Another Republican President, Another Recession.

Roger A. Shrubber said:

https://www.politifact.com/factchecks/2022/jul/27/instagram-posts/no-white-house-didnt-change-definition-recession/
another republicunt lie...
keep spreading them, we'll keep knocking them down...

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TankHankerous said:

The redefining of recession.... has the Biden Administration finally jumped the shark?

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Last week US Senator Joe Manchin and Majority Leader Chuck Schumer unexpectedly announced the reconciliation bill that had been declared dead was back. US Senator Kyrsten Sinema and various conservative Democrats could still decide to blow it up. But if all goes well, it could be voted on in the next couple of weeks.

What’s in the $485 billion Inflation Reduction Act of 2022 (IRA22)? The measure addresses three major Democratic priorities:

Climate, health care and taxes.

Clean energy

The $385 billion in climate provisions is the part of the proposal that has perhaps most excited the Democratic base. The Atlantic quotes Sam Ricketts of Evergreen Action enthusing, “I struggle to find enough superlatives to describe this deal.”

The majority of the climate spending centers on $260 billion in tax credits. These replace former and clumsy green energy incentives that couldn’t be used by public utilities and couldn’t be used to incentivize newer forms of non-carbon energy.

The new tax credits provide public and private companies with subsidies for producing renewable energy and for creating renewable technologies like solar panels.

Researchers who analyzed an earlier version of this plan judged it to be extremely cost-effective. They believe it could create $1.5 trillion in economic surplus, while cutting 5 billion tons of carbon from the atmosphere by 2050.

The IRA22 also includes around $80 billion in incentives for car and home-owners.

A $7,500 rebate for new EV purchases for family vehicles could cut carbon emissions substantially, since personal transportation produces about 17 percent of US carbon pollution.

The proposal also includes $27 billion for a federal green bank — a fund that can be used to invest in clean energy. The green bank provides money for low-income households to purchase heat pumps, solar cells and electric cars. States, tribes and municipalities can also compete for grants for green energy projects.

Fossil fuel production

That’s the (substantial!) climate upside of the bill.

The less pleasing aspect is an expansion in carbon fuel production. In the name of energy independence, Manchin and his industry lobby buddies demanded oil and gas leasing in the Gulf of Mexico and off the Alaskan coast.

The bill also prevents the federal government from leasing land for solar or wind unless it has also leased territory to oil and gas developers.

These carve outs, in technical language, suck.

However, climate advocates in general see these concessions as a small price to pay for what is in other respects easily the most substantial effort to fight global warming in US history.

Healthcare

The IRA22 includes $100 billion for healthcare.

The largest chunk of that is $65 billion to expand ACA subsidies.

Tax credits that help some 13 million low-income Americans buy health insurance were set to lapse at the end of this year. That could cause premiums to increase by hundreds of dollars per person in January. Many people would be notified of the upcoming increase just weeks before the election.

The IRA22 extends the subsidies for three years into 2025. That will enable millions of people to retain their health care. It also pushes the next funding cliff out past 2024, so Democrats won’t have to struggle with it right before another election.

The other major health care provision in the bill addresses prescription drug prices.

IRA22 caps out-of-pocket spending on prescription drugs for Medicare beneficiaries at $2,000 per year.

Currently, Medicare recipients continue to pay 5 percent out of pocket for scripts after total charges reach $7,050 per year.

That 5 percent doesn’t sound like much, but for those with medication costing thousands of dollars, or with large numbers of prescriptions, it can become a major financial burden.

The bill would also restrict increases on prescription drug price increases for Medicare patients and for patients with private insurance. Manufacturers that increased prices faster than inflation would have to pay a rebate.

Finally, the bill gives the government the ability to negotiate prices of high-cost drugs for Medicare recipients. Only a few drugs would be subject at first, but it would gradually increase to 20 by 2029.

The exact savings here depend on the drugs that are selected and what the prices end up being. But the CBO estimates the provision could save the government $101.8 billion. The inflation rebate provision could add another $100.7 billion in savings.

The IRA22 saves another $120 billion through repeal of a complicated Trump era drug rebate rule.

Taxes

IRA22 substantially increases taxes on the wealthy.

Most analyses treat this as a funding mechanism. But taxing the rich is important in its own right to control runaway inequality and prevent the powerful from seizing control of the country’s institutions and political processes.

The biggest tax increase is a 15 percent corporate minimum tax.

Trump cut the US corporate tax rate from 35 percent to 21 percent in 2017. Many corporations use write-offs and tax shelters to pay even less than that. Some pay nothing at all.

The new tax would end that.

It imposes a minimum of 15 percent on all corporations with over $1 billion in profits. This should raise $313 billion in revenue over a decade.

Another big chunk of revenue is expected to come from improved enforcement. The bill spends $80 billion to beef up the IRS.

Of that, $45 billion would go toward enforcement. Some $25 billion would go toward operations support. Another $4.75 billion would go to IT modernization, and $3 billion to taxpayer services.

The IRS budget has been systematically cut by the Congress for more than a decade. Republicans in particular have seen starving the agency as a way to protect their wealthy base. As a result, the IRS hasn’t had the funds they’ve needed to pursue tax cheats.

The tax gap between what is owed and what is collected may be as high as $1 trillion a year.

IRA22 estimates that the additional funds for tax enforcement will result in revenue of $124 billion.

The bill also closes the carried interest loophole, which allows private equity and hedge funds to pay tax on their income at a lower capital gains rate rather than at the rate normally paid by wage earners. This should raise $14 billion.

Inflation Reduction

Overall, the bill is designed to lower the deficit by $300 billion over 10 years. Schumer and Manchin believe that raising taxes and increasing revenue should have an anti-inflationary effect.

