Biden Admits to Shrinking Agenda; Kerry Eyes Business on Climate

President Joe Biden acknowledged that Congress will need to scale back his sweeping economic, tax, and social spending agenda from its recent $3.5 trillion target figure. Meanwhile, his chief climate envoy John Kerry lauded corporate actions on climate, amid concern that the shrinking package won’t contain promised carbon cuts and climate provisions.

Here’s what else Bloomberg Government is tracking today.

Biden Concedes Economic Plan to Fall Short of $3.5 Trillion

President Joe Biden conceded today that his economic plan won’t pass Congress with $3.5 trillion in new spending over a decade, the level sought by progressives, but again declared that the legislation will become law.

“I’m convinced we’re going to get this done,” he said at a childcare center in Hartford, Conn. “We’re not going to get $3.5 trillion. We’ll get less than that. But we’re going to get it and we’re going to come back and get the rest.”

Disputes between progressive and centrist factions of Democrats in Congress have slowed progress on the plan, which would combine a package of tax cuts and spending on education, child and elderly care, climate and other measures with the Senate-passed bipartisan bill carrying $550 billion in new spending on public works.

The White House and Democratic congressional leaders are discussing how to scale back the larger, social-spending measure to win the votes of two holdout Senate Democrats, Arizona’s Kyrsten Sinema and West Virginia’s Joe Manchin. Manchin has said he wants a topline of no more than $1.5 trillion over 10 years for the legislation, though Biden has said he thinks a compromise might be found around $2 trillion.

“They’re not about left versus right. They’re not about moderate versus progressive, or anything else that pits one American against another,” Biden said. “These bills in my view are literally about competitiveness versus complacency, about opportunity versus decay, about leading the world or continuing to let the world move by us.” Read more from Nancy Cook and Josh Wingrove.

Happening on the Hill

Kerry Talks Up Corporate Climate Action as Bills Stall: Special Presidential Envoy for Climate John Kerry during a virtual event lauded corporate actions to stem greenhouse gas emissions amid concern that legislation to help fulfill promised carbon cuts is languishing in Congress before critical negotiations in Scotland.

U.S. lawmakers are still deliberating the budget reconciliation legislation that would devote hundreds of billions of dollars to expanding the use of renewable energy and clean transportation. Yesterday, Kerry told the Associated Press that if Congress fails to pass significant climate legislation, the U.S. would struggle to regain its leadership on climate. “It would be like President Trump pulling out of the Paris agreement again,” Kerry said. Read more from Jennifer A. Dlouhy.

Manchin Raises Concerns Over Chief Wage Regulator Pick: Sen. Manchin has privately voiced concerns about the president’s nominee to be the top U.S. wage regulator, David Weil, an ardent critic of gig-economy companies who may need Manchin’s vote to get confirmed, according to three sources familiar with the matter. Manchin’s specific reservations weren’t immediately clear, but they’ve recently come to the attention of multiple senators, industry groups, and the White House, the sources said. Read more from Ben Penn.

House Transportation Chair Calls for Action in Boeing Case: House Transportation and Infrastructure Committee Chair Peter DeFazio (D-Ore.) said the indictment of an ex-Boeing pilot in relation to 737 Max crashes shouldn’t be the end of accountability, according to a statement. “Senior leaders throughout Boeing are responsible for the culture of concealment” that ultimately led to the “colossal and tragic failure,” he said. The Federal Aviation Administration must implement legislation to prevent a repeat, he said, Daniela Sirtori-Cortina reports.

Capitol Police Officer Indicted for Obstruction: A U.S. Capitol Police officer was indicted on obstruction of justice charges related to the Jan. 6 attack at the Capitol, the AP reported. Prosecutors said the officer, Michael A. Riley, sent messages to a rioter to remove Facebook posts showing the person inside the Capitol during the attack, the outlet reported, citing court documents. Riley is set to appear in federal court in Washington today. Read more from Daniela Sirtori-Cortina.

