Manchin Throws Another Wrench Into Biden Agenda

Plus - Quick guide to ‘Bidenomics’  [The Fisc](   By Yuval Rosenberg and Michael Rainey Manchin Throws Another Wrench Into Biden Agenda Sen. Joe Manchin, the West Virginia Democrat who has emerged as a power center in the evenly divided Senate, made clear in an [op-ed]( for The Washington Post Wednesday night that he opposes eliminating or weakening the filibuster and is concerned about the repeated use of a maneuver known as budget reconciliation as a way to pass legislation by simple majority. Together, those comments could represent an obstacle for Democrats as they look to pass a massive infrastructure package that has yet to garner any Republican support. “If the filibuster is eliminated or budget reconciliation becomes the norm, a new and dangerous precedent will be set to pass sweeping, partisan legislation that changes the direction of our nation every time there is a change in political control. The consequences will be profound — our nation may never see stable governing again,” Manchin wrote. Senate Democrats passed a $1.9 trillion Covid rescue package via the reconciliation process and are looking at using the same maneuver to push through Biden’s infrastructure package without the threat of a Republican filibuster. Doing so, however, would require the support of all 50 Senate Democrats, given the unlikelihood of any Republican backing. “I simply do not believe budget reconciliation should replace regular order in the Senate. How is that good for the future of this nation?” Manchin wrote. “Senate Democrats must avoid the temptation to abandon our Republican colleagues on important national issues. Republicans, however, have a responsibility to stop saying no, and participate in finding real compromise with Democrats.” White House officials told CNN that they were not alarmed by Manchin's article and that they expect the infrastructure package will be subject to months of negotiations, including talks with Manchin. "There is a lot of conversation between not only Senator Manchin's office and the White House but members all across the Hill," White House communications director Kate Bedingfield told CNN. Manchin may have just burst liberals’ hopes: “With just 15 words,” CNN’s Chris Cillizza writes, “Joe Manchin ended the possibility that Joe Biden's first term would live up to the hopes that liberals had for it on everything from gun control to voting rights to even, possibly, the size and scope of the President's $2 trillion infrastructure bill.” Manchin’s yearning for “a new era of bipartisanship,” the Post’s Paul Waldman [writes]( “is kind of like me saying, ‘The time has come to make me the starting point guard for the Washington Wizards, where I’ll average 35 points and 15 assists per game.’ I might like that to happen, but there are some pretty good reasons it won’t.” But given the current state of political debate around the filibuster and budget reconciliation, Waldman says, the outlook for the next couple of years of legislating boils down to this: “Either Joe Manchin gets to decide what bills pass, or Mitch McConnell (R-Ky.) does.” A Quick Guide to ‘Bidenomics’ President Joe Biden is proposing an array of policies that mark a dramatic shift away from decades of conventional wisdom about economics and politics in the U.S., Greg Ip of The Wall Street Journal [wrote]( this week. Known as the “Washington consensus” or “neoliberalism,” the conventional wisdom holds that private markets provide the best solutions to most problems, and that governments should avoid interfering in the economy as much as possible – a prohibition that includes a strong aversion to deficit spending and running up the national debt. With some variations in emphasis, that consensus basically held from Ronald Reagan to Barack Obama, a roughly forty-year reign of free-market liberalism tempered by moderate redistribution and regulation. But Biden is offering something new, Ip says. In the wake of Donald Trump, who ignored the conventional wisdom by attacking free trade and failing to pay even lip service to the virtues of fiscal constraint, Biden has turned to a new generation of advisors who believe that neoliberalism has run its course. What does that mean for economic policy in the Biden administration? Here’s a summary of Ip’s brief but insightful analysis: * Growth: Grounded in scarcity, the old economic model is more concerned with supply than demand, focusing on incentives to produce more work and investment to drive growth. The new ‘Bidenomic’ model, grounded in the work of John Maynard Keynes during the Great Depression, assumes that insufficient demand is a constant drag on the modern economy, and extensive government intervention is required to push growth closer to its potential. * Fiscal policy: Inflation is a defining problem for neoliberal policymakers and worries about sparking an inflationary spiral serve as a brake on running the economy “hot,” which would require the Federal Reserve to slow things down by raising interest rates. Influenced by years of disappointing growth, Biden’s advisers are far less concerned about inflation and see increased government spending as a crucial tool for boosting growth rates, reducing unemployment and raising wages. * Deficit spending: Conventional economic models assume excess government spending “crowds out” private investment, pushing interest rates higher while reducing investment and long-term growth. The new view is that low interest rates betray no shortage of investment capital, so deficits have little effect on rates and are not necessarily harmful – and may even be necessary. * Social programs: Tightly linked with conservative social views, the old economic model sees government-funded aid as inherently problematic and links most public assistance to participation in the labor market. Biden’s economic policies move toward universal assistance regardless of employment