News: Biden rolls out executive order on the economy — Stimulus already in some trouble

Friday, January 22, 2021

Biden rolls out executive order on the economy — Stimulus already in some trouble — Yellen gets "Hamilton" treatment

Jan 22, 2021

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Quick Fix

Biden rolls out economic actions — After launching a series of Covid-19 actions on Thursday, President Joe Biden will roll out a series of executive moves on the economy on Friday, though senior advisers note that none of these will be anywhere near enough. The only big bazooka will come from Congress passing another big stimulus package, somewhere along the lines of the new president's $1.9 trillion "American Rescue Plan" proposal. And that could be super tricky to pull off (more below.)

Among Biden's moves : Asking the Agriculture Department to expand and extend federal food assistance programs; asking Treasury to "focus on getting relief to the 8 million Americans who still have not received the financial assistance to which they are entitled"; and asking the Labor Department to "to consider clarifying that workers who refuse unsafe working conditions can still receive unemployment insurance."

Biden is also moving to lay the ground work for an executive order that would require federal contractors to pay at least a $15 per hour minimum wage and provide emergency leave to workers.

Nowhere near enough — On a call with reporters interrupted by technical difficulties, Brian Deese, Biden's new director of the National Economic Council, acknowledged that these efforts would not be close to enough to address the crisis in food insecurity, joblessness and rampant economic inequality driven by the Covid-19 epidemic.

"In whole, this executive order is about martialling the whole federal government to take what actions we can to help working families right now," he said. "These actions … will provide immediate relief to hard hit families. They are not enough. Much more is needed. That's why as we take these actions we will continue to engage with Congress and the American people on the need for the 'American Rescue Plan' as well."

Yeah about that plan — Republicans in the Senate, led by Minority Leader Mitch McConnell, are not going to make it easy. Via our Burgess Everett: "Senate Republicans vowed … that … Biden's coronavirus relief bill will not get 60 votes, daring the White House to either compromise with the GOP or use partisan procedural tactics to evade their filibuster.

"Put simply, the Senate GOP says Biden's proposal spends too much money and comes too soon on the heels of Congress' $900 billion stimulus package from last month. And that unless the proposal has major changes made to it or Democrats use budget reconciliation to pass it with a simple majority, it is doomed on the Senate floor."

Real talk — The stimulus and filibuster issues will test Biden's desire to work with Republicans and "unify" the country against the strong desire among many Democrats to simply steamroll the GOP and move to a 51-vote standard for legislation.

There's no consensus yet on how to approach this. Biden's preference is to negotiate a bipartisan deal that may fall well short of $1.9 trillion (and omit stuff like a $15 minimum wage). But patience on the part of his party is likely to be limited.

GOOD FRIDAY MORNING — Still a bit mind-bending being in a post-Trump environment. May take a good while to get used to it. Email me on bwhite@politico.com and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on aweaver@politico.com and follow her on Twitter @AubreeEWeaer.

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As part of our ongoing commitment to help mitigate the risks of climate change, we've announced plans to further reduce emissions in our operations by 2025. Through continued application of operational efficiencies, ongoing development and deployment of lower-emission technologies and other measures, our plans drive meaningful near-term emission reductions and are consistent with the goals of the Paris Agreement. Learn more about our plan to reduce our emissions.

Driving the Day

Senate Finance Committee meets at 10:00 a.m. and is expected to approve Janet Yellen's nomination as Treasury Secretary and send it to the Senate floor … Existing home sales at 10:00 a.m. expected to dip to 6.55M from 6.69M

SPEAKING OF YELLEN — She gets a pretty incredible "Hamilton"-style treatment from rapper Dessa, part of the Doomtree collective, in a short song called "Who's Yellin Now?" (We act like we knew who Dessa was. But we really didn't given that we are old.)

A sample: "She's five foot nothing, but hand to God, she can pop a collar, she can rock a power bob. Bay Ridge represent. Brooklyn in the Cabinet … It only took a couple centuries, the first female secretary of the Treasury."

One Washington insider emailed: "Has to be second to Alexander Hamilton for best songs about a cabinet secretary. What else could compete?" People inside the Fed, where Yellen served as Chair, were also quick to text the song to MM. Not like she really needs it. She's a lock.

BIDEN TO BREAK WITH LEFT ON OCC — Our Zachary Warmbrodt: "Biden's expected nomination of a former Obama Treasury Department official to regulate national banks is triggering fierce opposition from progressive activists, who say the president's choice is too closely tied to the finance industry.

"Biden's planned selection of Michael Barr to lead the Office of the Comptroller of the Currency also marks a break from Sen. Sherrod Brown (D-Ohio), who is in line to chair the Senate Banking Committee, which will vet the nomination. Brown has been advocating for a competing candidate, law professor Mehrsa Baradaran, an expert on the racial wealth gap who has called for the delivery of banking services through the U.S. Postal Service."

BIDEN'S MASSAIVE VIRUS CHALLENGE — Via our POLITICO Nightly colleagues: "On this first full day on the job, … Biden reset expectations on his single biggest campaign promise: an end to the pandemic. 'It's going to take months for us to turn things around,' he said …

"Biden had already set a low bar for early success, which he has yet to revise. … At a pace of 1 million doses a day, the virus wouldn't be contained until sometime in 2022. About 2 to 3 million Americans need to be vaccinated daily to end the pandemic by September …

"[T]he Biden administration has yet to detail how they will solve the problems that will plague the distribution effort in the coming months."

