working to improve its equipment. “Our focus is to make both our distribution and transmission system more resilient and fireproof,” said Sumeet Singh, PG&E’s chief risk officer.

But spending on fire prevention by California utilities has raised electricity rates, and consumer groups say building more power lines will drive them even higher.

Average residential electricity rates nationally have increased by about 14 percent over the last decade even though average household energy use rose just over 1 percent.

2019 report by the National Renewable Energy Laboratory, a research arm of the Energy Department, found that greater use of rooftop solar can reduce the need for new transmission lines, displace expensive power plants and save the energy that is lost when electricity is moved long distances. The study also found that rooftop systems can put pressure on utilities to improve or expand neighborhood wires and equipment.

Texas was paralyzed for more than four days by a deep freeze that shut down power plants and disabled natural gas pipelines. People used cars and grills and even burned furniture to keep warm; at least 150 died.

One reason for the failure was that the state has kept the grid managed by the Electric Reliability Council of Texas largely disconnected from the rest of the country to avoid federal oversight. That prevented the state from importing power and makes Texas a case for the interconnected power system that Mr. Biden wants.

Consider Marfa, an artsy town in the Chihuahuan Desert. Residents struggled to stay warm as the ground was blanketed with snow and freezing rain. Yet 75 miles to the west, the lights were on in Van Horn, Texas. That town is served by El Paso Electric, a utility attached to the Western Electricity Coordinating Council, a grid that ties together 14 states, two Canadian provinces and a Mexican state.

$1.4 million, compared with about $1 million to Donald J. Trump, according to the Center for Responsive Politics.

In Washington, developers of large solar and wind projects are pushing for a more connected grid while utilities want more federal funding for new transmission lines. Advocates for rooftop solar panels and batteries are lobbying Congress for more federal incentives.

Separately, there are pitched battles going on in state capitals over how much utilities must pay homeowners for the electricity generated by rooftop solar panels. Utilities in California, Florida and elsewhere want lawmakers to reduce those rates. Homeowners with solar panels and renewable energy groups are fighting those efforts.

Despite Mr. Biden’s support, the utility industry could struggle to add power lines.

Many Americans resist transmission lines for aesthetic and environmental reasons. Powerful economic interests are also at play. In Maine, for instance, a campaign is underway to stop a 145-mile line that will bring hydroelectric power from Quebec to Massachusetts.

New England has phased out coal but still uses natural gas. Lawmakers are hoping to change that with the help of the $1 billion line, called the New England Clean Energy Connect.

This spring, workmen cleared trees and installed steel poles in the forests of western Maine. First proposed a decade ago, the project was supposed to cut through New Hampshire until the state rejected it. Federal and state regulators have signed off on the Maine route, which is sponsored by Central Maine Power and HydroQuebec.

But the project is mired in lawsuits, and Maine residents could block it through a November ballot measure.

set a record in May, and some scientists believe recent heat waves were made worse by climate change.

“Transmission projects take upward of 10 years from conception to completion,” said Douglas D. Giuffre, a power expert at IHS Markit. “So if we’re looking at decarbonization of the power sector by 2035, then this all needs to happen very rapidly.”

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Congress Faces Renewed Pressure to ‘Modernize Our Antitrust Laws’

WASHINGTON — When the nation’s antitrust laws were created more than a century ago, they were aimed at taking on industries such as Big Oil.

But technology giants like Amazon, Facebook, Google and Apple, which dominate e-commerce, social networks, online advertising and search, have risen in ways unforeseen by the laws. In recent decades, the courts have also interpreted the rules more narrowly.

On Monday, a pair of rulings dismissing federal and state antitrust lawsuits against Facebook renewed questions about whether the laws were suited to taking on tech power. A federal judge threw out the federal suit because, he said, the Federal Trade Commission had not supported its claims that Facebook holds a dominant market share, and he said the states had waited too long to make their case.

The decisions underlined how cautious and conservative courts could slow an increasingly aggressive push by lawmakers, regulators and the White House to restrain the tech companies, fueling calls for Congress to revamp the rules and provide regulators with more legal tools to take on the tech firms.

David Cicilline, a Democrat of Rhode Island, said the country needed a “massive overhaul of our antitrust laws and significant updates to our competition system” to police the biggest technology companies.

Moments later, Representative Ken Buck, a Colorado Republican, agreed. He called for lawmakers to adapt antitrust laws to fit the business models of Silicon Valley companies.

