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Biden says rising wages are an indication his financial agenda is working

Biden says rising wages are a sign his economic agenda is working

WASHINGTON — After weeks of defending his economic policies against critics who blame them for overheating the economy, President Joe Biden went on the offensive Thursday, arguing that rising wages are a sign his agenda is boosting the fortunes of working Americans.

“The bottom line is this: The Biden economic plan is working,” said the president in a speech at Cuyahoga Community College in Cleveland, Ohio. “We’ve had record job creation, we’re seeing record economic growth, we’re creating a new paradigm. One that rewards work — the working people in this nation, not just those at the top.”

Republicans and business groups claim that the enhanced federal unemployment benefits in Biden’s American Rescue Plan, his signature domestic accomplishment, are to blame for a “labor shortage” that has forced corporations like McDonald’s and Bank of America to raise their minimum hourly wage.

Biden rejected this view of the economy: “When it comes to the economy we’re building, rising wages aren’t a bug, they’re a feature,” he said.

The president on Thursday renewed his call for Congress to raise the federal minimum wage to $15 an hour.

Biden credited the American Rescue Plan and his ambitious vaccination program with jump-starting a U.S. economy battered by the Covid pandemic.

The bill passed with no Republican votes, but several Republicans later sought to take credit for it with their constituents despite having voted against it.

“I’m not going to embarrass anyone, but I have here a list of who, back in their districts, they’re bragging about the rescue plan,” said Biden, holding up a list of Republicans who touted the relief funding.

“I mean, some people have no shame,” he added. “I’m happy they know that it benefited their constituents, that’s okay with me. But if you are going to try to take credit for what we’ve done, don’t get in the way of what we still need to do.”

As Biden seeks to build support for more than $3 trillion in additional economic stimulus programs, Republican opposition is solidifying.

As the economy improves, conservatives are arguing that Biden’s proposed stimulus is no longer necessary.

Private sector wages rose 3% in the first quarter of this year, the fastest pace in at least 25 years, according to economist Mark Zandi. This has made it harder for employers to attract workers willing to work for minimum hourly wages.

“We want to get something economists call full employment, where instead of workers competing with each other for jobs that are scarce, we want employers to compete to attract workers,” Biden said.

Biden rejected the growing alarm among some businesses and economists that higher wages and full employment will lead to runaway inflation. Instead, he said, corporations can afford to pay workers more without passing on higher prices to consumers.

“A lot of companies have done extremely well in this crisis, and good for them,” he said. “The simple fact is, though, corporate profits are the highest they’ve been in decades. Workers’ pay is at the lowest it’s been in 70 years. We have more than ample room to raise worker pay without raising customer prices.”

In addition to supporting higher wages, Biden pressed for a corporate tax increase to 28%, revenue he will need to fund his ambitious infrastructure proposal. The American Jobs Plan proposes to spend around $2 trillion over the next decade revitalizing the country’s infrastructure and manufacturing sector.

The president also made it clear that he sees these tax hikes as more than just a necessary evil to fund his big plans: They’re a key part of reestablishing a sense of shared responsibility and shared burden across the American economy.

“We have a chance to seize the economic momentum of the first months of my administration, not just to build back, but to build back better,” he said. “And this time we’re going to deal everyone in.”

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Biden infrastructure plan: Senate Republicans make counteroffer

Biden infrastructure plan: Senate Republicans make counteroffer

Senate Republicans unveiled their $928 billion infrastructure counteroffer to President Joe Biden on Thursday, as the sides see whether they can bridge an ideological gulf to strike a bipartisan deal.

The plan includes:

  • $506 billion for roads, bridges and major infrastructure projects, including $4 billion for electric vehicles
  • $98 billion for public transit
  • $72 billion for water systems
  • $65 billion for broadband
  • $56 billion for airports
  • $46 billion for passenger and freight rail systems
  • $22 billion for ports and waterways
  • $22 billion for water storage
  • $21 billion for safety efforts
  • $20 billion for infrastructure financing

Biden’s latest offer to Republicans came in at $1.7 trillion — $600 billion less than his original plan. He has urged the GOP to put at least $1 trillion into an infrastructure package.

