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Power Up: New Moody's report concludes infrastructure bills are key to nation's economic growth

with Tobi Raji

Good Wednesday morning. The Milwaukee Bucks' 50-year wait for an NBA title ends. This is the Power Up newsletter and if you don't think Giannis is the GOAT, feel free to unsubscribe.  

On the Hill

🚨FIRST IN POWER UP🚨: Moody's Analytics chief economist, Mark Zandi, is releasing a new report today that could make the case for passing both the bipartisan infrastructure framework and the $3.5 trillion reconciliation package outlined and agreed to last week by Democrats on the Senate Budget Committee. 

Zandi's new report, which Senate Majority Leader Charles E. Schumer (D-N.Y.) is expected to hand out to Senate Democrats and discuss publicly, according to a person familiar with his plans, also concludes that the GOP fearmongering over the pair of bills impact on inflation is “overdone.

Bottom line: The report says that much of the additional fiscal support being considered is designed to lift the economy’s longer-term growth potential and ease inflation pressures.” 

  • Key: “Greater investments in public infrastruc­ture and social programs will lift productivity and labor force growth, and the attention on climate change will help forestall its increas­ingly corrosive economic effects,” Zandi concludes. Moreover, the policies being considered would direct the benefits of the stronger growth to lower-in­come Americans and address the long-run­ning skewing of the income and wealth distribution. Passage of legislation is far from certain but failing to pass legislation would certainly diminish the economy’s prospects.”

More from Zandi: He argues that concerns about inflation cannot be dismissed but “it is likely misplaced.”

  • With unemployment still near 6% and labor force participation well below where it was pre-pandemic, the economy still has considerable slack, equal to approximately 10 percentage points of GDP. But the bipartisan infrastructure deal and reconciliation package will deliver less than a percentage point of GDP growth in 2022 and closer to 2 percentage points of GDP growth each year from 2023 to 2025. Given the fiscal support still in train, mostly from the [American Rescue Plan], this would be just enough to provide the added GDP needed to get the economy back to full employment. Moreover, much of the additional fiscal support being considered is designed to lift the economy’s longer-term growth potential and ease inflation pres­sures.”
  • The legislation is more-or-less paid for on a dynamic basis through higher taxes on multinational corporations and the well-to-do and a range of other pay-fors. Worries that the plan will ignite undesirably high inflation and an overheating economy are overdone.”
  • Another benefit, according to Zandi: “The reconciliation package also helps address the wide and growing disparity in the nation’s income and wealth distribution. 

The context: Zandi's report comes as Republicans are seeking to blame Democrats and the Biden administration ahead of the 2022 midterm elections for the rapid rise of consumer prices as the economy has reopened. Internal polling conducted by the National Republican Senatorial Committee and provided to Power Up show that 25 percent of independent voters agree with the statement that the increase in inflation is due to Joe Biden's economic policies. 

  • “Republicans have started referring to 'Bidenflation' on the campaign trail, and GOP lawmakers are getting theatrical with their attacks,” The Hill's Julia Manchester and Sylvan Lane report.
  • “We will have several more months of rapid inflation,” Treasury Secretary Janet Yellen told CNBC's Sara Eisen in an interview last week. “So I’m not saying that this is a one-month phenomenon. But I think over the medium term, we’ll see inflation decline back toward normal levels. But, of course, we have to keep a careful eye on it.”

Happening today: “A bipartisan Senate deal to improve the nation’s infrastructure again appeared in political peril Tuesday as Republican negotiators demanded a delay on an upcoming vote on the proposal until next week,” our Tony Romm, Mike DeBonis and Seung Min Kim report

  • “With Senate Majority Leader Charles E. Schumer (D-N.Y.) refusing to bend, GOP senators indicated that they plan to oppose a vote to begin debate on the deal they helped craft. In a closed-door lunch Tuesday afternoon, Senate Republicans came to a consensus that they could not support advancing a package that had yet to be finalized, although negotiators have insisted for days that they are close to putting the finishing touches on the agreement, according an attendee.”

“All of this would be bog-standard congressional sausage-making if the issue at hand were just the contents of an infrastructure package,” the New York Times’ Maggie Astor writes. “Instead, it has basically become a referendum on the concept of bipartisanship.”

