WASHINGTON – After nearly eight months of deadlock, President Joe Biden’s efforts to reform the economy are finally gaining momentum as Democrats in Congress overcome internal divisions and push forward his iconic legislative initiatives.
Long blocked by seemingly intractable divisions, Biden in the same week enacted a bipartisan $ 1.2 trillion infrastructure bill while pushing through the House of Representatives a separate $ 2 trillion social and climate policy measure. dollars that has become the centerpiece of the president’s vision to change the US economy. The president is also expected to choose the new chairman of the Federal Reserve in a few days, a major move that shapes the country’s economic destiny.
The explosion in progress on Biden’s economic agenda comes amid unresolved tensions the administration has struggled to cope with in recent months, with high inflation becoming a major concern for U.S. voters amidst most sharp price increases in nearly three decades. Republicans blamed inflation concerns on Biden’s economic agenda, but there are signs the White House may soon back down with more force, saying big business is partly to blame for the dramatic increase costs.
White House officials also hope that the coronavirus booster shots, the authorization of vaccines for young children and the forecast of rapid economic growth for 2022 could represent a major turnaround. They spent much of their first year in office mediating legislative wrangling and dealing with the continuing economic impact of the pandemic.
âIn the economy, consumers buy goods; initial unemployment claims [benefits] are almost where they were before the pandemic, and many disappointing job applications over the summer have been revised upwards, âsaid Mervin Jebaraj, director of the Center for Business and Economic Research at the University of Arkansas. “We are coming to the end of 2021 in much better shape than I think most people expected a few months ago, when the delta was raging.”
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Even as Biden gets long-awaited progress on his legislative agenda, the White House is considering action to deal with other issues. They plan to step up an attack on parts of U.S. businesses over rising consumer prices, according to an administration official and three people familiar with the discussions who spoke on condition of anonymity to reflect meetings. private.
Several outside advisers have hurled senior White House officials – including White House Chief of Staff Ron Klain and White House National Economic Council Director Brian Deese – on an offensive in which the administration allegedly amplifies criticism of large companies in highly concentrated industries for passing higher prices on to consumers because they enjoy high profits, people familiar with the matter said. The effort is said to be both aimed at getting voters’ attention to companies over inflation and giving companies a reason to think twice before raising prices. But the push could backfire, if it upsets many businesses it relies heavily on to resolve supply chain pressures ahead of the holiday season.
The White House took a step in that direction earlier this week, with Biden urging the Federal Trade Commission to step up its investigation into anti-competitive behavior in the oil and gas industry, which the president said led to higher prices for conductors to the pump. . Administration officials have discussed launching similar measures, with aides discussing drawing attention to the consolidation of the grocery industry as food prices rise, two people familiar with the matter said.
A senior White House official, who spoke on condition of anonymity to reflect internal thinking, said the administration has focused since the administration’s inception on antitrust measures – from housing to housing. agriculture – partly aimed at reducing costs for consumers. Senior White House officials released an analysis in September on the role of concentration in the meat packaging industry on higher prices. The administration has also already appointed a number of aggressive antitrust lawyers to key positions.
âThe White House is trying to make it clear that inflation does not happen for organic reasons; this happens because it pays off for huge companies to raise prices on consumers, âsaid Sarah Miller, executive director of the American Economic Liberties Project, a think tank that supports aggressive antitrust policy, who said his point of view had been made clear to the administration.
Miller acknowledged Biden’s letter to the FTC on oil and gas companies, but said, âI think this strategy can be scaled up with the resources that the White House needs to do a broader and more urgent investigation into the rising prices. pricing in key industries for consumers and identifying excess profits. this results from it. They should do it now.
Many economists are skeptical about whether publicly cajoling companies would actually cause them to lower their prices. And Biden has leaned heavily on executives from companies like FedEx, Walmart and Target for tightening the supply chain, with the administration this month touting executives’ commitment to stocking their shelves before the holidays. . It is not known how these companies would react to being criticized over corporate consolidation.
Conservative and even non-partisan economics experts say consolidation trends since the start of the pandemic do not explain a massive increase in inflation expectations over the past year.
âThis is just a fantasy – there is no corporate consolidation to explain it,â said Douglas Holtz-Eakin, Republican political analyst. “It’s just an attempt to change the subject.”
The White House has found itself squeezed by short-term price pressures, even amid advancements in the bipartisan infrastructure law and the social spending bill – which are primarily aimed at solving long-term structural problems. run of the economy.
One of the federal government’s more traditional ways of fighting inflation is through action by the Federal Reserve, and Biden is expected to announce who he will appoint to head the agency in the coming days. The four-year term of Fed Chairman Jerome Powell expires in early 2022.
In an undisclosed White House meeting on Monday, a bipartisan group of 10 centrist senators met with Biden around the signing of the bipartisan infrastructure law they had helped negotiate. Biden gave the group very complimentary comments towards Powell, two people who attended the meeting told the Washington Post, speaking on condition of anonymity to reveal details of the private conversation. A White House spokesman said the president has yet to make a decision on the selection of the Fed.
But later in the same week, Powell was increasingly attacked by two Democratic senators who joined Senator Elizabeth Warren, D-Mass., In opposing the re-appointment of central bank chairman. Democratic Senators Jeff Merkley of Oregon and Sheldon Whitehouse of Rhode Island said Powell had not done enough to use the central bank’s regulatory power to deal with the financial risks of climate change.
“President Biden must appoint a Fed chairman who will ensure that the Fed fulfills its mandate to protect our financial system and shares the administration’s view that tackling climate change is the responsibility of every decision-maker “said Merkley and Whitehouse. “This person is not Jerome H. Powell.”
Despite internal divisions, the White House was supported on Friday by the passage of House of the Build Back Better legislation. The bill would spend more than $ 2 trillion on dozens of key policy priorities, and the administration is eager to tout improvements in early childhood education, energy policy, health care, housing and other key policy areas in which Americans face high costs.
“This sets us on the path to rebuilding our economy better than before by rebuilding America’s backbone: working people and the middle class,” Biden said in a statement after the bill was passed at the Bedroom.
Conservatives blasted the measure, with Rep. Jason Smith, R-Mo., Saying in a statement: Rich and built Washington’s bureaucracy.
The legislation will now head to the Senate, where the senses. Kyrsten Sinema, D-Ariz., And Joe Manchin, DW.Va., have made it clear that it will need to undergo key changes before it can be approved. The revised Senate package would then have to be approved again by the House. Party leaders hope that the bill’s final passage could take place before the end of the year.