After months of uncertainty, Congress greenlit a $95 billion package with substantial aid for Ukraine, as well as funds for Israel and US allies in the Indo-Pacific region.

It’s one of the most significant bills to pass in months, and follows weeks of intense GOP infighting about the wisdom of sending more money to Ukraine as its war with Russia enters its third year. Ukraine is heavily dependent on US aid, and its leaders have argued that American money will be critical to break the impasse the country is in amid tenacious Russian attacks.

The bill is also a strong signal of support for Israel as global and domestic outcry has grown regarding the country’s attacks in Gaza and the humanitarian crisis there. And, it contains two elements meant to target China’s power: military funding for Asian allies — including Taiwan — as well as a measure banning TikTok in the US if the app’s China-based owner, ByteDance, does not divest it.

All four measures advanced with bipartisan support in both chambers, though a sizable number of House Republicans balked at approving more support for Ukraine. Similarly, progressives in the House and Senate opposed providing more funding for Israel, highlighting the enduring foreign policy divides in both parties.

What’s in this package

In total, the package contains four bills meant to assist key allies with their military efforts, while also deterring China and Russia.

Ukraine aid: The bulk of this aid package — $61 billion — is dedicated to helping Ukraine counter Russia’s ongoing military offensive. These funds include $14 billion aimed at replenishing Ukraine’s weapons and ammunition, $13 billion to restock US military supplies that have previously been sent over, and $9 billion in forgivable loans for other rebuilding efforts, including infrastructure.

This measure passed 311-112 in the House, with only Republicans voting against it, and provides long-awaited funds to Ukraine as Russia has made territorial gains. The four bills were also approved as one package in the Senate, advancing 79-18, with two Democrats, one independent, and 15 Republicans voting against it.

Support for Ukraine has prompted backlash from far-right Republicans, who argue these funds would be better spent domestically at the southern border. As a result of this vote, Rep. Marjorie Taylor Greene (R-GA) has threatened to call for Speaker Mike Johnson’s removal when the House returns from recess.

Israel aid: There’s $26 billion in the measure dedicated to aid related to the Israel-Gaza conflict, including $13 billion to bolster Israel’s military capabilities and US stockpiles that have been depleted due to material transfers, and $9 billion for humanitarian aid for Gaza and other places around the world.

This measure passed 366-58 in the House, and signals that the US will continue to boost Israel’s military resources despite some lawmakers’ concerns about violence and famine in Gaza. More than 30 progressive Democrats opposed this bill and a handful of far-right Republicans did the same. Progressives have been vocal about the need for an immediate ceasefire and have spoken out against sending more money to arm Israel due to the casualties and humanitarian crisis in Gaza.

Aid to Indo-Pacific allies: About $8 billion in the aid package is focused on helping US allies in the Indo-Pacific region, including Taiwan, boost their military capabilities. There’s roughly $6 billion dedicated to deterrence, which includes building out stronger submarine infrastructure in the region.

This measure passed the House 385-34 and comes as Russia’s invasion of Ukraine has put a new spotlight on Taiwan and the question of whether the Chinese government would one day invade it. Of the three aid bills, this one received the most bipartisan support, with just roughly three dozen Republicans voting against it.

REPO Act and sanctions: A fourth bill, which contains provisions of the REPO Act, would allow the US to transfer seized Russian assets to Ukraine, which it could use for reconstruction. It also imposes harsher sanctions on Russia, Iran, and China. TikTok bill: A TikTok “ban” is also included in this fourth bill. That measure requires ByteDance, TikTok’s parent company, to sell the app within nine months or risk getting banned from operations in the US.

This fourth bill passed the House 360-58 and had about 30 progressives and 20 far-right Republicans opposed. The REPO Act and TikTok measures were an attempt to add some concessions for Republicans reluctant to back Ukraine aid who’ve raised national security concerns about the app in the past.

Why this is such a big deal

Ukrainian President Volodymyr Zelenskyy enthusiastically welcomed the House’s actions, calling them “vital” and claiming they will save “thousands and thousands of lives.”

Military leaders and foreign policy experts have emphasized that US aid to Ukraine has been central to its ability to hold off Russia and will be critical if Ukraine is to counter a potential summer offensive. Since the war began, the US has sent Ukraine roughly $111 billion in aid. In recent months, Ukraine has been running low on ammunition and material needed for its air defenses, as Russia has made more inroads. “Make no mistake: without US aid, Ukraine is likely to lose the war,” Max Boot, a military historian and fellow at the Council on Foreign Relations, has written.

