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      Roosevelt plots route out of economic depression – archive, 11 March 1933

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      New York, March 10While plans are being hurried on to permit the reopening of solvent banks by Monday, Mr Roosevelt today asked Congress for authority to make drastic economies in the cost of government in order to balance the Budget and restore public confidence. Pointing out that the accumulated deficit would soon be $5,000,000,000 (about $1,000,000,000 at par), he asked for power to reduce ex-soldiers’ payments and also government salaries and expenses. It is known that he hopes to save about $614,000,000 in this way, of which $279,000,000 come from the veterans, $135,000,000 from federal salaries, and $200,000,000 from reorganisation and elimination of governmental offices.In a special message to Congress he says that if powers are granted to him “within a year the income of the government will be sufficient to cover expenditure.”The reduction of federal salaries, including previous cuts, will total not more than 15 per cent. The reductions of ex-soldiers allowances will cut off disability payments except for those actually disabled while serving.Reserve backs reopen to-dayLate last night Mr Roosevelt issued an order extending the federal bank holiday until further notice. Meanwhile the Secretary of the Treasury invited solvent banks to apply individually for permission to reopen. State banks must apply to the State authorities, but it is safe to assume that few of them can reopen until they receive Federal aid, which will only be forthcoming if they join the Federal Reserve system. The gold embargo will of course, continue even after the banks reopen.The twelve central Federal Reserve banks will reopen tomorrow.All important life insurance companies with headquarters in New York state have suspended making loans or paying cash-surrender values on policies. In a public statement, however, they say their liquid resources amount to 50 per cent and are larger than their liabilities under their actual insurance and annuity obligations.Work for unemployedMr Roosevelt to-morrow will ask Congress for a $500,000,000 bond issue for a vast programme of public works. The plan involves putting 500,000 unemployed men into a “peacetime army,” where they will receive food and $1 a day while engaged in afforestation and similar work projects. More

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      Biden hails 'giant step' as Senate passes $1.9tn coronavirus relief bill