The White House did not immediately respond to a request to comment on the senators’ offer.

Republicans and the White House have moved closer to agreement on an infrastructure plan but still need to resolve fundamental issues about the scope of a package and how to pay for it, a GOP senator leading the effort said Thursday. Sen. Shelley Moore Capito said the sides are “inching closer” in negotiations ahead of Memorial Day, the date by which the White House wanted to see progress in bipartisan talks.

“We’re still talking. I’m optimistic, we still have a big gap,” Capito told CNBC’s “Squawk Box.” “I think where we’re really falling short is we can’t seem to get the White House to agree on a definition or a scope of infrastructure that matches where we think it is, and that’s physical, core infrastructure.”

“The White House is still bringing their human infrastructure into this package and that’s just a nonstarter for us,” she continued, referencing Biden’s plans to put money into programs including care for elderly and disabled Americans.

U.S. Sen. Shelley Moore Capito (R-W.Va.) asks questions during a Senate Appropriations Subcommittee hearing to examine the FY 2022 budget request for the Centers for Disease Control and Prevention in the Dirksen Senate Office Building in Washington, May 19, 2021.

Greg Nash | Pool | Reuters

It is unclear if the two parties can overcome broad ideological differences over what constitutes infrastructure, and how to pay for improvements to it, to strike a bipartisan deal. If negotiations do not show promise, Democrats will have to decide whether to try to pass an infrastructure bill on their own using special budget rules.

The process would bring its own headaches, as Senate Democrats would have to both keep all 50 members of their caucus on board and comply with strict rules about what can go into a budget reconciliation bill.

Republicans have said they do not want to raise taxes to cover the costs of improving transportation, broadband and water systems. Biden has called to hike the corporate tax rate from 21% — the level set by the GOP after it cut taxes in 2017 — to at least 25%.

“We can do this without touching … those tax cuts,” Capito told CNBC.

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She mentioned that lawmakers could redirect unused coronavirus relief funds to state and local governments to infrastructure, or implement user fees on transportation like electric vehicles. Those Republican solutions could put Biden in a bind.

The president has promised not to raise taxes on anyone who makes less than $400,000 per year. User fees or an increase to the gas tax would put an extra burden on many Americans whose incomes falls under the threshold.

Capito said she sees the potential for bipartisan agreement on transportation spending. She noted that the Senate’s Environment and Public Works Committee — where she sits as ranking member — advanced a roughly $300 billion surface transportation bill that she thinks could guide a broader infrastructure deal.

In trimming his original $2.3 trillion plan, Biden cut out funding for research and development and supply chain enhancements. He also reduced proposed spending on broadband, roads and bridges.

Biden did not cut down the proposed $400 billion for home-based health care. Republicans have criticized that spending as part of an infrastructure package.

This story is developing. Please check back for updates.

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Broad Coalition of Democrats Presses Biden to Broaden Medicare

Broad Coalition of Democrats Presses Biden to Expand Medicare

WASHINGTON – A broad coalition of Democrats from across the ideological spectrum plans on Thursday to begin what it promises to be a loud and sustained campaign to pressure President Biden to add a major Medicare addition to his infrastructure package.

More than 150 House Democrats – including Representative Pramila Jayapal of Washington, chairman of the progressive wing of the House, and Representative Jared Golden of Maine, one of the chamber’s most centrist Democrats – have teamed up in what is far from certain to draw Republican opposition but contains suggestions that are popular with a broad segment of the electorate.

Disappointed that Mr Biden has not yet responded to an election promise to expand Medicare benefits, members of the group, which together represent nearly 70 percent of House Democrats, have signed a letter starting their print campaign. The organizers say it will contain opinion pieces and press events. Representatives Conor Lamb from Pennsylvania and Joe Neguse from Colorado are also leading the push.

“It is really unusual for a health proposition to reach this intensity,” Ms. Jayapal said in an interview.

At the heart of the plan is to call for the Medicare Eligibility Age to be lowered from 65 to 60 and to enroll approximately 23 million Americans on the federal senior health program, which will cost $ 200 billion over 10 years. Lawmakers are also pushing for Medicare benefits to be extended to include teeth, eyesight and hearing, which would cost approximately $ 350 billion over 10 years.

