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      US Senate approves $50bn boost for computer chip and AI technology to counter China

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      The US Senate has overwhelmingly approved a bill to boost American semiconductor production and the development of artificial intelligence and other technology in the face of growing international competition, most notably from China.The 68-32 vote for the bill on Tuesday demonstrates how confronting China economically is an issue that unites both parties in Congress. It is a rare unifying issue in an era of division as pressure grows on Democrats to change Senate rules to push past Republican opposition and gridlock.The centerpiece of the bill is a $50bn emergency allotment to the US commerce department to boost semiconductor development and manufacturing through research and incentive programs previously authorised by Congress. Overall, the bill would increase spending by about $250bn, with most of the spending occurring in the first five years.The bill now heads to the House of Representatives, which earlier passed a different version. The two will have to be reconciled into a single bill before it is sent to the White House for the president’s signature.Joe Biden said he was “encouraged” by the Senate’s passage of the United States Innovation and Competition Act.“We are in a competition to win the 21st century, and the starting gun has gone off,” Biden said.“As other countries continue to invest in their own research and development, we cannot risk falling behind. America must maintain its position as the most innovative and productive nation on Earth.”Supporters described the bill as the biggest investment in scientific research that the country has seen in decades. It comes as the nation’s share of semiconductor manufacturing globally has steadily eroded from 37% in 1990 to about 12% now, and as a chip shortage has exposed vulnerabilities in the US supply chain.“The premise is simple, if we want American workers and American companies to keep leading the world, the federal government must invest in science, basic research and innovation, just as we did decades after the second world war,” said Senate majority leader, Chuck Schumer.“Whoever wins the race to the technologies of the future is going to be the global economic leader, with profound consequences for foreign policy and national security as well.“If we do nothing, our days as the dominant superpower may be ending. We don’t mean to let those days end on our watch. We don’t mean to see America become a middling nation in this century.”The bill has a number of other China-related provisions, including prohibiting the social media app TikTok from being downloaded on government devices, and would block the purchase of drones manufactured and sold by companies backed by the Chinese government.It would also allow diplomats and Taiwanese military to display their flag and wear their uniforms while in the US on official businesses, and creates broad new mandatory sanctions on Chinese entities engaged in US cyberattacks or theft of US intellectual property from US firms. It provides for a review of export controls on items that could be used to support human rights abuses.The Senate minority leader, Mitch McConnell, backed the bill but said it was incomplete because it did not incorporate more Republican-sponsored amendments.“Needless to say, final passage of this legislation cannot be the Senate’s final word on our competition with China,” he said. “It certainly won’t be mine.”Senators slogged through days of debates and amendments leading up to Tuesday’s final vote. Schumer’s office said 18 Republican amendments will have received votes as part of passage of the bill. It also said the Senate this year has already held as many roll call votes on amendments than it did in the last Congress, when the Senate was under Republican control.While the bill enjoys bipartisan support, a core group of Republican senators has reservations about its costs.One of the bill’s provisions would create a new directorate focused on artificial intelligence and quantum science with the National Science Foundation. The bill would authorize up to $29bn over five years for the new branch within the foundation, with an additional $52bn for its programs.Rand Paul, a Republican senator for Kentucky, said Congress should be cutting the foundation’s budget, not increasing it. He called the agency “the king of wasteful spending”. The agency finances about a quarter of all federally supported research conducted by America’s colleges and universities.The lead Republican on the committee also weighed in to support the bill.“This is an opportunity for the United States to strike a blow on behalf of answering the unfair competition that we are seeing from communist China,” said Roger Wicker.Senators have tried to strike a balance when calling attention to China’s growing influence. They want to avoid fanning divisive anti-Asian rhetoric when hate crimes against Asian Americans have spiked during the coronavirus pandemic.Senators added provisions that reflect shifting attitudes toward China’s handling of the Covid-19 outbreak. One would prevent federal money for the Wuhan Institute of Virology as fresh investigations proceed into the origins of the virus and possible connections to the lab’s research. The city registered some of the first coronavirus cases. More