status, with an emphasis on essential activities such as caregiving that are undersupplied by the private economy. The bottom line: Although he is concerned that “Bidenomics is more a political movement than a school of economic thought,” Ip says that the new view simply “reflects what economists have observed in the past 20 years: government debt rose sharply while interest rates fell and unemployment hit historic lows without unleashing inflation.” The main question is whether those conditions will continue to hold, boosting Biden’s attempt to rework the American political economy, or if the problems predicted by the old models reemerge, forcing yet another course change for Biden and his successors. Treasury Races to Distribute Nearly $50 Billion in Rental Aid and Avoid an Eviction Crisis: Report The United States faces a race to avoid an eviction crisis, The Washington Post’s Jonathan O’Connell [reports](. The Biden administration last week extended a federal moratorium on evictions through June 30, “but conflicting court rulings on whether the ban is legal, plus the difficulty of rolling out nearly $50 billion in federal aid, means the country’s reckoning with its eviction crisis may come sooner than expected,” O’Connell writes. More than 7 million renters, or nearly 14%, were behind on their payments as of last month, according to a Census Bureau [survey](. Treasury officials are rushing to get some $46.5 billion in aid delivered through state, local and tribal housing agencies before courts start processing evictions again. But many of those agencies reportedly have yet to create programs for disbursing the aid money, and some landlords have refused to participate. The Treasury Department is working to build confidence among landlords, one official told O’Connell. [Read the full piece at The Washington Post.]( Department of Transportation Lists $621 Billion in Potential Projects In an effort to build support for President Biden’s $2.3 trillion infrastructure plan, the Department of Transportation has circulated a spreadsheet for lawmakers that defines specific projects worth $621 billion. According to [Roll Call]( the list includes: - $174 billion to support electric vehicles, including $15 billion to build charging stations; - $115 billion for roads and bridges; - $85 billion for transit, mostly rail; - $50 billion to boost infrastructure resilience in the face of extreme weather events; - $44 billion to accelerate shovel-ready projects; - $25 billion to make transportation more equitable for minority populations; - $25 billion for aviation projects; - $17 billion for ports and waterways. In a note to lawmakers, Edward McGlone, deputy assistant secretary for congressional affairs at Transportation, said “it is important to us to share this level of detail so that you can get a sense of how we arrived at the numbers that the President is proposing.” McGlone added that ‘we want to stress that we fully anticipate these numbers and proposals to go through revision as Congress deliberates on this.” Send your feedback to yrosenberg@thefiscaltimes.com. And please tell your friends they can [sign up here]( for their own copy of this newsletter. News - [Pelosi Backs Two-Bill Infrastructure Strategy Amid Progressives’ Push for One]( – Roll Call - [Manchin Taps Brakes on Biden Agenda by Warning Against Overuse of Budget Tool]( – CNN - [More Questions Than Answers in Parliamentarian’s Budget Opinion]( – Roll Call - [Tax Talks Gain Momentum as US Offers New Proposal Toward Global Deal]( – Wall Street Journal - [Washington Widens Digital Tax Push to Target World’s Largest 100 Companies]( – Politico - [Biden’s Infrastructure Tax Hike Worries Some Democrats About Impact on Wealthy Voters]( – McClatchy - [Inflation Has Gone K-Shaped in the Pandemic Like Everything Else]( – Bloomberg - [Biden Administration Spending $60 Million per Week to Shelter Unaccompanied Minors]( – Washington Post - [Is the U.S. Heading for a New Wave? The Upper Midwest May Offer a Hint]( – New York Times - [Rise of Coronavirus Variants Will Define the Next Phase of the Pandemic in the U.S.]( – Washington Post - [The Big Hole in America's Plan to Fight Covid-19 Variants]( – Politico - [Virus Variants Stoke Need for Vaccine Cash, Rockefeller Says]( – Bloomberg - [The World Needs the Not-for-Profit AstraZeneca Vaccine, Minus the AstraZeneca Drama]( – Bloomberg Businessweek - [U.S. Jobless Claims Jump, Showing Choppy Labor-Market Recovery]( – Bloomberg - [Over 500,000 People Sign Up for Obamacare in Special Sign-Up Period]( – The Hill Views and Analysis - [Joe Manchin: I Will Not Vote to Eliminate or Weaken the Filibuster]( – Sen. Joe Manchin (D-WV), Washington Post - [We’re All Joe Manchin’s Prisoners]( – Paul Waldman, Washington Post - [Joe Manchin Just Crushed Liberals' Dream for Joe Biden's First Term]( – Chris Cillizza, CNN - [Republicans Are Concerned About the Debt Again, Even as They Admit Trump Grew It]( – JM Rieger, Washington Post - [Four Ways of Looking at the Radicalism of Joe Biden]( – Ezra Klein, New York Times - [Tax Cuts Versus Big Spending Is the Debate of the Decade]( – Conor Sen, Bloomberg - [Confusion May Be Democrats’ Friend in Drive to Raise Corporate Taxes]( – Brian Faler, Politico - [What’s More Important Than Slashing Child Poverty?]( – E.J. Dionne Jr., Washington Post - [Taxes Will Have to Go Up (for Someone)]( – Zachary B. Wolf, CNN - [AstraZeneca's Vaccine Is Still Considered Safe to Take]( – Paige Winfield Cunningham, Washington Post - [Fact-Checking GOP Criticism Biden's Infrastructure Plan Will Kill Jobs, and Isn't Really Infrastructure]( – Tara Subramaniam and Holmes Lybrand, CNN - [Biden’s Inattention to the Fed Is a Mistake]( – Jonathan Bernstein, Bloomberg - [Covid-19 Is About to Become Much Less Deadly]( – Cathy O’Neil, Bloomberg Copyright © 2020 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, [thefiscaltimes.com]( or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](