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The Memo: Bad jobs report boosts Biden stimulus case

The Memo: Bad jobs report boosts Biden stimulus case
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President Biden is an unusual position — the weaker the economy is perceived to be, the stronger the political case for his COVID-19 stimulus package.

The administration seized on a mediocre jobs report Friday to argue that the full $1.9 trillion package Biden has proposed is essential.

Biden outlined the kind of bleak picture most presidents would normally suppress as he spoke in the State Dining Room at the White House on Friday.

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“It’s very clear our economy is still in trouble,” he said. 

He went on to outline “enormous pain” in the country, encompassing not just elevated unemployment levels and 15 million people behind on rent payments, but also rising rates of suicide and domestic abuse.

Politically speaking, the president’s calculation is clear. He will presumably not be blamed for current economic conditions since he has just taken office, and painting the darkest possible picture explains the need for extensive action.

The Senate cleared the way for a potential party-line vote on Biden’s stimulus measures in the early hours of Friday, when Vice President Harris cast the deciding vote on crucial amendments.

In his remarks Friday, Biden said, “I would like to be doing it with the support of Republicans … but they are just not willing to go as far as I think we have to go.”

He later added that, “What Republicans have proposed is either to do nothing or not enough.”

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Sen. Susan CollinsSusan Margaret CollinsOVERNIGHT ENERGY: Senate confirms Mallory to lead White House environment council | US emissions dropped 1.7 percent in 2019 | Interior further delays Trump rule that would make drillers pay less to feds Anti-Asian hate crimes bill overcomes first Senate hurdle On The Money: Senate confirms Gensler to lead SEC | Senate GOP to face off over earmarks next week | Top Republican on House tax panel to retire MORE (Maine) and nine other GOP senators have floated a compromise bill that carries a price tag roughly one-third of Biden’s proposal. Other Republicans have simply registered their opposition to Biden’s measure, which they argue is larger than necessary.

Rachel Greszler, a research fellow at the conservative Heritage Foundation, has written about the dangers she sees in raising the federal minimum wage to $15 per hour. In her judgement such a move would hit hardest some of the industries already worst affected by the pandemic, such as hotels, restaurants and clothing retailers.

The chances of the $15 minimum wage being enacted anytime soon have declined sharply. Sen. Joe ManchinJoe ManchinHouse committee approves DC statehood bill Romney, Sinema teaming up on proposal to raise minimum wage The Hill's 12:30 Report: Biden defends Afghanistan withdrawal after pushback MORE (D-W.Va.) has indicated he would not support it and even its strongest advocate, Sen. Bernie SandersBernie SandersBernie Sanders says he disagrees with Tlaib's call for 'no more police' Briahna Joy Gray: IRS needs proper enforcement mechanisms to tax wealthy Biden sparks bipartisan backlash on Afghanistan withdrawal  MORE (I-Vt.), has accepted it cannot happen immediately.

Still, conservatives like Greszler have general worries about excessive government spending if a grand stimulus measure is passed.

She argued that a debt crisis for the United States is “definitely plausible in the not too distant future” and that the way back from the crisis is mainly through an effective vaccination program that will speed a full reopening of the economy.

“The stimulus bill they are talking about now is not timely or targeted, and it is just being used to throw a ton of wish-list items into a package,” she asserted.

The skeptics’ case got an unexpected assist from Larry Summers, who served as Treasury secretary under President Clinton and was a key economic adviser to President Obama.

In a Washington Post op-ed published Thursday, Summers argued, in essence, that the current proposal was too large.

Summers, in one sense, was making an optimistic case. Unemployment is in decline and there is “likely to be further strengthening of demand,” he wrote. 

The dangers, he contended, were that massive public spending could spark inflationary pressure and would leave less money to deal with other priorities later.

Summers has always been viewed with distaste by progressives, who blame him for advancing deregulation under Clinton and curbing Obama’s response to the Great Recession, among other things. 

There was firm pushback from the White House against his latest intervention.

Jared BernsteinJared BernsteinPrices jump 0.6 percent in March, highest increase since 2012 Working for lasting change Congress mulls tightening eligibility for stimulus checks MORE, a member of Biden’s Council of Economic Advisers, said during a White House briefing Friday that Summers was “just wrong” to suggest the president does not care about the threat of inflation.

Asked about Summers’s apparent belief that the Biden administration was overreaching in its proposal, Bernstein replied: “No, I firmly would disagree with that contention. … We have to hit back hard, we have to hit back strong.”

Other liberal-leaning economists see it the same way.

“The Biden plan is an intentional overreach because, as I understand it, they think the economy has just run too cold for a very long time — since the Great Recession — and we need a period of very strong growth to repair the damage,” said Josh Bivens, research director at the left-leaning Economic Policy Institute.

Bivens also took issue with the idea that a large stimulus measure now would sap Biden of political, and literal, capital later. A public perception that the White House had met the current economic problems effectively would “strengthen their pitch” for later action, Bivens contended.

Among Democrats, there is clearly an appetite for action, whether Republicans care to come along or not. 

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Many on the left cite the experience of the Obama administration, where they say the White House made too many concessions in search of GOP cooperation that never materialized.

Even now, “I believe the Republicans were never serious about negotiating an economic recovery package,” said Democratic strategist Julie Roginsky. 

“We have seen this playbook before from [Senate Minority Leader] Mitch McConnellAddison (Mitch) Mitchell McConnellThe Memo: Biden puts 9/11 era in rear view Anti-Asian hate crimes bill overcomes first Senate hurdle Greitens Senate bid creates headache for GOP MORE [R-Ky.],” Roginsky added. “He knows full well that if the economy tanks in the next two years, the chances of him taking back the Senate majority are better.”

The Memo is a reported column by Niall Stanage.