President Joe Biden and his administration are sticking to their position of not invoking the Taft-Hartley Act to force International Longshoremen’s Association dock workers back on the job at East and Gulf coast ports where a strike is hitting day two on Wednesday, a political decision that reflects the power of unions one month out from an election but risks losing some progress on what is the No. 1 issue for many voters: the economy.

Rhetoric from Cabinet secretaries, including Transportation Secretary Pete Buttigieg and acting Labor Secretary Julie Su, has become sharper in recent days, pointing the finger at the ports ownership and ocean carriers. But right now, there is no sign of any progress bringing the ILA and port owners back to the table for a new round of negotiations, according to CNBC sources. And there remains a big risk on the other side of the political decision-making: wage increases that are a win for workers but ultimately ripple through the economy in the form of higher prices, both domestically and around the world.

Much of the focus about the economic impact of the ports strike to date has been focused on the direct hit to the economy from the massive trade shutdown, and the ways in which supply chain congestion and delays can result in higher prices being passed along to consumers, which will become a bigger factor the longer a strike persists. But maritime and business experts are also warning about the risk of persistent wage inflation making its way into supply chain prices that the Federal Reserve has recently been successful in taming.

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The East and Gulf Coast ports strike could be a no-win situation for the Biden administration https://t.co/x17dHuIkW9

— CNBC (@CNBC) October 2, 2024

The new tariffs President Biden announced last week aren’t economically significant. Symbolically, they are huge.

The U.S. buys almost no electric vehicles, steel or semiconductors—all targets of the tariffs—from China. But, by adding to, rather than rescinding, tariffs imposed in 2018 by former President Donald Trump, it signals that the decoupling of the Chinese and U.S. economies is becoming irreversible.

More important, the tariffs are the final piece of an economic strategy for competing with China.

This strategy is a three-legged stool. The first consists of subsidies to build a viable technology manufacturing sector, from clean energy to semiconductors. The second is tariffs on Chinese imports that threaten those efforts. The third is restrictions on access to money, technology and know-how that could help China compete. A fourth leg, a unified economic front with allies, remains unrealized.

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Biden's new tariffs round out a three-legged strategy for competing with China. Leg 1: subsidies to build a viable technology manufacturing sector, from clean energy to semiconductors. 2: tariffs on Chinese imports that threaten those efforts. 3: restrictions on access to money,…

— Greg Ip (@greg_ip) May 20, 2024

The Social Security and Medicare Trustees just released their annual reports on the financial status of the Social Security and Medicare programs. The Trustees project that both the Social Security and Medicare trust funds are within 12 years of insolvency and in need of trust fund solutions. Specifically, they project the Social Security Old Age and Survivors Insurance (OASI) trust fund will run out of reserves in 2033, the Medicare Hospital Insurance (HI) trust fund will become insolvent by 2036, and the Social Security Disability Insurance (SSDI) trust fund will remain solvent over the 75-year projection window. Assuming revenue is reallocated in the years between OASI and SSDI insolvency, the theoretically combined Social Security trust funds will be insolvent by 2035.

In other words, Social Security’s retirement trust fund will reach insolvency when today’s 58-year-olds reach the normal retirement age and today’s youngest retirees turn 71. At that point, all beneficiaries will face a 21 percent across-the-board benefit cut. On theoretically combined basis, all beneficiaries will face a 17 percent cut in 2035. Over the full 75-year projection window, Social Security’s combined funds faces an actuarial imbalance of 3.50 percent of taxable payroll, which is the equivalent of 1.2 percent of Gross Domestic Product (GDP) or 20 percent of all future benefits.

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🚨 ANALYSIS: The latest #Medicare Trustees' projections show:

➤ The HI Trust Fund will run out of reserves in 12 years, and faces a large shortfall;
➤ Total Medicare costs will grow rapidly;
➤ Medicare's outlook has largely improved since last year, but might be far worse… pic.twitter.com/G7fyrvCILX

— CRFB.org (@BudgetHawks) May 7, 2024

It was not so long ago that the hottest topic in American politics was the ballooning national debt. In 1992 Ross Perot had the best showing for a third-party candidate in a presidential election since 1912 on a platform of fiscal probity. Two years later the Republicans seized control of Congress for the first time in 40 years, with the first item in their “Contract with America” being a pledge to balance the budget. Bill Clinton easily won re-election two years after that, in part by negotiating spending cuts with Republicans that led to America’s first surpluses in a generation.

