Another Republican President, Another Recession.

BEIJING (AP) — One of China’s biggest real estate developers is struggling to avoid defaulting on billions of dollars of debt, prompting concern about a broader economic fallout and protests by buyers of unfinished apartments.

Evergrande Group appears likely to be unable to repay all of the 572 billion yuan ($89 billion) it owes banks and other bondholders, financial rating agencies say. That might jolt financial markets, but analysts say Beijing is likely to step in to prevent wider damage if Evergrande can’t manage an orderly resolution of its debts.

“In the unlikely event that a default unsettles the broader property market, significantly disrupting sales and investment, this could have farther-reaching macroeconomic effects,” said Fitch Ratings analysts in a report Wednesday.

Evergrande ran into a cash crunch after its borrowing to build apartments, office towers and shopping malls collided with pressure from the ruling Communist Party to reduce corporate debt loads that are seen as a threat to the economy.

Beijing has made reducing financial risk a priority since 2018. In 2014, authorities allowed the first corporate bond default since the 1949 communist revolution. Defaults have gradually been allowed to increase in hopes of forcing borrowers and investors to be more disciplined.

Despite that, total corporate, government and household debt rose from the equivalent of 270% of annual economic output in 2018 to nearly 300% last year, unusually high for a middle-income country. Economists say a financial crisis is unlikely but debt could drag on economic growth by diverting money from consumption and investment.

Evergrande’s struggle has prompted warnings abroad that a broader financial squeeze on real estate — an industry that propelled China’s explosive 1998-2008 boom — could lead to trouble for banks and an abrupt and politically dangerous collapse in economic growth.

The government has yet to say what it might do about Evergrande, one of China’s biggest private sector conglomerates, but financial analysts say Beijing is likely to intervene, especially to protect households that bought unfinished apartments.

An outright default might dent consumer confidence if homebuyers suffer losses, “but we assume the government would act to protect households’ interests, making this outcome unlikely,” Fitch analysts said.

President Xi Jinping is promoting a “common prosperity” initiative to spread China’s wealth more broadly and narrow its politically volatile gap between a wealthy elite and the poor majority. So regulators may favor homebuyers at the expense of banks and other investors in Evergrande debt.

Headquartered in the southern city of Shenzhen, near Hong Kong, Evergrande has sold assets to pay down debt since regulators in August 2020 tightened controls on financing for China’s 12 biggest developers.

The companies were told to limit debt relative to “three red lines” — cash on hand, the value of their assets and equity in their businesses. Banks are required to limit real estate lending to 40% of their total under rules that took effect in January.

In addition to bondholders, the company owes 667 billion yuan ($103 billion) to construction companies and other business creditors.

Its share price in Hong Kong plunged 34% to an all-time low on Wednesday. It has fallen 50% over the past month.

Evergrande reported a $1.6 billion profit for the first half of 2021. In a statement Tuesday, it said it has hired outside experts in debt restructuring. On Monday, the company denied it would apply for a corporate restructuring under China’s bankruptcy law.

A financial information service, REDD, reported last week, citing unidentified sources, that Evergrande would suspend interest payments on loans to two banks. The company has yet to confirm that.

As of June 30, Evergrande had 240 billion yuan ($37.3 billion) of debt due within a year, down 28.5% from the end of 2020 but nearly triple its cash holdings of 86.8 billion yuan ($13.5 billion), according to a company financial report.

On Sunday, about 100 people who invested in Evergrande debt through “wealth management products” sold by banks crowded into its Shenzhen headquarters to demand repayment.

The company said those investors can choose to be repaid in property, cash in installments or a claim to payments on residential units, according to the business magazine Caixin.

“It is difficult for Evergrande to make 40 billion yuan ($6.2 billion) of repayments at once for the wealth management products,” the head of Evergrande’s wealth management unit, Du Liang, was quoted as saying.

On Friday, apartment buyers who complain Evergrande suspended construction protested at its headquarters, according to Hong Kong news reports. The company also faces lawsuits by construction contractors that say it has delayed paying them.

Evergrande also sank money into launching its own electric vehicle brand, a priority in the ruling party’s technology plans. It said this week it was making no progress in selling stakes to outside investors.

Other major Chinese developers do not appear to be facing the same cash crunch. But other companies are struggling with debt.

Huarong Asset Management Co., Ltd., the biggest of a group of state-owned companies created to help resolve bad loans held by state banks, reported in August that it lost 102.9 billion yuan ($15.9 billion) last year.

Huarong’s debts stood at $162.3 billion in mid-2020, according to financial information company Capital IQ. However, Huarong said it had no plans to restructure after receiving a capital injection in August from state-owned companies.