Legislators say the third element of their package more than offsets the cost: Medicare’s power to negotiate drug prices. Ms. Jayapal said change – one that Democrats have been unsuccessful in promoting for years – could generate as much as $ 650 billion in a decade, although the Congressional budget bureau has estimated the savings at about $ 450 billion over that period.

Mr Golden, who has historically opposed some large-ticket spending, including the nearly $ 1.9 trillion stimulus bill, said the Department of Veterans Affairs, which has the power to negotiate drug prices for veterans, is paying far less for prescription drugs than the rest of the government.

The Government Accountability Office found that the prescription drug division paid an average of 54 percent less than Medicare in 2017.

Lawmakers have made Zoom calls with White House officials over the proposal, which they hope Mr Biden will include in a large spending package that can lead the Senate through accelerated budget reconciliation this year.

It is not clear whether Mr Biden and other Democrats in Congress will accept the move, as Democratic leaders have focused on competing efforts to achieve a permanent increase in health subsidies under the Affordable Care Act in the Boom Act. There is widespread support for this proposal, including from hospitals who want to get the higher private insurance rates and insurers who want more people to buy their products. Any attempt to expand Medicare is likely to encounter opposition from the same groups.

Updated

May 26, 2021, 9:17 p.m. ET

However, Ms. Jayapal argued that the two health care proposals were compatible. She said negotiating lower drug prices could generate enough money to pay for the changes to the Affordable Care Act as well. If not, “there are many sources of income that are possible and necessary,” she said.

The Medicare proposals have proven popular with so-called Front Democrats – those who represent conservative districts. More than a dozen have joined the effort, underscoring its bipartisan appeal.

After meeting with White House officials on the matter, Neguse argued that Democrats could go further and lower the Medicare Eligibility Age to 55 to cover more than 40 million additional people.

“Many seniors in our nation cannot treat their illnesses because Medicare benefits are not as comprehensive as they should be,” he said.

Democrats say that at least 75 percent of Medicare beneficiaries who require a hearing aid do not have a hearing aid, and much of the country has low rates for dental visits or eye exams.

Mr. Golden said when speaking to voters he had heard repeatedly that the change would help the residents of his district.

“How crazy is it that we have been paying into Medicare all our professional lives, and at the time when your dental care is likely to be the most important, Medicare doesn’t even cover it?” he said. “I know seniors get frustrated with this.”

Nearly 20 Senators, led by Senator Bernie Sanders, the independent Vermonter, have joined forces on a similar call for White House action on the matter.

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Health

Biden Orders Intelligence Inquiry Into Origins of the Coronavirus

Biden Orders Intelligence Inquiry Into Origins of the Coronavirus

The intelligence on the three workers came from outside the United States intelligence agencies’ own collection, which means its veracity is more difficult to authenticate. The source of the information was unclear, but several American officials said they believed the report that the three researchers got sick.

American intelligence officials do not know whether the lab workers contracted Covid-19 or some other disease, like a bad flu. If they did have the coronavirus, the intelligence may suggest that they could have become sick from the lab, but it also could simply mean that the virus was circulating in Wuhan earlier than the Chinese government has acknowledged.

Also toward the end of Mr. Trump’s term, State Department officials began examining the origins of the virus and concluded that it was highly unlikely to have appeared naturally and thus was likely the product of laboratory work.

CNN first reported the effort and suggested that the group’s efforts had been shut down by the Biden administration, prompting scathing Republican criticism. A State Department spokesman, Ned Price, denied that, saying that the team’s findings were briefed to senior officials in the department’s arms control bureau in February and March.

“With the report delivered, the work was ended,” Mr. Price said.

Mr. Trump issued a statement on Tuesday boasting of his early insistence that the Wuhan lab was the source of the virus. “To me, it was obvious from the beginning,” he said. “But I was badly criticized, as usual.”

Despite the absence of new evidence, a number of scientists have lately begun speaking out about the need to remain open to the possibility that the virus had accidentally emerged from a lab, perhaps after it was collected in nature, a lab origin distinct from a creation by scientists.