This week’s rulings have now put the pressure on lawmakers to push through a recently proposed package of legislation that would rewrite key aspects of monopoly laws to make some of the tech giants’ business practices illegal.

“This is going to strengthen the case for legislation,” said Herbert Hovenkamp, an antitrust expert at the University of Pennsylvania Law School. “It seems to be proof that the antitrust laws are not up to the challenge.”

introduced this month and passed the House Judiciary Committee last week. The bills would make it harder for the major tech companies to buy nascent competitors and to give preference to their own services on their platforms, and ban them from using their dominance in one business to gain the upper hand in another.

including Lina Khan, a scholar whom President Biden named this month to run the F.T.C. — have argued that a broader definition of consumer welfare, beyond prices, should be applied. Consumer harm, they have said, can also be evident in reduced product quality, like Facebook users suffering a loss of privacy when their personal data is harvested and used for targeted ads.

In one of his rulings on Monday, Judge James E. Boasberg of U.S. District Court for the District of Columbia said Facebook’s business model had made it especially difficult for the government to meet the standard for going forward with the case.

The government, Judge Boasberg said, had not presented enough evidence that Facebook held monopoly power. Among the difficulties he highlighted was that Facebook did not charge its users for access to its site, meaning its market share could not be assessed through revenue. The government had not found a good alternative measure to make its case, he said.

He also ruled against another part of the F.T.C.’s lawsuit, concerning how Facebook polices the use of data generated by its product, while citing the kind of conservative antitrust doctrine that critics say is out of step with the technology industry’s business practices.

The F.T.C., which brought the federal antitrust suit against Facebook in December, can file a new complaint that addresses the judge’s concerns within 30 days. State attorneys general can appeal Judge Boasberg’s second ruling dismissing a similar case.

fined Facebook $5 billion in 2019 for privacy violations, there were few significant changes to how the company’s products operate. And Facebook continues to grow: More than 3.45 billion people use one or more of its apps — including WhatsApp, Instagram or Messenger — every month.

The decisions were particularly deflating after actions to rein in tech power in Washington had gathered steam. Ms. Khan’s appointment to the F.T.C. this month followed that of Tim Wu, another lawyer who has been critical of the industry, to the National Economic Council. Bruce Reed, the president’s deputy chief of staff, has called for new privacy regulation.

Mr. Biden has yet to name anyone to permanently lead the Justice Department’s antitrust division, which last year filed a lawsuit arguing Google had illegally protected its monopoly over online search.

The White House is also expected to issue an executive order this week targeting corporate consolidation in tech and other areas of the economy. A spokesman for the White House did not respond to requests for comment about the executive order or Judge Boasberg’s rulings.

Activists and lawmakers said this week that Congress should not wait to give regulators more tools, money and legal red lines to use against the tech giants. Mr. Cicilline, along with Representative Jerrold Nadler of New York, the chairman of the House Judiciary Committee, said in a statement that the judge’s decisions on Facebook show “the dire need to modernize our antitrust laws to address anticompetitive mergers and abusive conduct in the digital economy.”

Senator Amy Klobuchar, a Democrat of Minnesota who chairs the Senate Judiciary Committee’s subcommittee on antitrust, echoed their call.

“After decades of binding Supreme Court decisions that have weakened our antitrust policies, we cannot rely on our courts to keep our markets competitive, open and fair,” she said in a statement. “We urgently need to rejuvenate our antitrust laws to meet the challenges of the modern digital economy.”

But the six bills to update monopoly laws have a long way to go. They still need to pass the full House, where they will likely face criticism from moderate Democrats and libertarian Republicans. In the Senate, Republican support is necessary for them to overcome the legislative filibuster.

The bills may also not go as far in altering antitrust laws as some hope. The House Judiciary Committee amended one last week to reinforce the standard around consumer welfare.

Even so, Monday’s rulings have given the proposals a boost. Bill Baer, who led the Justice Department antitrust division during the Obama administration, said it “gives tremendous impetus to those in Congress who believe that the courts are too conservative in addressing monopoly power.”

Facebook and the tech platforms might like the judge’s decisions, he said, “but they might not like what happens in the Congress.”

Mike Isaac contributed reporting.

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High Lumber Prices Add Urgency to a Decades-Old Trade Fight

In 2016, toward the end of the Obama administration, the American lumber industry petitioned the government to impose duties on Canadian softwood lumber imports in response to what it contended were unfair trade practices. The proceedings continued under the Trump administration, which in 2017 imposed duties of 20.2 percent for most Canadian producers. The rate was lowered to 9 percent last year.