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      Joe Biden hailed “one more giant step forward on delivering on that promise that help is on the way”, after Democrats took a critical step towards a first major legislative victory since assuming control of Congress and the White House, with a party-line vote in the Senate to approve a $1.9tn coronavirus relief bill.After a marathon voting session through the night on Friday and into Saturday afternoon, Democrats overcame unified Republican opposition to approve the sweeping stimulus package. The final tally was 50-49, with one Republican senator absent.One of the largest emergency aid packages in US history now returns to the House for final approval before being signed into law by Biden. Nancy Pelosi, the House speaker, has said she expects to approve the measure before 14 March, when tens of millions of Americans risk losing unemployment benefits if no action is taken.The House majority leader, Steny Hoyer, said the Senate version of the American Rescue Plan would be considered “on Tuesday … so that we can send this bill to President Biden for his signature early next week”.Biden and Democrats will look to move on to other priorities, including voting rights reform and an ambitious infrastructure package.The bill aimed at combating the Covid-19 pandemic and reviving the US economy will provide direct payments of up to $1,400 to most Americans; extend federal unemployment benefits; rush money to state, local and tribal governments; and allot significant funding to vaccine distribution and testing.Republicans attacked the bill as a “liberal wishlist” mismatched with an improving economic and public health outlook as more are vaccinated and infections plateau.“Our country is already set for a roaring recovery,” said Mitch McConnell, the Senate minority leader, on Friday, citing a jobs report that showed 379,000 jobs added in February. “Democrats inherited a tide that was already turning.”But Democrats and the White House were quick to push back, pointing to more than 9 million Americans out of work and millions more struggling to pay for rent and food.On Saturday, with Vice-President Kamala Harris looking on, Biden spoke to reporters at the White House.“I want to thank all of the senators who worked so hard to do the right thing for the American people during this crisis and voting to pass the American rescue plan,” he said. “It obviously wasn’t easy, wasn’t always pretty, but it was so desperately needed. Urgently needed.”Biden has been criticised for not holding a press conference since taking office. On Saturday he attempted to leave without taking questions. To shouted questions, he avoided direct criticism of Senator Joe Manchin of West Virginia or Republicans.The marathon “vote-a-rama” session on amendments that preceded the final vote featured the longest vote in Senate history, just shy of 12 hours, on Friday, as Democrats scrambled to strike a deal with Manchin, a moderate who mounted a last-minute push to scale back unemployment benefits.Bowing to Manchin, a compromise kept benefits at $300 a week instead of $400, as proposed by Biden and approved by the House. However, the benefits will be extended until October rather than August, and Democrats added a provision to provide up to $10,200 in tax relief for unemployed Americans.Speaking to reporters on Saturday, the Senate majority leader, Chuck Schumer, repeatedly hailed his caucus and deflected invitations to criticise Manchin, the target of anger among House progressives.“People have new differences all the time,” he said, when asked why Manchin had not levelled his demand earlier, adding: “Unity, unity, unity. That’s how we got this done.”Schumer was asked if another bill might be needed.“It’s a very strong bill,” he said, “part of it will depend on Covid. How long will it last, will there be a new strain.”Experts have warned of a potential fourth surge as variants emerge and predominantly Republican states reopen their economies and abandon basic public health measures.“Part of it will depend on the economy,” said Schumer. “It has some underlying weaknesses that need bolstering. How deep and weak are those. Our No 1 lodestar is going to be helping the American people and if they need more help, we’ll do another bill. If this bill is sufficient, and I think it’s going to help in a big way, then we won’t.”At the White House, Biden praised Schumer: “When the country needed you most you lead, Chuck, and you delivered.”Despite deep political polarization and staunch Republican opposition, the legislation has broad public appeal. A poll by Monmouth University found that 62% of Americans approve of the stimulus package, including more than three in 10 Republicans.In tweets on Saturday, former president Barack Obama said: “Elections matter … this is the kind of progress that’s possible when we elect leaders across government who are devoted to making people’s lives better.”Yet the endeavor tested the fragile alliance between progressives and moderates as Democrats attempt to wield their power with only the barest control of Congress.Early on Friday, the Senate rejected a proposal by the Vermont senator Bernie Sanders to include a $15-an-hour minimum wage increase, a top liberal priority and a key plank of Biden’s economic agenda. The Senate parliamentarian had deemed the provision inadmissible under the rules of a special budget process Democrats are using to bypass Republican opposition.Despite widespread public support for raising the federal minimum wage, Democrats remain divided. On Friday, eight joined Republicans in blocking the amendment, which would have required 60 votes to pass.“Let me be very clear: we are not giving up on this,” Sanders said. “We are going to come back with vote after vote. And one way or the other we are going to pass a $15 minimum wage. That is what the American people want and that is what the American people need.”The approval of the bill in the Senate came after hours upon hours of voting on a torrent of amendments, most offered by Republicans with the goal of forcing Democrats to take a position on measures designed to be politically troublesome.Proceedings had already been much delayed on Thursday, when the Republican Ron Johnson, of Wisconsin, forced Senate clerks to read the 628-page bill in its entirety – a task that took nearly 11 hours.At the White House, Biden quoted Sanders as he hailed the bill as “progressive” and delivered a familiar appeal for national – and party – unity, if with a shot at his predecessor, Donald Trump.“When I was elected,” Biden said, “I said we’re going to get the government out of the business of battling on Twitter and back in the business of delivering for the American people, of making a difference in their lives, giving everyone a fighting chance, of showing the American people that their government can work for them, and passing the American Rescue Plan, we’ll do that.“You know it may sound strange but … I really want to thank the American people … quite frankly, without the overwhelming bipartisan support of the American people this would not have happened.“… Every public opinion poll shows that people want this, they believe it is needed. And they believe it’s urgent.” More

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      Biden's FDR moment? President in New Deal-like push that could cement his legacy