WASHINGTON GETS BACK TO BUSINESS AS USUAL — Our David Siders: "The thesis of … Biden's inaugural speech was hard to miss: Eleven times he said the word 'unity' or 'uniting' on Wednesday, or about once every two minutes. Yet within hours, official Washington was back in business.

"Biden fired the general counsel of the National Labor Relations Board, a Donald Trump appointee. America Rising, the Republican opposition research firm, began trashing Biden's Cabinet picks. And on Thursday — one day after Biden urged the nation to 'start afresh' — Mitch McConnell, the Senate Republican leader, was on the Senate floor accusing Biden of already taking 'several big steps in the wrong direction.'"

CAN BIDEN PULL IT OFF? — Mohamed A. El-Erian in the FT: "When … Biden became vice-president 12 years ago, he joined an administration dealing with a major economic heart attack in the form of the financial crisis.

"Today, the new president leads a country confronting not a single but multiple self-reinforcing crises. Responding well will require supplementing smart economic policy design with agile political manoeuvring at a time when financial markets remain focused on a 'pedal-to-the-metal' Federal Reserve."

HOUSING GROUPS PUSH FOR STIMULUS RELIEF — Our Katy O'Donnell: "A group of 38 housing organizations from across the political spectrum are urging the Biden administration to include $25 billion in direct assistance for homeowners in the economic relief legislative proposal the White House is expected to send to Congress shortly"

IRS SAYS NEXT ROUND OF STIMULUS PAYMENTS COULD BE TOUGH — Our Brian Faler: "The head of the IRS suggested … it could be tricky for the agency to distribute another round of stimulus payments during this year's tax-filing season. 'We need some time to program and reprogram,' said Commissioner Charles Rettig, when asked about Democrats' plans for another round of payments."

A NEW YEAR, A NEW WASHINGTON, A NEW PLAYBOOK TEAM: Ryan Lizza, Tara Palmeri, Eugene Daniels and Rachael Bade take the reins of Playbook this week to set the agenda for the political day and days ahead; break news and make sense of it; and provide a steady dose of insider nuggets and intrigue for and about the power players in Washington. Delivered to your inbox twice a day, POLITICO Playbook keeps you up to speed with everything happening in the world of politics as a new administration enters the White House. Subscribe today to the unofficial guide for official Washington.

Markets

STOCKS DRIFT TO MIXED CLOSE — AP's Stan Choe and Alex Veiga: "U.S. stock indexes capped a day of choppy trading with a mixed finish Thursday, though solid gains by technology companies helped lift the S&P 500 and Nasdaq composite to more record highs."

CHINESE TELECOM CARRIERS ASK NYSE TO MAKE ANOTHER U-TURN ON DELISTING — WSJ's Chong Koh Ping and P.R. Venkat: "China's big telecom carriers asked the New York Stock Exchange to rethink their planned delisting, the latest twist in a to-and-fro about whether they should be allowed to trade in U.S. markets"

Fly Around

INFLATION RIPPLING THROUGH MARKETS IS JUST WHAT FED WANTS TO SEE — Bloomberg's Liz McCormick: "Every new sign that U.S. financial markets finally see some inflation in the pipeline is another piece of good news for the Federal Reserve. Bond-market indicators of inflation, from long-term yields to the cost of hedging, have all pushed higher in recent weeks — and extended the rise on Thursday after a Treasury auction.

"Investors can see price pressures waking up — perhaps more than the U.S. is accustomed to lately, but well short of Fed targets, let alone anything that would set off alarm bells with the economy still stuck in a coronavirus slump."

BIDEN INHERITS DAMAGED ECONOMY, WITH SIGNS OF HOPE — AP's Christopher Rugaber: "Biden has inherited a badly damaged economy pulverized by the pandemic, with 10 million fewer jobs than a year ago and as many as one in 6 small businesses shut down.

"Yet there are also signs of resilience and recovery that suggest the prospect of a rebound, perhaps a robust one, by the second half of his first year in office. Despite the bleakness of the economic landscape, Biden by most accounts faces a less daunting challenge than he confronted as vice president under Barack Obama more than a decade ago in the depths of the Great Recession."

FED SAYS ALL 12 REGIONAL BANK PRESIDENTS RENOMINATED TO NEW TERMS — WSJ's Michael S. Derby: "The Federal Reserve said Thursday all 12 regional bank presidents and their current second-in-commands are approved for new five-year terms. The little-known renomination process happens every five years"

YELLEN LEAVES DOOR OPEN TO TAX INCREASE ON THE WEALTHY — Bloomberg's Saleha Mohsin and Jenny Leonard: "Yellen … said she would work with lawmakers to fast-track a series of tax increases on corporations and wealthy Americans as the Biden administration tries to pass spending on infrastructure and expanding the social safety net."

KEEP UP WITH CONGRESS IN 2021: Tensions remain high on Capitol Hill as we inaugurate a new president this week. How are lawmakers planning to move forward after a tumultuous few weeks? How will a new Senate majority impact the legislative agenda? With so much at stake, our new Huddle author Olivia Beavers brings you the most important news and critical insight from Capitol Hill with assists from POLITICO's deeply sourced Congress team. Subscribe to Huddle, the essential guide to understanding Congress.

For Your Radar

SPAC'S GO CRAZY — Nasdaq Chief Economist Phil Mackintosh takes a look at the wild growth in the sector.

TRANSITIONS — Lindsay Owens is now interim executive director of the Groundwork Collaborative. She previously was a senior economic policy adviser to Sen. Elizabeth Warren (D-Mass.), and is a Keith Ellison and Pramila Jayapal alum …

Mike Burns left the House Appropriations Committee to move to HUD as deputy assistant secretary for public affairs.

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