The Ukraine bill was a sharp reminder of the divides in the Republican Party, with more moderate and classically conservative members supporting aid and some far-right members calling for a more isolationist stance.

Senate Minority Leader Mitch McConnell, for instance, heralded the bill’s passage and criticized former Fox News anchor Tucker Carlson for sowing opposition to Ukraine. “The demonization of Ukraine began by Tucker Carlson, who in my opinion ended up where he should have been all along, which is interviewing Vladimir Putin,” McConnell said in a press briefing.

Far-right Republicans, like Greene, however, have been incensed by the approval of the bill, and vowed to keep on pushing for Johnson’s removal, the same threat that was once employed against former House Speaker Kevin McCarthy.

After the House returns from its current recess, Johnson could face additional calls to vacate from those on the right, though some Democrats have signaled that they could save him. Should Johnson lose his gavel, the House would, once again, have to navigate the chaos of another speaker’s race as it did last year.

The aid to Israel is notable in that it comes as Democratic support for a ceasefire has grown as more than 34,000 people have been killed in Gaza.

Overall, Israel aid remains an ongoing flash point for Democrats, with progressives calling out the Biden administration’s willingness to provide this support without strings attached. In recent months, the Democratic-led White House has taken an at times contradictory stance, offering critiques of Israel’s offensive while simultaneously funding it.

“To give Netanyahu more offensive weapons at this stage, I believe, is to condone the destruction of Gaza that we’ve seen in the last six months. And it’s also a green light for an invasion of Rafah,” Rep. Becca Balint (D-VT), a Jewish lawmaker who has called for a ceasefire, told the New York Times last week.

Many of the issues raised by this package are enduring ones. Ukraine will need more support from the US down the line as Russia maintains its attacks, and Republican divides are expected to persist. It’s possible Israel could seek more funding too, as its war continues, and that tensions inherent in the US’s current position toward the country will continue.

And the TikTok measure isn’t necessarily the end of the dispute over what to do about the app, either. As Vox’s Nicole Narea has explained, TikTok intends to challenge the policy in court on the grounds that it threatens people’s free speech.

Update, April 24, 1:30 pm ET: This story was originally published on April 21 and has been updated to include a Senate vote on this bill.

Malala Yousafzai, the Pakistani student who won the Nobel Prize, said: “We have all watrched the atrocities against Palestinian people for more than six months now with anger and despair”.

Turning to Instagram, she wrote: ‘I wanted to speak today because I want there to be no confusion about my support for the people of Gaza’.

This week’s news of mass graves discovered at Gaza’s Nasser and Al-Shifa hospitals is yet another reminder of the horrors Palestinians are facing, Malala stated.

The Pakistani student added that it is hard enough to watch from afar. ‘I don’t know how Palestinians bear it in their bones. We do not need to see more dead bodies, bombed schools and starving children to understand that a ceasefire is urgent and necessary’.

I have and will continue to condemn the Israeli government for its violation of international law and war crimes, and I applaud efforts by those determined to hold them to account, she continued.

Malala further said that publicly and privately, she will keep calling on world leaders to push for a ceasefire and to ensure the delivery of urgent humanitarian aid.

She was determined to stand against any form of violence against innocent civilians, including the taking of prisoners and hostages. And I stand in solidarity with the people in Gaza whose voice and demands must be heard.

When we see alarming signs of genocid, we cannot wait to take decisive action. We must work together to urge our leaders to stop these war crimes and hold preparators to account, stated Malala.

 

 

 

 

 

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A post shared by Malala Yousafzai (@malala)

American workers’ wages have been rising faster than prices for more than a year now. Their nation’s economy, meanwhile, is the envy of the wealthy world: Since the Covid recession, the United States has seen nearly twice as much growth as any other major rich country without suffering significantly higher inflation. And economic analysts expect that America will continue to grow at double the rate of its peers for the rest of 2024.

This growth will enhance an already robust economy. The nation’s unemployment rate has sat below 4 percent for more than two years now, the longest such streak since the 1960s. With labor markets persistently tight, low-income workers have finally secured some leverage over their employers, and wage inequality has fallen as a result.

Nevertheless, US voters give their nation’s economy poor marks in surveys. In the latest polling from Civiqs, 61 percent of respondents rate the “national economy” as “fairly bad” or “very bad” — with 39 percent choosing the latter description.