The status of the long-running dispute took on a new urgency as the price of lumber soared over the past year. The National Association of Home Builders estimated in April that higher lumber costs had added nearly $36,000 to the price of an average newly constructed single-family home. A benchmark for the price of framing lumber set a record high of $1,515 per thousand board feet in May, four times the price at the beginning of 2020, before beginning to plummet. Last week, the price stood at $930, still more than double its level at the start of 2020, according to Fastmarkets Random Lengths, the trade publication that publishes the benchmark.

“As an economist, it is very hard to understand why we’re taxing something we don’t produce enough of,” said Robert Dietz, the chief economist for the National Association of Home Builders.

On the other side of the issue are U.S. lumber producers. The U.S. Lumber Coalition, an industry group, has argued that strong demand, not duties, is driving lumber prices and that the duties make up only a small portion of the total cost of lumber for new homes.

The coalition credits the duties with strengthening the U.S. lumber industry, saying in a statement that American sawmills had expanded capacity in recent years, producing an additional 11 billion board feet of lumber since 2016. “More lumber being manufactured in America to meet domestic demand is a direct result of the trade enforcement, and the U.S. industry strongly urges the administration to continue this enforcement,” the coalition said.

Dustin Jalbert, a senior economist at Fastmarkets, a price reporting firm, attributed the chaotic lumber market and high prices in large part to effects from the pandemic. At the start of the pandemic, he said, sawmills “assumed the worst” and curbed production, only for the housing market to rebound and for demand to soar.

Mr. Jalbert said the duties stemming from the U.S.-Canada dispute were not a major reason for the high prices. “In terms of the short-term pricing situation, it’s lower down the list in terms of the factors that are driving the record prices that we’ve seen in the market,” he said.

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Top U.S. Officials Consulted With BlackRock as Markets Melted Down

As Federal Reserve Chair Jerome H. Powell and Treasury Secretary Steven Mnuchin scrambled to save faltering markets at the start of the pandemic last year, America’s top economic officials were in near-constant contact with a Wall Street executive whose firm stood to benefit financially from the rescue.

Laurence D. Fink, the chief executive of BlackRock, the world’s largest asset manager, was in frequent touch with Mr. Mnuchin and Mr. Powell in the days before and after many of the Fed’s emergency rescue programs were announced in late March. Emails obtained by The New York Times through a records request, along with public releases, underscore the extent to which Mr. Fink planned alongside the government for parts of a financial rescue that his firm referred to in one message as “the project” that he and the Fed were “working on together.”

While some conversations were previously disclosed, the newly released emails, together with public calendar records, show the extent to which economic policymakers worked with a private company as they were drawing up a response to the financial meltdown and how intertwined BlackRock has become with the federal government.

60 recorded calls over the frantic Saturday and Sunday leading up to the Fed’s unveiling on Monday, March 23, of a policy package that included its first-ever program to buy corporate bonds, which were becoming nearly impossible to sell as investors sprinted to convert their holdings to cash. Mr. Mnuchin spoke to Mr. Fink five times that weekend, more than anyone other than the Fed chair, whom he spoke with nine times. Mr. Fink joined Mr. Mnuchin, Mr. Powell and Larry Kudlow, who was the White House National Economic Council director, for a brief call at 7:25 the evening before the Fed’s big announcement, based on Mr. Mnuchin’s calendars.

book on funds.

On March 24, 2020, the New York Fed announced that it had again hired BlackRock’s advisory arm, which operates separately from the company’s asset-management business but which Mr. Fink oversees, this time to carry out the Fed’s purchases of commercial mortgage-backed securities and corporate bonds.

BlackRock’s ability to directly profit from its regular contact with the government during rescue planning was limited. The firm signed a nondisclosure agreement with the New York Fed on March 22, restricting involved officials from sharing information about the coming programs.

were contracting and its business outlook hinged on what happened in certain markets.

While the Fed and Treasury consulted with many financial firms as they drew up their response — and practically all of Wall Street and much of Main Street benefited — no other company was as front and center.

Simply being in touch throughout the government’s planning was good for BlackRock, potentially burnishing its image over the longer run, Mr. Birdthistle said. BlackRock would have benefited through “tons of information, tons of secondary financial benefits,” he said.