At the start of this fiscal hullabaloo, in 1992, America’s net debt amounted to 46% of gdp. Today it has reached 96% of gdp. For the past five years, under first Donald Trump and then Joe Biden, the federal deficit has averaged 9% of gdp a year. The International Monetary Fund says that America’s borrowing is so vast it is endangering global financial stability. s&p and Fitch, two credit-rating agencies, have already downgraded America’s debt; a third, Moody’s, is threatening to.

Yet concern about deficits and debt has all but vanished from American politics. Voters seem relaxed about the subject, which barely registers in pollsters’ tallies of the biggest problems facing the country. Although Messrs Biden and Trump both tut-tut about the dire fiscal outlook from time to time, neither has made improving it a centrepiece of his campaign. On the contrary, both would in all likelihood add to America’s debts, by spending more in Mr Biden’s case and by taxing less in Mr Trump’s. Neither candidate dares breathe a word about trimming spending on health care and pensions for the elderly, which account for the biggest share of the federal budget and are set to grow still bigger as the population ages. Yet a fiscal reckoning is coming, whether the candidates admit it or not—and given the politicians’ denial, it may take an unexpected form.

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In the 1990s the hottest topic in American politics was the ballooning national debt. In 1992 this amounted to 46% of GDP; today it has reached 96%. Yet Joe Biden and Donald Trump are all but ignoring this https://t.co/S3QseVdONa 👇

— The Economist (@TheEconomist) May 5, 2024

Some Democrats inside and outside of Biden’s bubble were privately anxious about what’s next for the campaign. The report came during a week when Biden made a number of high-profile flubs, confusing current and past world leaders. He didn’t help matters when he referred to the Egyptian president as the president of Mexico in his remarks on the counsel’s report Thursday night, and his decision to forego a high-profile interview ahead of Sunday’s Super Bowl has also drawn scrutiny.

“Anytime his age and capacity is front and center is bad for his re-election prospects. That said, it does provide an opportunity to more forcefully deal with this issue which they have to do,” said Brian Goldsmith, a Biden donor and a Democratic consultant based in Los Angeles. “The right response is that Biden is a better president because of his age and wisdom and experience, not despite his age and wisdom and experience.”

“They need to find a way to jujitsu this and turn it from a negative into a positive because it is not going away,” Goldsmith said. He added: “Avoiding the Super Bowl interview is a mistake.”

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Democrats’ anxiety over Biden’s age spilled out into the public this week after a special counsel report
https://t.co/g8V3TcFRAG via @WSJ

— Dan Whitcomb (@DanWhitcomb) February 9, 2024

I will take comments on this submitted by email only to KSHarmon[at]mindspring[dot]com.

Only 14 per cent of American voters believe they are better off financially now than when Joe Biden took office, in the latest sign that the president’s economic record could undermine his re-election prospects.

A poll found that almost 70 per cent of voters thought Biden’s economic policies had either hurt the US economy or had no impact, including 33 per cent who said they believed the president’s policies had “hurt the economy a lot”. Only 26 per cent said his policies had helped.

The new monthly poll conducted for the Financial Times and the University of Michigan’s Ross School of Business will seek to track how economic sentiment affects the race for the White House. In 1980, Republican Ronald Reagan famously asked voters whether they were better off than they were four years earlier, setting the stage for his landslide victory over incumbent Democrat Jimmy Carter.

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Only 14% of American voters believe they are better off financially now than when Joe Biden took office, according to a. new monthly poll conducted for the ⁦@FT⁩ and the University of Michigan’s Ross School of Business. https://t.co/MTAfuXdUr2

— annmarie hordern (@annmarie) November 13, 2023

It is sobering to think that the US federal government was running a large budget surplus in 2000 and the gross debt ratio was 54pc of GDP.