  • “The success of most of Biden’s agenda depends on either getting 10 Republicans on board or getting rid of the filibuster, a measure that centrist Democrats like Sens. Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona have refused to do.”
  • “And if they can’t manage that on a bill that Republicans helped negotiate, then — well, we don’t know what then.”

Introducing … Schumer’s gamble. “The moment speaks to the unprecedented level of difficulty Schumer faces in managing a 50-50 Senate,” Politico’s Burgess Everett and Marianne Levine write.

  • “He’s now the majority leader who’s done so for the longest period in U.S. history; the last 50-50 Senate fell apart after fewer than six months, with the late Sen. Jim Jeffords (R-Vt.) handing Democrats a majority after feuding with former president George W. Bush over economic policy.”
  • “There are no signals that Schumer’s majority is in similar jeopardy, given how close he keeps Manchin and other moderates. But he’s unlikely to reach his goal of uniting his members around the $3.5 trillion spending blueprint by” today.

The policies

GET VACCINATED: “A growing number of top Republicans are urging GOP supporters to get vaccinated as the delta coronavirus variant surges across the United States, marking a notable shift away from the anti-vaccine conspiracy theorizing that has gripped much of the party in opposition to the Biden administration’s efforts to combat the virus,” Marianna Sotomayor, Mike DeBonis and I report

Senate Minority Leader Mitch McConnell (R-Ky.) was part of the rising chorus on Tuesday, stressing the need for unvaccinated Americans to receive coronavirus shots and warning that the country could reverse its progress in moving on from the pandemic.”

  • “These shots need to get in everybody’s arm as rapidly as possible, or we’re going to be back in a situation in the fall that we don’t yearn for, that we went through last year,” McConnell said during his weekly news conference. “I want to encourage everybody to do that and to ignore all of these other voices that are giving demonstrably bad advice.”
  • Another notable voice: “…Rep. Steve Scalise of Louisiana, the No. 2 Republican in House leadership, who received his first dose of the Pfizer vaccine over the weekend and urged others to follow suit. Scalise had long resisted vaccination, claiming protection from antibodies and saying earlier this year that he wanted to ensure his constituents had a chance to be vaccinated first.”
  • “I just felt the time was right to do it,” he said. “I’m happy that I got the vaccine, and I’ve always had high confidence in the process that was used to develop it.”
  • And on the airwaves, some Fox News hosts who have helped amplify skepticism about the vaccines’ efficacy and slammed the idea of vaccination mandates by businesses are now pushing their viewers to get vaccinated immediately.”

More to come: “In light of the delta variant’s potency, the GOP Doctors Caucus — Republican members of Congress with medical and health-care provider backgrounds — plan to recirculate a pair of public service announcements encouraging voters to get vaccinated that members in the Senate and the House recorded earlier this year, according to a person familiar with the plans. More outreach is likely to come soon, Republicans said.” 

  • By the numbers: A new survey from the Annenberg Public Policy Center found that “after months of attacks on Fauci in conservative and social media, the survey found that people who said they rely on conservative and very conservative media rather than other sources were more likely to have less confidence in Fauci’s trustworthiness on Covid-19 and more likely to accept misinformation about him and misinformation and conspiracy theories about the authorized Covid-19 vaccines and the novel coronavirus.” 

The White House has also been quietly trying to fix the Fox News problem: “Because of its popularity among Republicans, the White House has attempted some outreach to Fox News over the last several months, though it's unclear how successful the administration has been,” CNN's Kaitlan Collins and Brian Stelter report. 

  • “A source familiar with the talks told CNN that there have been regular conversations between the White House and Fox News regarding the network's coverage of the pandemic and the vaccines.” 

In the media

📚WHAT WE’RE READING: In part two of Tobi’s interview with Carol Leonnig and Philip Rucker about their latest book, “I Alone Can Fix It: Donald J. Trump’s Catastrophic Final Year,” our Post colleagues explain how former president Donald Trump’s dichotomous view of loyalty and betrayal colored his presidency.