Manchin also argues that moving away from fossil fuels will help the US avoid inflationary spirals. And the drug price controls should keep health care costs down.

Will the bill actually fight inflation? Probably not in the short term. The name is more of a gimmick than anything. But if a gimmick gets Manchin on board, so be it.

What’s missing?

There are a lot of things that aren’t in this bill.

Progressives had hoped to expand Medicare to cover vision, hearing and dental benefits during this Congress. Biden wanted to spend $400 billion on universal preschool and affordable childcare.

Neither are in the final package.

The IRA22 also doesn’t renew the expanded child tax credit. The program lifted millions of children out of poverty in 2021 before it was allowed to expire in 2022. Allowing such a vital, successful program to evaporate is a tragedy.

Perhaps most disturbing, IRA22 includes zero spending on COVID mitigation.

The pandemic continues to kill more than 400 people a day, 2,800 people a week. New variants continue to develop, cases remain high and the healthcare system is facing staffing shortages.

But funds for vaccine development and distribution have dried up, and the Congress has largely abandoned the issue.

It’s easy to get discouraged when you contemplate the crises that our government refuses to confront. But for all its failures, IRA22 also offers much reason for hope.

Its prescription drug benefits and ACA subsidies provide real, material help for seniors, independent small businesspeople and the less affluent. Its tax provisions address growing inequality for the first time in decades. And its climate measures finally take real strides toward preserving the planet for future generations.

If the Congress can pass this, it will be a real victory for the Democrats, the country and the planet.

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Last week’s report on economic output recharged speculation about whether the U.S. economy is in a recession. Gross domestic product shrank for the second quarter in a row, a common, but unofficial, definition of a recession.

But GDP isn’t the only measure that matters, especially in the tangled mess of the pandemic economy.

The National Bureau of Economic Research (NBER) has the final say on whether a period of economic decline is a recession, a determination that can lag for months. NBER economists consult a wide range of indicators that suggest this year’s economy stands on sturdier ground than in recent recessions.

Americans feel bad about the economy, and there’s no doubt that soaring priceson everyday essentials are making it harder to get by. But a recession isn’t a measure of how hard it is to make ends meet. It is, as defined by NBER, a downturn that is deep, diffused and lasts for at least a few months.

But there is no exact formula for a recession. For instance, two months in early 2020 were declared a recession, despite being so brief, because the economic decline from the pandemic was so drastic and far-reaching.

“Every recession is unhappy in its own way,” said David Wilcox, senior economist with the Peterson Institute for International Economics and Bloomberg Economics. “It’s important for the Business Cycle Dating Committee to sift through the indicators and make their decision in a flexible way.”

We took a look at where the indicators used by the decision-makers at NBERstand today, compared with recessions over the past 50 years. This year’s economy is far from bulletproof — but it is strikingly different from hard times in the past.

The overall size of the economy

Gross domestic product measures the country’s economic growth by tallying up the value of all its goods and services. It has declined the past two quarters, but GDP often has big revisions after its initial release, averaging a full percentage point of change between the first estimate and its final revision months later.

[Why the U.S. economy shrank]

NBER also takes into account GDP’s less prominent cousin, gross domestic income (GDI), which measures the same thing — economic growth — from a different angle: how much money was earned by making those goods and providing those services.

In practice, the measures aren’t quite equal, but this year they’re pointing in opposite directions: GDP says the economy is shrinking, while GDI says it’s growing.

Averaging the GDP and GDI together, as NBER does, suggests the economy has largely stayed the same in the first three months of the year. Gross domestic income for the second quarter has yet to be reported.

Employment

Employment shows a much stronger picture, especially when compared with past recessions.

NBER looks at two different measures of employment: payrolls reported by businesses and direct household surveys. Both are a big contrast with the job losses seen in the first six months of most previous recessions.

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There are signs that last year’s frenetic labor market is easing: job openings dipped slightly in June after months of record highs, and tech companies are slowing their growth. But unemployment remains at a pandemic low.

“Employment is usually a contemporaneous indicator,” Wilcox said. “If the overall economy was contracting, you’d see it in employment.”

Earning and buying, making and selling

Total income offers an additional angle on employment, because it reflects reductions in working hours that might not result in job losses. And income has largely held steady, even after adjusting for inflation.

[The changing shape of inflation]

Consumer spending remains close to its all-time pandemic highs. Rising prices are putting many households under economic strain, however. Essentials like groceries and gas are taking up a greater part of household budgets, potentially crowding out discretionary spending on goods.

Industry and manufacturing represent only a small part of the economy, but economists consult these measures because they have historically been sensitive to changes in the overall economy.

The Industrial Production Index, which measures the value of items produced in the United States, shows growth far above that of previous recessions.

On the other hand, the inflation-adjusted value of items sold in the United States, measured by real manufacturing and trade sales, has dropped, resembling the patterns of previous recessions. That may be because of how the pandemic reshaped consumer spending: goods spending is starting to cool from its pandemic-fueled frenzy, and service spending has finally risen back to its pre-pandemic levels.

We won’t know for a while whether we are in a recession and, if so, when it began. But the measures that matter to decision-makers at NBER suggest a different and more complicated picture than previous recessions.

If we are in a recession or enter one soon, it may be unlike the most recent economic downturns we’ve faced.

“All of our thinking is based on the last 20 years of recessions,” said Thomas Coleman, an economist at the University of Chicago. “I’m not sure that’s a good guide.”

The Great Recession and the 2020 recession were both tipped off by crises: a financial meltdown and a pandemic suddenly shutting down the economy.

