NEWS WRAP

Republican or Republican't

• No beating around the Bush | George W. Bush criticised the Republican Party for an increasing lack of inclusivity. In a recent interview, the former President rebuked the bid by pro-Trump Republicans in Congress to establish an America First Caucus to promote Anglo-Saxon values and traditions, arguing it "basically says that we [Republicans] want to be extinct." Bush warned if the GOP continues like this, "there's not going to be a party" in three to five years. READ MORE HERE
   
• In the crosshairs (again) | Prominent Republican members of Congress Mitt Romney and Liz Cheney have again attracted scrutiny for their opposition to former President Donald Trump. Renewed calls for Cheney's removal from GOP leadership came after she repudiated the recent statement from Donald Trump arguing anyone supporting these claims is "poisoning our democratic system." It comes after Mitt Romney was booed at a Utah GOP convention, where a vote to censure the senator for supporting Trump's impeachment narrowly failed 798 to 711. READ MORE HERE
   
• (Dem)olition in Texas special election | Republican candidates have claimed both runoff spots in the special election for a House seat outside Fort Worth, quashing Democratic hopes to bolster their slim House majority. The race is now between Republicans Susan Wright, endorsed by former President Donald Trump, and Jake Ellzey. In her concession speech, third-place candidate Jana Lynne Sanchez said the "Democrats have come a long way toward competing in Texas but we still have a long way to go." READ MORE HERE
   
• Facebook friends? | An independent board is poised to announce whether former President Donald Trump will be allowed to return to Facebook following his four-month ban in the wake of the Capitol riots in January. The decision by Facebook's Oversight Board is to be announced on Wednesday, 5 May at 11pm AEST. The outcome of the review is being watched closely as a benchmark for social networks' handling of political speech and the spread of misinformation by political leaders. READ MORE HERE
   
• Reversing the reversal | In response to sustained criticism, President Biden announced a fourfold increase to the annual limit of refugees admitted to the United States. The cap will be boosted to 62,500 from the record-low 15,000 brought in by the Trump administration. While Biden campaigned on dramatically increasing the refugee cap, the administration recently indicated it wanted to maintain the same 15,000 cap, resulting in significant Democratic opposition. READ MORE HERE

SOTUS WEBINAR | 5 MAY

Australia-US collaboration for the economic security of the Indo-Pacific

State of the United States webinar series

Geoeconomic threats to American primacy are prompting the Biden administration to explicitly connect domestic recovery to external strength, with reviews of supply chains and strategic, government-led investments to secure US technological supremacy. Given increasing threats to the rules-based order, it is imperative that Australia and the US work together to reinforce a secure Indo-Pacific economy. How can Australia work together with the Biden administration to manage geoeconomics, contestation and coercion in the Indo-Pacific region?

To discuss these issues, please join us for a webinar discussion with Perth USAsia Centre Research Director Dr Jeffrey Wilson, Senior Policy Fellow Hayley Channer and United States Studies Centre Non-Resident Senior Fellow Dr John Lee in conversation with Perth USAsia Centre CEO Professor Gordon Flake.

Jeffrey Wilson, Hayley Channer and John Lee are authors of featured chapters from the United States Studies Centre and Perth USAsia Centre joint publication State of the United States: An evolving alliance agenda.

WHEN:
Wednesday 12 May, 3pm AEST (Sydney) 1pm AWST (Perth)

COST:
Free but registration is essential.

You can also subscribe to have event invitations and reminders sent straight to your inbox, so you never have to miss an event!

ANALYSIS

Biden’s big spending and taxing is a drag on US growth

Dr Stephen Kirchner
Director of Trade and Investment

The Biden administration has announced some of the biggest changes to US federal spending and taxation in peacetime in its first 100 days in office.

While some of the new spending measures will have a positive economic payoff, the tax measures proposed to finance them will be a long-term drag on US economic growth and dynamism, with potential implications for US investment in Australia.

The new administration has either legislated or proposed some US$6.4 trillion (AUD$8.3 trillion) in new spending under the headings of the American Rescue Plan, Jobs Plan and Families Plan, with more spending still to be announced.

It is difficult to generalise about the economic effects of such far-reaching spending proposals, but it is possible to point to some measures that will have a positive economic payoff.

It would be almost impossible to overspend on the vaccine rollout given the benefits that will flow from greater resistance to COVID-19. The vaccination effort has been one of the few bright spots in America’s pandemic response.

Similarly, extensions to tax expenditures such as the Child Tax, Child and Dependent Care and Earned Income Tax credits will provide much-needed support for families and workers without qualifying children.

Other elements of the administration’s spending plans raise significant questions about design and implementation, as well as opportunity cost. While such far-reaching spending measures are necessarily a mixed bag in terms of their macro and microeconomic effects, the tax proposals for the most part will weigh on future investment and economic growth by increasing the tax burden on capital.

This is an excerpt from an article by Dr Stephen Kirchner in The Australian Financial Review. Click below to read the full article.

BY THE NUMBERS

Family income spent on childcare

AU 31.1%  |  US 33.2%

Sarah Hamilton
Research Assistant for Data Insights

In a similar vein to Biden's proposed American Families Plan, the Morrison government has announced next week’s budget will include additional spending on childcare. The Australian Government spends $10.3 billion (US$7.9 billion) annually on childcare or approximately $7,031 (US$5,445) per child between the ages of zero to four. The proposed additional $1.7 billion (US$1.3 billion) removes subsidy caps and targets families with two or more children in childcare.

In contrast, the United States federal government currently spends $28 billion (US$22 billion) on childcare, equal to approximately $1,449 (US$1,123) per child aged between zero to four. Biden plans to invest $290 billion (US$225 billion) in subsidising low- and middle-income families as well as investing in those who work in the industry.

In 2019, the cost of childcare in the United States was the third highest in the OECD, costing families 33.2 per cent of their pay on average. Australia trailed close behind in fourth place, with childcare costs accounting for roughly 31.1 per cent of families' earnings. Both countries are radically more expensive than the OECD average of 11 per cent, and highlights the considerable challenge ahead of President Biden, who has committed to a target of 7 per cent for low- and middle-income families.

VIDEO

SOTUS: How should the US and Australia bolster collective deterrence and defence?

Did you miss our webinar State of the United States: How should the US and Australia bolster collective deterrence and defence? You can now watch the full replay on our YouTube channel!

Tune in to hear United States Studies Centre (USSC) Director of Foreign Policy and Defence Ashley Townshend, Research Fellow Brendan Thomas-Noone and Australian Strategic Policy Institute Senior Analyst Dr Huong Le Thu in a discussion with USSC Director of Communications and Stakeholder Engagement Mari Koeck about how Australia can work with the Biden administration to transform the alliance for collective deterrence and defence.

Watch the full event HERE.

THE WEEK IN TWEETS

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