“It is most likely that this is a virus that arose naturally, but we cannot exclude the possibility of some kind of a lab accident,” Dr. Francis Collins, the director of the National Institutes of Health, told senators on Wednesday.

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Biden orders nearer evaluation of Covid origins as U.S. intel weighs Wuhan lab leak concept

Biden orders closer review of Covid origins as U.S. intel weighs Wuhan lab leak theory

Security personnel stand guard outside the Wuhan Institute of Virology in Wuhan as members of the World Health Organization (WHO) team investigating the origins of the COVID-19 coronavirus make a visit to the institute in Wuhan in China’s central Hubei province on February 3, 2021.

Hector Retamal | AFP | Getty Images

WASHINGTON – President Joe Biden on Wednesday announced that he has ordered a closer intelligence review of what he said were two equally plausible scenarios of the origins of the Covid-19 pandemic.

Biden revealed that earlier this year he tasked the Intelligence Community with preparing “a report on their most up-to-date analysis of the origins of Covid-19, including whether it emerged from human contact with an infected animal or from a laboratory accident.”

“As of today, the U.S. Intelligence Community has ‘coalesced around two likely scenarios’ but has not reached a definitive conclusion on this question,” Biden said in a statement.

“Here is their current position: ‘while two elements in the IC leans toward the former scenario and one leans more toward the latter – each with low or moderate confidence – the majority of elements do not believe there is sufficient information to assess one to be more likely than the other,” said the president.

Biden used the Intelligence Community’s traditional language when they provide assessments to a president. This includes explaining to the president when different agencies within the IC disagree, and always giving the president the level of confidence they have in the accuracy of the raw intelligence.

Biden issued the new directives as the origins of the coronavirus pandemic, still officially unknown, come under increasing scrutiny.

The hypothesis that the virus may have escaped from a laboratory, while initially dismissed by some as a conspiracy theory, has in recent months gained more mainstream traction.

Centers for Disease Control and Prevention Director Dr. Rochelle Walensky last week said in Senate testimony that a lab-leak origin “certainly” was “one possibility.”

White House officials told reporters Tuesday that China hasn’t been “completely transparent” in the global investigation into the origins of Covid-19, and that a full investigation is needed to determine whether the virus that’s killed almost 3.5 million people came from nature or a lab.

“We need to get to the bottom of this, whatever the answer may be,” White House senior covid-19 advisor Andy Slavitt told reporters at a covid briefing Tuesday. “We need a completely transparent process from China, we need the [World Health Organization] to assist in that matter and we don’t feel like we have that now.”

The World Health Organization said in March that it was “extremely unlikely” that the virus was introduced to humans through an accidental lab leak. But that report was heavily criticized by scientists who said the WHO gave the possibility of a lab accident short shrift compared with a natural-origin scenario..

“The report lacks crucial data, information, and access. It represents a partial and incomplete picture,” White House press secretary Jen Psaki said at the time when asked about WHO’s stance on Covid’s origins.

The Office of the Director of National Intelligence, which leads the nation’s 18 intelligence agencies, did not immediately respond to CNBC’s request for comment.

The Chinese Embassy in Washington, D.C., did not immediately respond to CNBC.

This is breaking news. Please check back for updates.

—- CNBC’s Kevin Breuninger and Amanda Macias contributed to this story.

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Household meets with Biden, Harris at White Home

Family meets with Biden, Harris at White House

Gianna Floyd, daughter of George Floyd, along with other family members and lawyers, raise fists and say his name while facing reporters at the White House following their meeting with President Joe Biden in Washington, U.S., May 25, 2021.

Kevin Lemarque | Reuters

WASHINGTON — Members of George Floyd’s family met with President Joe Biden and Vice President Kamala Harris at the White House on Tuesday, to mark the first anniversary of Floyd’s murder by a Minneapolis police officer.

Floyd, a 46-year-old Black man, died on May 25, 2020, after then-Minneapolis cop Derek Chauvin pressed his knee onto Floyd’s neck for more than nine minutes. Floyd was unarmed.

Floyd’s death sparked worldwide calls for racial justice in policing and a reimagining of law enforcement. Following the hourlong meeting, the Floyd family spoke to reporters outside the White House.