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      Joe Biden came to power promising a New Deal-like economic agenda that would not only combat the Covid-19 pandemic, which has now claimed more than half a million lives in the US and caused unemployment not seen since the Great Depression, but also confront the deep-rooted disparities it has exposed.After a blitz of executive orders in the opening days of his presidency, Biden is on the verge of achieving the first major piece of his multi-pronged relief and recovery plan, a $1.9tn coronavirus stimulus package expected to reach his desk by the end of next week.But the partisan tightrope Biden has walked to advance the sweeping pandemic relief bill – which enjoys broad public support – likely foreshadows even greater challenges that lie ahead as he pivots from “rescue” mode to his next and possibly biggest legislative act: a multi-trillion dollar plan to rebuild the country’s ailing infrastructure.“The American Rescue Plan is largely about relief – for the millions of people unemployed, for distributing vaccines, for opening schools safely,” said Virginia congressman Don Beyers, the Democratic vice-chairman of the joint economic committee.“This next bill can be almost completely characterized as investment in the future.”Even more so than the stimulus plan, a wide-ranging jobs and infrastructure bill would weigh the president’s desire for bipartisanship against his promise to enact progressive economic policies that could forge his legacy. With the barest of majorities in Congress, Biden has little room for error if he hopes to succeed in a policy quest that bedeviled his predecessors.In theory, infrastructure is an area where Democrats and Republicans can find common ground. Fixing bridges, roads and broadband networks has long unified Americans and elected leaders. Yet there is little bipartisan agreement over the size and scale of such a package.“He wants to move as quickly as possible,” Peter DeFazio, an Oregon Democrat and the chairman of the House transportation and infrastructure committee, said after a bipartisan meeting with Biden on Thursday. “He wants it to be very big and he feels that this is the key to the recovery package.”Emerging from the same meeting, Missouri congressman Sam Graves, the top Republican on the transportation committee, tempered expectations of a deal.“A highway bill cannot grow into a multi-trillion dollar catch-all bill, or it will lose Republican support,” he warned in a statement. “Republicans won’t support another Green New Deal disguising itself as a transportation bill.”During his presidential campaign, Biden cast the infrastructure effort as an economic road map to create jobs and revitalize industry, saying it would be the “largest mobilization of public investment since” the second world war.As proposed, his “Build Back Better” infrastructure plan would spend trillions of dollars to make the US economy more sustainable, more equitable and more competitive, particularly with China, with ambitious investment in public transportation, sustainable housing, electric vehicles and upgrading the power grid to be carbon pollution-free by 2035. Funded by a mix of tax increases on corporations and the wealthy, his agenda promises to create millions of union jobs and direct significant resources to communities of color disproportionately affected by the consequences of climate change.As talks intensify between the White House and Congress, progressives and environmental groups are contemplating even bigger proposals, pointing to the recent crisis in Texas that left millions without water and electricity during a severe winter storm, as a reason to act urgently – and unilaterally, if necessary. Some moderate Democrats are angling for a more cautious, bipartisan approach, while Republicans and business groups are setting conditions for their cooperation, as fights brew over how to pay.The White House has said it is premature to talk about the shape of an infrastructure package, at least until Congress passes the relief bill. But this week, House Speaker Nancy Pelosi said Democrats were already proceeding with the “recovery” part of Biden’s agenda.“Its’ an exciting time,” she said.Haunted by the slow-paced recovery that followed the financial collapse of 2008, when the Obama administration enacted a slimmed-down stimulus package amid fears of inflation and Republican objections to rising national debt, only to suffer major defeats in midterm elections, Democrats are eager to act boldly while they have unified control of Congress.“If you have an opportunity to go big, go big,” Beyer said. “You’re going to pay a political cost one way or the other, so you might as well get as much as you possibly can when you get the opportunity to do it.”Sean McElwee, co-founder and head of the progressive polling firm, Data for Progress, said it was good policy and good politics to pursue an ambitious economic agenda. Voters prioritize results over bipartisanship, he said, arguing that Democrats could defy political history in the 2022 congressional midterms if they act boldly on the economy.“Joe Biden understands that Democrats will be judged in 2022 by how he has handled the economy and the pandemic,” McElwee said, citing broad public support for the president’s relief plan and the enduring appeal of infrastructure spending. “The political benefits of going small just aren’t there any more.”Biden has held several high-profile meetings to build support for a bipartisan package, including with top officials, labor leaders and lawmakers involved in drafting infrastructure legislation.Ahead of his meeting with lawmakers on Thursday, Biden said the group, which included transportation secretary Pete Buttigieg, planned to discuss “what we’re going to do to make sure we, once again, lead the world across the board on infrastructure”.After spending decades in the Senate and eight years as vice-president to Barack Obama, Biden is plainly aware of the complex matrix of political and ideological considerations that have felled previous attempts to pass a major infrastructure bill.Yet since the onset of the pandemic, and the ensuing economic crisis, Biden has embraced a far more aspirational agenda that intentionally echoes the vision of Franklin Roosevelt, whose New Deal programs helped lift the country out of the Great Depression and transformed the role of government in American life.Despite his reputation for compromise and preference for bipartisanship, Biden largely rejected appeals from Republicans to dramatically shrink his $1.9tn stimulus package, which includes $1,400 payments to tens of millions of families, extended unemployment benefits as well as tens of billions of dollars for vaccine distribution and coronavirus testing.In pitching his relief plan, Biden has insisted that now is time to “go big,” and that the greater risk is doing too little, not too much. But as he looks beyond the immediate crisis, it remains unclear how the president will choose to proceed with the rest of his agenda.Progressives, largely encouraged by the opening weeks of his presidency, are now pressuring Biden to adopt the same go-it-alone approach for the rest of his agenda. Attempting to forge a consensus with Republicans, they warn, would almost certainly result in a bill that falls short of his campaign promises to address the deep-seated, structural inequalities in the economy exacerbated by the pandemic.“I think Biden understands that there is a real opportunity here to deliver lasting, legacy-defining improvements to America that otherwise would never get done,” said Faiz Shakir, who was the campaign manager for Bernie Sanders’ 2020 presidential run. “He wanted an FDR-modeled presidency and this would be a huge, huge investment in working people on a scale that we have not seen since FDR.”The urgency of the pandemic has helped fuse public opinion – and a factious Democratic caucus – around the need for a massive stimulus bill. But spending trillions more on infrastructure with initiatives that reach far beyond the present emergency is a different battle entirely, said Bill Galston, a senior fellow at the Brookings Institution.Biden campaigned on his plans to control the pandemic – and a promise to end hyper-partisanship in Washington. A plan that achieves neither goal could risk a “huge political backlash” beginning with the midterms next year, Galston said.“History is full of administrations who came to power, over-read their mandate and then went too far and evoked a reaction,” he said. More