Around the Administration

U.S. Borders to Open Nov. 8 for Vaccinated: The U.S. will open its borders to vaccinated foreigners on Nov. 8, a White House official said, granting access to millions of people who have been shut out of the country while closing it off to anyone who hasn’t had their shots. The overhaul marks the biggest change to America’s travel rules since the start of the Covid-19 pandemic, replacing a policy that flatly barred most foreign nationals coming directly from major markets including Europe, India, Brazil and China.

Under the new system, vaccinated people who have had a negative test in the previous 72 hours will be able to board a flight to the U.S. as long as they share contact tracing information. Unvaccinated foreigners will be generally barred from entry, while unvaccinated Americans will need a negative Covid-19 test. Read more from Josh Wingrove, Siddharth Philip and Christopher Jasper.

Separately, United Airline‘s policy that mandates all employees be vaccinated and places those with religious exemptions on unpaid leave can go into effect, a federal court in Colorado ruled. The decision is at odds with a recent opinion by the U.S. District Court for the Northern District of Texas, which issued a temporary restraining order against the policy in a similar challenge. Read more from Bernie Pazanowski.

J&J Booster Garners FDA Advisers’ Backing: Johnson & Johnson’s Covid-19 vaccine booster gained a key recommendation from advisers to U.S. regulators that brings the additional shot a step closer to clearance. The Food and Drug Administration’s vaccine advisory group voted unanimously today in favor of recommending the booster for people 18 and older who received their initial immunization at least two months earlier. The panel has so far recommended boosters for people at least 65 years old and younger adults who risk severe illness or viral exposure at work. Read more from John Lauerman.

The best way to bolster antibodies in people who got J&J’s single-shot vaccine may be to give an additional full dose of a messenger RNA vaccine, if a federal government-sponsored trial is any indication. The FDA may consider authorization of using one of the U.S.-cleared vaccines to boost initial doses of another, Peter Marks, director of the agency’s Center for Biologics Evaluation and Research, told the panel of advisers. He didn’t give a timeline for when this might happen. Read more from Robert Langreth.

DOJ Will Ask Top Court to Halt Texas Abortion Law: The Justice Department said it will ask the U.S. Supreme Court to lift Texas’s ban on abortion after the sixth week of pregnancy, setting up a showdown likely to determine whether the law stays in effect through the end of the year. A federal appeals court last night let the law stay in effect as the case goes forward, even though a trial judge ruled the measure was unconstitutional. DOJ will ask the Supreme Court to set aside the appeals court order, a spokesman said. Read more from Greg Stohr.

Watchdog Group Files Complaint Against Psaki: A government watchdog group filed its first complaint against a Biden administration official for violating federal ethics law today, alleging Press Secretary Jen Psaki wrongly endorsed Virginia gubernatorial candidate Terry McAuliffe (D). Citizens for Responsibility and Ethics in Washington said Psaki broke the Hatch Act at a press briefing yesterday, when she said that “we’re going to do everything we can to help former Governor McAuliffe, and we believe in the agenda he’s representing.” Josh Wingrove have more.

HHS Outside Help for Migrant Children Program: The administration wants outside help to improve its programs for unaccompanied migrant children amid steady public scrutiny of how the federal government cares for them. The Health and Human Services Department this week announced it’s seeking a contractor to give it recommendations “about how best to structure its resources to meet the myriad needs” of its program for unaccompanied children. Read more from Ellen M. Gilmer.

Treasury Offers Crypto Guidance As Ransomware Sets Record: There was $590 million in suspicious activity related to ransomware in the first six months of 2021, exceeding the entire amount in 2020, according to a report released today by the Treasury’s Financial Crimes Enforcement Network. If the current trend continues, suspicious activity reports filed in 2021 “are projected to have a higher ransomware-related transaction value than SARs filed in the previous 10 years combined,” the report said, referring to suspicious activity reports.

The report was filed as department issued guidance to the virtual currency industry to prevent exploitation by entities sanctioned by the U.S. and ransomware groups. Read more from William Turton.