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“Being here today is an honor,” said Terrence Floyd, a brother of George Floyd. “To meet with the president and vice president, and for them to show their concern for our family and to give an ear to our concerns and how we feel in this situation. It was a very productive conversation, and we thank everyone for the love.”

In a statement, Biden said the Floyd family “has shown extraordinary courage, especially [George Floyd’s] young daughter Gianna, who I met again today. The day before her father’s funeral a year ago, Jill and I met the family and she told me, ‘Daddy changed the world.’ He has.”

Despite the global response to Floyd’s murder, Congress has yet to pass a bill to reform policing.

Bipartisan negotiators have worked for weeks to tweak the House-passed George Floyd Justice in Policing Act in order to win enough Republican support to get it through the Senate. Negotiators include Rep. Karen Bass, D-Calif., and Sens. Tim Scott, R-S.C., and Cory Booker, D-N.J., who are expected to continue talks this week.

Floyd family lawyer Ben Crump said members of the family would meet with senators later in the day Tuesday.

A Marine holds the door as Gianna Floyd, the daughter of George Floyd, walks into the White House, Tuesday, May 25, 2021, in Washington.

Evan Vucci | AP

Earlier this year, Biden called on Congress to pass a policing reform bill and send it to his desk before the first anniversary of Floyd’s death. That deadline passed Tuesday, but Biden stressed that he was willing to wait longer to make sure the bill contained genuine accountability measures.

“So he’s going to be patient and make sure it’s the right bill and not a rushed bill,” said Crump.

“We have to act,” said Biden. “We face an inflection point.”

Floyd’s brother Philonise Floyd said that a Congress that voted to protect wildlife could vote to protect Black lives.

“If you can make federal laws to protect the bird that is the bald eagle, you can make federal laws to protect people of color,” he said.

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Biden doubles FEMA spending on excessive climate preparedness

Biden doubles FEMA spending on extreme weather preparedness

U.S. President Joe Biden visits Federal Emergency Management Agency (FEMA) headquarters to receive a briefing on the Atlantic hurricane season, in Washington, U.S., May 24, 2021.

Evelyn Hockstein | Reuters

WASHINGTON — President Joe Biden on Monday announced that the Federal Emergency Management Agency (FEMA) would double the funding available to help cities and states prepare for extreme weather disasters, to $1 billion this year from $500 million in 2020.

Biden also announced the launch of a new NASA initiative to more closely track how the climate is changing, and the impact of these changes on local communities, both in the near term and farther into the future.

The president revealed the additional funding during a visit to FEMA headquarters, where he received a briefing on the upcoming Atlantic hurricane season and delivered remarks to agency employees.

“Now is the time to get ready for the busiest time of the year for disasters in America,” Biden said following the briefing. “Hurricane season in the South and East, and the fire season out West.”

“We all know that the storms are coming, and we’re going to be prepared,” he added. “We have to be ready.”

The United States endured last year 22 separate weather and climate-related disasters that each caused more than $1 billion in damages, according to a White House fact sheet. Taken together, the damages from these 22 disasters — primarily wildfires, hurricanes and snowstorms — amounted to nearly $100 billion.

The newly announced funds will be distributed through FEMA’s Building Resilient Infrastructure and Communities (BRIC) program. Created in 2018, BRIC awards grants to states, local communities and tribes to undertake pre-disaster hazard mitigation projects.

Monday’s actions are the latest in a series of initiatives launched by the Biden administration to help measure and prepare for extreme weather events, which have increased in both frequency and severity as the climate has warmed over the past few decades.

Last week, Biden signed an executive order directing federal agencies to conduct a broad assessment of the financial risks posed by climate change to both government and the private sector

The order gives Biden’s top economic and climate advisors four months to produce an estimate of how much it would cost to achieve a U.S. economy with net-zero greenhouse gas emissions by 2050.

From the start of his presidency, Biden has made tackling climate change an integral part of his governing strategy.

A centerpiece of his climate strategy, a clean electricity standard, is part of the $2.3 trillion infrastructure package currently being negotiated by the White House and Senate Republicans.