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      US adds 559,000 jobs in May as fears of hiring slowdown fade

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      The US added 559,000 jobs in May as the coronavirus pandemic receded, shaking off fears of a substantial slowdown in hiring after April’s disappointing monthly report.The Bureau of Labor Statistics said on Friday that the unemployment rate had fallen to 5.8% from 6.1% in April, still significantly higher than the 3.8% unemployment rate recorded in February 2020 before Covid 19 hit the US but less than half its 14.8% peak in April last year.The news comes one month after the labor department shocked economists by announcing the US had added just 266,000 new jobs in April – far below the 1m gain that had been expected. May’s gains were less than economists had predicted and with the level of employment still 7.6m jobs below its pre-pandemic peak, the Capital Economics group calculates it would take more than 12 months at the current pace to fully eradicate the shortfall.April’s report led to sparring between the Biden administration and Republicans who claimed higher levels of unemployment benefits were keeping people from returning to work and this month’s lukewarm report is unlikely to end that row.But there are signs of a strong rebound across the US economy. Worker filings for unemployment benefits have dropped by 35% since late April and fell to a pandemic low of 385,000 last week, the labor department said on Thursday.Private sector employment increased by 978,000 jobs in May, according to ADP, the US’s largest payroll supplier. The figure was the strongest gain since the early days of the recovery. “Companies of all sizes experienced an uptick in job growth, reflecting the improving nature of the pandemic and economy,” said Nela Richardson, chief economist at ADP.More than half of adult Americans are now fully vaccinated and business is booming in many sectors as state and local governments ease restrictions. But employers across the country are reporting worker shortages as the recovery strengthens. The US Chamber of Commerce said this week that labor shortages now represent “the most critical and widespread challenge” to US businesses. Nearly half of small-business owners had unfilled job openings in May, according to a survey from the National Federation of Independent Business.Alongside evidence of strong growth, some economists are warning about the return of inflation. Prices on a broad range of goods from lumber to chicken have soared as demand has outstripped supply. In April a key inflation indicator – the personal consumption expenditures (PCE) price index – rose to 3.1% compared to last year, its highest level in 13 years. More

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      Biden proposes $6tn budget to boost infrastructure, education and climate

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      Joe Biden set out a $6tn budget proposal on Friday that, if passed, would fund a sweeping overhaul of US infrastructure and pour money into education and climate action, while driving government spending to its highest sustained levels since the second world war.The president’s first budget is largely a political document, and faces months of difficult negotiations in Congress where Republicans are already balking at the scale of his spending plans. But it clearly sets out Biden’s ambition to remake the US after the coronavirus pandemic.“Now is the time to build on the foundation that we’ve laid, to make bold investments in our families, in our communities, in our nation,” Biden told a crowd in Cleveland on Thursday. “We know from history that these kinds of investments raise both the floor and the ceiling of an economy for everybody.”Republicans immediately attacked the plan. Senator Mitch McConnell said it would “drown American families in debt, deficits, and inflation.”The White House has set out a two-part plan to overhaul the US economy by upgrading its infrastructure and expanding its social safety net. The costs of the programmes would lead to the US running annual deficits of over $1.3tn over the next decade and debt rising to 117% of the value of economic output by 2031.Alongside rebuilding bridges, roads, airports and other infrastructure, Biden has proposed a $13bn federal investment to roll out broadband internet access. Democrats are also pushing to expand and reform the US’s social programmes with government money for paid family leave and universal pre-school.In part the plan would be funded by tax increases on corporations and the very wealthy. Biden has already proposed increasing US corporation taxes to 28% from 21%, a plan opposed by all Republicans and some Democrats.Biden has said he is willing to negotiate with his political opponents on the shape and size of his proposals, but he will struggle to find Republican support for his agenda. No Republicans voted for his $1.9tn Covid stimulus bill and he has already been forced to scale back his infrastructure bill to $1.7tn from the originally proposed $2.2tn effort.The economy has improved markedly since Biden took office and the pandemic began to wane in the US. More than half of the country is now fully vaccinated and hiring has picked up as the economy has reopened.But the Biden administration believes the pandemic highlighted many structural issues with the US economy that need to be addressed by federal spending.Unemployment rates for Black and Latino Americans remain disproportionately high and women were hit particularly hard by the pandemic recession – in many cases because a lack of affordable childcare prevented them from working.A huge increase in government spending has fueled concerns about rising inflation. Prices on goods including lumber, cars and chicken have soared in recent months, and the commerce department said on Friday that the personal consumption expenditures index, a key measure of inflation, increased by 3.1% in April from a year ago, its highest level since 1992.On Thursday the treasury secretary, Janet Yellen, said the budget would push US debt above the size of the US economy, but said the proposed plan was responsible and would not contribute to inflationary pressures.“I believe it is a fiscally responsible program,” Yellen told a House appropriations subcommittee. More