Separately, the Securities and Exchange Commission is poised to allow the first U.S. Bitcoin futures exchange-traded fund to begin trading in a watershed moment for the cryptocurrency industry, according to people familiar with the matter. The regulator isn’t likely to block the products from starting to trade next week, they said. Read more from Katie Greifeld, Vildana Hajric and Ben Bain.

DOL Ramps Up Youth Vocational Training: The Labor Department is taking steps to return its vocational training program for at-risk youth to pre-pandemic status, following steep challenges to ensure participants were engaged remotely. Department-administered Job Corps centers will resume enrolling new students for in-person instruction across the country, DOL announced today. The residential career training campuses previously restricted enrollment for in-person instruction. Read more from Ben Penn.

What Else to Know Today

Consumer Sentiment in U.S. Falls: U.S. consumer sentiment fell unexpectedly in early October to the second-lowest level since 2011, as Americans grew more fearful over both current conditions and the economic outlook. The University of Michigan’s preliminary sentiment index fell to 71.4 from 72.8 in September, data published today showed. The figure came in below the median 73.1 in a Bloomberg survey of economists. Read more from Olivia Rockeman.

Meanwhile, U.S. retail sales unexpectedly increased last month in a broad advance, suggesting resilient demand for merchandise even as production constraints limit supply. The value of overall retail purchases increased 0.7% in September following an upwardly revised 0.9% gain in August, Commerce Department figures showed today. Read more from Olivia Rockeman.

Russia Says Warship Intercepted U.S. Destroyer: Russia said one of its warships intercepted a U.S. destroyer in the Sea of Japan that was encroaching on its territorial waters, claiming that the vessels came within 60 meters of each other during the confrontation. The Russian Defense Ministry posted a video today of the Admiral Tributs sailing near the USS Chafee, a guided-missile destroyer, and said it prevented the American vessel from violating Russia’s territorial waters. Read more from Jake Rudnitsky.

U.S. Officials to Travel to Southeast Asia: State Department Counselor Derek Chollet and a delegation of interagency officials will travel to Thailand, Singapore and Indonesia from Oct. 17 to Oct. 22 to discuss various issues including the crisis in Myanmar, the agency said in a statement. The U.S. delegation will underscore the “urgent responsibility” of the international community to pressure Myanmar’s military regime to cease violence, release political prisoners, and restore country “to the path of democracy,” Se Young Lee reports.

SCOTUS Report Downplaying Expansion Dismays Panelists: Several members of Biden’s commission examining changes to Supreme Court criticized its initial documents for coming down against expanding the size of the nation’s highest court. The report on this point “tilts rather dramatically in one direction,” said former federal district court Judge Nancy Gertner. The commission released its “discussion materials” in advance of its public hearing today, which Gertner explained was “the first chance that we all have had to actually deliberate face to face” the contents of the commission’s report. Read more from Kimberly Strawbridge Robinson.

The bipartisan commission lost two of its conservative members ahead of today’s meeting to review the preliminary findings. Caleb Nelson, a law professor at the University of Virginia, and Jack Goldsmith, a law professor at Harvard, are no longer members of the panel, the White House confirmed. The commission, which has been working since April, originally had 36 members. In a statement, Nelson said he was honored to be part of the commission, but had no further comment. Read more from Madison Alder.

Kushner Pal Kurson in Plea Discussions: Former New York Observer editor-in-chief Ken Kurson, who was pardoned by Donald Trump over cyberstalking allegations, is now in plea discussions over state charges springing from the same conduct, a prosecutor said today. Kurson was charged by Manhattan District Attorney prosecutors on eavesdropping and computer trespass charges, both felonies that carry a maximum of four years in prison. A president can pardon federal crimes but not state crimes. Read more from Patricia Hurtado.

To contact the reporter on this story: Michaela Ross in Washington at mross@bgov.com

To contact the editors responsible for this story: Brandon Lee at blee@bgov.com; Zachary Sherwood at zsherwood@bgov.com