The standard would require fossil fuel-burning power plants to gradually adopt carbon free methods of generating power, like wind and solar. Under the standard as currently written, the deadline for making electricity carbon free would be 2035.

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Republicans Push Biden to Divert Federal Help for Infrastructure

Republicans Push Biden to Divert Federal Aid for Infrastructure

WASHINGTON — From California to Virginia, many states that faced devastating shortfalls in the depths of the pandemic recession now find themselves flush with tax revenues because of a rebounding economy and a soaring stock market. Lawmakers who worried about budget cuts are now proposing lucrative increases in school spending, tax cuts and direct payments to their residents.

That turnaround is partly the product of strong income tax receipts, particularly in states that heavily tax high earners and the wealthy, whose finances have fared well in the crisis. The unexpectedly rosy picture is raising pressure on President Biden to repurpose hundreds of billions of dollars of federal aid approved this year, in order to help fund a potential bipartisan infrastructure deal.

Last week, Senator Mitt Romney, Republican of Utah, suggested that Mr. Biden and Republican negotiators look to “some of the funding that’s been sent to states already under the last few bills” to help pay for that agreement. “They don’t know how to use it,” Mr. Romney said. “They could use that money to finance part of the infrastructure relating to roads and bridges and transit.”

Some economists and budget experts support that push, arguing that the money could be better spent elsewhere and that states’ spending plans could add to a risk of rapid inflation breaking out across the country. Other researchers and local budget officials say that the federal aid is rescuing harder-hit cities and states, like New York City and Hawaii, from a cascade of layoffs and spending cuts.

Biden administration officials say they continue to support distributing the full $350 billion in state, local and tribal aid that was contained in the $1.9 trillion economic assistance package that Mr. Biden signed in March. They say the aid will help ensure that the economic rebound does not repeat the years of state and local budget cutting that followed the 2008 financial crisis, which slowed the recovery from recession and contributed to millions of Americans waiting years to reap its benefits.

“We still feel strongly that the state and local plan is critical to ensuring we have a strong insurance policy for the type of strong growth we want, the type of equitable recovery the country deserves,” Gene Sperling, a senior adviser to Mr. Biden who oversees fulfillment of the March assistance package, said in an interview, “and to coming back from the 1.3 million jobs lost at the state and local level.”

Even if the administration wanted to recoup or divert the funds, it is unlikely that it could repurpose the money or make significant changes to how it is used without congressional action.

The debate over the state and local funding comes as Mr. Biden navigates a critical week of negotiations with Republicans over infrastructure in search of a deal, and as he prepares to travel to Cleveland on Thursday to speak about the economy. How to pay for any new spending is a primary hurdle in the talks, with Mr. Biden pushing to raise taxes on corporations and Republicans preferring increased user fees like the gas tax.

Repurposing unspent funds could help advance an agreement, particularly given Republican opposition to bankrolling state aid in previous rescue packages. Democrats pushed hard to include lucrative financial assistance for states, cities and tribes in Mr. Biden’s rescue bill. Republicans fought those efforts, warning they would serve as a “bailout” to high-tax, high-spend liberal states. They also cited a series of projections from Wall Street firms and other analysts suggesting that many states’ revenues were faring better than officials had feared in the early months of the pandemic.

It increasingly looks like many liberal states are not being “bailed out” — but also that some of them do not need more federal money. That is particularly true in states that do not rely primarily on the tourism or hospitality industries for tax revenues. Those with progressive tax systems that have caught surging revenues from investment income enjoyed by wealthy residents — like Silicon Valley moguls — are also faring well.

California officials expect a $15 billion surplus this fiscal year, after fearing a $54 billion shortfall. Virginia has seen nearly $2 billion in unanticipated revenues. As has Oregon, where economists recently upgraded the state’s revenue forecasts — moving it from projected deficits to surplus — in a report that surprised and delighted many lawmakers.

“It’s extremely surprising,” said Mark McMullen, the Oregon state economist.

“Obviously, when the shutdowns first set in and we saw these catastrophic employment losses, we treated them as a normal recession in our forecasts,” he said.