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hanimmal said:

https://www.marketwatch.com/story/dow-futures-drop-300-points-as-china-property-fears-grow-11632121264View attachment 4991291

Looks like the market is tanking today because of this:

https://apnews.com/article/business-china-beijing-financial-markets-9b77908b0333b601bffa016a6f7c2892
View attachment 4991292

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Evergrande Gave Workers a Choice: Lend Us Cash or Lose Your Bonus (Published 2021)

The Chinese property giant owes $300 billion and is on the hook for as many as 1.6 million apartments. It may owe tens of thousands of its employees money, too.

www.nytimes.com

Fogdog said:

Chinese markets have an odor about them. This story is particularly revolting.

The company's business model relies on up front purchase of the property. It has 1.5 million buyers who have a down payment with them. Some have been waiting years. Due to nonpayment issues with their suppliers, in May, the company began suspending construction. Unsurprisingly, sales took a precipitous drop last month. Concurrent with that, the company this summer, demanded loans from its employees, threatening their yearly bonus if they did not make the loans. It would be difficult to say no to a boss if I needed the job. What a creepy situation.

Evergrande Gave Workers a Choice: Lend Us Cash or Lose Your Bonus (Published 2021)

The Chinese property giant owes $300 billion and is on the hook for as many as 1.6 million apartments. It may owe tens of thousands of its employees money, too.

www.nytimes.com

They have $300 B in debt. Probably just the first of many to go into some form of default due to debt triggered by recession or maybe triggering recession. Not sure which is first.

1.6% drop in S&P today. Maybe going to get worse, my guess is probably not. Chinese government will step in.

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Rep. Marjorie Taylor Greene (R-GA) claimed on Tuesday that President Joe Biden's proposed budget would make all Americans slaves to China.

During an appearance on Real America's Voice, Greene argued that the government should not be funded.

"Stopping them from continuing on with the massive debt that they're piling on you, the American taxpayer, is so critical," she told host Steve Bannon. "We have to stop the debt ceiling from being raised because Nancy Pelosi and [Chuck] Schumer, they want to continue it for another 15 months so they can ram through the infrastructure bill and the budget."

"In reality, they're setting up the passage for the Green New Deal, which is in raw form in the budget, the $3.5 trillion budget that is going to enslave all of you to China," she said.

Bannon noted that Democrats "need the deplorables' permission" to raise the debt ceiling and pass a budget.

"Yeah, but let's keep them shut down," Greene insisted. "Because what did they do to the American people? How many small businesses closed over Covid? Over 100,000."

Greene's remarks triggered a rant from Bannon about the danger of China enslaving Americans.

"You're not going to enslave our children!" Bannon shouted. "Right now, they're Russian serfs because of what you've done. Now they're going to be debt slaves! We're not going to do it. You're not going to be a debt slave. Your children are not going to be debt slaves. Your grandchildren are not going to be debt slaves because in September-October of 2021 we called their bluff!"

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On the Senate floor Monday, Minority Leader Mitch McConnell (R-Ky.) proclaimed that if the Democratic majority decides, in his rendering, to “go it alone” on a suite of pending budgetary matters, “they will not get Senate Republicans’ help with raising the debt limit,” a ceiling that Treasury Secretary Janet Yellen has warned we’ll hit sometime in October. Since 19 Senate Republicans, including McConnell, already voted for a compromise version of President Biden’s infrastructure bill, and since debate on Biden’s larger budget package is an intramural negotiation among Democrats — with Republicans choosing to be on the sidelines by threatening a filibuster — McConnell is signaling that his caucus is content to kneecap a Democratic president with the threat of letting the United States default on its credit.

It’s a move from the same playbook McConnell used to try to hamstring President Barack Obama in budget talks.
But it’s a riskier one now, in the post-Trump era, when some congressional Republicans, with no serious agenda of their own and motivated by residual fake 2020 outrage, might be tempted to let a default happen for what they hope is a political win.

No matter how far they take their threat this time, McConnell and Republicans are counting on Americans not understanding what the debt ceiling is — that’s the only way this scam can work.

The debt limit is a legal formality. It isn’t an economic constraint on the federal government’s ability to borrow. A vote to raise it isn’t a vote for more debt; it’s a vote to fund the debts the government already owes. The debt limit exists because some policymakers would like to turn the public’s general opposition to debts and deficits into legislation that would reduce them or at least control their growth.

