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What We're Watching: Biden's climate bill, Gaza ceasefire, Ukrainian nuclear jitters
US Senate passes Biden's big climate bill
Following a marathon vote-a-rama session that started late Saturday, the US Senate on Sunday passed a $740 billion package aimed at fighting climate change and lowering the cost of prescription drugs by raising certain corporate taxes. Although the legislation is a trimmed-down version of the Biden administration's doomed $3.5 trillion Build Back Better spending plan, it’s still the most ambitious climate legislation passed to date in America. Dubbed the “Inflation Reduction Act” — though economists doubt it'll live up to its name immediately — it allocates $369 billion for climate and clean energy investments, enables the government to negotiate some prescription drug prices, and slaps a 15% minimum tax on large corporations. Republicans say the tax hikes in the bill will kill jobs and spur inflation, but politically it's the latest in a series of victories for President Joe Biden at just the right time: three months ahead of November’s midterms. The legislation now heads to the House, where it is expected to be approved in a few days, before hitting Biden’s desk to be signed into law.
A tenuous truce in Gaza
Israel and the Islamic Jihad militant group agreed Sunday to an Egypt-brokered truce after three days of intense clashes in the Gaza Strip. Hours earlier, the Israeli military had killed a second Islamic Jihad senior commander in an offensive against the Iran-backed militant group in Gaza. At least 41 Palestinians have died in the worst violence the region has seen since Israel and Hamas — another militant group, which controls Gaza — fought an 11-day war in May 2021. The fighting began Friday, when an Israeli air strike eliminated Khaled Mansour, an Islamic Jihad top gun who'd previously survived five Israeli assassination attempts. Israel later carried out more air strikes and detained dozens of suspected Islamic Jihad members, while the group responded by firing upwards of 600 rockets at Israel. The tensions come at a tricky time in Israeli politics: caretaker PM Yair Lapid hopes that the offensive will help boost his national security credentials ahead of the Nov. 1 election, with former prime minister and security hawk "Bibi" Netanyahu planning his comeback.
Nuclear trouble in Ukraine
Europe’s largest nuclear power station, located in the Russian-occupied province of Zaporizhzhia in southern Ukraine, became the site of artillery duels over the weekend, with the two sides blaming each other for the fight. According to Kyiv, since the Russians took control of the plant in March, they’ve used it as a fortified position and stockpiled military hardware there. The IAEA was quick to sound the alarm over a “very real risk” of a nuclear disaster, warning that the shelling has seriously damaged the radiation sensors after striking close to a storage unit for spent fuel at Zaporizhzhia, one of four working atomic power stations in Ukraine (Chernobyl, the notorious site of the deadly nuclear accident in 1986 under Soviet rule, has been decommissioned). Although no radiation leaks were reported, the IAEA wants to dispatch an emergency and inspection team, but it’s unclear if the fighting will cease. Meanwhile, Ukraine’s President Volodymyr Zelensky denounced “Russian nuclear terror.”
Will the US debt ceiling debate cause a government shutdown?
Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, shares insights on US politics:
Is a US government shutdown coming?
Hard to say. Republicans and Democrats generally are in agreement about the need to fund the government. And they generally agree at what level the government should be funded. And they generally agree about the need for supplemental money for Afghanistan and some natural disasters, coming out of hurricanes this season and wildfires. What they're not in agreement about is the federal debt limit, which is the cap on US borrowing that the US hit in early August and needs to be extended by some time in October. Otherwise, the US will have a first-ever default. This would be a very bad outcome with cataclysmic results for the entire world economy.
But Republicans are saying, "Hey, you guys want to spend a bunch of money on $3.5 trillion. We are not going to help you. So you need to find the votes for this on your own." And the Democrats are saying, "This debt belongs to all of us and therefore we all need to vote to increase the debt ceiling." The government shutdown and the debt limits so far are linked. And as long as they remain linked, there will be a government shutdown. The issue has to be resolved by the end of the month. Otherwise, government functions shut down until they get a resolution.
Why is President Biden's economic plan hanging in the balance?
