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- President Joe Biden has shifted his approach to the $1tn spending plan
- Negotiations continue as the bipartisan agreement is yet to become a law
US President Joe Biden has walked back his comments that he would not sign the $1tn infrastructure package unless it was accompanied by broader and more comprehensive legislation. The move by Mr. Biden marked a U-turn in his approach to the agreement that was reached just two days earlier and included the support of Republicans.
The shift in perspective from President Biden was a result of pressure by Republicans who opposed his threat to block the deal if it didn’t include a broader spending package that supported by Democrats alone.
“At a press conference after announcing the bipartisan agreement, I indicated that I would refuse to sign the infrastructure bill if it was sent to me without my Families Plan and other priorities, including clean energy,” the President said on Saturday. “That statement understandably upset some Republicans, who do not see the two plans as linked,” he added. “My comments also created the impression that I was issuing a veto threat on the very plan I had just agreed to, which was certainly not my intent.”
The President’s attempt to enact another large spending package alongside the infrastructure plan was rejected by Republicans on the grounds that they do not want to be associated with Mr. Biden’s broader spending efforts and his planned tax increases.
“No deal by extortion!”, Republican Senator Lindsay Graham said on Twitter on Saturday. “It was never suggested to me during these negotiations that President Biden was holding hostage the bipartisan infrastructure proposal unless a liberal reconciliation package was also passed.”
The larger spending plan that Mr. Biden intended to tie to the landmark cross-party deal includes a total of $1.8tn aimed to expand the US social safety net. The plan, called American Families Plan, should cover areas such as child care, education, paid leave and antipoverty efforts. It would be funded by hefty tax increases on the wealthiest households, a measure strongly opposed by the Republicans.
The continued negotiations over the infrastructure legislation represent Joe Biden’s biggest test to achieve a bipartisan victory during his term as President. Mr. Biden is certain he could get the job done as he has pointed to his 40 years of experience in the Senate as proof of his deal-making abilities.
Biden’s Retort Eases Markets
President Biden’s flexible stance toward the $1tn spending package appears to have calmed investors who are once again ready to bet on the expansion of the US economy.
The stock market is poised to open slightly higher on Monday as futures contracts tied to the main indexes hover in green territory. Equities on Wall Street ended last week with gains across the board with the S&P500 setting a new record on Thursday and Friday. The Dow Jones now floats less than 2% below its all-time peak, while the Nasdaq Composite is just a few points away from its record high.
The constant fiscal and monetary effort by the government and the Federal Reserve to sustain and grow the economy has resulted in dozens of new highs for the benchmark averages this year. As the first half of 2021 draws to a close, the broad-based S&P500 has advanced more than 15%, while the Dow Jones Industrial Average is higher by nearly 14%. Year-to-date, the Nasdaq Composite has gained a little over 13%.
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