with Brent D. Griffiths

For a preview of economic policymaking in a second Trump term, consider the process playing out on Capitol Hill right now.

President Trump has all but dealt himself out of leading the latest emergency response for the pandemic-ravaged economy. Instead, he has handed off to deputies a set of priorities — a payroll tax cut and funding for a new FBI headquarters — that Senate Republicans roundly dismissed. He went a step further Tuesday evening, undercutting the package GOP leaders are struggling to assemble as “semi-irrelevant” and noting he opposes elements of it.

In the absence of presidential command, Senate Republicans are sniping at each other, their leadership, and their bill itself. More than 20 million Americans relying on federal unemployment benefits now hang in limbo as Republicans debate what to do about that expiring program. But that and other staples of the federal bailout have become proxy fights among the next generation of aspiring GOP leaders over the party’s direction.

Trump has offered no indication he will take a more hands-on approach if reelected.

Indeed, with less than 100 days to until Election Day, he has yet to detail an economic vision for a second term. In interviews over the last month, the president has botched friendly questions from Fox News’s Sean Hannity and Sinclair's Eric Bolling on his agenda, failing to name any policy objectives. Hannity gave him a do-over earlier this month that didn’t go much better. Here was the beginning of the president’s answer:

First of all, we're going to defeat the invisible enemy. And that's — and we are well on our way, and, again, as I told you, the mortality rate is tenfold down.

We are going to rebuild the economy. We're going to bring back jobs from all of these foreign lands that have stolen our jobs on horrible trade deals. We are going to continue to make great trade deals. We're going to finish rebuilding our wall.

We're going to finish. We're going to have that. It's going to be almost complete by the end of this year. Shortly thereafter, it's finished. It's made a tremendous difference. You see, we're doing record numbers on the border. Very few people are able to get through. We are rebuilding with our military. We have rebuilt the military, $2.5 trillion. We are fixing up the VA for our vets. What — the job we have done there, between Choice and Accountability. We have Choice, where they have — they can go out and get a doctor if they are sick.

They don't have to wait for five weeks, six weeks, two weeks. So we are doing great with the vets. And the vets are loving Trump.

Trump went on to tick through other priorities: protecting the Second Amendment; confirming more judges, including to the Supreme Court (“The next president is going to be able to pick two or three or one or whatever,” he said); lowering drug prices; and “choice in school, so a parent can take their child to a school of their choice.”

When I asked the campaign for more details, Trump deputy national press secretary Ken Farnaso turned the question around on former vice president Joe Biden. “During President Trump’s first term, his unwavering leadership and successful economic policies built an American renaissance and the strongest economy in the world,” Farnaso said in an email. “On Election Day, Americans will get to decide between capitalism and socialism and make no mistake, Joe Biden’s progressive agenda will unravel the very fabric of our free society plunging us towards a path of no return.” 

Veteran Republican strategists say Trump needs to do more. 

“A presidential campaign is a job interview, and it’s hard to argue you deserve a job if you can’t make a positive, compelling case what you’ll do with it,” said Michael Steel, a top aide to then-House Speaker John Boehner (R-Ohio) and 2016 presidential candidate Jeb Bush. “The American people deserve a choice of two futures and President Trump, frankly, isn’t offering one.”

Stephen Myrow, a top Treasury official in the George W. Bush administration, called the pandemic a “moment that requires a strong governing agenda from a White House that has a game plan” and deep ties to its own party on the Hill. He argues Trump has neither and is demonstrating in real time his inability to rally GOP lawmakers to a cause. “That’s something you can expect in a second term,” he says.

Myrow now works as managing director for Beacon Policy Advisors, a policy research firm. He says Trump has been so vague about his specific second-term intentions, it has been impossible to assemble an analysis of his plans. Considering the unlikelihood of Republicans recapturing control of the House, Trump will be facing what for him would be at best a divided Congress. That will incentivize him to do more through executive action, Myrow says, but “anything he’s doing right now is for the sole purpose of reelection. You don’t know what he’d do afterwards."