  • “The characteristics of Trump’s leadership — chaos, bluster, bullying, cruelty — have been evident since even before he became president,” Rucker told Power Up. “But our reporting for this book shows that his tool kit was woefully inadequate in navigating a real crisis, the coronavirus pandemic. Trump’s management style was downright deadly.”
  • “He put his personal and political gain above American lives without a thought or a moment of concern,” Leonnig told Power Up. “He was impervious to being educated by those who were experts, as if inconvenient truths that didn’t benefit him bounced off him.”
  • “Trump was unable to accept information that conflicted with what he wanted to do and how he wanted to see this world,” Leonnig said. “This personality trait is incredibly dangerous for a world leader.”

Trump “silenced good information from being used to make decisions for the benefit of the country. For example, even in the late fall of 2020, when more than 200,000 Americans had died of covid, he seemed genuinely surprised when his Health secretary told him that masks were proven effective in slowing the transmission of the disease.”

  • What readers can expect from “I Alone Can Fix It,” per Leonnig: “In richly-detailed scenes, we show a president who doesn’t even pretend to feel for the public he is leading — unless they vow to support him on election day.”

In the latest excerpt, per People Magazine’s Sam Gillette and Virginia Chamlee, Leonnig and Rucker detail Rep. Liz Cheney’s (Wyo.) explosive confrontation with Rep. Jim Jordan (Ohio) on Jan. 6. 

  • “When hundreds of angry Trump supporters attacked the U.S. Capitol on Jan. 6 after being incited by the president, Cheney was inside with other members of Congress, including Jordan.”
  • “Jordan — who had supported Trump’s false claims that the 2020 election was stolen — offered to help Cheney out of the aisle.”

“She wasn’t having it.”

  • “‘That f---ing guy Jim Jordan. That son of a b----,’ Cheney told Chairman of the Joint Chiefs Gen. Mark Milley on the phone, detailing the siege.”
  • “‘While these maniacs are going through the place, I’m standing in the aisle and he said, ‘We need to get the ladies away from the aisle. Let me help you,’ recalled Cheney, then the House of Representatives’ No. 3 Republican, per the book.”
  • “‘I smacked his hand away and told him, ‘Get away from me. You f---ing did this.’”

Outside the Beltway

MINE WORKERS ARE ON STRIKE IN ALABAMA … WHERE’S CABLE NEWS? “Union mine workers in Alabama are taking part in a historic strike, the first of its kind in four decades, accusing Warrior Met Coal of first exploiting its workers and now inspiring violence against them on the picket line,” Media Matters’ Mia Gingerich reports.

  • “Freelance journalists are on the ground and local news has been covering the story from the start — yet more than three months into the strike, the historic labor action has not received so much as a single mention from CNN, Fox News, or MSNBC, according to a new analysis from Media Matters.”

Context: “The origins of the strike lie in the 2016 takeover of a failing coal company by newcomer Warrior Met, leading to profits for the buyer alongside lower pay and loss of benefits for the workers.”

  • “The miners in Tuscaloosa County, Ala., who were caught up in the acquisition faced dramatic pay cuts and reportedly weaker safety measures for what is often ranked one of the nation’s most dangerous professions, leading to multiple charges of unfair labor practices levied against Warrior Met.”
  • “The miners said they were promised wages would increase with profits, so when management this year failed to restore pay and benefits during contract renegotiations with the workers, the United Mine Workers of America called a strike.”
  • “On July 10, the strike passed its 100-day mark. Two days earlier, the wife of a striking miner was struck by a vehicle, and the union claims the violence was perpetrated by individuals working for the company.”

What we’re watching: “The miners have announced they will return to New York City to picket Warrior Met’s investors again on July 28.”

Viral

TRUMP’S VERY BAD, HORRIBLE DAY: “Tom Brady visited the White House Tuesday to celebrate the Tampa Bay Buccaneers winning the Super Bowl, where he joked around with Biden at Trump’s expense,” the Intelligencer’s Jonathan Chait writes

“It was a scene straight out of a Trump nightmare, and quite possibly the worst day of Trump’s life.”

  • “To grasp why such an anodyne scene would produce such a wounding effect on a man who has endured misfortunes such as bankruptcy, losing a presidential election, two impeachments, and innumerable legal setbacks, one needs to understand his peculiar psychology.”

Here is Trump’s hierarchy of needs, per Chait:

  • “To be treated as a winner.”
  • “To pal around with celebrities.”
  • “To not be laughed at.”
  • “To gain the specific approval of Tom Brady.” 😬
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