Without a crisis on a similar scale, Coleman says, the next recession will be more like those from the 1970s to the early 2000s, causing significant pain but not repeating the devastating job losses of the past two recessions.

“The question we need to ask,” said Coleman via email, “is ‘do we feel unlucky?’ ”

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WASHINGTON (AP) — America’s hiring boom continued last month as employers added a surprising 528,000 jobs despite raging inflation and rising anxiety about a recession.

July’s hiring was up from 398,000 in June. The unemployment rate slipped to 3.5%.

The U.S. economy shrank in the first two quarters of 2022 — an informal definition of recession. But most economists believe the strong jobs market has kept the economy from slipping into a downturn.

The American job market has repeatedly defied skeptics this year. Economists had expected only 250,000 new jobs this month.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

WASHINGTON (AP) — The American job market has defied raging inflation, rising interest rates, growing recession fears. Month after month, U.S. employers just kept adding hundreds of thousands of workers, at a pace that regularly exceeded the expectations of most economists.

Yet cracks have begun to appear in one of the nation’s pillars of economic strength. Job openings are down, and the number of Americans signing up for unemployment benefits is up.

“When we look across the labor market, we are seeing broad indications of cracks beginning to show,” said Sarah House, senior economist at Wells Fargo. “Overall conditions aren’t nearly as strong as what we were seeing three to six months ago.’’

The Labor Department on Friday well report how many jobs were created in July and whether the super-low U.S. unemployment rate has begun to tick higher.

Forecasters, on average, expect the economy to have picked up another 250,000 jobs last month, according to a survey by the data firm FactSet. That would be a solid number in normal times but would mark a big deceleration for 2022: Employers have been hiring an average 457,000 workers a month so far this year.

The unemployment rate is expected to remain at 3.6% — just off a 50-year low — for the fifth consecutive month.

There are, of course, political implications in the numbers being released Friday: Rising prices and the risk of recession are likely to weigh on voters in November’s midterm elections, potentially making it tougher for President Joe Biden’s Democrats to maintain control of Congress.

The economic backdrop is troubling: Gross domestic product — the broadest measure of economic output — fell in both the first and second quarters; consecutive GDP drops is one definition of a recession. And inflation is roaring at a 40-year high.

The resiliency of the current labor market, especially the low jobless rate — is the biggest reason most economists don’t believe a downturn has started yet, though they increasingly fear that one is on the way. History isn’t entirely reassuring: The unemployment rate was even lower — 3.5% — when an 11-month recession began in December 1969.

Recession is not an American problem alone.

In the United Kingdom, the Bank of England on Thursday projected that the world’s fifth-largest economy would slide into recession by the end of the year.

Russia’s war in Ukraine has darkened the outlook across Europe. The conflict has made energy supplies scarce and driven prices higher. European countries are bracing for the possibility that Moscow will keep reducing — and perhaps completely cut off — flows of natural gas, used to power factories, generate electricity and keep homes warm in winter.

If Europeans can’t store enough gas for the cold months, rationing may be required by industry.

Economies have been on a wild ride since COVID-19 hit in early 2020.

The pandemic brought economic life to a near standstill as companies shut down and consumers stayed home. In March and April 2020, American employers slashed a staggering 22 million jobs and the economy plunged into a deep, two-month recession.

But massive government aid — and the Federal Reserve’s decision to slash interest rates and pour money into financial markets — fueled a surprisingly quick recovery. Caught off guard by the strength of the rebound, factories, shops, ports and freight yards were overwhelmed with orders and scrambled to bring back the workers they furloughed when COVID hit.

The result has been shortages of workers and supplies, delayed shipments -- and rising prices. In the United States, inflation has been rising steadily for more than a year. In June, consumer prices jumped 9.1% from a year earlier — the biggest increase since 1981.

The Fed underestimated inflation’s resurgence, thinking prices were rising because of temporary supply chain bottlenecks. It has since acknowledged that the current spate of inflation is not, as it was once referred to, “ transitory.”

Now the central bank is responding aggressively. It has raised its benchmark short-term interest rate four times this year, and more rate hikes are ahead.

Higher borrowing costs are taking a toll. Rising mortgage rates, for instance, have cooled a red-hot housing market. Sales of previously occupied homes dropped in June for the fifth straight month.

Real estate companies — including lending firm loanDepot and online housing broker Redfin — have begun laying off workers.

The labor market is showing other signs of wobbliness.

The Labor Department reported Tuesday that employers posted 10.7 million job openings in June — a healthy number but the lowest since September.

And the four-week average number of Americans signing up for unemployment benefits — a proxy for layoffs that smooths out week-to-week swings — rose last week to the highest level since November, though the numbers may have been exaggerated by seasonal factors.

Friday’s jobs report comes at a critical moment for President Biden, who has maintained that the economy is merely slowing down rather than heading into a recession. Inflation has dogged public support for Biden, yet the administration has stressed that the 3.6% unemployment rate and solid job gains are signs of a healthy economy.

White House press secretary Karine Jean-Pierre said the administration expects the pace of hiring to fall further in the coming months because the unemployment rate is already near historic lows and fewer potential workers are available.

A slower pace of hiring and reduced levels of wage growth could also suggest that inflationary pressures are easing, but it has the White House attempting to convince the American public that less growth is a positive at a moment when Republican lawmakers are saying a recession has already started; they cite the drop in GDP over the first half of the year.

“We’re expecting it to be closer to 150,000 jobs per month,” Jean-Pierre said at Thursday’s briefing. “This kind of job growth is consistent with the lower level of unemployment numbers that we’ve been seeing.”