Speaking on July 9, presumptive Democratic presidential nominee Joe Biden contrasted his economic plan with President Trump’s work while in office. (The Washington Post)
Biden’s specificity provides a stark contrast.

The presumptive Democratic nominee has spelled out his agenda in what by comparison registers as wonky granularity. He tied a ribbon on his economic blueprint in a Tuesday speech outlining the fourth and final installment of his “Build Back Better” recovery plan. The last piece of the proposal advocates spending tens of billions of dollars to address economic inequality among people of color.

“The plan calls for dedicating $30 billion of previously proposed spending on a small-business opportunity fund for black, brown and Native American entrepreneurs,” Maura Ewing and Sean Sullivan report. “Biden also proposed tripling the goal for federal contracting with small disadvantaged businesses, from 5 percent to at least 15 percent of all spending on materials and services by 2025… The former vice president said he wants [Trump] and Congress to create an emergency housing support program, along with promoting a refundable tax credit of up to $15,000 to help families purchase their first homes.”

In the planks of the agenda Biden has already rolled out, he described plans to spend $700 billion “on U.S. products and research to jump-start the domestic economy; eliminate carbon pollution from power plants by 2035 and spend $2  trillion to spur the clean-energy economy; and invest $775  billion on helping to care for young and old Americans through universal preschool and other initiatives,” Maura and Sean write.

The presumptive Democratic nominee has also laid out a proposal that would raise $4 trillion in taxes over a decade, mostly by rolling back Trump’s tax cuts for top earners and corporations. And earlier this month, a joint group of Biden allies and those of Sen. Bernie Sanders (I-Vt.) — formed to sew up divisions between the party’s establishment and leftist wings — presented policy recommendations. They ranged from how to impose tougher rules on the financial sector to undoing Trump’s immigration crackdowns.

On July 28, presumptive Democratic presidential nominee Joe Biden announced his plans to assist minority communities economically. (The Washington Post)
Biden and his team are determining how much they could fit into his first day in office. 

“Executive orders would be signed, thick pieces of proposed legislation sent to Congress, phone calls placed to foreign leaders, international agreements reentered. New ethics guidelines would be instituted for the White House and new inspectors general would take up oversight positions,” Matt Viser reports this morning. 

As the former vice president “hones his list of what to tackle on his first day were he to win the White House, he has pledged a portfolio of actions that would impact a wide and diverse array of American life. Biden representatives already have held preliminary discussions with top House and Senate Democrats about what to prioritize, according to campaign and congressional aides."

More on the federal pandemic response

Senate Majority Leader Mitch McConnell (R-Ky.) on July 28 said the next coronavirus relief package will only receive a vote if it includes liability protection. (The Washington Post)
Top Republican says Senate may need to pass stand-alone extension of jobless benefits. 

The acknowledgment came as Republicans continued to struggle to find common ground: McConnell "disavowed a key Trump administration priority in the bill — funding for a new FBI headquarters — while the second-ranking GOP senator suggested that Congress might be unable to make a deal in time to avert the expiration of emergency unemployment benefits on Friday,” Erica Werner, Seung Min Kim and Jeff Stein report.

“Sen. John Thune (R-S.D.) said Congress might have to pass a stand-alone extension of the unemployment benefits, a piecemeal approach that administration officials have floated but that Senate Republican leaders had avoided publicly embracing before now … If the wheels were not entirely off Tuesday, negotiations were not off to a great start. Democratic leaders accused McConnell of not wanting a deal at all, while one Republican senator called the new GOP bill ‘a mess.’”

  • McConnell conceded his conference's division: “I think it’s a statement of the obvious, that I have members who are all over the lot on this,” he told reporters. “There are some members who think we’ve already done enough, other members who think we need to do more. This is a complicated problem.”