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      in World Politics

      India Is Slowly Evolving Into a Market Economy

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      India has come a long way since its independence from colonial rule in 1947. It started as a mixed economy where elements of both capitalism and socialism coexisted uneasily. Jawaharlal Nehru, India’s first prime minister, was a self-declared Fabian socialist who admired the Soviet Union. His daughter, Indira Gandhi, amended the constitution in 1976 and declared India to be a socialist country. She nationalized banks, insurance companies, mines and more. 

      Gandhi tied Indian industry in chains. She imposed capacity constraints, price controls, foreign exchange control and red tape. India’s colonial-era bureaucracy now ran the commanding heights of the economy. Such measures stifled the Indian economy, created a black market and increased bureaucratic corruption. The Soviet-inspired Bureau of Industrial Costs and Prices remains infamous to this day.

      Expect an Uneven Rebound in MENA and Central Asia

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      India also adopted the Soviet five-year plans. A centralized economy emerged with the state controlling the media and telecom, financial, infrastructure and energy sectors. Even in seemingly private sectors such as consumer and industrial, the state handled too many aspects of investment, production and resource allocation.

      Opening Up the Economy

      In the 1980s, India took gentle strides toward a market economy and opened many sectors to private competition. In 1991, the Gulf War led to a spike in oil prices, causing a balance-of-payments crisis. In response, India rolled back the state and liberalized its economy. The collapse of the Soviet Union that year pushed India toward a more market-oriented economy. 

      Over the years, state-run monopolies have been decimated by private companies in industries such as aviation and telecoms. However, India still retains a strong legacy of socialism. The government remains a major participant in sectors such as energy and financial services.

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      After years of piecemeal reforms, the Indian government is again unleashing bolder measures. These involve the opening up of several state monopolies to private competition. They are diluting state ownership of public sector units. In some cases, they are selling these units to domestic or foreign buyers. In due course, professionals, not bureaucrats, will be running this sector.

      The government’s bold move to privatization is because of two reasons. First, India’s public sector has proved notoriously inefficient and been a burden on the taxpayer. Second, the COVID-19 pandemic has made the economy shrink and caused a shortfall in tax revenue. Privatization is a way for the government to balance its books.

      As Shwweta Punj, Anilesh S. Mahajan and M.G. Arun rightly point out in India Today, the country “will have to rethink how it sells” its public sector units for privatization to be a success. India’s track record is poor. The banana peels of political opposition, bureaucratic incompetence and judicial proceedings lie in waiting.

      Potential Benefits of Privatization

      Yet privatization, if managed well, could lead to several benefits. It will lead to more efficiently managed businesses and a more vibrant economy. Once a state-controlled firm is privatized, it could either be turned around by its new owner or perish. In case the company fails, it would create space for better players. Importantly, privatization could strengthen the government’s fiscal position, giving it greater freedom to invest in sectors like health care and education where the Indian government has historically underinvested. Furthermore, privatization could increase investable opportunities in both public and private markets.

