Strength of recovery from coronavirus recession fades at dangerous time for President BidenJoe BidenGruden becomes Raiders coach after more emails reveal homophobic and sexist comments Abbott bans vaccination warrants from any “Texas entity” Jill Biden to campaign with McAuliffe on Friday MORE and Democrats.
White House and Democratic lawmakers face a growing number of challenges to Biden’s pledge to ‘build back better’ from the depths of the COVID-19 pandemic as the party braces for intimidating midterm elections .
A summer resurgence of the virus, booming supply chains, rising prices and a slower-than-expected labor market recovery have prompted economic forecasters to lower their growth projections this year and next.
The International Monetary Fund (IMF) expects the US economy to grow 1 percentage point slower this year than it expected in July, according to new projections released on Tuesday.
US growth this year is expected to slow to 6 percent, down from the IMF’s estimate of 7 percent in July, according to forecasts.
“The global recovery continues but the momentum has weakened, hampered by the pandemic,” wrote IMF chief economist Gita Gopinath.
“Pandemic outbreaks in critical links in global supply chains have resulted in longer-than-expected supply disruptions, fueling inflation in many countries. Overall, risks to the economic outlook have increased and political trade-offs have become more complex. “
While the IMF expects some of this year’s lost growth to appear in 2022, other economists see a darker path for the United States to come.
Goldman Sachs economists said this week that they expected the U.S. economy to grow 5.6% in 2021, down 0.1 percentage point from a previous estimate. They expect growth in 2022 to slow to 4% in 2022, from an initial estimate of 4.3%.
And the Atlanta Federal Reserve’s estimate of third-quarter annualized growth fell to 1.3% last week, from just over 6% on July 28.
While growth is expected to remain well above pre-pandemic levels through 2022, even with the downgrades driven by the COVID-19 delta variant, the dual force of slower growth and persistently high inflation could be tough hurdles to a dangerous stretch for Biden’s program.
Democrats rush to find a compromise on social services and Biden’s multibillion-dollar climate bill that will satisfy progressive lawmakers – who reluctantly agreed to drop below the original 3.5 baseline trillions of dollars – and Democratic Sens. Joe manchinJoe Manchin Using common principles to guide our global and national energy policy Sinema’s office denies report that she wants to cut climate spending by $ 0 billion (W.Va.) and Kyrsten SinemaKyrsten SinemaSinema’s office denies reports she wants to cut climate spending by $ 0 billion Juan Williams: Women hold power The Memo: Biden’s horizon is clouded by doubt MORE (Arizona) with their calls for steep cuts. The fate of a separate bipartisan infrastructure bill is tied to the broader Democratic bill, much to the wrath of moderate lawmakers in Purple Districts likely to face serious Republican challenges in 2022.
The White House and Congress will also face a looming fiscal cliff in early December, with government funding and the country’s ability to borrow money set to expire on December 3.
Whether Biden can guide his plans through Congress will be largely determined by political considerations within the Democratic Party, including the divide between moderates and progressives and the strategy most likely to help Democrats retain control of Congress.
The uncertainty surrounding the economy, however, could throw a wildcard into the mix as Biden tries to cement a winning message for 2022.
Republicans have sought to blame Biden’s ambitious spending plans and handling the pandemic on decades-long high inflation, hiring problems and other obstacles to recovery. While many other wealthy countries have experienced similar problems in their rebounds from the pandemic, GOP lawmakers have tied the speed bumps to Biden in preparation for a majority in Congress.
“American families feel the power of their paychecks shrinking day by day. Workers struggle to find jobs that match their skills and companies struggle to find volunteer workers, ”Sen said. Mike leeMichael (Mike) Shumway Lee McConnell promises the GOP will not help raise the debt ceiling in December after Schumer reached a deal to vote on raising the debt ceiling on Thursday. (R-Utah), vice chairman of the Joint Economic Committee, in a statement released Friday after the September jobs report was released.
“Our economy is still recovering. Now is one of the worst times for further massive tax hikes and inflationary spending. Instead, Congress should pursue policies that allow more Americans to get back to work. “
Democrats have retorted for months that adopting an ambitious infrastructure and social services plan is essential to repairing both the damage from the pandemic and long-term structural problems.
Supporters of Biden’s platform say the recent weakness in the economy illustrates why Democrats must unite to pass the sweeping budget measure.
“The most recent jobs report demonstrated what many economists have always said – that this is first and foremost a public health crisis and that the Delta variant stalled the labor market recovery in August and September, “wrote Kate Bahn, Acting Chief Economist and Director. from Labor Market Policy to the Washington Center for Equitable Growth, in an email.
Job growth has fallen sharply over the past two months, from a gain of 1 million in July to 366,000 in August and 194,000 in September, largely due to the increase in coronavirus cases . As the unemployment rate fell 0.4 percentage points to a pandemic low of 4.8%, female labor force participation fell sharply as schools closed and other responsibilities for care has trained the workforce according to gender criteria.
“The features of Build Back Better that center the myriad of caregiving supports that families need simultaneously – such as the Child Tax Credit, paid time off, and accessible child care – recognize that caregiving are the backbone of the economy, ”Bahn wrote.
“Reconstructing the economy requires families to be able to take care of themselves and others before they can fully engage in the labor market. “