Sen. Ben Sasse (R-Neb.) went after Treasury Secretary Steven Mnuchin in a blistering statement:

More on where the talks stand:
  • The $2 trillion gap remains: Democrats want to spend three times more than the $1 trillion in the GOP package, and they support continuing the $600 weekly enhanced unemployment insurance benefits that expire days from now.”
  • Different sides on a liability shield: “That is no way to negotiate, particularly when his provision is so extreme. … It’s a radical change of all liability law,” Senate Minority Leader Charles E. Schumer said of McConnell's “red line” after he and House Speaker Nancy Pelosi (D-Calif.) met with Mnuchin and White House Chief of Staff Mark Meadows for their second day of talks.
  • Sen. Mitt Romney pitches a new approach to pandemic unemployment: Romney (R-Utah) suggested a more gradual phasing-out of expanded unemployment benefits than what is outlined in the GOP bill, proposing that the benefits scale down by $200 every 30 days for three months rather than being cut overnight by two-thirds."
  • One GOP senator criticized the inclusion of another round of $1,200 checks: "The vast majority of direct payments went to people who did not have any lost income, and we’re going to do that again except on a bigger scale,” Sen. Patrick J. Toomey (R-Pa.) said.
Fed extends several of its lending programs through the end of the year.

Some lending facilities were set to expire near the end of September: “'The three-month extension will facilitate planning by potential facility participants and provide certainty that the facilities will continue to be available to help the economy recover,' the Fed said,” Reuters's Lindsay Dunsmuir reports.

“The U.S. central bank said the extensions apply to the Primary Dealer Credit Facility, Money Market Mutual Fund Liquidity Facility, Primary Market Corporate Credit Facility, Secondary Market Corporate Credit Facility, Term Asset-Backed Securities Loan Facility, Paycheck Protection Program Liquidity Facility, and Main Street Lending Program. All are designed to keep credit flowing to businesses and households and stave off long-term harm to the economy."