Other polls indicate that this widespread pessimism is preventing the public from ascertaining basic economic facts. For example, 74 percent of swing-state voters in a recent Wall Street Journal poll said that inflation had moved in the wrong direction over the past year, a statement that is straightforwardly untrue.

Liberal pundits are generally keen to correct popular misperceptions of economic statistics, and they are ideologically invested in Joe Biden’s reelection. For these reasons, many have spent the past few months touting the economy’s objective virtues and bemoaning the public’s misguided discontent.

Such commentary can make liberals sound complacent about the American people’s myriad economic challenges. And yet, although commentators should not ignore those difficulties, they also shouldn’t exaggerate them. Affirming the working class’s misperceptions of the Biden economy does it no favors. To the contrary, validating the public’s economic pessimism risks shifting American macroeconomic policy in an anti-labor direction.

But this hazard is lost on many in the commentariat. In recent months, several pundits and influencers have sought to portray the contemporary economy’s champions as cosseted elites who’ve lost touch with reality. And their argument boasts superficial plausibility.

After all, the Paul Krugmans of this world enjoy an exalted place in America’s socioeconomic hierarchy. The Democratic economists who sing the Biden economy’s praises in prestigious publications are generally much wealthier than the voters who lament runaway inflation in opinion polls. And sometimes, the former really do gloss over the more unfortunate aspects of Biden’s economic record.

If you zero in on these omissions, the posture of these Democratic economists can appear unseemly: Where do these rich liberals find the nerve to tell working-class Americans that they should stop worrying about rising food prices and start loving the Biden economy?

Countless self-styled populists have made versions of this argument in recent months. This X post from the author Carol Roth is a crude, but not atypical, example: “Paul Krugman doesn’t know any regular Americans, and so he and the rest of the corporate press mock and gaslight you while you struggle with your rent or mortgage, food and other living costs. Absolutely zero compassion or connection to reality.”

And yet, although this brand of commentary is populist in affect, it may be contrary to workers’ best interests in practice. The signature strengths and weaknesses of the Biden economy — its low unemployment and elevated prices — are byproducts of one fundamental policy decision: Faced with the Covid recession, the US government chose to prioritize poverty reduction and full employment over minimizing the risk of inflation.

Put differently, instead of forcing the nation’s most vulnerable workers to pay the inescapable economic costs of the pandemic through prolonged periods of material deprivation and joblessness, we spread those costs across the entire population through a temporary period of high inflation.

This is not how the US government has traditionally responded to recessions. And it is an approach to macroeconomic policy that simultaneously centers the interests of the working class and promotes economic growth.

Yet it is also politically vulnerable due to widespread misconceptions about how the economy works. If those misconceptions lead the electorate to punish lawmakers for prioritizing full employment, then macroeconomic policy will likely shift rightward in the future, and the next recession will take a needlessly large toll on America’s most vulnerable.

What critics of the Biden economy get right

To appreciate the pitfalls of anti-inflation populism, we need to first grapple with the strongest arguments for that outlook. The Atlantic’s Michael Powell helpfully assembles these in his most recent column, titled “What the Upper-Middle-Class Left Doesn’t Get About Inflation.”

Powell argues that liberal commentators’ enthusiasm for the Biden economy betrays their class privilege. “The modern Democratic Party, and liberalism itself,” Powell writes, “is to a substantial extent a bastion of college-educated, upper-middle-class professionals, people for whom Biden-era inflation is unpleasant but rarely calamitous.”

But “poor, working-class, and lower-middle-class” Americans aren’t so insulated from the harms of rising prices. Telling them that the economy is actually strong is both incorrect, in Powell’s view, and politically counterproductive.

In making this case, Powell makes several strong points.

First, and most compellingly, he notes that measures of “real wages” don’t take account of rising borrowing costs. Inflation has fallen sharply since 2022, but interest rates have risen. And since Americans finance many of their purchases through debt, higher interest rates dampen the impact of slowing price growth. As he notes, a recent National Bureau of Economic Research working paper found that when you account for borrowing costs, the public’s mood about the economy comes much closer to tracking objective changes in the cost of living.

Second, Powell correctly observes that low-income Americans are much more vulnerable to sudden increases in the cost of food and energy than are more affluent Americans. The inflationary spike of 2021 and 2022 was indeed deeply bruising for a large swath of the US population: Most US workers suffered from declining real wages for nearly all of Biden’s first two years in office. Things have turned around since then, but many workers still have less purchasing power now than they did when Biden was inaugurated. And it’s understandable that others would have lingering resentments.