Economist House at Wells Fargo expects employers to keep adding jobs for a few months. But rising interest rates, she said, will gradually choke off economic growth.

“We are actually looking for outright declines in hiring come the first quarter, maybe second quarter of next year,” she said. “As monetary policy continues to tighten, that’s going to have an effect on overall business conditions and therefore demand for workers.

“Our expectation is that the U.S. economy will slip into recession, probably at the start of the year.”

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hanimmal said:

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hanimmal said:

It is sad how much the right wing Republican trolls are rooting for the American economy to tank, and hilarious how desperate they get when it keeps showing strength.

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WASHINGTON (AP) — Democrats pushed their election-year economic packageto Senate passage Sunday, a hard-fought compromise less ambitious than President Joe Biden’s original domestic vision but one that still meets deep-rooted party goals of slowing global warming, moderating pharmaceutical costsand taxing immense corporations.

The estimated $740 billion package heads next to the House, where lawmakers are poised to deliver on Biden’s priorities, a stunning turnaround of what had seemed a lost and doomed effort that suddenly roared back to political life. Cheers broke out as Senate Democrats held united, 51-50, with Vice President Kamala Harris casting the tie-breaking vote after an all-night session.

“Today, Senate Democrats sided with American families over special interests,” President Joe Biden said in a statement from Rehoboth Beach, Delaware. “I ran for President promising to make government work for working families again, and that is what this bill does — period.”

Biden, who had his share of long nights during his three decades as a senator, called into the Senate cloakroom during the vote on speakerphone to personally thank the staff for their hard work.

The president urged the House to pass the bill as soon as possible. Speaker Nancy Pelosi said her chamber would “move swiftly to send this bill to the president’s desk.” House votes are expected Friday.

“It’s been a long, tough and winding road, but at last, at last we have arrived,” said Senate Majority Leader Chuck Schumer, D-N.Y., ahead of final votes.

“The Senate is making history. I am confident the Inflation Reduction Act will endure as one of the defining legislative feats of the 21st century,” he said.

Senators engaged in a round-the-clock marathon of voting that began Saturday and stretched late into Sunday afternoon. Democrats swatted down some three dozen Republican amendments designed to torpedo the legislation. Confronting unanimous GOP opposition, Democratic unity in the 50-50 chamber held, keeping the party on track for a morale-boosting victory three months from elections when congressional control is at stake.

The bill ran into trouble midday over objections to the new 15% corporate minimum tax that private equity firms and other industries disliked, forcing last-minute changes.

Despite the momentary setback, the “Inflation Reduction Act” gives Democrats a campaign-season showcase for action on coveted goals. It includes the largest-ever federal effort on climate change — close to $400 billion — caps out-of-pocket drug costs for seniors on Medicare to $2,000 a year and extends expiring subsidies that help 13 million people afford health insurance. By raising corporate taxes and reaping savings from the long-sought goal of allowing the government to negotiate drug prices for Medicare, the whole package is paid for, with some $300 billion extra revenue for deficit reduction.

Barely more than one-tenth the size of Biden’s initial 10-year, $3.5 trillion Build Back Better initiative, the new package abandons earlier proposals for universal preschool, paid family leave and expanded child care aid. That plan collapsed after conservative Sen. Joe. Manchin, D-W.Va., opposed it, saying it was too costly and would fuel inflation.

Nonpartisan analysts have said the 755-page “Inflation Reduction Act” would have a minor effect on surging consumer prices.

Republicans said the new measure would undermine an economy that policymakers are struggling to keep from plummeting into recession. They said the bill’s business taxes would hurt job creation and force prices skyward, making it harder for people to cope with the nation’s worst inflation since the 1980s.

“Democrats have already robbed American families once through inflation, and now their solution is to rob American families a second time,” Senate Minority Leader Mitch McConnell, R-Ky., argued.

In an ordeal imposed on most budget bills like this one, the Senate had to endure an overnight “vote-a-rama” of rapid-fire amendments. Each tested Democrats’ ability to hold together the compromise bill negotiated by Schumer, progressives, Manchin and the inscrutable centrist Sen. Kyrsten Sinema, D-Ariz.

Progressive Sen. Bernie Sanders, I-Vt., criticized the bill’s shortcomings and offered amendments to further expand the legislation’s health benefits, but those efforts were defeated. Republicans forced their own votes designed to make Democrats look soft on U.S.-Mexico border security and gasoline and energy costs, and like bullies for wanting to strengthen IRS tax law enforcement.

Before debate began, the bill’s prescription drug price curbs were diluted by the Senate’s nonpartisan parliamentarian who said a provision should fall that would impose costly penalties on drug makers whose price increases for private insurers exceed inflation.

It was the bill’s chief protection for the 180 million people with private health coverage they get through work or purchase themselves. Under special procedures that will let Democrats pass their bill by simple majority without the usual 60-vote margin, its provisions must be focused more on dollar-and-cents budget numbers than policy changes.

But the thrust of Democrats’ pharmaceutical price language remained. That included letting Medicare negotiate what it pays for drugs for its 64 million elderly recipients, penalizing manufacturers for exceeding inflation for pharmaceuticals sold to Medicare and limiting beneficiaries out-of-pocket drug costs to $2,000 annually.

The bill also caps Medicare patients’ costs for insulin, the expensive diabetes medication, at $35 monthly. Democrats wanted to extend the $35 cap to private insurers but it ran afoul of Senate rules. Most Republicans voted to strip it from the package, though in a sign of the political potency of health costs seven GOP senators joined Democrats trying to preserve it.

The measure’s final costs were being recalculated to reflect late changes, but overall it would raise more than $700 billion over a decade. The money would come from a 15% minimum tax on a handful of corporations with yearly profits above $1 billion, a 1% tax on companies that repurchase their own stock, bolstered IRS tax collections and government savings from lower drug costs.