Coronavirus fallout

More from the U.S.:
  • Cases on rise in the Midwest as they ebb in the Sun Belt: “Anthony S. Fauci, the nation’s leading infectious-disease expert, warned that positive coronavirus tests were rising in Ohio, Indiana, Tennessee and Kentucky as the number of new cases is showing signs of leveling off in Florida, Texas, Arizona and California,” Carol Morello reports.
  • Trump continues to defend doctor who blames illnesses on ‘demon sperm’: “Just over a week after he began a rebooted effort, driven by rising infection rates and sinking poll numbers, to talk about the virus in terms more in line with medical consensus, Trump was again making unfounded claims and defending discredited medical experts,” the New York Times's Michael Crowley reports of a news briefing that quickly went off the rails. More on the demon warning doctor here.
  • California could create its own $600 unemployment benefit. State lawmakers “are weighing whether to provide a supplemental unemployment benefit with the extra $600 per week provided by the federal government expiring this month,” the Los Angeles Times's Patrick McGreevy reports. The money would “be borrowed from a federal trust fund that has already been covering the state’s costs of paying unemployment benefits to millions of Californians who lost jobs after the state ordered residents to stay home in March to stop the spread of the virus.”
  • SBA watchdog finds pervasive fraud in disaster loans. The agency's inspector general reports it has identified "$250 million in taxpayer-subsidized coronavirus loan funds given to ‘potentially ineligible recipients,’ pointing to a strong likelihood of widespread fraud in an important but troubled economic assistance program,” Aaron Gregg reports. The watchdog launched the probe into the Economic Injury Disaster Loans program after receiving more than 1,000 complaints about it. It is separate from the Paycheck Protection Program. 
  • The U.S. completely botched mask wearing for months: “The mask is the simplest and among the most effective weapons against the coronavirus in the public health arsenal. Yet from the start, America’s relationship with face coverings has been deeply fraught. Faulty guidance from health authorities, a cultural aversion to masks and a deeply polarized politics have all contributed. So has a president who resisted role modeling the benefits of face coverings, and who belittled those who did,” Griff Witte, Ariana Eunjung Cha and Josh Dawsey report.
From the corporate front:
  • Pfizer foresees lasting demand for the coronavirus vaccine: “Mass vaccinations across the globe could be needed into 2022 and booster shots may be needed annually or every few years if the new coronavirus becomes a seasonal or long-term health concern, company executives said,” the Wall Street Journal's Matt Grossman reports.
  • MLB's struggles cast shadow over reopenings: “One after another this week, more than a dozen Miami Marlins players and coaches tested positive for the coronavirus, leaving Major League Baseball scrambling to quell an outbreak just days after its reopening experiment began,” Brady Dennis and Chelsea Janes report. “After all, if pro sports teams — with their relatively limited number of participants, robust testing and detailed safety protocols — couldn’t evade the virus, what hope is there for students returning to classrooms or workers returning to offices?”
  • McDonald's global sales suffered amid shutdowns: “Total sales sank 30 percent in the second quarter compared to a year ago, McDonald's announced … falling to $3.77 billion. Net income plummeted 68 percent to $483.8 million,” CNN's Jordan Valinsky reports. Despite the slump, Chief Financial Officer Kevin Ozan said the fast-food giant expects U.S. sales to grow in July after losses narrowed in May and June.
  • 3M misses profit targets: “3M is the world’s biggest producer of N95 respirator masks and has seen sales surge as governments fought over supplies of protective equipment for healthcare and other essential workers,” Reuters's Rachit Vats reports. But demand for its wide range of other business and industrial products has declined. Shares in the company dropped about 5.3 percent.
  • Harley-Davidson was hammered, too: “The company has not posted retail sales growth in the United States, its biggest market, in the past 14 quarters,” Reuters's Rajesh Kumar Singh reports. “The pandemic has exacerbated its challenges. In the latest quarter, U.S. retail sales plunged 27 percent year-on-year, the steepest fall in at least six years.”
  • Remington files for bankruptcy as gun sales soar: “Founded in 1816, the privately held maker of rifles, pistols, shotguns and ammunition listed assets of $100 million to $500 million, according to its filing in U.S. Bankruptcy Court in the Northern District of Alabama. It put its liabilities in the same range, and said it had from 1,000 to 5,000 creditors,” Jacob Bogage reports.
  • Kodak shifts into drug production: “Eastman Kodak Co. has won a $765 million government loan under the Defense Production Act, the first of its kind. The purpose: to help expedite domestic production of drugs that can treat a variety of medical conditions and loosen the U.S. reliance on foreign sources,” the WSJ's Rachael Levy reports.
Around the world:
  • Vietnam's outbreak is spreading: “Coronavirus cases have been detected in Vietnam’s two biggest cities Hanoi and Ho Chi Minh City and in the country’s central highlands coffee belt, due largely to increased domestic travel, state television reported …,” Reuters's Phuong Nguyen reports.
  • Venice is still planning its renowned film festival for September: “The event, which typically draws an A-list audience, will run over 10 days, with many of the screenings taking place outdoors. Social distancing will be required. Due to travel restrictions, it is unclear if many American actors or directors will attend in person, Deadline reported,” Antonia Farzan writes.

Money on the Hill

Tech CEOs offer prebuttals before historic hearing.

The executives will try to extol the public's love of their brands: Amazon chief executive Jeff Bezos cited the e-commerce company’s ‘customer obsession’ for fueling its business success as he attempts to counter congressional antitrust concerns a day ahead of a House hearing probing the power of tech giants,” Jay Greene and Elizabeth Dwoskin report.

“Bezos will swear an oath and appear at the hearing alongside Facebook’s Mark Zuckerberg, Apple’s Tim Cook and Google’s Sundar Pichai. Lawmakers are examining the clout of the tech behemoths that represent a nearly $5 trillion slice of the U.S. economy. Other tech executives’ planned testimony also surfaced [last night].” You can read Bezos's full remarks here. (Bezos also owns the Washington Post.)

The hearing starts at noon Eastern: Our Post colleagues will have live coverage starting at 11:30 a.m. and continuing after the hearing, which you can watch here. (Bonus: You can set a reminder to watch through that link).