      Given India’s fractious nature and labyrinthine institutions, privatization is likely to lead to mixed results and uneven progress. One thing is certain, though. Privatization is inevitable and cannot be rolled back. Sectors in which market forces reign supreme and shareholder interests are aligned are likely to do well. State-controlled companies that prioritize policy goals over shareholder value are unlikely to do so. Similarly, sectors that have experienced frequent policy changes are unlikely to thrive. 

      There is a reason why savvy investors are constructing portfolios weighted toward consumer and technology sectors. So far, companies in these sectors have operated largely free of state intervention. They have had the liberty to grow and function autonomously. Unsurprisingly, they have delivered good returns.

      The state-dominated financial services sector also offers promise. Well-managed private companies have a long runway to speed up on. Among large economies, India’s financial services sector offers unique promise. In the capitalist US, the state has limited presence and private players dominate. This mature market offers few prospects of high growth. In communist China, state-controlled firms dominate financial services, leaving little space for the private sector. With the Indian government planning to reduce its stake in a state-controlled life insurance company, as well as sell two state-owned banks and one general insurance company, the financial services sector arguably offers a uniquely important opportunity for investors.

      Just as India did well after its 1991 balance-of-payments crisis, the country may bounce back after the COVID-19 pandemic. The taxpayer may no longer need to subsidize underperforming state-owned companies holding the country back. Instead, market competition may attract investment, create jobs and increase growth.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      in World Politics

      Expect an Uneven Rebound in MENA and Central Asia

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      Projections, no matter how well-grounded in analytics, are a messy business. Three years ago, COVID-19 was unheard of and then-US President Donald Trump’s politics caused uncertainty in international relations, with democracy in retreat across the world. Despite the best-informed prognostications, predictions failed to capture cross-border variables such as immigration and civil conflict that have yet to play out in rearranging local and regional economic prospects.

      The COVID-19 Crisis Has Catalyzed Vision 2030

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      No region is more complex in terms of confusing signals than the Middle East and North Africa (MENA) and Central Asia. This is the subject of the latest report by the International Monetary Fund titled, “Regional Economic Outlook: Arising from the Pandemic: Building Forward Better.”

      What is clear from a review of the data is that 2020 was an outlier in terms of trend lines earlier in the decade, skewed by the COVID-19 pandemic, erosion of oil prices, diminished domestic economic activity, reduced remittances and other factors that have yet to be brought into an orderly predictive model. Even the IMF had to recalibrate its 2020 report upward for several countries based on rising oil exports, while decreasing marks were given countries slow to vaccinate against COVID-19 and that rely on service-oriented sectors.

      Mixed Outlook

      The numbers indicate a mixed picture, ranging from Oman growing at 7.2% and the West Bank at 6.9%, to Lebanon receiving no projection and Sudan at the bottom of the range with a 1.13% real GDP growth rate. Yet, so much can impact those numbers, from Oman’s heavy debt burden to continuing turmoil in intra-Palestinian and Palestinian-Israeli affairs.

      The good news is that real GDP is expected to grow by 4% in 2021, up from the projection last October of 3.2%. Much of the lift has come from two factors: a more optimistic trend line for the oil producers and the rate of vaccinations in countries that will promote business recovery.

      Embed from Getty Images

      As CNBC pointed out, Jihad Azour, director of the IMF’s Middle East and Central Asia department, noted that recovery will be “divergent between countries and uneven between different parts of the population.” Key variables include the extent of vaccine rollout, recovery of tourism and government policies to promote recovery and growth.

      In oil-producing countries, real GDP is projected to increase from 2.7% in 2021 to 3.8% in 2022, with a 5.8% rise in the region’s sector driven by Libya’s return to global markets. Conversely, non-oil producers saw their growth rate estimates reduced from 2.7% to 2.3%. In fact, Georgia, Jordan, Morocco and Tunisia, which are highly dependent on tourism, have been downgraded in light of continuing COVID-19 issues such as vaccination rollout and coverage.