A quarter of a century later the ratio is 120pc and vaulting past the 1945 peak. This is partly due to two big recessions and Covid, to be sure, but mostly due to three sets of unfunded tax cuts, two unfunded 21st-century wars and no serious effort to control ballooning middle-class entitlements.

David Kelly from JP Morgan says the US is looking at annual fiscal deficits of $2 trillion this year, next year, and as far as the eye can see. This is at a time of effectively full employment and what should be bumper tax revenues. The deficit could hit $3.5 trillion in the next downturn.

The US Treasury must roll over $8 trillion of existing debt and raise $2 trillion of fresh debt this fiscal year, even as the Fed tosses another $1 trillion onto the heap under its QT programme.

Investors have belatedly, and suddenly, woken up to the shocking implications of a structural budget deficit heading for 8pc of GDP even before any trouble starts. It is this that has driven up yields on US Treasuries by 100 basis points since July.

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If rates continue to rise the way that they’ve been rising, eventually there’s going to be a financial accident, eventually something will break, said JP Morgan’s David Lebovitz on Bloomberg Surveillance. https://t.co/ZsQ8NfcD3n must-read. we thank AEP & David Lebovitz @jpmorgan

— tom keene (@tomkeene) October 7, 2023

The mandate was an attempt by the Biden administration to define sex to include “gender identity” for the purposes of Health and Human Services (HHS) regulations. Critics say the rule would have required doctors, clinics, and hospitals to perform procedures to which they object and insurance companies to pay for such procedures.

The Southern Baptist Convention’s Ethics and Religious Liberty Commission (ERLC) president Brent Leatherwood welcomed the news.

“The Biden administration’s decision to back down from the transgender mandate marks a significant victory in safeguarding the rights of medical professionals to operate in a manner consistent with their deepest held beliefs,” Leatherwood said in written comments.

“This is an important development we should take note of because it not only represents a win for conscience rights but also furthers efforts to shield vulnerable individuals who should never become pawns in the sexual revolution.”

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Treasury Secretary Janet Yellen said that the government could become unable to pay bills on time by June 1. In that case, the Treasury Department could halt payments, such as to federal employees or veterans.

In a worst-case scenario, a failure to pay holders of U.S. government debt, a linchpin of the global financial system, could trigger severe recession and send stock prices plummeting and borrowing costs soaring.

Many economists don’t expect a default for the first time in U.S. history. But they outline three potential ways the standoff could affect the economy and financial system, ranging from not great to extremely scary.

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U.S. lawmakers might have just days to act before the standoff over the debt ceiling reverberates through the economy https://t.co/JM1UfZ7HfW

— Real Time Economics (@WSJecon) May 22, 2023

Prices continued to climb at a brutally rapid pace in September, with a key inflation index increasing at the fastest rate in 40 years, bad news for the Federal Reserve as it struggles to wrestle the cost of living back under control.

Overall inflation climbed 8.2 percent over the year through September, according to the latest Consumer Price Index report on Thursday, a slight moderation from August but more than what economists had expected.

Even more worrisome, underlying inflation trends are headed in the wrong direction. After stripping out fuel and food — which are volatile and removed to get a better sense of the trajectory — prices climbed 6.6 percent over the year through September. That was the quickest rate since 1982.

Inflation has been rapid for a year and a half now, and it is proving stubborn even as the Fed mounts its most aggressive campaign in generations to slow the economy and bring price increases under control. Fast inflation has also triggered the highest Social Security cost-of-living adjustment in decades — an 8.7 percent increase in benefits to retired and disabled Americans, a move that was announced Thursday.

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Inflation Is Unrelenting, Bad News for the Fed and White House https://t.co/VC0vlFl1h8

— Bill Labovitz (@wlabovitz) October 13, 2022

If the U.S. is going to develop an effective response to this combination of strategic threats, our political leaders will have to move beyond finger pointing and blame games over the fate of the JCPOA. Republicans can say justly that Mr. Obama’s decision to sign something as consequential and controversial as the Iran nuclear deal without the bipartisan support needed to get a treaty ratified in the Senate was a historic mistake. Democrats can reasonably riposte that Mr. Trump’s unilateral withdrawal made everything worse. Such matters can be left to the historians. The question before us now is not who was right in 2015 or 2018. It is what we do next.