But surging income tax revenues and several rounds of federal assistance have now put the state “above our prepandemic forecasts,” Mr. McMullen added.

The strong revenue figures come as more federal relief money is just beginning to roll out the door. The Treasury Department began sending funds to states this month and has so far distributed more than $100 billion — about half of what is available to be disbursed immediately. Local governments are expected to receive the rest next year, although states still experiencing a sharp rise in unemployment will get a lump sum right away.

The Committee for a Responsible Federal Budget estimates that state and local governments have received a total of nearly $1 trillion in relief money in the past year. State and local revenues were running about 7 percent above their prepandemic levels in the last quarter — excluding the federal aid they have received.

Marc Goldwein, the senior policy director for the committee, said that states like Hawaii and Nevada that rely heavily on tourism clearly needed the assistance, but that for many others, the money was unnecessary.

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May 24, 2021, 5:00 p.m. ET

The reasons vary, but Mr. Goldwein noted that home values have been surging around the country, providing a boost to property taxes; that states that were struggling from sagging oil prices have seen those prices pick up; and that consumers have been spending at a healthy clip thanks to stimulus checks and expanded jobless benefits.

“State and local governments, by and large, are frankly swimming in revenue,” Mr. Goldwein said. “It’s pretty clear to me that we spent a lot of money on states that we didn’t need to.”

Some economists, like Harvard’s Lawrence H. Summers, a former Treasury secretary under President Bill Clinton, have pushed Mr. Biden to repurpose the state and local aid for longer-term infrastructure projects, in hopes of easing what Mr. Summers warns is a dangerous buildup of inflationary pressure. Administration officials view high inflation as a much lower risk than Mr. Summers does.

Other analysts warn that state budget situations could sour if the stock market dips sharply or economic growth fizzles. Many cities, like New York, have struggled with sluggish tax revenues and still are reliant on federal to help avoid further layoffs.

New York expects to receive more than $22 billion in Covid-19 federal aid, according to the nonpartisan Citizens Budget Commission. Despite the funds, the city is still anticipating budget gaps in the coming years, the result of declining revenues like property taxes.

In retrospect, said Lucy Dadayan, a senior research associate at the Tax Policy Center, the March law should have included “more targeted funding” for the states and cities that need it most.

“I would still be all for helping state and local governments — more local governments than state governments, given what we know,” Ms. Dadayan said.

Treasury Department officials say the Biden administration wants states to have sufficient resources to cover immediate costs related to emerging from the pandemic and to be able to pay for more expansive services to help people who were hardest hit.

But many states and cities are eyeing windfall spending plans that go well beyond repairing their safety nets. Gov. Gavin Newsom of California, a Democrat facing a recall vote, has proposed a series of spending increases, including $1,100 stimulus checks to individuals and tax credits for filmmakers.

In Florida, the revenue forecast for 2021 has been revised upward twice in the past year. The state is now expected to get $8.8 billion from the federal government. Ben Watkins, the director of the Florida Division of Bond Finance, said the state was using the relief money to invest in infrastructure and water quality projects and directing some of its surplus funds to hurricane preparedness.

He described the windfall as staggering.

“It’s a good problem to have,” Mr. Watkins said, “but that doesn’t mean that it’s not excessive.”

States have substantial leeway in how they use the money, though they are prohibited from using the funds to subsidize tax cuts. Several Republican-led states have sued the Treasury Department, arguing that the restriction infringes on state sovereignty.

The lawsuits do not appear to be slowing the delivery of the funds. Ohio failed to win an injunction blocking the restrictions from being enforced this month, and Missouri had its case thrown out of court after a federal judge said the state did not demonstrate that the law caused it harm.

The Treasury Department plans to closely monitor how the money is spent and whether states are using budget gimmicks to actually fund tax cuts. The agency maintains that the federal government has a right to place conditions on how federal funds are used and that states are allowed to decline the money. A Treasury Department official said that no state had indicated yet that it would reject the funds.

In the meantime, states that are flush with revenues are pressing ahead with their plans. Nebraska approved a $26 million corporate tax cut last week, and lawmakers have told The Omaha World-Herald that they believe that by keeping the federal funds in a separate account from the state’s general fund, they will be in compliance with the law.

