Infrastructure Update: Pelosi Pushes Back
Despite enduring disagreement between Republicans and Democrats over Biden’s proposed infrastructure bill, a bipartisan group consisting of 10 Senate moderates recently agreed upon a new proposal for infrastructure spending. The plan, which includes $974 billion in spending over the next 5 years, is far cheaper than Biden’s current proposed $1.7 trillion.
The disagreement over Biden’s plan stems from what each party thinks should qualify as “infrastructure” spending. Republicans feel that infrastructure should not inherently include health or child care, whereas Democrats, like Nancy Pelosi, fear that neither plan currently provides enough support for American families, as per her statement last week: “If this [bipartisan plan] is something that can be agreed upon, I don’t know how we can possibly sell it unless we know there is more to come.”
These vast differences in opinion are likely to hold all infrastructure proposals at enduring standstills.
Expanded Tax Credits: IRS Guides While Harris Touts
The IRS released guidance on Friday clarifying the expanded tax breaks under Biden’s American Rescue Plan. The guidance includes two FAQs centered around eligibility, credit calculation, and claiming of both the Child and Dependent Care Credit and the Paid Sick and Family Leave Credit.
The agency’s guidance coincided with remarks made Friday afternoon by VP Kamala Harris, publicizing the Biden administration’s focus on expanding financial assistance and benefits for families. At a child care center in Washington, Harris outlined the administration’s priorities and goals under the proposed American Families Plan, saying, “We know that the pandemic did not invent these challenges, but it certainly accelerated these challenges.”
Has the Recession Receded?
In April 2020, a committee of economists from the National Bureau of Economic Research (NBER) announced their official judgment that the US had fallen into an economic recession, courtesy of the Coronavirus pandemic. The economic peak in February 2020, partnered with the subsequent trough a month later in March 2020, led the US through a significant collapse in economic activity as several key industries—manufacturing, retail, construction, and health care, to name a few—shut down.
The ephemeral nature of the “recession” —lasting only a few short weeks at the onset of the pandemic—has caused many to question whether we can even define last year’s economic contraction as a recession at all. The NBER stands by their conclusion saying: “In the case of the February 2020 peak in economic activity, we concluded that the drop in activity had been so great and so widely diffused throughout the economy that the downturn should be classified as a recession even if it proved to be quite brief.”
Currently, though the future of our country’s economy looks bright as we head into the third quarter of 2021, the NBER has still yet to call an end to the pandemic recession.