The Wharton wonks giving the White House fits

From: POLITICO West Wing Playbook - Tuesday Nov 09,2021 11:44 pm
Presented by Uber:
Nov 09, 2021 View in browser
 
West Wing Playbook

By Alex Thompson , Kate Davidson and Tina Sfondeles

Presented by Uber

Welcome to POLITICO’s West Wing Playbook, your guide to the people and power centers in the Biden administration. With Allie Bice.

Send tips | Subscribe here | Email Alex | Email Tina

The Biden administration’s economic team has a new, wonky enemy: The Penn Wharton Budget Model (PWBM).

The model, an initiative of the University of Pennsylvania, has emerged as a surprise complication for the passage of Biden’s $1.75 reconciliation bill. In the process, it has drawn the ire of top White House officials.

That’s because while there are many economic analyses of the bill out there, the PWBM has proven influential with one particularly important audience: Sen. JOE MANCHIN (D-W.Va.), who takes its findings seriously, according to people familiar with the matter.

And to the White House’s frustration, PWBM’s latest analyses contend the reconciliation framework would add nearly $500 billion to the national debt over the next decade, contradicting the White House argument that the package would not just be completely paid for but reduce the deficit.

Chief of staff RON KLAIN has dismissed the model as right-wing and conservative, according to one source familiar with the matter. Biden top economic officials, including the National Economic Council deputy director DAVID KAMIN and Assistant Treasury Secretary for Economic Policy BEN HARRIS, have been in touch with the Penn Wharton Team about the model’s conclusions.

“The Penn Wharton Budget Model is simply wrong on its math, and didn't even evaluate the policies actually in the bill," said JESSE LEE, a spokesperson for the White House’s National Economic Council.

“We’ve laid out our math on the bill on the table for all to see,” Lee said. “That math relied entirely on the independent Joint Committee on Taxation estimates for tax provisions — estimates that contradicted the Penn Wharton Budget Model and validated the administration's initial estimates.“

KENT SMETTERS , a Wharton School professor and the faculty director of the PWBM, described the White House response as “the standard ‘not our bill’ and ‘version control’ redirects.” His team has about 30 people working for it in both Philadelphia and Washington, D.C., with more expected in the coming months.

PWBM also put out an analysis on how much the reconciliation bill would cost if all the temporary programs were extended (which is not the actual plan but what Democrats want), without Congress finding additional offsets (which may be hard to find). That model pegged the potential total cost at $4 trillion, a topline that some congressional Republicans and media outlets latched onto.

Manchin seems to have been at least somewhat persuaded by this argument. At a press conference last week, he said "[a]s more of the real details outlined in the basic framework are released, what I see are shell games and budget gimmicks that make the real cost of this so-called ‘$1.75 trillion dollar’ bill estimated to be twice as high if the programs are extended or made permanent.” He added, "That is a recipe for economic crisis."

The White House and congressional Democrats now must persuade Manchin that PWBM’s numbers are incorrect, or wait until the Congressional Budget Office’s analysis comes in and hope it’s closer to their projections.

"Because the Senate has to rely on CBO for important process determinations, CBO scores are more comprehensive than any other group," said ZACH MOLLER, a former Senate budget aide and director of the centrist think tank Third Way's economic program.

PWBM’s Smetters previously worked in the Congressional Budget office from 1995 to 1998 and at GEORGE W. BUSH’s Treasury Department as deputy assistant secretary for economic policy from 2001 to 2002. Democrats may use his past service in a Republican administration to undermine the analysis, although Democrats often cited PWBM’s analyses during the fight over the Trump tax cuts.

“We were left-wing just a few years ago,” said Smetters. “If we're right-wing, it would be hard to understand how we, for example, posted something on how universal health care can actually expand the economy, contrary to what people think.”

JASON FURMAN , the former chair of the Council of Economic Advisers during the Obama administration, said that he doesn’t believe the team has an ideological slant but added that he thinks their model has limitations.

“I don't think they're biased,” he said. “I think the Penn Wharton budget model is pretty good, but I think there's a huge error band around it, like there is around any forecast. The issue is their model is reasonably complicated and blackbox. I think it's one useful thing to look at, but I wouldn't treat it as the truth.”

INTRODUCING ‘POTUS PUZZLER’ — Regular readers of this newsletter know we try to keep our trivia questions fun, really difficult, and a little nerdy. Starting this week, we are partnering with the Miller Center of Public Affairs, a nonpartisan research center and preeminent authority on the American presidency based at the University of Virginia, to help us test your White House know-how.

BUT, BUT, BUT: We have been pleasantly surprised by the stupendous reader-submitted trivia we’ve received, so we are going to keep featuring a POTUS Puzzler from a reader every Wednesday. Keep sending us your toughest, most fun presidential questions. And thanks for reading.