Third, Powell rightly notes that the American economy remains riven by structural inequalities. Many households have never fully recovered from the 2008 foreclosure crisis. And the nation’s skimpy welfare state keeps many workers perpetually on the brink of financial crisis.

Fourth, America is suffering from a housing shortage that makes homeownership unaffordable for the middle class and rent burdensome for many workers.

But none of these points refute the core claims of the so-called “upper-middle-class left” — namely, 1) that national economic conditions are significantly better than most voters recognize and 2) that America’s Covid-era macroeconomic policies, while imperfect, were remarkably successful in mitigating the inescapable economic damages wrought by the pandemic.

Powell never engages with the second point. Rather, his piece focuses on portraying the first claim as a delusion of the privileged. Yet his argument suffers from a fundamental flaw: When analyzing the impact of inflation on Americans’ finances, he repeatedly ignores the inextricable and countervailing impact of wage growth. Ironically, this exact error likely explains a considerable portion of the public’s economic discontent.

Americans’ real wages are higher now than they were before the pandemic

Early in his column, Powell writes that since 2019, America’s working-class has “weathered 20 percent inflation and now rising interest rates—which means they’ve lost more than a fifth of their purchasing power.”

This is simply false. You cannot measure a trend in workers’ purchasing power over time by looking exclusively at changes in their costs. Since 1947, the consumer price index has risen by roughly 1,400 percent. If we applied Powell’s logic to that data point, we would conclude that Americans’ purchasing power had apocalyptically collapsed since the Truman administration. But of course, Americans are not poorer today than they were in 1947 — because since that year, the median US household income has increased by roughly 2,400 percent.

Similarly, although consumer prices have risen 20 percent since 2019, the average hourly wage among nonmanagerial workers in the US has grown by 25 percent over the same period. Put differently, at least for Americans who don’t debt-finance their expenditures, purchasing power is higher today than it was in 2019.

It’s difficult to say exactly how one should factor interest rate increases into this equation, since exposure to elevated borrowing costs varies so widely across the population. But it’s safe to say that, even considering the impact of higher rates, Americans have not lost anything close to one-fifth of their buying power since 2019, if they’ve lost any at all. Were that actually the case, inflation would be minimal because consumers would not be able to afford to bid up the prices of goods and services, and the economy would likely be in recession.

Powell does eventually acknowledge that wages have been rising faster than inflation for a while now. But he minimizes this fact by suggesting that it is only true if you ignore food and energy prices.

As an example of liberals’ out-of-touch optimism, he links to a report from the Center for American Progress (CAP), which found that nearly 60 percent of US workers enjoyed higher inflation-adjusted earnings in 2023 than in 2022. In Powell’s telling, the upshot of that report is “that median wage growth has nudged ahead of the core inflation rate.”

He then suggests that this is a trivial fact because“core inflation” — which is to say a version of the consumer-price index that excludes volatile food and energy prices — is a poor gauge of household costs. After all, Powell notes, grocery and gas prices are “economic indicators that affect Americans’ daily lives.”

Yet this whole line of argument is a non sequitur: The CAP report that Powell cites includes food and energy prices when calculating real wages. It does not argue that wage growth has “nudged ahead of the core inflation rate.” Rather, the report shows that wage growth has outpaced inflation, full stop. (When I asked Powell about this discrepancy, he told me that he had not intended to link to the CAP report. I know from personal experience that adding the wrong hyperlink to a piece is an easy mistake to make — yet Powell’s column does not cite or link to any other example of liberal economists measuring real wages using core inflation.)

It is true that macroeconomists tend to focus on “core inflation” when analyzing monetary policy. But this is merely because food and energy are globally traded commodities, the prices of which are influenced by myriad factors that have little to do with consumer demand in the United States, such as outbreaks of bird flu or geopolitical conflicts.

In other words: Powell is right that core inflation is a poor gauge of the public’s cost burdens. But I’m not aware of any commentator who has used it for that purpose.

The economy has real problems, but it’s still stronger than voters realize

When you recognize that real wages are higher today than they were in 2019 — a year when Americans gave their nation’s economy historically high marks — it becomes clear that Powell’s strongest arguments don’t add up to a rebuttal of the Biden economy’s boosters.