Indeed, Americans regularly express concern about the deficit, which is the annual increment to the debt. In practice, however, it has proved difficult to transform this concern into specific policy actions or even electoral consequences: The debt rises under both Republican and Democratic administrations. When Republicans hold the White House, some Democrats are less inclined to vote for a debt-limit increase. And as the Manhattan Institute’s Brian Riedl recently noted, Democrats could have taken care of the debt limit earlier this year.

But only one party brands its members as fiscal hawks. Republicans still try to claim that mantle, but they engage in orgies of tax-cutting (without corresponding “pay-fors”) whenever they get the opportunity. GOP notables such as former House speaker Paul Ryan, with his largely undeserved reputation as a green-eyeshade-wearing budget-cutter, have vanished from view. Despite professing outrage about deficits and debt, many tea partyers embraced Donald Trump, on whose watch the national debt rose by close to $8 trillion.

I helped create the GOP tax myth. Trump is wrong: Tax cuts don’t equal growth.

On either side of the aisle, legislators can reasonably debate what they consider the right amount of borrowing and spending, but they can’t reasonably argue that it’s anything other than derelict to play chicken with the nation’s creditworthiness.

The debt limit, which has existed since 1917, hasn’t been an effective brake on the growth of debt. It mainly allows members of Congress to pontificate on the evils of debt without requiring them to stand behind any politically painful act that would actually reduce it, such as raising taxes or cutting popular spending programs.

Nearly a half-century ago, policymakers genuinely concerned about deficits tried to create an improved budgetary system, culminating in the Budget Act of 1974. It requires Congress, at intervals, to set a limit on the federal debt. When the limit needs to be increased, specific congressional action is required — raising it can’t be just an automatic part of the appropriations process. The law created a mechanism called “reconciliation” that would facilitate deficit reduction by preventing a Senate filibuster for legislation that would affect the debt.

Unfortunately, in recent years, the budget process has become something of a joke insofar as deficit limitation is concerned: Congress simply ignores it except when it wants to use reconciliation to increase deficits with tax cuts or spending hikes.

This has left the debt limit as a merely theoretical restraint on the national debt’s climb. Everyone in Congress knows that it’s about as useful as a too-ambitious New Year’s resolution. But it still serves a demagogic purpose for the political party not in control of the White House. (Fewer Americans would blame their own member of Congress if the country defaulted on its obligations; most would blame the president.)

The right wants a hands-off approach to business. Until it hates the results.

As McConnell put it during the 2011 debt limit crisis: “It’s a hostage that’s worth ransoming. And it focuses the Congress on something that must be done.” This time around, McConnell hasn’t specified his ransom, but it will undoubtedly be something unpalatable to Democrats. Democrats are playing their own game of chicken, with moderates and progressives not trusting the other faction to provide enough votes for final passage of both Biden’s infrastructure legislation and his overall budget proposal.

The danger, as with Cold War “brinkmanship,” is that you never know if things will go too far and someone will decide to test the nuclear option. The equivalent result in today’s budget fight would be a default, with an ensuing meltdown in financial markets if U.S. government bonds become questionable assets. Markets have always believed that a default on the federal debt would never happen. Up to now, that thinking has been right — but there’s a first time for everything: On Jan. 5, few envisioned the Jan. 6 insurrection. These days, McConnell’s caginess is offset by a lot of Republican craziness.

Whether Republicans are still only bluffing, or if they’re really ready to gamble with America’s creditworthiness just to stick it to Biden, it would matter a whole lot less if they couldn’t rely on the public’s confusion about the debt limit. If raising it were properly understood for what it is — authorization for the country to pay what it owes — then it wouldn’t be a hostage worth taking. McConnell and Republicans would look like deadbeats.

But so long as Republicans can convince voters that a debt-limit raise is runaway spending, not responsible bill-paying, they’ll have a potent way to disrupt the budget process, divert Democrats from passing popular spending programs and mask their own lack of fiscal discipline.

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WASHINGTON (AP) — What will it cost to enact President Joe Biden’s massive expansion of social programs?

Congress has authorized spending up to $3.5 trillion over a decade, but Biden is prodding Democrats to fully cover the cost of the legislation — by raising taxes on corporations and the wealthy, negotiating the price of prescription drugs and dialing up other sources of federal revenue such as increased IRS funding.

The idea is that entire package should pay for itself.

Defending a bill not yet fully drafted, Democrats are determined to avoid a deficit financed spending spree. They are growing frustrated by the focus on the proposed $3.5 trillion spending total, arguing far too little attention is being paid to the work they are doing to balance the books. Biden on Friday said he would prefer the price tag described as “zero.”

“We pay for everything we spend,” Biden said at the White House. “It’s going to be zero. Zero.”