      As the IMF report summary notes, “The outlook will vary significantly across countries, depending on the pandemic’s path, vaccine rollouts, underlying fragilities, exposure to tourism and contact-intensive sectors, and policy space and actions.” From Mauritania to Afghanistan, one can select data that supports or undercuts the projected growth rates. For example, in general, Central Asia countries as a group seem to be poised for stronger results than others. Meanwhile, Arab countries in the Gulf Cooperation Council face greater uncertainty, from resolving debt issues to unforeseen consequences of negotiations with Iran.

      So, how will these projects fare given a pending civil war in Afghanistan and the possible deterioration of oil prices and debt financing by countries such as Bahrain and Oman? Highlighting this latter concern, the report goes on to say that public “gross financing needs in most emerging markets in the region are expected to remain elevated in 2021-22, with downside risks in the event of tighter global financial conditions and/or if fiscal consolidation is delayed due to weaker-than-expected recovery.”

      An Opportunity

      Calling for greater regional and international cooperation to complement “strong domestic policies” focused on the need “to build forward better and accelerate the creation of more inclusive, resilient, sustainable, and green economies,” the IMF is calling on the countries to see a post-pandemic phase as an opportunity. This would involve implementing policies that promote recovery, sustain public health practices that focus on sustainable solutions, and balance “the need for debt sustainability and financial resilience.”

      There is great uncertainty assigning these projections without more conclusive data on the impact of the pandemic, the stress on public finance and credit available to the private sector, and overall economic recovery across borders that relies on factors such as the weather, oil demand, external political shocks and international monetary flows. The IMF report is a very helpful bellwether for setting parameters for ongoing analyses and discussions.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Markets fall as US consumer prices see sharpest monthly climb since 2008

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      US consumer prices soared in April as post-lockdown demand and shortages drove up the cost of a wide range of goods, from used cars and home furnishings to airline tickets.The news triggered a further slide in markets unsettled this week by the threat of rising prices, which could force central banks to abandon zero0-interest rate policies that have helped stoke share prices. The Dow Jones index fell 1.3% in early trading and the tech-heavy Nasdaq lost 2.5%.The Consumer Price Index (CPI) climbed 4.2% during the month from a year earlier, the labor department said, the biggest 12-month increase since September 2008, the height of the financial crisis. The figure was significantly higher than economists had predicted.CPI measures the prices consumers pay for goods and services, including clothes, groceries, restaurant meals, recreational activities and vehicles. This month’s rise saw increases across the board and was driven by many factors.The Biden administration’s economic stimulus package has pumped money into the economy just as it reopens from coronavirus lockdown measures. Fresh demand for goods and services has also outpaced supply, which is still recovering from the lockdowns at the start of the pandemic, leading to shortages for a broad range of goods from lumber and steel to ketchup.Used car and truck prices in particular have surged as a global shortage of microchips has dampened production of new vehicles. The price of a used car rose 10% over the month and topped $25,000 for the first time, about $2,800 higher than in April last year, according to the research firm JD Power.The figures are inflated by a collapse in prices last year as the US economy shut down, but they still caught economists by surprise. Economists surveyed by Bloomberg had expected a 3.6% increase in CPI over the year and a 0.2% increase from March. The monthly increase was 0.8%. The news led US stock markets to fall again after a sharp selloff on Tuesday.The Federal Reserve has predicted a spike in inflation in the wake of the coronavirus pandemic but has said it believes it will be short-lived. Last month Fed chair Jerome Powell said the central bank was watching price increases but was not yet concerned about inflation, arguing “one-time increases in prices are likely to only have transitory effects on inflation”.Others are more concerned. Former treasury secretary Larry Summers has warned the US could face a period of high inflation unseen since the 1970s. Talking to Bloomberg TV he said it was “plain wrong” to suggest that inflation cannot surge unexpectedly.“It may be that a way will be found to bring it under control,” he said. “But as I look at $3tn of stimulus, $2tn of savings overhang, a major acceleration coming from Covid in the rear-view mirror, rates expected by the Federal Reserve to be at zero for three years even in a booming economy, record growth this year, major expansion of the Fed balance sheet, and much new fiscal stimulus to come – I’m worried.”Investors too are now worried that the rise in prices will be higher and more sustained than the central bank believes, and that in order to contain the price surge the Fed may have to increase interest rates sooner than expected from the near zero level it set in March last year as the pandemic struck.“April inflation data far exceeded market expectations,” the Economist Intelligence Unit wrote in a note to investors. “We had expected to see a big jump in year-on-year inflation in April, given the comparison to the depth of the recession in April 2020. However, the month-on-month increase in prices, coming on top of a 0.6% monthly increase in March, was surprisingly strong.”“We do not expect this increase to be replicated again in May, but this will still be enough to lift inflation expectations for the full-year 2021,” the Economist Intelligence Unit wrote. More