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      House set to approve $1.9tn Covid aid bill despite minimum wage setback

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      The US House of Representatives is aiming to pass Joe Biden’s $1.9tn coronavirus aid bill on Friday in what would be his first big legislative win, although marred by the news that a favored minimum wage hike would have to be tossed out.A spirited and potentially long debate was expected, as most Republicans oppose the cost of the bill that would pay for vaccines and other medical supplies to battle a Covid-19 pandemic that has killed more than 500,000 Americans and thrown millions out of work.The measure would also send a new round of emergency financial aid to households, small businesses and state and local governments.A group of Senate Republicans had offered Biden a slimmed-down alternative, but the White House and some economists insist a big package is needed.Biden has focused his first weeks in office on tackling the greatest public health crisis in a century, which has upended most aspects of American life.Democrats control the House by a 221-211 margin, and Speaker Nancy Pelosi is counting on nearly all of her rank and file to get the bill passed before sending it to a 50-50 Senate, where the Democratic vice-president, Kamala Harris, holds the tie-breaking vote.Embedded in the House bill is a federal minimum wage increase, which would be the first since 2009 and would gradually bump it up to $15 an hour in 2025 from the current $7.25 rate.But the future of the wage hike was dealt a serious blow on Thursday, when the Senate parliamentarian ruled that it could not be allowed in the Senate version of the coronavirus bill under that chamber’s “reconciliation” rules.The special rules allow the legislation to advance in the Senate with a simple majority of the 100 senators, instead of the 60 needed for most legislation.Biden has not given up on raising the minimum wage to $15, a top White House economic adviser said on Friday.A higher wage “is the right thing to do”, White House national economic council director, Brian Deese, said in an interview on MSNBC.“We’re going to consult with our congressional allies, congressional leaders today to talk about a path forward, about how we can make progress urgently on what is an urgent issue.”Meanwhile, lawmakers must also act on the coronavirus stimulus package, Deese said.The $15 minimum wage figure had already faced opposition in the Senate from most Republicans and at least two Democrats, which would have been enough to sink the plan. An array of senators are talking about a smaller increase, in the range of $10 to $12 an hour.In a statement after the Senate parliamentarian’s ruling, Pelosi said: “House Democrats believe that the minimum wage hike is necessary.”She said it would stay in the House version of the coronavirus bill.In arguing for passage of the relief bill, Pelosi cited opinion polls indicating the support of a significant majority of Americans who have been battered by the yearlong pandemic.“It’s about putting vaccinations in the arm, money in the pocket, children in the schools, workers in their jobs,” Pelosi told reporters on Thursday. “It’s what this country needs.“Among the big-ticket items in the bill are $1,400 direct payments to individuals, a $400-per-week federal unemployment benefit through 29 August and help for those having difficulties paying their rent and home mortgages during the pandemic.An array of business interests also have weighed in behind Biden’s America Rescue Plan Act, as the bill is called.Republicans have criticized the legislation as a “liberal wishlist giveaway” that fails to dedicate enough money to reopening schools that have been partially operating with “virtual” learning during the pandemic.The House minority leader, Kevin McCarthy, complained it was “too costly, too corrupt”. While Republicans for months have blocked a new round of aid to state and local governments, McCarthy said he was open to his home state of California getting some of the bill’s $350bn in funding, despite a one-time $15bn budget surplus.Efforts to craft a bipartisan coronavirus aid bill fizzled early on, shortly after Biden was sworn in as president on 20 January, following a series of bipartisan bills enacted in 2020 that totaled around $4tn. More