Mr. Mnuchin could not be reached for comment. Asked whether top Fed officials discussed program details with Mr. Fink before his firm had signed the nondisclosure agreement, the Fed said Mr. Powell and Randal K. Quarles, a Fed vice chair who also appears in the emails, “have no recollection of discussing the terms of either facility with Mr. Fink.”

“Nor did they have any reason to do so because the Federal Reserve Bank of New York handled the process with great care and transparency,” the central bank added in its statement.

Brian Beades, a spokesman for BlackRock, highlighted that the firm had “stringent information barriers in place that ensure separation between BlackRock Financial Markets Advisory and the firm’s investment business.” He said it was “proud to have been in a position to assist the Federal Reserve in addressing the severe downturn in financial markets during the depths of the crisis.”

The disclosed emails between Fed and BlackRock officials — 11 in all across March and early April — do not make clear whether the company knew about any of the Fed and Treasury programs’ designs or whether they were simply providing market information.

Fed chair’s official schedule from that March. Those calendars generally track scheduled events, and may have missed meetings in early 2020 when staff members were frantically working on the market rescue and the Fed was shifting to work from home, a central bank spokesman said.

Mr. Powell’s calendars did show that he talked to Mr. Fink in March, April and May, and he has previously answered questions about those discussions.

“I can’t recall exactly what those conversations were, but they would have been about what he is seeing in the markets and things like that, to generally exchanging information,” Mr. Powell said at a July news conference, adding that it wasn’t “very many” conversations. “He’s typically trying to make sure that we are getting good service from the company that he founded and leads.”

BlackRock’s connections to Washington are not new. It was a critical player in the 2008 crisis response, when the New York Fed retained the firm’s advisory arm to manage the mortgage assets of the insurance giant American International Group and Bear Stearns.

Several former BlackRock employees have been named to top roles in President Biden’s administration, including Brian Deese, who heads the White House National Economic Council, and Wally Adeyemo, who was Mr. Fink’s chief of staff and is now the No. 2 official at the Treasury.

in early 2009 to $7.4 trillion in 2019. By the end of last year, they were $8.7 trillion.

As it expanded, it has stepped up its lobbying. In 2004, BlackRock Inc. registered two lobbyists and spent less than $200,000 on its efforts. By 2019 it had 20 lobbyists and spent nearly $2.5 million, though that declined slightly last year, based on OpenSecrets data. Campaign contributions tied to the firm also jumped, touching $1.7 million in 2020 (80 percent to Democrats, 20 percent to Republicans) from next to nothing as recently as 2004.

short-term debt markets that came under intense stress as people and companies rushed to move all of their holdings into cash. And problems were brewing in the corporate debt market, including in exchange-traded funds, which track bundles of corporate debt and other assets but trade like stocks. Corporate bonds were difficult to trade and near impossible to issue in mid-March 2020. Prices on some high-grade corporate debt E.T.F.s, including one of BlackRock’s, were out of whack relative to the values of the underlying assets, which is unusual.

People could still pull their money from E.T.F.s, which both the industry and several outside academics have heralded as a sign of their resiliency. But investors would have had to take a financial hit to do so, relative to the quoted value of the underlying bonds. That could have bruised the product’s reputation in the eyes of some retail savers.

fund recovery was nearly instant.

When the New York Fed retained BlackRock’s advisory arm to make the purchases, it rapidly disclosed details of those contracts to the public. The firm did the program cheaply for the government, waiving fees for exchange-traded fund buying and rebating fees from its own iShares E.T.F.s back to the New York Fed.

The Fed has explained the decision to hire the advisory side of the house in terms of practicality.

“We hired BlackRock for their expertise in these markets,” Mr. Powell has since said in defense of the rapid move. “It was done very quickly due to the urgency and need for their expertise.”

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Lina Khan Named F.T.C. Chair by Biden

President Biden named Lina Khan, a prominent critic of Big Tech, as the chair of the Federal Trade Commission, according to two people with knowledge of the decision, a move that signals that the agency is likely to crack down further on the industry’s giants.

A public announcement of the decision is expected Tuesday, one of the people said.

Earlier in the day, the Senate voted 69 to 28 to confirm Ms. Khan, 32, to a seat at the agency. The commission investigates antitrust violations, deceptive trade practices and data privacy lapses in Silicon Valley.

Ms. Khan did not immediately respond to a request for comment.

In her new role, Ms. Khan will help regulate the kind of behavior highlighted for years by critics of Amazon, Facebook, Google and Apple. She told a Senate committee in April that she was worried about the way tech companies could use their power to dominate new markets. She first attracted notice as a critic of Amazon. The agency is investigating the retail giant and filed an antitrust lawsuit against Facebook last year.

