The Washington PostDemocracy Dies in Darkness

Congress returns to battles over spending as inflation looms

Lawmakers look to finalize an economic package that Democrats hope will boost their election prospects

President Biden speaks at the White House about the Russian invasion of Ukraine. (Demetrius Freeman/The Washington Post)
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With inflation on the rise and coronavirus cases once again climbing, lawmakers are set to return to Washington this week and confront pitched fights over the financial and physical health of the country.

For Democratic leaders, the list includes a need to confirm a slate of nominees for the Federal Reserve, finalize about $10 billion in stalled pandemic aid and refashion the White House signature social spending initiative, which has been bogged down for more than a year.

Each of the debates promises to train attention on the vexing state of the economy. Unemployment is low, yet labor needs remain high. Wages have grown while prices are on a steep incline. National gauges for inflation alone reached their highest levels in four decades last month, a spike that left lawmakers hearing an earful from voters in their states and districts during the recess.

“They’re concerned about the rising costs of living, and that’s everything from the rising costs of gas to groceries,” said Rep. Stephanie Murphy (D-Fla.), adding that the shortages on store shelves in her Orange County district seemed reminiscent of hurricane season.

Much of the economic tumult stems from a pandemic that remains impossible to predict and the evolving aftermath of the Russian invasion of Ukraine. The dynamic nonetheless offers fertile ground for fresh political squabbles between Democrats and Republicans, just over six months before Americans head to the polls in the 2022 midterm elections.

“My sense is this is a make or break moment,” Sen. Chris Van Hollen (D-Md.) said about the fate of the Democratic spending agenda. “This will be the moment people have to look at each other, eyeball to eyeball, and make a determination of whether we’ll move forward.”

Prices rose more than 8 percent last month driven by energy costs

Setting the stage for the week, Democrats and Republicans took to the airwaves on Sunday, squaring off on competing news shows about the extent of inflation and the role Washington should play in combating it.

Appearing on CNN’s “State of the Union,” Sen. Elizabeth Warren (D-Mass.) stressed it “is the responsibility of Congress, of the president, to get out there and make the changes we need to make to bring down those prices for families.”

She accused Republicans of focusing their time on trying to “fight the culture wars,” even as she warned Democrats about the consequences if they fail to advance their own economic agenda. “If we don’t get up and deliver,” Warren said, “then I believe that Democrats are going to lose.”

Rep. Michael McCaul (R-Tex.), meanwhile, said rising prices will be a key driver for Republicans reclaiming the House in November. “I predict we’re going to get probably at least 40 seats because this president has been so unpopular when it comes to inflation” and other issues, McCaul said on “Fox News Sunday.”

For now, the immediate task in the Senate involves the future composition of the central bank. The chamber is set to vote as soon as this week on four nominees for the Federal Reserve: current Chair Jerome H. Powell, Davidson College professor Philip Jefferson, board governor Lael Brainard and Michigan State University professor Lisa Cook, who would become the first African American woman on the board.

All four nominees are expected to prevail, thanks to the tiebreaking majority held by Democrats. The process is likely to begin “starting Monday night,” said Sen. Sherrod Brown (D-Ohio), who leads the Banking Committee, adding that the exact timing would depend on “how much” Republicans try to slow down debate.

An earlier candidate, Sarah Bloom Raskin, withdrew her nomination amid opposition from Republicans and division among Democrats. Sen. Joe Manchin III (D-W.Va.), a moderate from coal country, had faulted Raskin in part because of her views that climate change threatens the financial system.

Still, the votes are likely to touch off another round of sparring over the White House economic policies and the Federal Reserve commitment to raising interest rates as a means of curtailing inflation. Manchin, for one, accused the central bank and the Biden administration this month of having “failed to act fast enough,” as he called for “more aggressive action by a Federal Reserve that waited too long to act.”

Federal Reserve nominees advance after one candidate withdraws

Republicans, meanwhile, are readying their own rhetorical barrage. While they support Powell and Jefferson, and lack the power to block Brainard and Cook, the upcoming votes offer an opportunity for them to swipe again at the Biden administration for the pace at which costs are rising.