Mr. Biden has repeatedly said that allowing Iran to build nuclear weapons is not an option. If his administration fails to hold that line, the consequences for American power in the Middle East and globally would be profound and perhaps irreversible. If America attacks Iranian nuclear facilities and finds itself stuck in yet another Middle Eastern quagmire, the effects at home and abroad will also be dire. China and Russia would take advantage of America’s Middle East preoccupation to make trouble elsewhere, and U.S. public opinion would be further polarized.

Few presidents have faced policy choices this tough or consequential. It’s understandable if not commendable that the administration postponed the day of reckoning for so long, but as the dead-cat stink intensifies, Mr. Biden is coming closer to the greatest test of his career.

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The Iran negotiations have moved toward failure as America’s international position grew less secure, and today the deal’s impending collapse is part of a global crisis of American power, writes @wrmeadhttps://t.co/SKtoqK6kX2

— Wall Street Journal Opinion (@WSJopinion) July 26, 2022

Senate negotiators announced on Sunday that they had struck a bipartisan deal on a narrow set of gun safety measures with sufficient support to move through the evenly divided chamber, a significant step toward ending a yearslong congressional impasse on the issue.

The agreement, put forth by 10 Republicans and 10 Democrats and endorsed by President Biden and top Democrats, includes enhanced background checks to give authorities time to check the juvenile and mental health records of any prospective gun buyer under the age of 21 and a provision that would, for the first time, extend to dating partners a prohibition on domestic abusers having guns.

It would also provide funding for states to enact so-called red-flag laws that allow authorities to temporarily confiscate guns from people deemed to be dangerous, as well as money for mental health resources and to bolster safety and mental health services at schools.

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A Senate gun safety plan endorsed by 10 Republicans and 10 Democrats falls far short of reforms long championed by gun control activists and a majority of congressional Democrats. It amounts to notable, albeit narrow, progress amid deep party divisions. https://t.co/WEFNp05vCL pic.twitter.com/KNCaulTD1s

— The New York Times (@nytimes) June 12, 2022

It was just before Christmas, and Jean H. Toal, then the chief justice of the South Carolina Supreme Court, was in a bind. She needed an emergency order drawn up, but the courthouse in Columbia, the state capital, was empty. She was relieved to reach someone who assured her, “Chief, I got it.”

It was J. Michelle Childs, then a state circuit court judge who had made a name for herself as one of the most adept on the bench.

“Within an hour she came back to me, and she had a complete order with footnotes and everything,” Judge Toal, now retired, recalled of the day more than a dozen years ago. “Days later, she delivered her child. So, she was über-pregnant and it was right at Christmas time, but she had her work ethic on full steam, as she always did.”

The memory sums up the reputation of Judge Childs, now a Federal District Court judge in South Carolina, who rose through the ranks of state schools, local government and the South Carolina legal system to the short list of potential Supreme Court nominees for President Biden, who has pledged to nominate a Black woman to replace Justice Stephen G. Breyer.

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A Court Candidate With No Ivy On Her Resume

▫Long-shot contender whose background may prove helpful
▫@EricaLG @EricaLG▫https://t.co/e0jOis1zRR @nytimes #frontpagestoday #USA pic.twitter.com/V9aVZIx8O3

— (@ukpapers) February 10, 2022

Mr. Youngkin had campaigned heavily on education and seized on Mr. McAuliffe’s remark that he didn’t “believe parents should be telling schools what they should teach.” Mr. Youngkin used the comment, made during a debate, as an entryway to hammer his rival on issues like race and transgender rights in schools. The issues simultaneously motivated the G.O.P. base while casting the matter to moderates as an issue of parental rights.

“This is no longer a campaign,” Mr. Youngkin said. “It is a movement being led by Virginia’s parents.”