Do you work in the Biden administration? Are you in touch with the White House? Are you JAMISON R. CITRON, special assistant to the president for personnel strategy and operations?

We want to hear from you — and we’ll keep you anonymous: westwingtips@politico.com. Or if you want to stay really anonymous send us a tip through SecureDrop, Signal, Telegram, or Whatsapp here. Or you can text/Signal Alex at 8183240098.

 

A message from Uber:

Whether it's because of the freedom to pick their hours, pick their rides, or simply pick their kids up on time, 86% of drivers say they need flexibility.*

*Finding from a recent Benenson Strategy Group survey.

 
POTUS PUZZLER

From the University of Virginia’s Miller Center

Which president said: "All the legislation in the world can't fix what's wrong with America"?

(Answer at the bottom.)

The Oval

HARRIS IN PARIS — According to travel pooler NOAH BIERMAN of the Los Angeles Times, Vice President KAMALA HARRIS ditched her travel pool in Paris on Tuesday after a tour of the Institut Pasteur, which was listed as her last public event that day. A senior administration official later told reporters Harris and second gentleman DOUG EMHOFF went to dinner with the chief of mission after the event: “This movement was not announced, and the pool was not taken,” Bierman wrote in a pool report. Harris’ office didn’t publicly comment on the dinner. But Harris is not subject to the same protective pool rules as POTUS, and her dinners elsewhere, included in Washington, aren’t covered by pool reporters.

The official in Paris, who requested anonymity, also gave a sneak peak of what Harris would focus on at a bilateral meeting with French President EMMANUEL MACRON on Wednesday: “The future will be a key topic on the agenda.” That includes climate change, space, the economy, supply chains, technology, cybersecurity, global health and the Indo-Pacific, the official said. So you know, just a few topics to cover. Also of note, per Bierman’s pool report, Harris traveled to France at Macron’s invitation.

TAKE THREE: White House principal deputy press secretary KARINE JEAN-PIERRE offered a “clarification” on the Line 5 pipeline at today’s briefing, after telling Fox News’ PETER DOOCY yesterday that the administration was studying the impact of shutting it down.

On Monday evening, the White House walked back that remark, telling Detroit News’ DC bureau chief MELISSA NANN BURKE that Jean-Pierre was referring to an Army Corps environmental study concerning a proposed replacement of the pipeline — not the existing line, according to Morning Energy’s MATTHEW CHOI.

Today, Jean-Pierre elaborated further and said discussions between the U.S. and Canada are “certainly not an indicator that the U.S. government is considering a shutdown.”

“That is something that we’re not going to do,” Jean-Pierre said.

KNOLLER CORNER — Longtime White House reporter and chronicler MARK KNOLLER (follow him here!) sent along his latest Biden statline comparing 46 to his predecessors.

By Knoller’s count, Biden is doing his third political fundraiser today (all 3 have been for the DNC).

This is how that compares to his immediate predecessors by this point in their presidencies:

  • DONALD TRUMP: 10 fundraisers including 4 for RNC/Trump fund
  • BARACK OBAMA: 28 fundraisers including 12 for DNC
  • GEORGE W. BUSH: 6 fundraisers including 2 for the RNC and the GOP congressional campaign committees and 4 for candidates.

DOUG’S EX: TIME’s CHARLOTTE ALTER interviewed DOUG EMHOFF’s ex-wife, KERSTIN, for a long profile on the second gentleman . Per the profile, “Kerstin says he does things with Harris, like plan couple’s trips, that he didn’t before. ‘Of course he’s a better husband, and that’s great,’ Kerstin says. ‘That’s how it should be.’”

ICYMI: our mini-profile of Kerstin.

MEENA INC.: Vice presidential niece MEENA HARRIS announced she has hired Universal executive JULIET LIU “to develop scripted and unscripted content for film, TV, and digital” for her company Phenomenal, according to the Hollywood Reporter.

The aim, Harris told the magazine, is “[t]rying to think about equity along every aspect of the value chain, as it related to Hollywood as an industry, as it relates to who we collaborate with, how we are making films or TV shows, whose voices we are amplifying.”

 

BECOME A GLOBAL INSIDER: The world is more connected than ever. It has never been more essential to identify, unpack and analyze important news, trends and decisions shaping our future — and we’ve got you covered! Every Monday, Wednesday and Friday, Global Insider author Ryan Heath navigates the global news maze and connects you to power players and events changing our world. Don’t miss out on this influential global community. Subscribe now.