What the other three will say:

  • Zuckerberg plans to emphasize Facebook's value in connecting people and businesses: “He is also expected to emphasize that Facebook’s success has been grounded in the American values of democratic expression and competition, and compare that with the approach taken by China as a rising tech power.” (His full remarks are here.)
  • Pinchai will talk about how people love Google's free tools: Google products such as Search and Maps are free for everyone, he noted, and the company invests billions of dollars in research and development every year. He pointed to Amazon’s Alexa and Twitter’s news feed as competitors to Google Search, one of the areas the committee is probing.” (His full remarks are here.)
  • Cook will say that Apple does indeed have rivals and people can take their money elsewhere: Cook tried to set Apple apart by highlighting the company’s focus on privacy and security. And he said Apple created the app store in part to help ‘creators large and small to not only bring their ideas to life, but to reach millions of users and build a successful business in the process.’” (His full remarks are here.)  

Market movers

Dow drops 200 points as Big Tech falters.

This is the busiest week of the corporate earnings season: “The Dow Jones Industrial Average closed 205.49 points lower, or 0.8 percent, at 26,379.28. The Nasdaq Composite dropped 1.3 percent to 10,402.09 and the S&P 500 dipped 0.6 percent to close at 3,218.44,” CNBC's Fred Imbert and Maggie Fitzgerald report.

“Shares of Amazon slipped 1.8 percent and Netflix declined by 1.4 percent. Alphabet shares fell 1.7 percent. Facebook shares dipped 1.5 percent and Apple closed 1.6 percent lower … Stocks that would benefit from an economic reopening rose. United and American Airlines gained more than 3 percent each. Delta advanced 1.7 percent. Carnival closed 4.2 percent higher and Norwegian Cruise Line jumped 6.3 percent.”

Goldman warns about the dollar's status as reserve currency: “Goldman strategists cautioned that U.S. policy is triggering currency ‘debasement fears’ that could end the dollar’s reign as the dominant force in global foreign-exchange markets,” Bloomberg News's John Ainger and Liz McCormick report.

“While that view is clearly still a minority one in most financial circles -- and the Goldman analysts don’t say they believe it will necessarily happen -- it captures a nervous vibe that has infiltrated the market this month: Investors worried that this money-printing will trigger inflation in years ahead have been bailing out of the dollar and piling furiously into gold.” 

Pocket change

Mackenzie Scott gives Howard its largest-ever donation from a single donor.

Scott pledged last year to donate a majority of her wealth: The author and philanthropist “announced $1.7 billion in donations, including $40 million to Howard University — the largest gift from a single donor in the school’s 153-year history,” Lauren Lumpkin reports.

“The eight-figure gift to Howard will allow the historically black university to graduate students on time, complete infrastructure projects, retain faculty and develop programs for innovation and entrepreneurship, said Wayne A.I. Frederick, the university’s president.”

Facebook offers money to reel in TikTok creators: “Facebook Inc.’s Instagram has offered financial incentives to TikTok users with millions of followers to persuade them to use a new competing service, an escalation in a high-stakes showdown between the two social-media giants,” WSJ's Euirim Choi reports.

“Instagram has made lucrative offers to some of TikTok’s most popular creators to use the new service, Reels … Facebook is planning to unveil Reels next month. The potential payments for some would be in the hundreds of thousands of dollars …"

Chart topper

Via Columbia University economist Adam Tooze:

Daybook

Today:

  • Fed Chair Jerome Powell holds a press conference at the end of the central bank's meeting
  • Boeing, Anthem, Deutsche Bank, Cheesecake Factory, GlaxoSmithKline, O'Reilly Automotive, Six Flags, Spotify, Blue Apron and Yum China are among the notable companies reporting their earnings

Thursday:

  • The Bureau of Economic Analysis releases an estimate for U.S. GDP in Q2
  • The Labor Department releases weekly jobless claims
  • Amazon, Apple, Alphabet, Ford, United Parcel Services, Yum! Brands, United States Steel, Gilead Sciences, Kellogg, Anheuser-Busch InBev, ConocoPhillips, Comcast, Kraft Heinz, Eli Lilly, Grubhub, MGM Resorts International are among the notable companies reporting their earnings

Friday:

  • U.S. consumer spending for June is released
  • Merck & Co., Caterpillar, Under Armour, AbbVie, Chevron, Fiat Chrysler, Exxon Mobil, Tiffany & Co. and Pintrest are among the notable companies reporting their earnings

The funnies

Bull session