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Glenn Youngkin's victory in the Virginia governor's race, combined with an unexpectedly tight contest in New Jersey, where the race remained too close to call, delivered a stark warning sign for Democrats less than 10 months into President Biden’s term. https://t.co/zOdYtEMhAt

— The New York Times (@nytimes) November 3, 2021

At least once a week, a team of President Biden’s top advisers meet on Zoom to address the nation’s supply chain crisis. They discuss ways to relieve backlogs at America’s ports, ramp up semiconductor production for struggling automakers and swell the ranks of truck drivers.

The conversations are aimed at one goal: taming accelerating price increases that are hurting the economic recovery, unsettling American consumers and denting Mr. Biden’s popularity.

An inflation surge is presenting a fresh challenge for Mr. Biden, who for months insisted that rising prices were a temporary hangover from the pandemic recession and would quickly recede. Instead, the president and his aides are now bracing for high inflation to persist into next year, with Americans continuing to see faster — and sustained — increases in prices for food, gasoline and other consumer goods than at any point this century.

That reality has complicated Mr. Biden’s push for sweeping legislation to boost workers, expand access to education and fight poverty and climate change. And it is dragging on the president’s approval ratings, which could threaten Democrats’ already tenuous hold on Congress in the 2022 midterm elections.

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Obama WH economist ⁦@jasonfurman⁩: “The original sin was an oversized American Rescue Plan. It contributed to both higher output but also higher prices.” https://t.co/zO8SKQjuCW

— Josh Kraushaar (@HotlineJosh) October 26, 2021

Seven major offshore wind farms would be developed on the East and West coasts and in the Gulf of Mexico under a plan announced Wednesday by the Biden administration.

The projects are part of President Joe Biden’s plan to deploy 30 gigawatts of offshore wind energy by 2030, generating enough electricity to power more than 10 million homes.

Interior Secretary Deb Haaland said her department hopes to hold lease sales by 2025 off the coasts of Maine, New York and the mid-Atlantic, as well as the Carolinas, California, Oregon and the Gulf of Mexico. The projects are part of Biden’s plan to address global warming and could avoid about 78 million metric tons of planet-warming carbon dioxide emissions, while creating up to 77,000 jobs, officials said.

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Seven major offshore wind farms would be developed on the East and West coasts and in the Gulf of Mexico under a plan announced by the Biden administration. https://t.co/w4iljqPT2U

— NBC 7 San Diego (@nbcsandiego) October 14, 2021

The Federal Reserve’s preferred gauge of inflation climbed in August at the quickest pace in 30 years, data released on Friday showed, keeping policymakers on edge as evidence mounts that rapidly rising prices are poised to last longer than practically any of them had expected earlier this year.

The numbers come at a pivotal moment, as inflationary warning signals abound. Used car prices show signs of picking up again, costs for raw goods like cotton and crude oil are increasing and companies continue to experience pain from persistent supply chain disruptions.

That is stoking fears in Washington and on Wall Street that although rapid price gains will eventually fade, the adjustment could drag on for months. A longer burst of inflation raises the chances that consumers will change their expectations and behavior, paving the way for more permanent price increases.

It is a high-stakes juncture for policymakers. The Fed is preparing to withdraw some of its support for the economy soon, but it would prefer to do so only gradually, given the millions of Americans who remain out of work. The White House is trying to pass two big policy packages at the core of President Biden’s economic agenda, and Republicans have begun wielding every new inflation data point as an argument against more federal spending.

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The August rise in the Personal Consumption Expenditures index is stoking fears that although rapid price gains will eventually fade, the adjustment could drag on for months, @jeannasmialek writes. https://t.co/PmlzSdu1kN

— NYT Business (@nytimesbusiness) October 2, 2021

Last month, the president would only commit to a return to normal by Christmas, citing uncertainty over how quickly the administration could ramp up its vaccination drive.

Biden will announce the new target during his first televised primetime address to the nation since his inauguration in January.

“He will communicate to Americans that, if we all do our part, there’s a good chance that families, friends, neighbours, will be able to gather in small groups to celebrate Independence Day on July 4,” a senior administration official said. “The next phase of our wartime effort will help us get closer to normal by July 4, Independence Day,” they added.

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Biden to tell states to make all adults eligible for Covid jab by May 1 https://t.co/C3d9d0SkHb

— Financial Times (@FinancialTimes) March 11, 2021