But the revenue side of the equation is vexing, and it’s emerged as a core challenge for Democratic bargainers as they labor to construct one of the largest legislative efforts in a generation. Their success or failure could help determine whether the bulk of Biden’s agenda becomes law and can withstand the political attacks to come.

Republicans, lockstep in opposition, aren’t waiting for the details. They’ve trained their focus on the $3.5 trillion spending ceiling set by Democrats, pillorying that sum as fiscally reckless, misguided, big government at its worst.

“The radical left is pushing in all their chips — they want to use this terrible but temporary pandemic as a Trojan horse for permanent socialism,” Senate Republican leader Mitch McConnell of Kentucky said Thursday. “Trillions upon trillions more in government spending when families are already facing inflation.”

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Part of the problem for Democratic leaders is the lack of a consensus about which programs to fund and for how long. House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Chuck Schumer, D-N.Y., acknowledge the price will likely come down and say they have a “menu” of revenue raisers to pay for it. But without certainty on what initiatives will be included, no final decisions can be made.

“This is not about price tag,” Pelosi said Thursday. “This is about what’s in the bill.”

Biden and administration officials stress the plan is as much about fairness as dollars and cents. By taxing the wealthy and corporations, they hope to fund paid family leave and child tax credits that help those reaching for the middle class, all while adopting environmental and economic policies that help the U.S. compete with China. But the haggling over a final spending target is overshadowing the policy goals they are trying achieve.

Washington Rep. Pramila Jayapal, a lead negotiator for House progressives, said Friday that reporters should not depict the measure as costing trillions of dollars when the accompanying proposed tax increases would cover the cost.

“I just believe that this is going to be a zero-dollar-bill — that’s the No. 1 priority,” she said.

Sharron Parrott, president of the Center on Budget and Policy Priorities, a liberal think tank based in Washington, warned Democrats that emphasizing the $3.5 trillion figure could detract from what they are trying to achieve.

“The debate so far has been overly focused on a single number: the $3.5 trillion in gross new investments over the next ten years — including both spending increases and tax cuts — that may be included in the package,” Parrott wrote in an August blog post. “True fiscal stewardship requires a focus on the net cost of the package and, even more fundamentally, a focus on the merits of the investment and offset proposals themselves.”

What Biden is really pushing are two goals that can easily come into conflict. He wants to restore the middle class to the epicenter of economic growth, but do so without worsening the national debt or raising taxes on people earning less than $400,000 a year.

Further complicating things is that many of his spending policies are actually tax cuts for the poor and middle class, which means he is raising taxes for one group in order to cut them for another.

Democrats also have to contend with how the measures are assessed by the Congressional Budget Office, the final arbiter of how the legislation will affect the federal balance sheet.

The Democrats’ expanded child credit and dependent care credits, enacted earlier this year, are counted as costs in a CBO score. Biden wants to extend these programs as part of the budget, which he is now arguing amounts to one of the largest middle-class tax cuts in U.S. history.

“It’s reducing taxes, not increasing taxes,” Biden said Friday.

It’s not entirely clear whether Biden’s claim of “zero” cost is feasible under the 10-year outlook used by the CBO to assess the economic impacts of legislation. Biden’s own budget officials earlier this year estimated that his agenda would increase the national debt by nearly $1.4 trillion over the decade.

Biden on Friday described the multi-tiered talks with legislators as at a “stalemate.” More meetings are expected in coming days.

In the evenly split Senate, key Democratic senators such as West Virginia’s Joe Manchin and Arizona’s Kyrsten Sinema have qualms about the total spending. Democratic moderates are jockeying for advantage against their liberal counterparts. With time running short, Biden is asking for more patience to get the numbers right so that the votes will follow.

“This is a process,” he said. “But it’s just gonna take some time.”

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Senate Republicans on Monday prepared to block a bill that would fund the government, provide billions of dollars in hurricane relief and stave off a default in U.S. debts, part of the party’s renewed campaign to undermine President Biden’s broader economic agenda.

The GOP’s expected opposition is sure to deal a death blow to the measure, which had passed the House last week, and threatens to add to the pressure on Democrats to devise their own path forward ahead of a series of urgent fiscal deadlines. A failure to address the issues could cause severe financial calamity, the White House has warned, potentially plunging the United States into another recession.

Ahead of the planned Monday vote, Senate Minority Leader Mitch McConnell (R-Ky.) staked his party’s position — that Republicans are not willing to vote for any measure that raises or suspends the debt ceiling, even if they have no intentions of shutting down the government in the process. GOP lawmakers feel that raising the borrowing limit, which allows the country to pay its bills, would enable Biden and his Democratic allies to pursue trillions in additional spending and other policy changes they do not support.