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      'Hopefully it makes history': Fight for $15 closes in on mighty win for US workers

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      Fear was the overwhelming emotion Alvin Major felt when, on a chilly November morning in 2012, he went on strike at the Brooklyn KFC where he worked.
      “Everybody was scared,” said Major. He may have been fearful, but what Major didn’t know was that he was about to make American history – an early leader in a labor movement that some historians now see as the most successful in the US in 50 years.
      Major was paid just $7.25 an hour as a cook at KFC, but the consequences of losing his job were dire, as his family was already struggling to make the next month’s rent. “Everybody was scared about going back to work,” he said. “Nobody visualized what this movement would come to.”
      The New York strike by hundreds of majority Black and brown New York fast-food workers was, at the time, the largest in US history – but it would be dwarfed by what was to come. Two years later, strikes had spread across America, and fast-food workers in 33 countries across six continents had joined a growing global movement for better pay and stronger rights on the job.
      In eight years, what became the Fight for $15 movement has grown into an international organization that has successfully fought for a rise in minimum wage in states across the US, redefined the political agenda in the US, and acted as a springboard for other movements, including Black Lives Matter. It now stands perilously close to winning one of the biggest worker-led rights victories in decades.
      Embed map
      This Tuesday, fast-food workers will walk out again, hoping to push through a change that will affect tens of millions of American workers.
      For Major, now 55, it all began in a hall in Brooklyn, where union and community activists had convened a meeting of fast-food workers to see what pressure they could bring on an industry notorious for its low wages and poor conditions, and a state that had shown those workers little interest.
      With a platform to speak, the workers talked about “how you had to be on food stamps, get rent assistance, all these kinds of things, and we’re working for these companies that are making billions”, said Major.
      At one point, a worker showed the burns on his arm he had suffered at work. In a show of solidarity, workers across the room others rolled up their sleeves to show their scars too. Even when injured on the job, workers said, they were too scared to take time off.
      This was not how Major imagined America to be when he moved to the US from Guyana in 2000. “In our family, with 14 kids, my dad’s wife never worked a day. My dad used to work, he took care of us, we had a roof over our head, we went to school, we had meals every day, he had his own transportation.”
      In America, “the greatest, most powerful and richest country in the history of the world”, he found “[that] you have to work, your wife has to work, when your kids reach an age they have to work – and still you could barely make it”.
      Industry lobbying allied to Republican and – until relatively recently – Democratic opposition has locked the US’s minimum wage at $7.25 since the last raise in 2009. Now a raise to $15 looks set to be included in Joe Biden’s $1.9tn Covid relief package – although it will still face fierce opposition.
      Even Biden, who campaigned on the raise, has expressed doubt about whether it can pass. But more progressive Democrats including longtime champion Senator Bernie Sanders are determined to push it through, and it remains in the House Covid relief bill.

      Rep. Pramila Jayapal
      (@RepJayapal)
      I’m thrilled to announce that after working with leadership, we’ve secured a $15 minimum wage in the House’s COVID relief bill!This provision would lift nearly 1 million people out of poverty. It’s long overdue that Congress enacts a minimum wage that is a living wage.