Sinema forced Democrats to drop a plan to prevent wealthy hedge fund managers from paying less than individual income tax rates for their earnings. She also joined with other Western senators to win $4 billion to combat the region’s drought.

Several Democratic senators joined the GOP-led effort to exclude some firms from the new corporate minimum tax.

The package keeps to Biden’s pledge not to raise taxes on those earning less than $400,000 a year.

It was on the energy and environment side that compromise was most evident between progressives and Manchin, a champion of fossil fuels and his state’s coal industry.

Clean energy would be fostered with tax credits for buying electric vehicles and manufacturing solar panels and wind turbines. There would be home energy rebates, funds for constructing factories building clean energy technology and money to promote climate-friendly farm practices and reduce pollution in minority communities.

Manchin won billions to help power plants lower carbon emissions plus language requiring more government auctions for oil drilling on federal land and waters. Party leaders also promised to push separate legislation this fall to accelerate permits for energy projects, which Manchin wants to include a nearly completed natural gas pipeline in his state.

Still, environmental groups hailed the passage as a milestone. “Tremendous progress,” said Manish Bapna, president and CEO of the Natural Resources Defense Council, in a statement.

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WASHINGTON (AP) — President Joe Biden on Tuesday signed a $280 billion bipartisan bill to boost domestic high-tech manufacturing, part of his administration’s push to boost U.S. competitiveness over China.

Flanked by scores of lawmakers, union officials, local politicians and business leaders, Biden feted the legislation, a core part of his economic agenda that will incentivize investments in the American semiconductor industry in an effort to ease U.S. reliance on overseas supply chains for critical, cutting-edge goods.

“The future of the chip industry is going to be made in America,” Biden said in a sweltering Rose Garden ceremony Tuesday, referring to the diminutive devices that power everything from smartphones to computers to automobiles. The legislation sets aside $52 billion specifically to bolster the U.S. computer chip sector.

The bill has been more than a year in the making, but finally cleared both chambers of Congress late last month with significant bipartisan margins. The Senate passed it 64-33, with 17 GOP senators supporting it, while the House quickly followed suit with a 243-187 vote that included 24 House Republicans in favor, even though party leaders began urging their ranks to vote against it after Democrats advanced a separate sweeping bill focused on climate and health care.

The White House sought Tuesday to begin selling the immediate impacts of the semiconductor measure, noting that Micron, a leading U.S. chip manufacturer, will announce a $40 billion plan to boost domestic production of memory chips, while Qualcomm and GlobalFoundries will unveil a $4.2 billion expansion of an upstate New York chip plant.

The administration has also repeatedly portrayed this legislation as a critical component in countering the influence of a rising China and ensure the U.S. can maintain a competitive edge against Beijing, particularly in semiconductor manufacturing. Administration officials have held multiple briefings for lawmakers to sketch out the national security implications of this bill, and Biden noted during his remarks Tuesday that the Chinese government had lobbied U.S. businesses against the legislation.

“The CHIPS and Science Act is going to inspire a whole new generation of Americans to answer that question: What next?” Biden said Tuesday during the signing ceremony. “Decades from now, people will look back at this week and all we passed and all we moved on, that we met the moment at this inflection point in history.”

Tuesday’s ceremony is one of several public events Biden has scheduled since recovering from COVID-19, including a visit to flood-ravaged Kentucky on Monday and another signing event on Wednesday for legislation aiding veterans who have suffered from toxic burn pits. But Biden appeared to be dealing with some residual symptoms, coughing heavily several times during his remarks and apologizing at one point for doing so.

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July inflation climbed 8.5 percent over the past year, a slightly slower pace than previous months, thanks to falling gas and energy prices, and offering fresh hope to families and businesses that inflation may start to simmer down after months of gains.

A different measure of prices showed the pace of inflation in July was flat when compared with the month before, in one of the most encouraging signs since prices took off last year. The latest figures from the Bureau of Labor Statistics marked the lowest month-to-month inflation reading since May 2020.



“These kind of swings should be a reminder of how far our economy is right now from some semblance of normal,” said Claudia Sahm, founder of SAHM Consulting and a former Federal Reserve economist. “We should take a deep breath today but not do a victory dance.”

The upbeat inflation report could help Democrats in Washington, who are on the verge of passing a major climate and health-care spending bill, called the Inflation Reduction Act. The legislative deal comes after months of President Biden struggling to score economic wins as prices surged and pushed consumer sentiment to dismal lows. The July inflation report also comes just days after an unusually stellar jobs report, suggesting jobs are readily available for workers nationwide.

“While the price of some things go up, went up last month, the price of other things went down by the same amount. The result: zero inflation last month,” Biden said during a White House event Wednesday. “When you couple that with last week’s booming jobs report of 528,000 jobs created last month, and 3.5 percent unemployment, it underscores the kind of economy we’ve been building.”

Investors cheered the news with a financial market rally. The tech-heavy Nasdaq closed up 2.9 percent, pulling into what’s considered bull market territory, rising 20 percent off its most recent low point. The Dow Jones industrial average also closed 1.6 percent higher, as the inflation data gave investors new hope that the Federal Reserve might ease up on interest rate hikes.

June’s inflation report was bleak, notching a new pandemic peak of 9.1 percent over the year before, as prices at the pump averaged above $5 per gallon. But by July, families felt more relief in their gas and energy bills. The gasoline index fell 7.7 percent in July, and the energy index fell 4.6 percent over the month.