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      AstraZeneca’s boss is a boardroom superstar but a potential £2m cherry is pushing the point

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      A majority is a majority, but a rebellion of 40% against an executive pay policy is too large to be pinned solely on those brain-dead fund managers who outsource their thinking to proxy voting agencies.At AstraZeneca some serious institutions, with Aviva Investors and Standard Life Aberdeen to the fore, clearly thought the company was pushing things too far by adding a potential £2m cherry on top of their chief executive, Pascal Soriot’s, already substantial pay package. The rebels had a point.Yes, Soriot is a boardroom superstar thanks to AstraZeneca’s success in supercharging the development and production of the Oxford University vaccine for no profit. Communication with regulators went awry at times, and Soriot himself obviously wasn’t getting his hands dirty in the labs. But the boss, even when operating from Australia, is doing an excellent job of standing up to irritating and ungrateful EU commissioners, which is also part of the pandemic operation. And, amid it all, the company didn’t miss a beat on its day job and had time to spend $39bn buying the rare disease specialist Alexion, which looks a promising deal.Yet exceptional effort in an exceptional year is roughly what one expects from a chief executive on Soriot’s pay package. In the last three years, his incentives have performed wonderfully and he has earned £13m, £15m and £15m, so is firmly established in the £1m-a-month category, which very few chief executives of FTSE 100 companies can say. Even for an international hero, it feels a decent whack.The company’s claim was that “the world drastically changed in the last 12 months, and so did AstraZeneca”, and thus adjustments should be made outside the normal three-yearly cycle for tweaking pay.That argument would have felt stronger if AstraZeneca was not already at the adventurous end by UK standards. Last year, Soriot earned 197 times the median pay among his workforce. And, critically, the new arrangement will take his variable pay – annual bonus plus long-term incentives – to 900% of his £1.33m salary. A few years ago 500% was regarded as high by FTSE 100 standards.That precedent-setting detail helps to explain why the rebellion was so strong. Those fund managers who care about controlling boardroom pay inflation saw the risk of knock-on effects elsewhere. Loyalty to Soriot probably swayed a few doubters and helped AstraZeneca prevail, but the company did not need to pick a fight at this time – it gave Soriot a chunky rise a year ago.Some real pay shockers (think Cineworld) have slipped through in recent months. If the wider message in the AstraZeneca vote is that fund managers are not all asleep, that would be no bad thing.Seatbelts on for more stock market turbulenceLast Friday investors preferred to see a silver lining in a weak set of US unemployment numbers – only 266,000 jobs created in the month of April, against forecasts of 1m. If a lack of new jobs implied no inflationary wage pressures in the US economy, at least the stock market could take a few days off from worrying about rises in interest rates, ran the theory.Inflationary pressures, though, come in many forms, and here is a piece of data that spooked the stock market on Tuesday: China’s producer prices index rose at an annual rate of 6.8% in April, up from 4.4% in March.That is the highest level for three years and a sign, probably, that the boom in prices of raw copper, iron ore and other raw materials is finally feeding through to goods. The FTSE 100 index fell 175 points, or 2.5%, following other stock markets down.The benign view says a flurry of higher prices is almost to be expected as the global economy reopens. In that case, central banks’ mistake would be to move too early and choke off recovery. Yet it is clearly also possible that we could be at the start of a big move on prices, with the next leg delivered by the Biden’s administration’s huge infrastructure programme. If so, the mistake would be to delay rate rises.Do not expect quick or clear answers. Inflation data can give mixed messages for months. Do, though, anticipate more bumpy days for stock markets. Investors’ default assumption is to assume the US Federal Reserve will play nicely and look through the short-term signals. Life could quickly get ugly if there is any deviation from that assumed path. More