Well, the plan is hanging in the balance because the Democratic Party itself is divided over how much money should be spent by the federal government over the next 10 years. The progressives support spending up to $6 trillion. The conservative members of the party are being a little bit cagier about what they'd be for. Basically, the party's in agreement that they should do some form of expanded social spending, direct subsidies for childcare, for education, for healthcare, and a whole bunch of new physical infrastructure spending. But how much and how to pay for it are really dividing the party. And there's no clear solution right now. Probably they get there by the end of the year. Biden himself has not been super effective in mitigating the differences between the two wings of the party. And you've got a small number of moderate members, including most prominently Kyrsten Sinema from Arizona, and Joe Manchin from West Virginia, who are holding out on the spending parts of the agenda. But there's also a bunch of members in the House who are for tax increases. So this will take some time to work out. Ultimately, they probably rally around $2 or $2.5 trillion in spending, but maybe not until Thanksgiving or Christmas.
US President Biden holds infrastructure event at Carpenters Pittsburgh Training Center in Pittsburgh, Pennsylvania.
Joe Biden’s plan to remake America
Well, after years of endless "infrastructure weeks" to nowhere, Joe Biden is now aiming for the moon.
On Wednesday, the US president unveiled a $2 trillion dollar plan that would rebuild tens of thousands of miles of dilapidated roads and rails, modernize ports and airports, boost employment and housing, expand broadband access, and accelerate the transition to a more climate-friendly economy. By the time it's all over, the total spending could rise to $4 trillion over a decade.
This is the most ambitious US infrastructure agenda in many decades. It vastly exceeds anything that Biden's two predecessors attempted. In fact, nothing of this scale has been tried at least since the construction of the interstate highway system in the 1950s. In some ways it invites comparison with the public works programs of FDR's New Deal or with the social aims of Lyndon B. Johnson's Great Society programs.
That's because Biden's proposal is about more than just building rails, bridges, electric cars, and the like. It's a bold attempt to revive a once-powerful idea in America: that the government can and should act expansively to reshape and improve society at large. Critics of that idea either object on philosophical grounds (arguing that more government means less liberty) or financial ones (running up the national debt is bad.)
Getting Biden's plan through Congress would upend a nearly 40-year trend of governments under both parties largely rolling back the federal government's presence in American life. Barack Obama's expansion of healthcare was the only major exception to that and it was, as a result, hugely contentious.
In principle, Biden's plan is a political winner. Three-quarters of Americans support a makeover for the country's crumbling infrastructure. Despite being the world's wealthiest country, the US ranks just 13th in overall infrastructure quality.
But as always, there are stark partisan differences here too. A majority of Democrats and independents support hiking taxes on the wealthy to pay for infrastructure, while a majority of Republicans either oppose new infrastructure spending altogether or think it should be paid for without tax increases. For the record, Biden's plan at the moment claims it would pay for itself over the course of 15 years via tax hikes on the wealthy and corporations.
In Congress, Republican leaders won't get on board with a plan of this size, not least because it envisions a sizable increase in the corporate tax rate, and because it contains more green initiatives than the current GOP is comfortable with.
But Democrats are at least as much of an obstacle here as the GOP. There's already a battle brewing within the Democratic caucus about the spending plans. Progressives, led informally by New York Representative Alexandria Ocasio-Cortez, are already up in arms because they think the proposal is too small. Rather than spending $2 trillion over a decade, they want to spend five times as much over the same period. But moderate Dems — including the crucial Democratic swing voters of the Senate, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona — are already balking at the cost and potential tax hikes.
And whereas the urgency of averting mass death smoothed party divisions when it came to the $1.9 trillion COVID stimulus bill, this one will spark a much fiercer battle for the soul of the Democratic party.
So, how are they going to pass this thing? There's virtually no chance of getting 10 Republican votes, which means that either Dems have to take the plunge and scrap the filibuster (which in effect forces lawmakers to get 60 Senate votes to pass most major pieces of legislation), or try to pass the measure through a simple-majority process called "budget reconciliation", which applies for bills that affect taxation and spending. Another question is whether the Biden administration decides to break up elements of the plan into smaller bills, or go for one massive history-making shot on goal.
Whatever Dems are gonna do, they have to do it fast. As the 2022 elections loom, Democrats know they have to use the moment or (potentially) lose it — midterms are historically unkind to the party in power, and the Democrats are working with a razor thin majority to begin with.- Biden takes his shot - GZERO Media ›
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