Bloomberg Businessweek - USA (2020-08-10)

◼ECONOMICS BloombergBusinessweek August 10, 2020

Counting

Puerto Ricans

the long-term fiscal health of the United States,”

says Jake Sullivan, one of his top policy advisers.

But he’s consulted a wide range of economists

and former government officials about the need

for stimulus, and “the answer that comes back

is we’re going to have to make big, bold invest-

ments early next year,” Sullivan says. “He feels

that’s going to be necessary.”

The biggest outlay in Biden’s plan is the $2 tril-

lion over four years earmarked to shift millions of

jobs into clean energy, with the goal of cutting car-

bon emissions from power generation to zero by

2030. The idea has been cheered by progressives
      who were skeptical of Biden on climate because
      he opposes the Green New Deal backed by such
      Democrats as Representative Alexandria Ocasio-
      Cortez of New York.
      Toboostmanufacturing,Bidenispledging
      anadditional$400billioninprocurementof
      domestically made goods, as well as $300 billion to
      support high-tech research. The other core spend-
      ing proposal is to expand the availability of care
      for the youngest and oldest Americans, including
      universal preschool for 3- and 4-year-olds, at a cost
      of $775 billion over a decade.
      While Biden has pledged to reverse most of
      Trump’s 2017 tax cuts, his campaign hasn’t gone
      into much detail on how his proposals will be
      financed. “How much is stimulus and how much is
      paid for,” Sullivan says, “is a question that turns on
      the economic conditions that we find in January.”
      That in turn may depend on the outcome of a
      budget battle in Congress this summer over the
      next round of coronavirus relief. Key parts of the
      $2 trillion in spending approved by lawmakers ear-
      lier in the crisis, such as the $600-a-week top-up for
      unemployment benefits, expired in July—just as the
      economy appeared at risk of a relapse amid a new
      wave of virus cases in Sun Belt states.
      Biden has backed congressional Democrats
      who are demanding more than $3 trillion in new
      measures, including an extension of the jobless
      payments and aid for state and local governments.
      Republicans,pointingtoanalreadyrisingnational
      debtandarguingthatovergenerousbenefitswill
      deterpeople from returning to work, want to cap
      the package at $1 trillion.
      If the GOP retains control of the Senate in the
      November election, it could throw up the same
      kind of roadblocks to a Biden administration’s
      spending plans. Pressure to “pare everything back
      because of concerns over deficits” won’t just be
      coming from the other side of the aisle—it could
      surface within Biden’s own party, too, according
      to Beth Baltzan, a fellow at the left-leaning Open

26

THEBOTTOMLINE Bidenwasoncea debtscold,buthis

$3.5 trillion spending plan demonstrates that his thinking on the

danger of deficits has evolved with the times.

Markets Institute. “There are plenty of Democrats

who are superhawkish on this stuff.”

But Baltzan says she doesn’t expect that kind

of “doctrinaire” approach to fiscal policy from the

former vice president if he wins the top job this

time. “I think he’s pragmatic,” she says. “I think

he understands the moment in history that we’re

dealing with.”

The Covid crisis may compel Democrats

who’ve voiced concerns about the national debt

to be pragmatic as well. “We’re in a very unique

moment, where if we don’t inject money into the

economy, we’re going to end up in a depression,”

saysRepresentativeTimRyan,a Democratfrom

OhiowhoslammedTrump’staxcutspartlyonthe

groundsofhowmuchtheywouldwidenthedeficit.

“We’re all concerned in the long term about debt

and deficits. But right now, it would be counterpro-

ductive.” �Jenny Leonard and Tyler Pager

● Ahead of a door-to-door campaign, the territory lags

all U.S. states in census responses

As Americans are being asked to stand up and

be counted in the 2020 census, Puerto Ricans are

takinga pass.

The U.S.commonwealthhas a censusself-

response rate of just 27%—the lowest of any U.S.

jurisdiction and well behind the national average of

63%. Alaska, the other national laggard, has a com-

paratively robust response rate of 49%.

Just how many people the island has lost in the

last decade—driven away by a deep recession, politi-

cal instability, and natural disasters—remains a mat-

terofcontention,particularlyonWallStreet.The

territoryhasbeenmiredincourtproceedingssince

2017,whenit soughttoreducealmost$125billion

in debt and pension liabilities by filing for munici-

pal bankruptcy—the largest claim in U.S. history. As