Biden’s reality check

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With Democrats in control of the White House and both chambers of Congress, U.S. President Joe Biden decided to go big. The result was an economic agenda that topped $4 trillion and included at least something for both the progressive and centrist wings of his party. But keeping ideologically disparate Democratic lawmakers on board through the Congressional process was always going to be tough. This week has underscored how tough, and the degree to which success — even on a much smaller package — is far from assured. Gripped by infighting, Democrats have hit a wall in their high-stakes effort to simultaneously avert a government shutdown at midnight tomorrow, avoid a debt default next month and advance Biden's agenda. Markets are increasingly rattled. A group of progressive House Democrats now say they will oppose the Biden-backed bipartisan infrastructure bill tomorrow without separate legislation for the bigger piece of the president's economic plans. In the Senate, Republicans have twice blocked a Democratic move to raise the federal debt limit, just three weeks before the Treasury potentially runs out of capacity to avert a federal payments default. As Mike Dorning writes, Democrats' stumbles in Congress compound problems Biden faces elsewhere: rising food and gas prices, supply-chain disruptions and waning confidence in his ability to curtail the pandemic. The longer the deadlock drags on, the more doubts could rise about his capacity as president, alongside the potential recriminations that Democrats have squandered their time in power. — Kathleen Hunter

The Marine Corp's Iwo Jima Memorial in front of the U.S. Capitol on Monday. Photographer: Al Drago/Bloomberg Click here to follow Bloomberg Politics on Twitter and tell us how we're doing or what we're missing at balancepower@bloomberg.net.

Global Headlines

Next leader | Fumio Kishida is set to become Japan's premier, after the ex-foreign minister overcame popular reformer Taro Kono in a contest to head the ruling party. Kishida, a self-effacing former banker from Hiroshima who acknowledges that some see him as boring, will face an immediate test in a general election he must hold by November and then in an upper house vote next year. Outgoing Prime Minister Yoshihide Suga, left, and Kishida after today's vote. Photographer: Kiyoshi Ota/Bloomberg France's fight | European officials are increasingly frustrated with President Emmanuel Macron's "Europe First" strategy that aims to lessen dependence on Washington for defense and sensitive technologies, Alberto Nardelli writes. The stance — more pronounced since France's loss of a giant Australian submarine contract — is causing concern that it's hampering a united Western response to China's growing clout. Australia's nuclear submarine deal with the U.S. and Britain is worrying workers in Adelaide, the city set to build them. European Union countries agreed on a joint statement for a key trade meeting later today with the U.S. after France successfully watered down aspects of it, including on semiconductors. At least 20 provinces and regions making up more than two-thirds of China's gross domestic product have announced some form of power cuts. That's prompted warnings from banks from Goldman Sachs to Nomura to issue warnings over growth and sparking concerns over supply-chain snarl-ups. Avoiding China | The world's largest pension fund said it won't include yuan-denominated Chinese sovereign debt in its portfolio. The decision by Japan's Government Pension Investment Fund came as relations between Tokyo and Beijing deteriorate and as the debt crisis at China Evergrande worsens. China's hidden local government debt has swelled to more than half the size of the economy, according to Goldman economists. Best of Bloomberg Opinion New Japan Premier's High Point Is Probably Today: Daniel Moss Another Fine Mess Trump Has Left Biden: Bobby Ghosh No, Joe Biden, U.S. Isn't Done With Nation-Building: Hal Brands Surprise disquiet | Senior members of Singapore's ruling People's Action Party are concerned that mixed signals from the country's virus task force give the appearance of divisions in a party that has governed for around six decades, sources say. Faris Mokhtar and Philip Heijmans report that PAP cadres worry it could spur rare infighting during an informal contest to succeed Prime Minister Lee Hsien Loong. Popular moves | Brazil's government is considering extending Covid-19 cash handouts through April as President Jair Bolsonaro seeks to boost his record-low popularity before 2022 elections. It's part of a bigger plan to informally kick off his campaign as he travels across the country to defend the administration, announce infrastructure works and deliver land titles to poor families. Argentina's central bank has stepped up money printing to fund state spending ahead of November's midterm ballot, potentially further stoking inflation. Bloomberg TV and Radio air Balance of Power with David Westin weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online here or check out prior episodes and guest clips here. What to Watch Russian President Vladimir Putin hosts Turkish leader Recep Tayyip Erdogan today in Sochi, where they will discuss issues including Afghanistan, Syria and Libya. U.S. drones have recently entered Afghanistan's airspace and such violations must stop, the Taliban said. Tesla CEO Elon Musk said Biden and his administration are "biased" against his company, citing a recent White House event touting electric vehicles that excluded the automaker. Top officials from Germany's Greens and Free Democrats signaled they are making progress in exploratory talks on joining the next government as junior coalition partners. And finally ... Philippine President Rodrigo Duterte goes by a host of nicknames: the Punisher, Dirty Harry, and even the Donald Trump of the East. Since his election in 2016, he has scrambled the country's international loyalties, shaken up big business and angered women's groups and the Catholic Church. Yet he remains popular despite his missteps handling the pandemic, allowing him to potentially stay a political player even with a constitutional limit of one term as president.

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