“If they want to tax, borrow, and spend historic sums of money without our input, they’ll have to raise the debt limit without our help. This is the reality. I’ve been saying this very clearly since July,” McConnell said last week.

White House tells U.S. agencies to get ready for first government shutdown of pandemic

Democrats have sharply rebuked that reasoning: They have pointed to the fact that the country’s debts predate the current debate, arguing that some of its bills, including a roughly $900 billion coronavirus stimulus package adopted in December, had been racked up on a bipartisan basis. Democrats also have stressed they had worked with Republicans under President Donald Trump to raise the debt ceiling even when he pursued policies they did not support, including the construction of a wall on the U.S.-Mexico border.

But Democrats’ arguments have failed to sway Republicans, resulting in a widely predicted outcome that now forces Democrats to recalibrate their strategy on a tight timeline. They have until Thursday at midnight to craft a plan to fund the government, or else key federal operations will suspend or scale back many operations Friday morning. And they must act before mid-October to raise the debt ceiling, or they could risk the sort of financial calamity that could destabilize global markets. The Treasury Department has not specified an exact deadline.

The standoff only serves to highlight the intensifying acrimony on Capitol Hill, where Democrats on Monday are also set to forge ahead on their plans to adopt as much as $4 trillion in new spending initiatives backed by Biden. That includes a plan to improve the nation’s infrastructure, which Republicans support, and another that raises taxes to fund new health-care, education and climate initiatives, which the GOP opposes. Those measures also hang in the balance, as the House had hoped to begin debating them — and potentially hold votes — as soon as this week.

$4 trillion White House agenda in peril as Democrats still at odds ahead of key votes

Republicans say they are still willing to support a funding stopgap, so long as it is entirely divorced from the debt ceiling. Absent an agreement, Washington would grind to a halt, disrupting federal agencies that are responding to the coronavirus while leaving thousands of federal employees out of work and without a paycheck.

“There would be a lot of Republican votes for that,” Sen. Patrick J. Toomey (R-Pa.) predicted Sunday during an interview on CNN’s “State of the Union.”

Democrats have also pledged to prevent a government shutdown, raising the odds that lawmakers can still stave off a worst-case scenario by the end of week — so long as the two parties cooperate. Their eventual measure is also expected to include billions of dollars to respond to two recent, deadly hurricanes that devastated the Gulf Coast and Eastern Seaboard, as well as money to help resettle Afghan refugees.

But the fight over the debt ceiling is another matter entirely.

Former GOP Treasury secretaries tried defusing debt ceiling bomb in talks with McConnell, Yellen

Even as they readied a vote against the suspension Monday, Republicans maintained they do not want the U.S. government to default. Instead, they have said Democrats should shoulder the burden on their own given their proposed increases in federal spending, including a roughly $3.5 trillion tax-and-spending package they hope to move through the House as soon as this week.

Democrats plan to advance that measure through a legislative maneuver known as reconciliation. The move allows them to sidestep Republican opposition, particularly once it reaches the Senate, where the party has only 51 votes — and otherwise would need 60 to proceed. But GOP lawmakers have seized on the process, demanding that Democrats also use it to increase the debt ceiling.

The move is easier said than done: It could be time consuming, and it could expose Democrats to a series of uncomfortable political votes. And it is guaranteed to force the party to choose a specific number by which to raise the country’s borrowing limit, rather than merely suspending it, perhaps turning the entire process into fodder for GOP attacks entering the 2022 congressional midterms.

The entire endeavor has frustrated Democrats, recalling for some the brinkmanship over the debt ceiling from a decade ago that hammered U.S. markets and spooked investors globally, as the country for the first time risked the potential for default. The standoff ended only after Democrats agreed to across-the-board budget cuts and caps that they say decimated the ability of federal agencies to provide much-needed health and education programs.

“It is bad for the economy. It is bad during this time we are struggling with a pandemic,” Sen. Cory Booker (D-N.J.) said during an interview on CNN over the weekend, noting that Republicans added more than $7 trillion to the deficit under Trump. “These are the kinds of things that should be pro forma.”

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mooray said:

I know he's not popular around here, but that's why I liked Bernie. Who wouldn't want to invest in the health and education of the people? That shit comes back tenfold.

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schuylaar said:

he's still popular and had most money of any candidate- Biden was broke.