      February 8, 2021

      The stakes are huge. The Congressional Budget Office said this week that 27 million Americans would be affected by the increase, and that 900,000 would be lifted out of poverty at a time when low-wage workers – and especially people of color – have suffered most during the pandemic. The CBO also said the increase would lead to 1.4m job losses and increase the federal budget deficit by $54bn over the next 10 years.
      Other economists have disputed the CBO’s job-loss predictions – the Economic Policy Institute called them “wrong, and inappropriately inflated”. The long-running debate about the real cost of raising the minimum age will no doubt continue. What is certain is that Biden will face enormous political blowback if his campaign promise to raise the minimum wage falls so early in his presidency – a promise that during his campaign he argued was central to his plans to address racial inequality.
      That backlash will also cross party lines – at least outside Washington. The US may be as politically divided as it has been since the civil war, but polling shows the majority of Americans support increasing the minimum wage no matter their chosen party. In November 60% of voters approved a ballot initiative to increase the minimum wage to $15 by 2026 even as they voted to re-elect Donald Trump.
      More people voted for that ballot initiative than voted for either presidential candidate in the state. With Florida, seven states plus the District of Columbia have now pledged to increase their minimum wage to $15 or higher, according to the National Employment Law Project (Nelp) and a record 74, cities, counties and states will raise their minimum wages in 2021.
      The movement, and this widespread support, has changed the political landscape, pushing Democratic politicians, including Biden, Hillary Clinton and the New York governor, Andrew Cuomo, to back a $15 minimum wage, against their earlier qualms.
      Cuomo called a $13 minimum wage a “non-starter” in February 2015. By July, he was racing California to get it into law.
      In the 2016 Democratic presidential primaries, Clinton went from supporting a raise to $12 an hour to $15 as Sanders made ground on the issue. Even Saturday Night Live parodied the pair arguing about who was most for a $15 higher wage.

      [embedded content]

      Big companies including Amazon, Target and Disney have all moved to $15, or pledged to do so. One of Biden’s first executive orders called for federal contractors to pay employees a $15 minimum wage. The federal holdout would be the movement’s biggest win to date, but there is little arguing that they have made significant progress without it – not least for Alvin Major, who now has a union job earning over $17 an hour working at JFK airport and who says he is no longer worried about his bills.
      For Mary Kay Henry, president of the Service Employees International Union (SEIU), this is “the David and Goliath story of our time”. She puts the public support down to the “pervasiveness of underpaid, low-wage work”.
      “Every family in America knows somebody that’s trying to make ends meet through a minimum-wage job. And the pandemic has revealed that essential work in a way that many people hadn’t noticed before, and they now understand how grocery store clerks, nursing home workers, janitors, airport workers, security officers, delivery drivers [and] fast-food workers are all people trying to do the very best job they can, and provide for their families.”
      The SEIU has been a longtime funder and supporter of Fight For $15 and for Henry, the first woman to lead the SEIU, the fight for a higher minimum wage is just the beginning of a greater push for workers’ rights – not least the right to join unions, in a service sector where women and people of color make up a disproportionate number of workers.
      “Eighty per cent of our economy is driven by consumer spending. Service and care jobs are the dominant sectors in the US economy, and we have to create the ability of those workers to join together in unions in this century, just like auto, rubber and steel were the foundation in the last century,” she said.
      “If the US Congress can’t see what the American people are demanding, in terms of ‘Respect us, protect us, pay us’, then they’re going to have a political price to pay in 2022,” she added. “Our nation’s leaders need to get this done. Congress has used its rules to pass trillions of dollars in tax cuts for billionaires and massive corporations, so now it’s time for our nation’s leaders to give tens of millions of essential workers a raise.”
      Backing Henry will be a younger generation of activists who cut their teeth in the Fight for $15 movement and have used it as a springboard into a political debate that is now centered around racial and economic justice. One of those leaders is Rasheen Aldridge, one of the first to take action when the Fight for $15 spread to St Louis, who was elected to Missouri state assembly last November.
      Aldridge was working at a Jimmy John’s restaurant in 2013 when he was approached by a community organizer asking him about his pay and conditions. Aldridge had recently been humiliated by a manager who took pictures of him and a co-worker holding signs they were forced to make, saying they had made sandwiches incorrectly and had been 15 seconds late with a drive-through order. “It was so dehumanizing and just a complete embarrassment,” said Aldridge.
      The organizer talked about the strikes in New York, Chicago and elsewhere, and suggested the same could happen in conservative Missouri. More