Yes, low-income Americans have suffered the most from inflation. But they also benefited the most from the ultra-tight labor market of the early Biden presidency. Between 2020 and 2022, real wages grew by 5.7 percent for those at the very bottom of America’s income ladder.

Yes, rising rents and home prices constitute a national crisis. But even taking housing into account, life has been getting more affordable for Americans over the past year as their real incomes have risen. And in any event, the primary target of Powell’s critique — the New York Times’s Paul Krugman — is well aware of the housing crisis and has called for policymakers to relax restrictions on apartment construction in order to address it.

Yes, the US economy is profoundly unequal and unjust. But this was also the case in 2019, when wage inequality was even higher than it is now, and Americans strongly approved of the economy five years ago. So the existence of such inequities cannot by themselves explain the public’s mood.

Finally, it is absolutely true that measures of real wages do not account for changes in borrowing costs. This is a significant limitation. And Powell is totally right that many liberal commentators have given it short shrift. But even the National Bureau of Economic Research paper that he cites notes that fully incorporating borrowing costs into the consumer price index still doesn’t fully explain the gap between objective economic conditions and consumer sentiment.

More basically: If borrowing costs were completely nullifying the impact of real wage increases — and Americans’ purchasing power was actually falling — then we would not expect to see US consumers increasing their spending. Yet retail sales rose sharply during the first quarter of this year.

Notably, if Americans’ spending habits suggest that they are doing reasonably well financially, their survey responses often indicate the same. In recent polls of Michigan and Pennsylvania voters, roughly 60 percent said their personal finances were in “good” or “excellent” shape, even as a similar percentage declared the national economy “bad” or “not so good.”

In the wake of the Covid crisis, inflation was the price of a pro-worker macroeconomic policy

Economic commentators have no obligation to abet Joe Biden’s reelection. But they do have a responsibility not to exaggerate the contemporary economy’s weaknesses. And this is especially true if they wish their commentary to advance the interests of working people.

The past four years witnessed a historic experiment in fiscal policy. Traditionally, recessions have brought increases in poverty and prolonged periods of elevated unemployment. But during the Covid downturn, poverty in the United States actually declined.

After the Great Recession of the late 2000s, it took more than nine years for America’s unemployment rate to return to its pre-crisis level. After the Covid downturn, it took just over two years.

These triumphs of economic management — and the elevated prices of the past three years — are inextricably linked.

The pandemic simultaneously reduced the economy’s productive capacity and induced a sudden shift in consumer preferences: All across the wealthy world, socially distanced households shifted their disposable income away from in-person services and toward manufactured goods.

Even in the absence of a public health emergency, the global economy would have struggled to accommodate this abrupt change in consumer demand. Add in pandemic-induced factory closures, and a gap inevitably opened up between demand for goods and their supply.

We could have brought supply and demand into balance by throttling the purchasing power of the most vulnerable working-class households: If you condemn 10 percent of the workforce to unemployment and 20 percent of households to poverty, you’ll alleviate inflationary pressure, since fewer people will have the money necessary for bidding up prices.

Instead, we chose to minimize the recession’s impact on the vulnerable to a historically unprecedented degree. A painful, but fleeting, period of high inflation proved to be the price of this decision.

Unfortunately, most voters do not recognize the connection between the Biden era’s inflation and its low unemployment or strong wage growth. A new analysis of survey data by the Harvard economist Stefanie Stantcheva lends credence to an old hypothesis: People tend to attribute wage gains to their own efforts or their employers’ largesse — rather than to market dynamics — even as they blame price increases on government mismanagement.

This is a potential problem for progressive macroeconomic policy. If voters will punish elected officials for presiding over inflation but won’t necessarily give them credit for engineering real wage gains, then Congress will have an incentive to err on the side of understimulating the economy during the next recession.

Powell never explicitly criticizes Biden’s fiscal policies. The main upshot of his piece is that Democratic politicians should not try to persuade voters that the economy is good but should instead embrace populist rhetoric and deflect blame for high prices onto greedy corporations.

This is reasonable advice for Biden and Kamala Harris. But public intellectuals serve a different function than politicians. Trying to make voters appreciate the connection between inflation and wage growth — or the fact that the United States has done a superlative job of navigating a worldwide economic crisis — may be a quixotic task. But it is not an inherently classist or condescending one.

To the contrary, such commentary ultimately aims to help workers make more informed choices at the ballot box so that they can better preserve their leverage in the labor market.