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Saturday, July 31, 2021

Amid focus on infrastructure, White House economic team wrenched back to coronavirus - The Washington Post

After weeks of tense negotiations with Congress on infrastructure, the White House economic team was wrenched back to dealing with the coronavirus pandemic this week, issuing a number of abrupt policy changes to combat the delta variant.

As the vaccination campaign progressed and the economy rebounded, President Biden and senior administration officials had pivoted to advancing trillions of dollars in spending through infrastructure and other domestic programs as part of his broader agenda. But the delta variant has complicated that break, forcing the White House to return to economic problems related to the pandemic and try to prod employers to step up vaccination efforts.

On Thursday, the White House issued an impromptu, last-minute call for Congress to extend an expiring moratorium on evictions nationwide, citing the renewed threat of the delta variant. That effort was not expected to pass and its late arrival frustrated liberal lawmakers and advocates close to the administration. Even some White House officials were confused by the sudden statement from White House press secretary Jen Psaki, which appeared incompatible with the congressional schedule. The moratorium ends Sunday, leaving lawmakers virtually no time to meet Psaki’s request.

“Why are we doing this now? Why did we wait so long? It’s very weird,” one senior administration official told The Washington Post, speaking on the condition of anonymity to reflect the mood among many officials.

The whiplash over the eviction moratorium underscores the broader uncertainty facing the administration as it tries to head off the delta variant as the other parts of its economic agenda proceed.

Even within 24 hours, the administration received deeply conflicting signs about the progress of its efforts.

On Wednesday, the White House and Senate Republicans announced they had secured a breakthrough agreement on a $1 trillion bipartisan infrastructure package, a key priority of the president’s. Thursday morning, the Department of Labor reported weekly unemployment claims had stayed relatively flat in a troubling sign of the economic rebound. Government data released Thursday also showed surging growth, with the economy growing by 6.5 percent in the quarter ending in June, while closing the gap created by the pandemic.

The eviction moratorium expiring Sunday highlighted the challenges of adjusting to the delta variant on such a rapid timeline.

The White House official in charge of implementing the stimulus, Gene Sperling, raised the idea in internal conversations over the past week of whether the moratorium could be extended unilaterally, two people familiar with the matter said. White House Domestic Policy Council Director Susan Rice and National Economic Council Director Brian Deese were also involved in discussions about extending it and supportive of the effort, the people said.

However, their suggestion ran into opposition from the White House Office of Legal Counsel, among other administration attorneys, who cited a Supreme Court opinion last month, the two people said. In voting with the court’s liberals to allow the moratorium to remain in place through July, Supreme Court Justice Brett M. Kavanaugh said that extending the moratorium further would require congressional approval.

Biden administration attorneys expressed concern that if the White House defied Kavanaugh, the Supreme Court could move to restrict other emergency public health rules instituted by the federal government, the people said. The people spoke on the condition of anonymity to discuss internal dynamics.

“There was a real desire to go back and kick the tires and say, ‘Are we absolutely sure we can’t extend?’ Everybody wanted to as a policy matter. But what was clear from the legal analysis was that we had already litigated this issue all the way to the Supreme Court, and the court had spoken on the issue,” Sperling told The Washington Post. “There was no chance of winning or it even having a temporary positive impact and some chance that it could provoke a harmful ruling.”

Still, Sperling’s explanation leaves unclear why the White House waited a month — between Kavanaugh’s June 29 opinion and Psaki’s statement on Thursday — to push for congressional action. The delay complicated legislative efforts to keep the ban in place. Two House Democrats involved in the push for extending the moratorium, who spoke on the condition of anonymity to discuss internal matters, said they had been waiting for guidance from the administration, before trying to push the effort through Congress.

The statement also said Biden would have “strongly supported” an extension in the eviction moratorium amid the delta variant were it not for the Supreme Court’s announcement. A White House statement stressed that the landscape of covid-19 had shifted rapidly since the time of the court’s ruling. The statement also emphasized the administration’s efforts to accelerate disbursal of rental assistance relief across the country.

The White House has cited strong economic growth and falling unemployment, and said it has always maintained the war against covid had not been fully won. A White House statement pointed to new efforts over the past several months to improve the pace of vaccinations and said the economy would receive further support from parts of the $1.9 trillion stimulus yet to be allocated.

Other advocates maintained the administration should have moved more quickly on the eviction moratorium. An analysis circulating among congressional Democratic offices found that millions of renters are at risk of eviction precisely in the areas where the delta variant is most strongly circulating.

“The ruling the Supreme Court gave was based on arguments filed in early June, when delta made up about 10 percent of cases. Now, delta is about 90 percent of cases and everything is surging,” said Paul Williams, a housing expert and fellow at the nonprofit Jain Family Institute and the author of the analysis.

“Why not instruct the CDC to extend it and let this go through the courts? Every day the rental assistance program can send out money and extinguish debt is evictions prevented.”

Some housing experts agreed with the White House, saying they believed that the administration’s hands were tied by the Supreme Court.

“The delta variant changed everything and created new urgency for an extension,” said Diane Yentel, president and CEO of the National Low Income Housing Coalition. “But the Supreme Court was really clear that if they attempted to extend the moratorium they would overturn it.”

Other analysts said the criticism of the administration is overblown. The economy is still set to grow at a rapid pace and much of the country is vaccinated. It remains far from clear whether the delta variant remains a long-term threat — even if that possibility continues to be a top concern of administration officials themselves.

“I think this is being overplayed,” said Dean Baker, a liberal economist. Baker pointed to a sharp decline in cases in the United Kingdom after an initial surge as a reason to be heartened. “The reality is they did a very good job getting the vaccines out.”

Still, other challenges loom. The White House has been consumed this month with pushing Congress to approve the infrastructure package and a separate $3.5 trillion spending bill. But even though the labor market remains far from fully healed, federal unemployment benefits for roughly 9.2 million Americans stand to expire in full in September, according to a recent analysis by the Century Foundation, a think tank.

Biden has been clear that he believes it is time for the additional federal $300 per week supplement to end. But another 5.2 million gig workers and other self-employed Americans are set to lose their unemployment altogether given that a special pandemic unemployment program will expire in September. Another approximately 4 million Americans are also at risk of losing long-term federal unemployment benefits.

A White House statement said the administration was still evaluating new data and pushing Congress to implement long-term reforms of the unemployment system. The White House has not answered questions about whether it will seek to extend the jobless program for gig workers and the long-term unemployed. One senior administration official said White House officials believe there is no political will on Capitol Hill for extending those benefits.

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Amid focus on infrastructure, White House economic team wrenched back to coronavirus - The Washington Post
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