(Bloomberg) — President Joe Biden is discovering the limits of his power to boost the world’s largest economy on his own, as congressional opposition to his sweeping stimulus plan hardened soon after he was inaugurated.
While publicly urging Congress to swiftly pass his $1.9 trillion proposal — warning of rising unemployment, hunger and homelessness if lawmakers don’t act — Biden issued more than a dozen executive actions in his first three days in office, some aimed at propping up the economy and containing the coronavirus to allow its reopening.
While moderate Republicans including Susan Collins of Maine see little need for a big new spending bill after last month’s dose, Biden’s making the case that the crisis is deepening, not fading, and urgent action is needed. But top Biden aides acknowledge that unilateral action can only accomplish so much.
“If we don’t act now, we will be in a much worse place, and we will find ourselves needing to do much more to dig out of a much deeper hole,” Biden’s top economic adviser, Brian Deese, said of the stimulus plan at a press briefing on Friday.
Record Covid-19 death tolls and renewed lockdowns have battered the economy this winter. A government report for December on Friday is expected to show the worst back-to-back monthly declines in personal spending since the dark days of last spring. And while U.S. stocks hit record highs the past week, some of that optimism has been based on assumptions of new stimulus getting passed.
Biden’s executive actions can at least signal his intentions, but he’ll need cooperation from Congress to validate financial markets’ confidence and make a real difference for the economy and the 11 million unemployed Americans. The legislature’s sign-off is required for the scale of spending needed to notably boost growth.
Biden signed two orders on Friday that expand food stamp benefits for low-income families, direct the Treasury Department to ensure Americans eligible for stimulus checks received them and reinstate protections and collective bargaining rights for federal workers. Next week, he’s expected to sign additional actions urging federal agencies to buy goods and services from U.S. companies, directing regulatory action to fight climate change and strengthening Medicaid.
“It is perfectly reasonable and necessary to start with a strong statement of intent from the administration, and it sounds like that is how they will use the executive orders — as ammunition in the battles to come,” said Thea Lee, president of the Economic Policy Institute, a left-leaning thinktank.
GOP Skepticism
“But when we talk about the $1.9 trillion Covid relief package or the big investments in infrastructure, climate change or the ‘care economy,’ those are things that will need the finance and power of the U.S. Congress to succeed,” she said.
Biden’s plan has so far sparked little enthusiasm from congressional Republicans. They have complained his first legislative proposal is too expensive, not targeted enough or is too much of a laundry list of liberal goals, including a minimum wage increase.
Not a single Republican has indicated support for Biden’s stimulus plan as presented, with Senators Mitt Romney, Chuck Grassley and Collins questioning the urgency since the government is still enacting a $900 billion stimulus from December.
“It’s hard for me to see, when we just passed $900 billion of assistance, why we would have a package that big,” Collins said this week about Biden’s proposal. “I’m not seeing it right now, but again, I’m happy to listen.”
Piecemeal Approach?
Parts of the plan could get traction, however. Republican Senator Todd Young of Indiana called the total package a “non-starter, but it’s something that we will scrutinize and hopefully, find some common ground on.”
He said he might support a proposal to add funding for coronavirus vaccinations, as an example, and said he and Vice President Kamala Harris had spoken about finding a compromise.
The Biden team has said it would prefer to pass the relief package with Republican votes. Deese is scheduled to speak with a bipartisan group of senators on Sunday at 3 p.m. Biden is making his own calls to lawmakers, though the White House has declined to specify with whom he’s speaking.
During her confirmation hearing on Tuesday, Treasury Secretary-designate Janet Yellen defended Biden’s proposal against Republicans who raised concerns about the deficit — an issue that practically evaporated in Washington while Donald Trump was president.
Yellen’s Case
She said Congress needs to “act big” to revive the economy.
“Right now, short term, I feel that we can afford what it takes to get the economy back on its feet, to get us through the pandemic,” Yellen told the Senate Finance Committee, highlighting that interest rates are historically low and that debt-servicing payments as a share of the economy are lower today than before the 2008 financial crisis.
She said doing too little to sustain the economy now could lead to “scarring.”
Presidents Barack Obama and Trump both made liberal use of executive orders and other actions to make policy, particularly when the opposing party controlled a chamber of Congress.
“Executive orders are the trend. It began almost 30 years ago, and they are becoming more and more the practice because Congress has been unable and unwilling to address these challenges through statute,” said former Democratic Senate Majority Leader Tom Daschle.
Daschle said Biden has no choice but to use the executive-authority tools: “He has an ambitious agenda.”
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