Her appointment was a victory for progressive activists who want Mr. Biden to take a hard line against big companies. He also gave a White House job to Tim Wu, a law professor who has criticized the power of the tech giants.

But Mr. Biden has yet to fill another key positions tasked with regulating the industry: someone to lead the Department of Justice’s antitrust division.

This is a developing story. Check back for updates.

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How Private Equity Firms Avoid Taxes

There were two weeks left in the Trump administration when the Treasury Department handed down a set of rules governing an obscure corner of the tax code.

Overseen by a senior Treasury official whose previous job involved helping the wealthy avoid taxes, the new regulations represented a major victory for private equity firms. They ensured that executives in the $4.5 trillion industry, whose leaders often measure their yearly pay in eight or nine figures, could avoid paying hundreds of millions in taxes.

The rules were approved on Jan. 5, the day before the riot at the U.S. Capitol. Hardly anyone noticed.

The Trump administration’s farewell gift to the buyout industry was part of a pattern that has spanned Republican and Democratic presidencies and Congresses: Private equity has conquered the American tax system.

one recent estimate, the United States loses $75 billion a year from investors in partnerships failing to report their income accurately — at least some of which would probably be recovered if the I.R.S. conducted more audits. That’s enough to roughly double annual federal spending on education.

It is also a dramatic understatement of the true cost. It doesn’t include the ever-changing array of maneuvers — often skating the edge of the law — that private equity firms have devised to help their managers avoid income taxes on the roughly $120 billion the industry pays its executives each year.

Private equity’s ability to vanquish the I.R.S., Treasury and Congress goes a long way toward explaining the deep inequities in the U.S. tax system. When it comes to bankrolling the federal government, the richest of America’s rich — many of them hailing from the private equity industry — play by an entirely different set of rules than everyone else.

The result is that men like Blackstone Group’s chief executive, Stephen A. Schwarzman, who earned more than $610 million last year, can pay federal taxes at rates similar to the average American.

Lawmakers have periodically tried to force private equity to pay more, and the Biden administration has proposed a series of reforms, including enlarging the I.R.S.’s enforcement budget and closing loopholes. The push for reform gained new momentum after ProPublica’s recent revelation that some of America’s richest men paid little or no federal taxes.

nearly $600 million in campaign contributions over the last decade, has repeatedly derailed past efforts to increase its tax burden.

Taylor Swift’s back music catalog.

The industry makes money in two main ways. Firms typically charge their investors a management fee of 2 percent of their assets. And they keep 20 percent of future profits that their investments generate.

That slice of future profits is known as “carried interest.” The term dates at least to the Renaissance. Italian ship captains were compensated in part with an interest in whatever profits were realized on the cargo they carried.

The I.R.S. has long allowed the industry to treat the money it makes from carried interests as capital gains, rather than as ordinary income.

article highlighting the inequity of the tax treatment. It prompted lawmakers from both parties to try to close the so-called carried interest loophole. The on-again, off-again campaign has continued ever since.

Whenever legislation gathers momentum, the private equity industry — joined by real estate, venture capital and other sectors that rely on partnerships — has pumped up campaign contributions and dispatched top executives to Capitol Hill. One bill after another has died, generally without a vote.

One day in 2011, Gregg Polsky, then a professor of tax law at the University of North Carolina, received an out-of-the-blue email. It was from a lawyer for a former private equity executive. The executive had filed a whistle-blower claim with the I.R.S. alleging that their old firm was using illegal tactics to avoid taxes.

The whistle-blower wanted Mr. Polsky’s advice.

Mr. Polsky had previously served as the I.R.S.’s “professor in residence,” and in that role he had developed an expertise in how private equity firms’ vast profits were taxed. Back in academia, he had published a research paper detailing a little-known but pervasive industry tax-dodging technique.

$89 billion in private equity assets — as being “abusive” and a “thinly disguised way of paying the management company its quarterly paycheck.”

Apollo said in a statement that the company stopped using fee waivers in 2012 and is “not aware of any I.R.S. inquiries involving the firm’s use of fee waivers.”

floated the idea of cracking down on carried interest.

Private equity firms mobilized. Blackstone’s lobbying spending increased by nearly a third that year, to $8.5 million. (Matt Anderson, a Blackstone spokesman, said the company’s senior executives “are among the largest individual taxpayers in the country.” He wouldn’t disclose Mr. Schwarzman’s tax rate but said the firm never used fee waivers.)