 
 
THE BUREAUCRATS

PAGING MANCHIN — Last week, the United States pointedly declined to sign onto an international agreement pledging to phase out coal. On Tuesday in Glasgow, however, Biden’s special presidential envoy for climate JOHN KERRY said, “[b]y 2030 in the United States, we won’t have coal...We will not have coal plants.”

We asked the White House whether Kerry’s remarks, made during an interview with Bloomberg Editor-in-Chief JOHN MICKLETHWAIT , represented a change in policy toward coal. The White House sent us a statement from a State Department spokesperson:

“Secretary Kerry reiterated that the United States has set a goal to reach 100 percent carbon pollution-free electricity by 2035. Reaching this goal will eliminate the use of unabated fossil fuel power by 2035, and it will require dramatically slashing emissions from coal power during this decade.”

Agenda Setting

FOR DC CABLE WATCHERS — Today, the pro-Biden outside group Building Back Together launched a six-figure television ad campaign touting Biden and the new infrastructure bill. But instead of targeting voters in swing states like many of their previous ad buys, the group is airing the ad on cable television in the D.C. market.

Asked about this strategy, BBT told West Wing Playbook: “This campaign is targeted to leaders in Washington to commend them for their votes to support investments in working and middle class families, and a call to keep fighting for the Build Back Better Act.”

 

Advertisement Image

 
What We're Reading

Harris gets a chance to burnish her image on the world stage in Paris (Washington Post’s Cleve R. Wootson Jr.)

Federal workers’ union asks Biden to delay vaccine mandate (The Hill’s Karl Evers-Hillstrom)

Biden made huge promises to HBCUs. Can he sell its students on compromise? (POLITICO’s Eugene Daniels)

What We're Watching

Surgeon General VIVEK MURTHY will join MSNBC’s “All In with Chris Hayes” tonight at 8 p.m. ET.

 

DON’T MISS POLITICO’S SUSTAINABILITY SUMMIT: Join POLITICO's Sustainability Summit on Tuesday, Nov. 16 and hear leading voices from Washington, state houses, city halls, civil society and corporate America discuss the most viable policy and political solutions that balance economic, environmental and social interests. REGISTER HERE.

 
 
Where's Joe

He spoke with Walmart CEO DOUG MCMILLON, UPS CEO CAROL B. TOMÉ, FedEx CEO FREDERICK SMITH and Target CEO BRIAN CORNELL about supply chain issues.

Later, the president spoke at a DNC virtual grassroots event and a DNC virtual fundraising reception.

Where's Kamala

In Paris, where she and the second gentleman toured the Institut Pasteur and met with American and French scientists working on pandemic response and preparedness.

The Oppo Book

SABRINA SINGH, White House deputy press secretary, revealed to POLITICO back in 2019 that she has a habit she hasn’t kicked since elementary school: “I eat chocolate chips almost every morning.”

She added that her “mom is still not pleased by this.”

Asked if she still has chocolate chips for breakfast, Singh did not respond.

POTUS PUZZLER ANSWER

JIMMY CARTER, in his famous "Crisis of Confidence" speech in 1979. Though his poll numbers declined precipitously after the address and never recovered, Carter later said, “It was a speech that needed to be made.”

For resources on key presidential speeches and all U.S. presidents, visit millercenter.org/the-presidency.

We want your trivia, but we also want your feedback. What should we be covering in this newsletter that we’re not? What are we getting wrong? Please let us know.

Edited by Emily Cadei

 

A message from Uber:

The reason flexibility is so essential for drivers is simple — it puts them in control. It allows them to set their schedules, work whenever they want, and come and go as they please.

See how flexibility works for over 3.3 million drivers.

 
 

Follow us on Twitter

Alex Thompson @AlexThomp

Tina Sfondeles @TinaSfon

Allie Bice @alliebice

 

Follow us

Follow us on Facebook Follow us on Twitter Follow us on Instagram Listen on Apple Podcast
 

To change your alert settings, please log in at https://www.politico.com/_login?base=https%3A%2F%2Fwww.politico.com/settings

This email was sent to by: POLITICO, LLC 1000 Wilson Blvd. Arlington, VA, 22209, USA

Please click here and follow the steps to .

More emails from POLITICO West Wing Playbook

Nov 08,2021 11:34 pm - Monday

Jay Powell's life in limbo is almost over

Nov 05,2021 09:44 pm - Friday

Joe Biden’s secret muse

Nov 04,2021 10:00 pm - Thursday

Team Biden fine tunes its BBB salesmanship

Nov 03,2021 11:17 pm - Wednesday

Where have you gone, Scranton Joe?

Nov 02,2021 10:34 pm - Tuesday

How Kamala became a deity... by name

Nov 01,2021 10:20 pm - Monday

What is the WH vax rate?

Oct 29,2021 08:45 pm - Friday

Exclusive: Donilon’s plea to Dems