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https://www.washingtonpost.com/politics/2021/09/29/if-america-were-smarter-about-math-our-politics-might-be-less-dumb/

My theory is that our failure to properly contextualize numbers is making our politics worse. Our inability to understand scale and context makes us see some things as more problematic or unusual than they actually are. My theory, further, is that encouraging a better sense of big numbers would make things, however slightly, better.
And to that point, I offer some examples.

Vaccination requirements

The coronavirus pandemic has prompted employers, public and private, to institute either mandates for vaccination or systems aimed at promoting vaccinations among employees. Despite the popularity of such measures in polling, they have spawned a robust opposition. In recent days, as those mandates begin to kick in, a number of news stories have emerged about employees resigning or being fired for failing to get a dose of a vaccine.

We’ll pick four examples that have gotten a lot of attention: a report that “dozens” of troopers with the Massachusetts State Police planned to resign, another that hundreds of employees in health-care systems in New York and North Carolina were likely to be fired, and an announcement from United Airlines that hundreds of its employees faced termination. We can visualize those threatened/imminent departures like so.



Some big boxes! And those are only four of the employers.

But as The Washington Post’s Aaron Blake pointed out on Wednesday, those boxes also represent only a small portion of those organizations’ total employee pools. The state police, for example, actually saw only one of its 2,000-plus troopers quit so far — but even “dozens” is just a slice of the total. That’s why the box above is colored in light orange: That’s what dozens would look like, should it emerge. Novant Health, the health-care system in North Carolina, actually had 200 hesitant employees — of about 35,000 total — who ended up getting vaccinated, leaving 175 who were fired after not getting the shots. At Albany Medical Center, a similar total declined the vaccine. And United, which may lose almost 600 employees, has more than 100 times that many.

In other words, the number of people negatively affected by these rules is, in each case, a small percentage of the total. In each case, it’s less than 1 in 50. (The dark-colored section on Novant’s square below indicates the 200 who decided to be vaccinated.)



It’s also useful to remember that the United States is a very big place. In August, there were about 8.4 million people out of work. If we take the termination and resignation boxes from the graphs above and compare them with the existing pool of unemployed Americans, it is not a large chunk.



Being unemployed is always a strain, and it’s clear that those who are losing their jobs will have real negative effects from their decisions. But they are still only a very small part of the universe of people affected by the vaccine requirements at their own employers, much less in the country.

Federal spending

Eight million people is a lot of people, as the graph above hopefully makes clear. But, again, it pales in comparison to a billion, much less a trillion.

How big is a trillion? Well, if we were to show one trillion at the same scale as the 8.3 million above, the image would have to be more than 417,000 times as long. And right now Congress is debating whether to pass legislation that would cost 3½ times that amount.

Again, context is useful. Yes, $3.5 trillion is an incomprehensibly large amount of money. But the government already spends an even more incomprehensibly large amount of money every year. Last year, for example, it spent $6.6 trillion. How much is that? Well, if you spent a dollar a second, you would finally spend $6.6 trillion by about 6 p.m. (as of writing) on April 30. Of the year 112,932. (It will be Wednesday, presuming the heat death of the universe has not yet occurred.)

It’s also useful to note that the $3.5 trillion is over the course of a decade. So the amount being proposed annually is, on average, $350 billion. That’s a sum that’s about 5 percent of what the government spent last year. Still a lot, absolutely. But the functional equivalent of your weekly grocery bill going from $300 to $315.

Then there’s the flip side of this, politically speaking. The tax cuts passed in 2017 were projected to add an estimated $1.9 trillion to the federal debt over 10 years, or an average of $190 billion per year. That’s about 6 percent of the federal deficit last year (though the deficit was particularly high in fiscal year 2020, due to the pandemic).



Incomprehensibly big numbers — except when you compare them to other incomprehensibly big numbers, which seems warranted.

The spread of the virus

Another place this sort of contextualization is useful is in the coronavirus pandemic. We are constantly seeking to understand how the pandemic is evolving, in part by considering where it is and isn’t spreading, information that seems as though it can help us figure out any role played by politics. But for a variety of reasons, that’s hard — including that tracking data is incomplete, operates at a lag and is hard to correlate directly to prevention efforts.

We can, however, do better. Consider two states that are seemingly moving in different directions, Florida and Maine. In the past week, Maine’s new case total has surged 20 percent, while Florida’s has dropped by a third. Because hospitalizations and deaths lag new cases (you get sick, then you might get sicker, and then you might die), those metrics are changing differently in each state at the same time.