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      The Guardian view on Covid relief: ideologies matter in democracies | Editorial

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      When Covid struck, it was governments that decided people could not go to work and governments that took people’s money away. It is now down to governments to decide whether or not to return that money and when to open up the economy. In the US, Democrats want to give generously. While $1.9tn dollars is a lot of money – about the size of Canada’s GDP – it probably is not enough.As Randall Wray of the Levy Institute has pointed out, the US government is engaged in relief, not stimulus, spending. It is offering much-needed assistance to the devastated balance sheets of households, school districts and local governments. Rescuing public services, making sure people don’t starve and building Covid-testing systems is not an economic stimulus but a necessary antidepressant. Reducing the size of the relief package would prolong the recession, which, given the virus’s capacity to surprise, may last longer than the experts predict. President Joe Biden was right to rebuff criticism that Democrats risked overheating the economy, saying the problem was spending too little, not too much. There is slack in the US economy: 400,000 Americans left the labour market in January.Mr Biden aims to control the virus and then create jobs with infrastructure investments to reinvent the post-crisis economy for a zero-carbon world. Call it a spend-then-tax policy. If he succeeds, Mr Biden will go some way to repudiate the conventional economic wisdom that argues that if governments keep borrowing too much, they risk defaulting, will end up printing money and be forced in a panic to put up interest rates. The pandemic revealed this to be bunk. Central banks can keep interest rates low by buying government bonds with money created from thin air. Last year, they bought 75% of all public debt.Within days of assuming power, Mr Biden had a plan, and new thinking, to rebuild a Covid-scarred country. Boris Johnson has little to show after months. His government intends to cut universal credit, raise council tax bills and freeze public-sector pay, weakening household finances. Given this mindset, which has dominated policy since 2010, it is hardly surprising that the £900bn of Bank of England “quantitative easing” money sitting with banks can’t find profits in the real economy. The Bank has “knowledge gaps” about QE. Yet there is truth in the quote attributed to Keynes that “you can’t push on a string” – when demand is weak, monetary policy can do little about it.With interest rates low, no recovery to invest in and no new regulations, UK banks will turn inwards, not outwards. Instead of the City contributing to the productive economy and a just green transition, expect speculation and Ponzi-like balance sheets. It is lobbying to expand lucrative but socially useless activities. In January, Tory peers with City interests argued for a new finance regulator with a “competitiveness” objective – a Trojan horse for deregulation.Central banks are creatures of their legislatures, but have been permitted, for ideological reasons, to work without a social contract. In her recent paper, Revolution Without Revolutionaries, the economist Daniela Gabor warned that unelected technocrats must not be allowed to hand politicians reasons to adopt external constraints that can be blamed for unpopular policies. It is timely advice. The UK will have record peacetime levels of debt. Rishi Sunak says such borrowing is “unsustainable”. Yet UK gilts are a risk-free financial asset, which is why banks crave them.The inequality, financial instability and ecological crises have multiple causes, but their existence is built on radical, free-market economics. It is not the case that the government’s ability to spend is temporary while interest rates remain low, as Mr Sunak claimed. Bond-purchasing programmes can control yields. A system that benefits private finance but subordinates the state and threatens to expose it, post-pandemic, to austerity and elevated levels of unemployment must be resisted. Only those unable or unwilling to believe the evidence of their own eyes would say otherwise. More

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      US economy adds 49,000 jobs as Biden aims for further Covid relief