Nicholas Fandos and Dana Goldstein contributed reporting.

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Biden to host George Floyd household at White Home

Biden to host George Floyd family at White House

Rodney Floyd and Philonise Floyd, brothers of George Floyd, and Brandon Williams, nephew of George Floyd, check in at a security entrance at the Hennepin County Government Center on April 9, 2021 in Minneapolis, Minnesota.

Brandon Bell | Getty Images News | Getty Images

President Joe Biden will host George Floyd’s family at the White House on Tuesday, an administration official has confirmed to CNBC.

The visit marks the one-year anniversary of Floyd’s death, which triggered international protests against police brutality and racism in the criminal justice system.

Floyd, a 46-year-old Black man, died after former Minneapolis police officer Derek Chauvin held his knee on Floyd’s neck for about nine minutes.

Chauvin was found guilty of murder and manslaughter in April. His sentencing date is set for June.

The Floyd family’s visit to the White House comes as lawmakers attempt to create bipartisan legislation on police reform that could pass through both chambers of Congress.

The House passed the George Floyd Justice in Policing Act in March. The police reform bill seeks to ban chokeholds, carotid holds and no-knock warrants as well as end qualified immunity.

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However, lawmakers have struggled to find a compromise that can win enough support in the evenly divided Senate.

Congress is set to miss the president’s deadline to pass the legislation by the anniversary of Floyd’s death. At least 10 Senate Republicans are needed for the bill’s passage due to the chamber’s filibuster rule.

“It would be a contribution to rebuilding trust in communities,” White House press secretary Jen Psaki said Friday with respect to the bill’s potential passage. “Obviously, there’s more that needs to be done beyond that; that’s not the only step — far from it.”

A point of contention in the negotiations has been on qualified immunity, which makes it difficult to sue individual officers.

Ten House Democrats are pushing congressional leaders not to scrap the provision seeking to end qualified immunity. But some GOP senators are concerned that ending it would make officers and departments vulnerable to a rash of lawsuits.

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Business

Defying Critics, Biden and Federal Reserve Insist Financial Restoration Stays on Observe

Defying Critics, Biden and Federal Reserve Insist Economic Recovery Remains on Track

“We should be on our way to a fantastic American comeback summer, full speed ahead,” said Senator Mitch McConnell of Kentucky, the Republican leader, on the chamber floor this month. “From vaccinations to job growth, the new Biden administration has inherited favorable trends in all directions.”

“But in several ways, the choices made by the Democratic elected have helped slow the return to normal,” he added.

Critics have also questioned the wisdom of the Fed’s commitment to keeping interest rates low and buying bonds even as prices begin to rise. Pennsylvania Republican Senator Patrick J. Toomey said last month that while the Fed “claims this inflation spurt will be mild and temporary,” it “may be time for the central bank to consider the alternative.”

Mr Biden’s advisors say they continue to monitor the risk of consumer prices rising, forcing a swift policy response that could curb economic growth. They say these risks remain small and that they see no reason to change course on the president’s agenda, including the proposed infrastructure and social programs that the president claims will prop the economy for years to come. That agenda could prove to be tougher, even among Congress Democrats, if employment growth continues to disappoint and inflation rises higher than expected.

Fed officials also remain intrepid. They show no signs of a rate hike anytime soon and continue to buy $ 120 billion worth of government bonds every month. Officials have only given the earliest indications that they may tip toe off this emergency policy. They argue that their job is to manage risk and the risk of early aid withdrawal is greater than the risk of the economy overheating.

“I don’t think it would be good for the industries we believe will be successful if the recovery continues so that we can complete this recovery early,” said Randal K. Quarles, Fed vice chairman of oversight, at a hearing of the House of Representatives committee this week when lawmakers pushed it on looming inflation. The Fed is independent from the White House but is responsible for keeping prices in check.

The voters give Mr. Biden good marks for his previous economic responsibility. A solid majority of Americans – including many Republicans – support the president’s plans to levy taxes on high wage earners and businesses to fund new spending on water pipes, electric vehicles, education, childcare, paid vacations, and other programs Conducted by online research company Survey Monkey through May 9th.