The numbers we highlight and how we highlight them are often choices being made to illustrate a point. Sometimes, though, it’s simply a failure to recognize context, to consider that 600 United Airlines employees is a lot of people but a small number of United Airlines employees. Or to think of 3.5 trillion inches as being 111 round trips to the moon instead of as only about half the trips to the moon that the country travels in a year anyway.

Speaking of, that’s how I explained the population of the planet to my son. I showed him how long an inch was and asked how long a line of inches would stretch if there was one for every person in the world. He underestimated it quite a bit, since people generally are bad at big numbers, particularly 4-year-olds. So I put it in terms of the circumference of the Earth.

Try to guess how far around the world it would get you. Then find out. Maybe you’re not so good at big numbers either.

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WASHINGTON (AP) — Congress is moving to avert one crisis while putting off another with the Senate poised to approve legislation that would fund the federal government into early December.

The House is expected to approve the measure following the Senate vote Thursday, preventing a partial government shutdown when the new fiscal year begins Friday.

Democrats were forced to remove a suspension of the federal government’s borrowing limit from the bill at the insistence of Republicans. If the debt limit isn’t raised by Oct. 18, the country would likely face a financial crisis and economic recession, says Treasury Secretary Janet Yellen. Republicans say Democrats have the votes to raise the debt ceiling on their own, and Republican leader Mitch McConnell is insisting that they do so.

MORE ON THE BUDGET SHOWDOWN

• – Agonizing choices as Dems debate shrinking health care pie
• – Biden can't budge fellow Dems with big overhaul at stake

But the most immediate priority facing Congressis to keep the government running once the current fiscal year ends at midnight Thursday. The bill’s expected approval will buy lawmakers more time to craft the spending bills that will fund federal agencies and the programs they administer.

Meanwhile, Democrats are struggling over how to get President Joe Biden’s top domestic priorities over the finish line. Those include a bipartisan infrastructure bill that contains $550 billion in new spending for roads, bridges, broadband and other priorities, as well as a $3.5 trillion slate of social, health and environmental programs.

“With so many critical issues to address, the last thing the American people need right now is a government shutdown,” said Senate Majority Leader Chuck Schumer, D-N.Y.

Schumer said the stopgap spending legislation will also provide aid for those reeling from Hurricane Ida and other natural disasters as well as funding to support Afghanistan evacuees from the 20-year war between the U.S. and the Taliban.

Action in the final hours to avoid a partial government shutdown has become almost routine, with lawmakers usually able to fashion a compromise. The funding bill was slowed this time by disagreement over allowing the government to take on more debt so that it could continue to meet its financial obligations. Currently the borrowing cap is set at $28.4 trillion.

FULL COVERAGE
Congress moves to avert partial government shutdown
Democrats divided: Progressives, centrists say trust is gone
Agonizing choices as Dems debate shrinking health care pie
Biden can't budge fellow Dems with big overhaul at stake
Takeaways from Trump aide's account of chaotic White House

The U.S. has never defaulted on its debts in the modern era, and historically both parties have voted to raise the limit. Democrats joined the Republican Senate majority in doing so three times during Donald Trump’s presidency. This time Democrats wanted to take care of both priorities in one bill, but Senate Republicans blocked that effort Monday.

Raising or suspending the debt limit allows the federal government to pay obligations already incurred. It does not authorize new spending. McConnell has argued that Democrats should pass a debt limit extension with the same budgetary tools they are using to try to pass a $3.5 trillion effort to expand social safety net programs and tackle climate change.

“There is no tradition of doing this on a bipartisan basis. Sometimes we have and sometimes we haven’t,” McConnell told reporters about past debt ceiling increases.

House Democrats complained about the steps they were being forced to take as they approved a standalone bill late Wednesday that would suspend the debt ceiling until December 2022. That bill now heads to the Senate, where it is almost certain to be blocked by a Republican filibuster.

“You are more interested in punishing Democrats than preserving our credit and that is something I’m having a real tough time getting my head around,” House Rules Committee Chairman Jim McGovern, D-Mass., told Republicans. “The idea of not paying bills just because we don’t like (Biden’s) policies is the wrong way to go.”

But Republicans were undaunted. They argued that Democrats have chosen to ram through their political priorities on their own, and thus are responsible for raising the debt limit on their own.

“So long as the Democratic majority continues to insist on spending money hand over fist, Republicans will refuse to help them lift the debt ceiling,” said Rep. Tom Cole, R-Okla.

McGovern said Republicans ballooned the debt under Trump and now are washing their hands of the consequences.

“Republicans have now rediscovered the issue of the debt,” McGovern said. “Where the hell were you the last four years?”