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      The US economy added back 49,000 jobs last month as coronavirus restrictions eased and fiscal stimulus from Washington goosed up the economy, the labor department announced on Friday.The unemployment rate dropped to 6.3%, down significantly from its pandemic high of 14.7% in April. While January’s figure marked a return to growth after job losses in December, the number was weak and big problems remain.On Thursday, the labor department said 779,000 people filed new unemployment claims last week, down from the week before but still close to four times pre-pandemic levels. The latest figures showed some 17.8 million Americans are still claiming unemployment benefits.In December the US lost 140,000 jobs as the latest wave of Covid-19 infections led to more shutdowns across the country and a slowdown in economic activity. That figure was revised to a loss of 227,000 jobs on Friday.Professional and business services (up 97,000 jobs) and local government (up 49,000) saw the largest gains over the month. The US is still losing huge numbers of jobs in leisure and hospitality (down 61,000) and retail (down 38,000) and the stark gap in racial unemployment rates remains.The unemployment rate for white Americans was 6% while for Black Americans it was 9.2% and for Latinos it was 8.6%.The jobs figure come as the Biden administration is trying to push through a $1.9tn stimulus package which would send $1,400 cheques to many Americans and provide fresh aid for struggling businesses. It would also increase the federal minimum wage from $7.25 to $15 – the first increase since 2009.The plan has widespread support from voters, with a Quinnipiac survey showing more than two-thirds of respondents in favor of the plan. But it has met with opposition from Republicans in Congress, who have balked at the size of the stimulus and proposed a far smaller package. Biden’s plan was approved in the Senate early Friday by a 51 to 50 vote, with the vice-president casting the tie-breaking vote, but still faces hurdles and is not expected to become law before mid March.The recovery in the jobs market may embolden opponents but some economists warned that the economic toll of the virus is far from over.Jason Reed, assistant chair of finance at the University of Notre Dame’s Mendoza College of Business, said: “We shouldn’t forget that the economy is still down about 10m jobs since the start of the pandemic. We aren’t anywhere close to where we were this time last year.“The rollout of the vaccine will surely help Americans get back to work, but we shouldn’t expect a return to normal until late 2021 or early 2022.” More

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      Kamala Harris uses casting vote to pass Covid relief budget resolution

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      The US Senate has passed a budget resolution that allows for the passage of Joe Biden’s $1.9tn (£1.4tn) Covid-19 relief package in the coming weeks without Republican support.
      The vice-president, Kamala Harris, broke a 50/50 tie by casting a vote in favour of the Democratic measure, which sends it to the House of Representatives for final approval. It marked the first time Harris, in her role as president of the Senate, cast a tie-breaking vote after being sworn in as the first female vice-president on 20 January.
      The House passed its own budget measure on Wednesday. Congress can now work to write a bill that can be passed by a simple majority in both houses, which are controlled by Democrats. Mid-March has been suggested as a likely date by which the measure could be passed, a point at which enhanced unemployment benefits will expire if Congress does not act.
      The vote came at 5.30am on Friday at the end of a marathon Senate debate session, known among senators as a “vote-a-rama”, a procedure whereby they can theoretically offer unlimited amendments.
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      Biden is scheduled to meet with Democratic House leaders and committee chairs early on Friday morning to discuss the Covid economic stimulus, and is expected to make public remarks on the progress at an 11.45am EST (1645 GMT) briefing.
      There was dissent from Republicans in the Senate overnight, particularly over plans for a $15 federal minimum wage. Iowa’s Republican senator, Joni Ernst, raised an amendment to “prohibit the increase of the federal minimum wage during a global pandemic”, which was carried by a voice vote.
      The Vermont senator Bernie Sanders said he still intended to support bringing the measure through: “We need to end the crisis of starvation wages in Iowa and around the United States.”
      He outlined plans to get a wage increase, phased in over five years, included in a budget reconciliation bill. The federal minimum wage is currently $7.25 an hour, and has not been raised since 2009.
      In a tweet after the vote, Sanders said: “Today, with the passage of this budget resolution to provide relief to our working families, we have the opportunity not only to address the pandemic and the economic collapse – we have the opportunity to give hope to the American people and restore faith in our government.”
      During the debate Senate minority leader Mitch McConnell said “This is not the time for trillions more dollars to make perpetual lockdowns and economic decline a little more palatable. Notwithstanding the actual needs, notwithstanding all the talk about bipartisan unity, Democrats in Congress are plowing ahead. They’re using this phony budget to set the table to ram through their $1.9 trillion rough draft.”
      The $1.9 trillion relief package proposed would be used to speed Covid-19 vaccines throughout the nation. Other funds would extend special unemployment benefits that will expire at the end of March and make direct payments to people to help them pay bills and stimulate the economy. Democrats also want to send money to state and local governments dealing with the worst health crisis in decades. More