“Inflation has risen steadily since the day Biden took office, and it’s taxing working families the hardest,” Sen. Tim Scott (R-S.C.), a member of the Banking Committee, said in a tweet Friday. “It seems like the very people Biden administration’s policies claim to help are paying the highest price.”

Along with the Federal Reserve, Senate Democrats also are scrambling to approve a roughly $10 billion package that would replenish key coronavirus aid programs. The measure passed the House but has remained stuck in the Senate, where partisan warfare continues to cut deeply into government efforts to provide Americans access to vaccines and treatments.

The stalemate stems from a political broadside in an unrelated fight over immigration. Republican lawmakers sharply disagree with recent White House plans to lift an order that had curtailed the ability of migrants to seek asylum in the United States.

In response, Senate Republicans sought to use the coronavirus aid as leverage. They thwarted swift passage of the money to try to force Senate Democrats to hold an uncomfortable vote on an amendment targeting the White House border policies. That essentially scuttled hopes in Congress to approve the pandemic relief package in the short time before they departed on their holiday recess.

Two weeks later, the fight is messier, as Democrats increasingly come to disagree with Biden themselves. Some of the dissenting voices, including Sens. Mark Kelly (Ariz.) and Raphael G. Warnock (Ga.), also count among the most vulnerable in the party ahead of the election.

In the meantime, the White House has sounded increasingly dire notes about the ability to respond to the pandemic, especially as case counts again trend upward.

Even the $10 billion compromise that lawmakers failed to approve marked a significant departure from the roughly $22 billion the administration initially sought, a request that Shalanda Young, director of the Office of Management and Budget, described at the time as a down payment for what the government ultimately would need. “We’re still banging the drums about the covid money,” White House press secretary Jen Psaki told reporters Wednesday.

Separately, a White House official added in a statement that the Biden administration “will be focused on working with lawmakers” to secure adoption of the pandemic aid as well as an additional tranche of funds to assist Ukraine. Biden previewed the request with reporters last week, noting that the intensifying conflict had cut deeply into the roughly $14 billion that Congress adopted in emergency support earlier this spring.

Some lawmakers have additional priorities on the agenda, including a bipartisan effort in the Senate to try to lower the price of insulin, which Senate Majority Leader Charles E. Schumer (D-N.Y.) previously pledged to bring to the floor in the weeks ahead.

Another crop of members is working on a measure to boost science and technology. The chamber is set to take its next steps on the bill, which includes about $50 billion to help produce more powerful computer chips in the United States, later this week. “The chip shortage is enough to tell you we need to start making investments in the United States to catch up,” said Sen. Maria Cantwell (D-Wash.), one of its chief authors.

Democrats scramble to resurrect parts of $2 trillion spending plan

For Democrats, the mounting workload means they must balance matters of routine governance with their broader political aspirations. Central to their task is a renewed attempt to pass a sprawling overhaul to health care, education, climate and tax law, a package of spending once known as Build Back Better.

Top White House aides have revived discussions with their chief antagonist, Manchin, whose prior opposition to the size and scope of the roughly $2 trillion plan scuttled it last year. His demands jeopardized hopes for Democrats to lower drug costs, rethink the tax code, expand health insurance, invest anew in child care and boost other social safety nets, all promises that helped the party take control of Congress in the first place.

Democrats now aim to finalize their work on a new version of the stalled measure by July 4. Manchin has demanded a lower price tag and more deficit reduction in exchange for his critical vote.

But Sen. Tina Smith (D-Minn.), a leading voice for the climate provisions, said she has been in conversations in which lawmakers acknowledge they have far less time than it appears, and they need instead to broker a deal around Memorial Day, which marks the end of the upcoming work period. “It doesn’t get easier the longer we wait,” she said.

For now, the uncertainty has stoked fresh speculation that Manchin might once again upend the political ambitions of his own party. And it has unnerved fellow Democrats, coming at a time when anxieties are high that voters could penalize lawmakers if they fail to deliver before the election.

“I think there’s more we need to do to earn their vote in November,” said Rep. Katie Porter (D-Calif.), a senior member of the Congressional Progressive Caucus. “I think we are very clear demonstrating the economy we’re fighting for is an economy that will help families have more money in their pockets.”

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