The Treasury has taken steps to preserve cash, but once it runs out, it will be forced to rely on incoming revenue to pay its obligations. That would likely mean delays in payments to Social Security recipients, veterans and government workers, including military personnel. The Bipartisan Policy Center, a think tank, projects that the federal government would be unable to meet about 40% of payments due in the several weeks that follow.

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WASHINGTON (AP) — Democrats are debating how to divide up what could be a smaller serving of health care spending in President Joe Biden’s domestic policy bill, pitting the needs of older adults who can’t afford their dentures against the plight of uninsured low-income people in the South.

“There’s always a battle of where you place your priorities,” Rep. Jim Clyburn, the No. 3 House Democratic leader, said Wednesday. “We don’t means-test Medicare, which means that pretty wealthy people will be getting both dental care (and) vision care while poor people will be denied. ... I don’t know that that’s a real good choice.”

Clyburn explained that more than 100,000 of his fellow South Carolinians remain uninsured because Republicans in charge of state government have refused to expand Medicaid to low-income working adults under the Affordable Care Act.

Health care is foundational to Biden’s $3.5 trillion domestic policy bill, which touches everything from taxes to climate change, child care to community college.

When budget screws get applied, entire proposals can disappear from legislative wish lists, or they can get authorized for a shortened time period, a fiscal tactic akin to wading in the water as opposed to swimming.

For now, nothing has been dropped from Democrats’ health care agenda, which includes new dental, vision and hearing coverage under Medicare, richer subsidies that reduce premiums for “Obamacare” plans, a federal work-around to expand Medicaid in a dozen states still refusing, improved post-partum Medicaid coverage for low-income women, and a permanent extension of the popular Children’s Health Insurance Program.

The health care upgrades amount to a major renovation of federal programs covering more than 145 million Americans and part of the Democratic political legacy.

“The health care elements are the tip of the spear, the most important, the most popular, and the most politically salient, and we simply have to get that done,” said Brad Woodhouse, executive director of Protect Our Care. The advocacy group, which is urging Democrats to go big, sponsored a teleconference with lawmakers Wednesday.

The plan has been to pay for health care improvements with savings reaped by authorizing Medicare to negotiate prices for the costliest prescription drugs. But there’s a dilemma. Just as with the overall price tag for the legislation, Democrats have disagreements over Medicare negotiations. A Senate bill still in the works may not go as far as the measure pending in the House.

And there’s another element to factor in: Biden is pushing for a major expansion of home-based long-term care services under Medicaid, an alternative to institutional placement in nursing homes.

Tensions are simmering between Senate Budget Chairman Bernie Sanders and some House Democrats. The Vermont independent is pushing hard to keep expanded Medicare benefits for dental, vision and hearing care at the front of the line, but Democratic veterans in the House who labored to pass and preserve the Obama-era health law see improving it as unfinished business that is their calling to complete.

Under the umbrella of the Obama law, closing the so-called Medicaid coverage gap has become a rallying cry for Black and Latino lawmakers, as well as for advocates for the poor. Some 2 million people in states refusing the health law’s Medicaid expansion make too much to qualify for Medicaid and too little to be eligible for HealthCare.gov plans. Three out of 5 are Black or Hispanic. Texas and Florida, states Democrats would like to flip, could see the biggest gains in coverage if the federal government steps in.

The intraparty political dynamics differ from the House to the Senate. While many House Democrats represent districts that would benefit from closing the Medicaid coverage gap, only three Democratic senators come from states that have not already expanded their programs.They are Sens. Tammy Baldwin of Wisconsin and Georgians Raphael Warnock and Jon Ossoff. They represent a sliver of the Democratic caucus in the Senate, but also the edge that gives Democrats control of the evenly divided chamber. Warnock, who faces reelection next year, has made closing the Medicaid gap his signature issue.

Advocates are worried that lawmakers will pare back the Medicaid fix to save money and apply it only for a brief period of several years, leaving it to a future Congress to make the change permanent.

“If the policy isn’t permanent, it’s important that it extend long enough to get the federal Medicaid program up and running,” said Judy Solomon of the Center on Budget and Policy Priorities, a nonprofit that advocates on behalf of low-income people. Medicaid is one of the most complex government programs and splicing in a new federal component for a limited number of states could be a time-consuming process.

For now, Democrats are hoping they don’t have to slice and dice their health care ambitions to fit new budget constraints.

“Obviously negotiations are ongoing,” said Rep. Lauren Underwood, D-Ill. “I’m sure that these critical health care topics have come up in discussion. I think that what we know for sure is that you can’t ‘build back better’ without protecting folks’ health care and lowering out-of-pocket costs, period.”

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