Grocery and housing costs continue to strain peoples’ budgets — and will also need to see months of steady declines for overall inflation tonear more normal levels. The food index continued to creep up, rising 1.1 percent over the month. Bread was up 2.8 percent over the month, and chicken 1.4 percent. Canned vegetables were up 1.5 percent.

Rent was also up 0.7 percent over the month, as increased housing costs are brewing into a bigger financial challenge for tenants nationwide. All told, the shelter index rose 5.7 percent over the last year, accounting for about 40 percent of the total increase in all items, discounting food and energy.

Still, there were bright spots in the report, many of which were tied to the fall in energy prices. Natural gas fell 3.6 percent. Airfares also fell at a sharp 7.8 percent, and prices for used cars dipped slightly. The apparel index also fell 0.1 percent after rising for the previous two months.

While some economists and policymakers hold back from drawing too much from one month of data, Jared Bernstein, a member of the White House’s Council of Economic Advisers, said American families got a bit of a respite in July, despite ongoing uncertainty. Last month, real average hourly earnings increased 0.5 percent from June.

“It’s no ‘mission accomplished,’ but some much-needed breathing room,” Bernstein told The Washington Post. “When it comes to energy, the president’s release of barrels from the Strategic Reserve are one of the factors playing a role in that now-persistent decline.”

The latest inflation data underscores the challenge for policymakers racing to control inflation. The Federal Reserve is moving swiftly to slow the economy through an aggressive series of interest rate hikes, which make a whole host of lending — from mortgage rates to auto loans and borrowing for businesses — more expensive, curbing demand. But if the Fed moves too aggressively, it risks jerking the economy into a recession or causing widespread job losses.

There is also the fraught reality that getting a real-time read on the economy has been a huge challenge. Gas and energy prices are already considered some of the more unpredictable commodities. The pandemic also makes it difficult to compare a peak travel season — with soaring airfares and hotel costs that accompany pent-up demand — to previous years.

“There’s positive news here, but not of a kind that should fundamentally alter anyone’s view,” said Larry Summers, the former Democratic treasury secretary who has long warned about the risks of high inflation. “Any surprising, good news here is largely from volatile, hard to measure and hard to seasonally adjust components, like hotels and airlines.”

So far, the Fed’s moves to cool demand are showing up in the housing market. A run-up in mortgage rates has pushed more buyers out of the market, leading to slowing home sales and easing price surges in some parts of the country. The tech sector also reported fresh waves of layoffs and hiring freezes, raising questions about whether the job market as a whole was teetering and if a recession was barreling closer.

But those fears were quelled last week, when the unemployment rate ticked down to its pre-pandemic low of 3.5 percent. For many businesses, economists and policymakers, the takeaway was that the labor market can stay strong, and even keep growing, as the Fed continues its rate hikes.

Mike Ryan is newly looking for a job after several years of being a stay-at-home dad. He and his husband, Joe Ryan, need the extra income: They go through gas quickly shuttling kids around rural Charles County, Md. Their costs for propane — which they use for cooking, heat and hot water — were $1,500 more expensive than they budgeted. The family watches YouTube videos to make fixes around the house, and they’ve put off the repairs they can’t do themselves, such as removing trees vulnerable to storms, until they can afford it.

Joe Ryan said the couple is already struggling to keep up with the cost of living. Now their biggest fear is falling into debt.

“Whatever debt we take on, we’re stuck with it. We have to stay within our means,” he said. “That’s a big concern. You just feel trapped, like there’s nowhere to go from here.”

Controlling inflation is the Fed’s job. But rising prices have been an enormous economic and political challenge for the Biden administration and congressional Democrats. Democrats secured a major legislative win this week, with the Senate passing the Inflation Reduction Act to combat climate change, lower health-care costs, raise taxes on some billion-dollar corporations and reduce the federal deficit.

Still, inflation is the main economic issue for both parties going into the midterms this year. The GOP has hammered Democrats for their sprawling stimulus efforts that juiced demand for goods and services, keeping consumer spending flowing throughout the economy.

Gas and fuel prices became a particularly fraught issue earlier this summer, especially since they can be one of the more tangible ways people feel inflation. At Cleveland Express Trucking, the falling price of diesel in July was a welcome change.

Company president John Lamb said diesel peaked at $5.79 per gallon June 17 but has since fallen to about $3.90. He’s been able to lower the fuel surcharge passed on to customers. And he hopes that if energy prices keep falling, every rung of the transportation and trucking industry will get a little more breathing room.

“It takes a while for things to work through the system, but the trend is moving in the right direction,” Lamb said. “Barring any unforeseen geopolitical risks, I think it’s going to stay low and maybe go even lower.”

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Republicans are attempting to distract voters with false allegations that new money in the Inflation Reduction Act for the Internal Revenue Service means that ordinary taxpayers would be subjected more audits and equally bogus claimsthat the bill would raise taxes on middle-income Americans. But try as they might, Republicans won’t be able to obscure the fact that the package’s health-care provisions will save Americans a lot of money.

The health-care aspects of the bill are nearly as historic as its climate change provisions. The New York Times reports, “The Senate bill, which the House is expected to pass on Friday, then send to President Biden’s desk, could save many Medicare beneficiaries hundreds, if not thousands of dollars a year. Its best-known provision would empower Medicare to negotiate prices with drug makers with the goal of driving down costs — a move the pharmaceutical industry has fought for years, and one that experts said would help lower costs for beneficiaries.” Medicare recipients would also get an annual cap of $2000 for out-of-pocket prescription drug costs and a $35 monthly limit on insulin.

