Nearly $100 Billion Stolen From Covid Relief

U.S. President Joe Biden speaks about the country's fight against COVID-19, in Washington
KEVIN LAMARQUE
By Yuval Rosenberg

Good Tuesday evening! Or not — on
top of everything else, now there's a
candy cane shortage?
Biden Says He’s Still Going to ‘Get Something
Done’ With Manchin

President Biden on Tuesday held out hope that Democrats could
still pass his Build Back Better plan of social spending and
climate programs even after Sen. Joe Manchin (D-WV), a key centrist
vote in the Senate, announced Sunday he is a "no" on the
legislation.

Asked whether Manchin went back on his word and how he can
rebuild trust among the divided members of his own party, Biden
told reporters he doesn’t hold a grudge.

"I want to get things done. I still think there’s a possibility
of getting build Back Better done," Biden said in remarks from the
White House after announcing steps to
address the latest surge of Covid-19 cases, fueled
by the rapid spread of the omicron variant. "Senator Manchin and I
are going to get something done," he said.

Biden went on the defend his bill against charges that it would
increase inflation and hurt the economy, citing the Goldman Sachs
analysis
we mentioned yesterday that said GDP growth would
be lower next year without the legislation. That same analysis
projected that inflation will remain high well into next year,
making passage of the Democratic plan more difficult.

While Biden signaled an openness to working with Manchin, other
Democrats, still irate over the West Virginia senator’s torpedoing
their agenda, reportedly are looking to ramp up the pressure on
him. "Senate Democrats are signaling they plan to take more of a
hardball approach," The Hill’s Alexander Bolton
reports. "Democrats are threatening to drive a
wedge between Manchin and his many lower-income constituents who
stand to reap billions of dollars in federal benefits if Build Back
Better passes, including an enhanced child tax credit, lower
Medicare-negotiated prescription drug prices and subsidies to cover
the cost of child care."

Manchin has bristled against such pressure tactics, and
Democrats have been wary of squeezing Manchin, fearing that it
could backfire.

A progressive proposal for Manchin: As the White House
tries to find a path forward, it must also contend with
progressives still fuming over what they see as a betrayal by
Manchin and in no mood to try to further appease him. "It is
abundantly clear that we cannot trust what Sen. Manchin says," Rep.
Pramila Jayapal (D-WA), chair of the Congressional Progressive
Caucus told reporters Monday. "No one should think that we are
going to be satisfied with an even smaller package that leaves
people behind or refuses to tackle critical issues like climate
change."

That could complicate Biden’s path to "getting something done,"
as he put it. "Whether liberals’ public pronouncements that they
are done scaling back their priorities is just pique talking or a
firm decision will be just as key to what the party can accomplish
as whether Manchin comes back to the negotiating table,"
writes The Washington Post’s Marianna
Sotomayor.

Jayapal on Monday suggested that Biden enact some of his agenda
via executive actions — a path many Democrats reportedly doubt
could be effective. On Tuesday, though, Jayapal floated another
suggestion, one aimed at pinning down just what Manchin can and
can’t support.

Washington Post columnist Greg Sargent
says Jayapal told him she reached out to Manchin
Tuesday morning and asked him to go back to the Build Back Better
framework released by the White House three months ago. That plan
called for a one-year extension of the expanded child tax credit,
boosting Obamacare subsidies for four years, funding universal
pre-K for six years and other measures.

"Jayapal told me she asked Manchin to take that framework and
line it up next to the BBB that
passed the House (which Manchin has rejected),"
Sargent writes. "She asked him to say what, specifically, in the
House bill doesn’t match up with what Manchin did commit to
in the framework (in his discussions with Biden), and to say what
specifically in the framework he did not commit to and
does not support."

In other words, Jayapal seems open to at least discussing ways
in which the House-passed plan might be reconfigured — and intent
on trying to decipher just what Manchin wants. "Another
possibility, Jayapal suggested, might be for Senate Democrats to
hold votes on each item, to get Manchin to commit one way or the
other," Sargent adds. "That could lead to an endgame in which a
stripped down BBB is negotiated."

