government in the economy. Now that his $1.9 trillion Covid rescue plan has cleared Congress, Biden is gearing up to roll out a “Build Back Better” plan that envisions spending at least $4 trillion over 10 years on infrastructure and strategic industries such as semiconductors, renewable energy, and electric vehicles. He promises that government action will not just generate millions of jobs and help the U.S. compete with China but also reduce inequality and help battle climate change.

    The timing for a new, muscular U.S. industrial policy might never be better. The pandemic and anxieties over the perceived growing threat from China have focused minds in Washington, fostering a rare bipartisan consensus on the need for measures to secure supply chains for semiconductors and other strategic goods such as surgical masks.

    Biden and his allies in Congress want to rewrite an economic narrative that has seen U.S. manufacturing employment slide since 1979 even as industrial output has continued to grow. “I don’t accept the defeatist view that the forces of automation and globalization can keep union jobs from growing here in America,” the president told reporters a few days after taking office in January. “We can create more of them.”

    https://www.bloomberg.com/news/articles/2021-03-11/biden-s-build-back-better-plan-faces-hurdles-outside-of-gop-politics?srnd=premium&sref=eGA8az79

  5. Federal Reserve officials continued to project near-zero interest rates at least through 2023 despite upgrading their U.S. economic outlook and the mounting inflation worries in financial markets.

    The decision came on a volatile day for investors with Treasury yields surging ahead of the announcement.

    “Following a moderation in the pace of the recovery, indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak,” the Federal Open Market Committee said in its policy statement Wednesday. “Inflation continues to run below 2%.”

    Seven of 18 officials predicted higher rates by the end of 2023 compared with five of 17 at the December meeting, showing a slightly larger group who see an earlier start than peers to the withdrawal of ultra-easy monetary policy, according to the FOMC’s quarterly economic projections also issued Wednesday.

    https://www.bloomberg.com/news/articles/2021-03-17/fed-keeps-zero-rate-outlook-sees-inflation-bump-as-short-lived?srnd=premium&sref=eGA8az79

  6. Most of the 18 Fed officials at the meeting still expect to hold short-term interest rates near zero through 2023, according to updated economic projections released Wednesday. But seven now expect to start lifting rates in 2022 or 2023, up from five in December.

    They plan to continue buying at least $120 billion per month of Treasury debt and mortgage-backed securities until “substantial further progress” is made toward those objectives.

    https://www.wsj.com/articles/federal-reserve-interest-rates-bond-purchases-march-2021-11615917632?mod=hp_lead_pos1

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