The benefit is not just monetary, the Times points out. “To hear the voices of older Americans who confront high drug costs month in and month out is to hear fear and worry, anger and stress. Many say they are figuring out how to get by, skipping vacations and other niceties for which they saved.” To paraphrase President Biden, the bill would give Medicare patients a little peace of mind.

The health-care provisions are not limited to Medicare. A report from the centrist Democratic think tank Third Way finds, “A typical family with health coverage at work will save about $1,000 a year, and a family with coverage through an exchange will save about $1,500 a year” between 2022 and 2025. Those savings would come primarily from three provisions. First is the bill’s extension of Affordable Care Act subsidies. The second is its fixes for the ACA’s “family glitch,” which ensures a person can get premium assistance if their employer-sponsored coverage is not “affordable,” but doesn’t extend that to their family. And third is the bill’s provisions allowing the Health and Human Services secretary to negotiate drug prices and to restrict the rate of increases for prescription drugs.

In short, there is big savings to be had for a lot of Americans. Third Way’s deputy director of economic communications and health policy Ladan Ahmadi tells me this is the most significant savings for Americans since the ACA was passed because “the IRA has supercharged the savings in the family glitch fix.”

What is even more remarkable is that every single Republican senator voted against the package. House Republicans will likely follow suit. That could be a risky position as they head out on the campaign trail and meet voters who have struggled to make ends meet. That might explain why they are throwing out distracting and untrue claims.

Inflation remains a major issue for most Americans. Despite the good news that inflation rates in July fell compared with the month before it, the fact remains that prices are still 8.5 percent higher than a year before. While wages have also grown, they have increased less than inflation, pinching household finances. The health-care provisions might not be “inflation reduction” per se, but any family that is able to save $1,000 or more will see it as cost reduction.

Certainly, the Federal Reserve is primarily responsible for inflation. The pandemic, supply chain snarls and Russia’s war of aggression against Ukraine are the primary drivers of rising prices, so there is not much the White House or lawmakers can do about the top-line inflation number. But Democrats did the next best thing: They saved families hundreds of dollars and helped them balance their budgets. And every Republican voted against it. Remarkable.

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WASHINGTON (AP) — For the first time in a decade, Americans will pay less next year on monthly premiums for Medicare’s Part B plan, which covers routine doctors’ visits and other outpatient care.

The rare 3% decrease in monthly premiums is likely to be coupled with a historically high cost-of-living increase in Social Security benefits — perhaps 9% or 10% — putting hundreds of dollars directly into the pockets of millions of people.

“That’s something we may never see again in the rest of our lives,” said Mary Johnson, the Social Security and Medicare policy analyst for The Senior Citizens League. “That can really be used to pay off credit cards, to restock pantries that have gotten low because people can’t afford to buy as much today as they did a year ago and do some long-postponed repairs to homes and cars.”

The 2023 decrease in monthly Medicare premiums comes after millions of beneficiaries endured a tough year of high inflation and a dramatic increase to premiums this year. Most people on Medicare will pay $164.90 a month for Part B coverage starting next year, a savings of $5.20.

The decrease helps to offset last year’s $21.60 spike, which was driven in large part by a new Alzheimer’s drug, Aduhelm, administered intravenously in doctors’ offices and introduced to the market last year with a $56,000 price tag. Medicare set strict limitations on the drug’s use earlier this year and the drugmaker has since cut the medication’s cost in half.

Medicare paid less for that drug than it expected this year, helping shore up reserves that allowed the agency to set the Part B premiums lower for 2023, the Centers for Medicaid and Medicare said in a statement Tuesday. Spending on other Medicare services and items was lower than expected, too. The annual deductible for the Part B program will also decrease $7 to $226.

President Joe Biden lauded the lower Medicare premiums during a Rose Garden speech Tuesday.

As the midterm elections near and Biden’s administration struggles to contain the painful side effects of inflation, the White House has increasingly trumpeted its work around curtailing health care costs.

“(To) millions of seniors and people with disabilities on Medicare, that means more money in their pockets while still getting the care they need,” Biden said.

Biden pointed to more cost savings on the way for some Medicare recipients starting next year thanks to the Inflation Reduction Act, which will require Medicare to cover the cost of recommended vaccines for older Americans and will cap monthly insulin copayments at $35 per month. Other provisions in the legislation, including a rule that allows Medicare to negotiate directly with drug companies on the price of some medications, will take a few years to kick in.

The bill received no support from congressional Republicans, a talking point the White House has frequently pushed in speeches and across its social media accounts in recent weeks.

Republicans have a different slant on the subject.

“Desperation is setting in at the White House,” the Republican National Committee said in response to Biden’s speech Tuesday. “Voters have a clear choice in the midterms as they know Biden and the Democrats sent costs for groceries soaring, created a recession and increased taxes.”

The lower Medicare premiums were announced as 66 million Americans await the announcement of next year’s Social Security cost-of-living increase for 2023. Analysts estimate that it could be historic, roughly between 9% and 10%. The exact amount will be announced next month.

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JACKSON, Miss. (AP) — Years before people in Jackson were recently left without running water for several days, Mississippi Gov. Tate Reeves claimed to have helped block money to fund water system repairs in the capital city.

Reeves, a Republican, blames Jackson’s water crisis on mismanagement at the city level. The city’s latest water troubles are far from its first, and they have stemmed from decaying infrastructure beyond one water treatment plant. The EPA said 300 boil water notices have been issued over the past two years in the city.

As Reeves climbed Mississippi’s political ladder, he cited his opposition to financially helping the capital as evidence of his fiscal conservatism. Jackson-area lawmakers say the troubled water system is one example of Jackson’s status as a political punching bag for Republican officials, who control the Legislature and the state Bond Commission.