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      Yellen seeks to tamp down concern over US government spending under Biden

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      The US treasury secretary, Janet Yellen, on Sunday sought to tamp down concerns that Joe Biden’s plans on infrastructure, jobs and families will cause inflation, saying spending will be phased in over a decade.“It’s spread out quite evenly over eight to 10 years,” the former chair of the Federal Reserve told NBC’s Meet the Press.She said the Fed would monitor inflation carefully.“I don’t believe that inflation will be an issue but if it becomes an issue, we have tools to address it,” Yellen said. “These are historic investments that we need to make our economy productive and fair.”Addressing Congress on Wednesday, Biden said his “American Jobs Plan is a blue collar blueprint to build America. That’s what it is.”He has said his plans will be paid for by a series of tax increases on the wealthiest Americans, less than 1% of the population, and by raising corporate taxes. Some Democrats have expressed concerns such increases will slow economic growth.“We’re proposing changes to the corporate tax system that would close loopholes,” Yellen said.“This comes also in the context of global negotiations to try to stop the decades-long race to the bottom among countries in competing for business by lowering their corporate tax rates. And we feel that will be successful.The president has pledged that no family earning under $400,000 will pay a penny more in taxes“The president has pledged that no family earning under $400,000 will pay a penny more in taxes. And we’ve been assiduous in sticking to that pledge.”Republicans oppose corporate tax increases. The Louisiana senator Bill Cassidy told Fox News Sunday: “Academics would say if you raise taxes on corporations, you have lower wages, you have less investment, and you hurt shareholders. Think pension funds.“Now, if it’s OK to have lower wages for working people, it’s a blue collar thing. If it’s OK to have less investment, it’s a blue collar thing. But if you want higher wages, if you want more investment, if you want more efficient deployment of capital, than it’s anti-blue collar.”Speaking to CBS’s Face the Nation, the White House chief of staff, Ron Klain, countered Cassidy’s claims.Corporations, he said, “got that giant tax cut in 2017 [under Donald Trump]. What we’re talking about is just rolling some of that tax cut back. So we’re talking about putting the rate back up to 28%. It was 35% before that tax cut came. So corporates would still have a lower tax rate than the rate they had prior to 2017.“We think that 2017 tax cut didn’t meet its promise. You didn’t see massive investments in [research and development], you didn’t see wages go up. What you saw was CEO pay go up … So we think we can raise those taxes on corporations and fund the things that make the economy grow. Bridges, roads, airports, rail.”Republicans also oppose the scope of Biden’s infrastructure proposals, contending priorities such as expanding green energy, electric cars and elder and child care should not be pursued.“The administration needs to kind of be honest with the American people,” Cassidy said. “If you really want roads and bridges, come where Republicans already are. If you want to … do a lot of other stuff, well that’s a different story. Roads and bridges, we’re a lot closer than you might think.”Yellen would not speculate on whether Biden would accept a bill from Congress that does not include a way to pay for the spending increases he wants.“He has made clear that he believes that permanent increase in spending should be paid for and I agree,” she said. More