Jayapal said she’s "not quite there yet" on the idea of a bill
that only includes a few programs and funds them fully for 10
years, an approach that would inevitably lead to some progressive
priorities being excluded. But she acknowledged that Democrats will
still need to win over Manchin: "We all understand that we need 50
votes, and he’s our 50th vote."

The bottom line: Senate Democrats are set to hold a
virtual caucus meeting tonight to discuss their path forward on
both this bill and a voting rights measure. As of Tuesday morning,
it wasn’t clear whether Manchin would participate. What is clear:
Biden’s goal of reviving some version of Build Back Better won’t be
easy.

Manchin Isn’t Buying Dems' New Thinking on Debt

In explaining his opposition to the House-passed version
of the Build Back Better bill, Manchin has repeatedly cited his
concerns about inflation and the national debt. We mentioned
yesterday that economists for the most part have concluded that the
bill would not produce a spike in inflation. Today, Bloomberg’s
Mike Dorning takes a look at Manchin’s other major concern, writing
that Manchin hasn’t bought into the Biden’s administration’s
efforts to "reframe" thinking around the debt given low interest
rates and shifts in mainstream economic views:

"Biden and his team more broadly have tried to get Congress to
assess what’s affordable by talking about the debt payments the
government is actually making -- much as a homebuyer or private
business might.
"‘The world has changed,’ Treasury Secretary Janet Yellen told
the Senate in her confirmation hearing at the start of the year.
‘In a very low interest-rate environment like we’re in, what we’re
seeing is that even though the amount of debt relative to the
economy has gone up, the interest burden hasn’t.’ …
"But Manchin isn’t buying the argument. In a statement
explaining his reasons for rejecting legislation enacting Biden’s
economic agenda, he highlighted the ‘staggering’ debt the U.S.
already has accumulated. …"


Read more at Bloomberg News.

Chart of the Day: Child Tax Credits

Manchin’s scuttling of the Build Back Better bill means that the
refundable child tax credits that were created by the American
Rescue Plan last March will expire at the end of December, instead
of being extended for one more year. Manchin has criticized the tax
credit program publicly, citing its cost, lack of work requirements
and relatively high income threshold. In private comments, Manchin
has reportedly said that he thinks some West Virginia families will
use the child credit payments to buy drugs rather than to help
their children.

However close to reality such that view may or may not be, data
from the U.S. Census Bureau, summarized in this chart from
Bloomberg News, show that the number one use of
the tax credit payments is for food, followed by utility bills,
rent and clothing. Other common uses for the funds include
education costs, debt reduction and child care.

According to an analysis from the liberal Center on Budget and
Policy Priorities, nearly
10 million children are at risk of slipping back
into poverty in the absence of the payments, which helped cut child
poverty by roughly 40% this year.

Nearly $100 Billion Stolen From Covid
Relief

Fraudsters have stolen close to $100 billion in Covid-19 relief
funds, the U.S. Secret Service said Tuesday.

Much of the fraudulent activity has been directed at the
trillions of dollars provided by Congress to help businesses and
individuals survive financially during the pandemic.

"While fraud related to personal protective equipment (PPE) was
of primary concern to law enforcement, including the Secret
Service, early in the pandemic, the release of federal funding
through the Coronavirus Aid, Relief and Economic Security (CARES)
Act has attracted the attention of individuals and organized
criminal networks worldwide," the agency said in a
statement announcing the appointment of a new
national pandemic fraud recovery coordinator.

Specific programs that have been targeted by an array of
criminals include the Paycheck Protection Program, the Economic
Injury Disaster Loan program and the Pandemic Unemployment
Assistance program.

Roy Dotson, the new fraud recovery coordinator, said the agency
currently has more than 900 active criminal investigations into
relief fund fraud. "It’s a wide range because the pot was so big,"
Dotson
told CNBC. "You not only have your typical
transnational organized groups and domestic organized groups,
criminal groups, but you have individuals that decided to take
advantage of that."

The agency said that it had recovered about $2.3 billion so far
and arrested more than 100 people. "I’ve been in law enforcement
for over 29 years and worked some complex fraud investigations for
20 plus years, and I’ve never seen something at this scale," Dotson
said.

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