“We operate under the golden rule here,” said Democratic Sen. John Horhn of Jackson. “And the golden rule is: He who has the gold makes the rules.”

In Jackson, 80% of residents are Black, and 25% live in poverty. Repeated breakdowns made it unsafe for people to drink from their tap, brush their teeth and wash their dishes without boiling the water first. At a September news conference, Reeves said water service was restored to most of the city only after the state “stepped in” to provide emergency repairs. He also said that he didn’t anticipate a need for the Legislature to approve more debt for Jackson’s water system.

The specter of another weather-induced water stoppage looms large for some Jackson residents. “Winter is coming,” said Brooke Floyd, a local activist. “He’s saying it’s fixed. But it’s not fixed.”

Water service was also cut off in parts of the city due to a winter storm in 2010. By June 2011, Reeves was locked in a Republican primary campaign for lieutenant governor. As the tea party movement thrust government spending to the center of political debate, his opponent lambasted him for signing off on bond debt increases.

With election day just weeks away, Reeves — who was the state treasurer — appeared on a conservative talk radio show to push his track record as a tightfisted “watchdog” over state legislators eager to borrow. The host, Paul Gallo, wanted to know why Reeves had voted to approve most bond projects as a member of the state Bond Commission. His voting record didn’t tell the whole story, Reeves said. For instance, take the millions in bonds the city had requested to repair its crumbling water and sewer infrastructure.

“I’ve never voted against that because it’s never gotten to the Bond Commission. We are talking to the city of Jackson,” Reeves said. “If we are not comfortable, we never bring it up for a vote.”

The Bond Commission decided not to consider issuing bonds for Jackson water projects that had been authorized by the Legislature, Reeves said.

“Let’s just say there is an economic development in a town that doesn’t have a lot of political power,” Gallo responded. “The Bond Commission can just refuse to take it up? ... Isn’t that the same thing as a negative vote?”

“It is the same thing as a negative vote,” Reeves said.

Most years, the Legislature authorizes projects in one king-sized measure, known in legislators’ parlance as “the big bond bill.” Then, the Bond Commission — made up of the governor, attorney general and state treasurer — votes on whether to issue the bonds.

The commission issues most bonds that come up for a vote. In 2011, Reeves’ primary opponent said Reeves voted during his two terms as state treasurer to approve too much debt. But some bonds aren’t brought to a vote or are delayed, such as those proposed for Jackson water and sewer improvements.

In response to questions at a September news conference, Reeves said his recollection of what happened in 2010 is that the city never prepared the necessary paperwork to receive water bonds authorized by the Legislature. A document obtained by The Associated Press shows city leaders prepared a proposal in 2010 asking the state for $13.5 million in bonds for water system upgrades downtown. The Legislature later approved a dwarfed bond proposal for $6 million.

But after the Legislature’s approval, Reeves and Republican Gov. Haley Barbour initially failed to include the city’s water project in the state bonds to be issued in the fall of 2010.

The Legislature added an application requirement for the bond, which former Mississippi Department of Finance and Administration spokeswoman Kym Wiggins told the Jackson Free Press was “exclusive” to Jackson at the time. In order to have its application approved, Reeves said the city would need to answer a number of questions about how the money would be spent.

Barbour and Reeves later relented and voted to approve the bond after city officials made commitments that included funding projects through low-interest loans, rather than the interest-free loans outlined in the legislation.

The governor’s office told the AP that as state treasurer, Reeves ultimately voted to approve the bonds. But in the June 2011 interview with Gallo, he said the Bond Commission had refused to put Jackson water bonds on its agenda.

“We make the decision prior to it being on the agenda such that there is not an actual vote,” Reeves said.

Before the Bond Commission gets involved, bond bills proposed by Jackson-area lawmakers frequently fail to make it out of the Legislature.

In the 2022 legislative session, a bill that would have authorized $4 million in bonds for Jackson water and sewer improvements died in committee. Anotherwould have appropriated money to construct a separate water system for Jackson State University, which had to bring in temporary restrooms and portable showers in August as discolored water flowed through dorm faucets.

At another September news conference, Reeves said the state gave Jackson $200 million over the last several years to address its water problems. But the numbers Reeves’ office gave Jackson television station WLBT-TV include revenue generated from measures like a 1% sales tax paid only by people who shop in Jackson.

“That is not money that comes from the state of Mississippi,” said Democratic state Rep. Earle Banks of Jackson. “That is money that comes from the citizens of Jackson and people who do business in the city of Jackson.”

With population decline eroding Jackson’s tax base, voters in 2014 overwhelmingly approved a 1% local sales tax for infrastructure repairs. The Jackson city council asked for legislative approval for another election to double that local tax to 2 cents on the dollar. A bill to increase the sales tax died in the 2021 legislative session.

Reeves said Jackson needed to fix its problems with its billing system before “asking everyone else to pony up more money.”

Efforts to attract private investment by keeping taxes low have long been central to Reeves’ economic thinking.

The government does not create jobs; it simply “creates an environment which encourages the private sector to invest capital,” Reeves said in the 2011 interview with Gallo. “And the infrastructure around that is a function of government.”

Reeves said government has a role to play in building infrastructure to hasten development. Those economic principles have not been applied to Jackson, some officials said.

“Look, we can we can bury our heads in the sand and say, ‘Jackson’s problem is not our problem,’” Horhn said. “But when you hear there ain’t no water, and you can’t brush your teeth or take a crap, you strike Mississippi from the list.”

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hanimmal said:

https://apnews.com/article/2022-midterm-elections-mississippi-tate-reeves-jackson-ae2460ffcbbd96a3cff1ab3ab5c44e4fView attachment 5204998

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