Lawmakers got cold feet. The initiative fizzled.

In 2015, the Obama administration took a more modest approach. The Treasury Department issued regulations that barred certain types of especially aggressive fee waivers.

But by spelling that out, the new rules codified the legitimacy of fee waivers in general, which until that point many experts had viewed as abusive on their face.

So did his predecessor in the Obama administration, Timothy F. Geithner.

Inside the I.R.S. — which lost about one-third of its agents and officers from 2008 to 2018 — many viewed private equity’s webs of interlocking partnerships as designed to befuddle auditors and dodge taxes.

One I.R.S. agent complained that “income is pushed down so many tiers, you are never able to find out where the real problems or duplication of deductions exist,” according to a U.S. Government Accountability Office investigation of partnerships in 2014. Another agent said the purpose of large partnerships seemed to be making “it difficult to identify income sources and tax shelters.”

The Times reviewed 10 years of annual reports filed by the five largest publicly traded private equity firms. They contained no trace of the firms ever having to pay the I.R.S. extra money, and they referred to only minor audits that they said were unlikely to affect their finances.

Current and former I.R.S. officials said in interviews that such audits generally involved issues like firms’ accounting for travel costs, rather than major reckonings over their taxable profits. The officials said they were unaware of any recent significant audits of private equity firms.

For a while, it looked as if there would be an exception to this general rule: the I.R.S.’s reviews of the fee waivers spurred by the whistle-blower claims. But it soon became clear that the effort lacked teeth.

Kat Gregor, a tax lawyer at the law firm Ropes & Gray, said the I.R.S. had challenged fee waivers used by four of her clients, whom she wouldn’t identify. The auditors struck her as untrained in the thicket of tax laws governing partnerships.

“It’s the equivalent of picking someone who was used to conducting an interview in English and tell them to go do it in Spanish,” Ms. Gregor said.

The audits of her clients wrapped up in late 2019. None owed any money.

As a presidential candidate, Mr. Trump vowed to “eliminate the carried interest deduction, well-known deduction, and other special-interest loopholes that have been so good for Wall Street investors, and for people like me, but unfair to American workers.”

wanted to close the loophole, congressional Republicans resisted. Instead, they embraced a much milder measure: requiring private equity officials to hold their investments for at least three years before reaping preferential tax treatment on their carried interests. Steven Mnuchin, the Treasury secretary, who had previously run an investment partnership, signed off.

McKinsey, typically holds investments for more than five years. The measure, part of a $1.5 trillion package of tax cuts, was projected to generate $1 billion in revenue over a decade.

credited Mr. Mnuchin, hailing him as “an all-star.”

Mr. Fleischer, who a decade earlier had raised alarms about carried interest, said the measure “was structured by industry to appear to do something while affecting as few as possible.”

Months later, Mr. Callas joined the law and lobbying firm Steptoe & Johnson. The private equity giant Carlyle is one of his biggest clients.

It took the Treasury Department more than two years to propose rules spelling out the fine print of the 2017 law. The Treasury’s suggested language was strict. One proposal would have empowered I.R.S. auditors to more closely examine internal transactions that private equity firms might use to get around the law’s three-year holding period.

The industry, so happy with the tepid 2017 law, was up in arms over the tough rules the Treasury’s staff was now proposing. In a letter in October 2020, the American Investment Council, led by Drew Maloney, a former aide to Mr. Mnuchin, noted how private equity had invested in hundreds of companies during the coronavirus pandemic and said the Treasury’s overzealous approach would harm the industry.

The rules were the responsibility of Treasury’s top tax official, David Kautter. He previously was the national tax director at EY, formerly Ernst & Young, when the firm was marketing illegal tax shelters that led to a federal criminal investigation and a $123 million settlement. (Mr. Kautter has denied being involved with selling the shelters but has expressed regret about not speaking up about them.)

On his watch at Treasury, the rules under development began getting softer, including when it came to the three-year holding period.

Monte Jackel, a former I.R.S. attorney who worked on the original version of the proposed regulations.

Mr. Mnuchin, back in the private sector, is starting an investment fund that could benefit from his department’s weaker rules.

Even during the pandemic, the charmed march of private equity continued.

The top five publicly traded firms reported net profits last year of $8.6 billion. They paid their executives $8.3 billion. In addition to Mr. Schwarzman’s $610 million, the co-founders of KKR each made about $90 million, and Apollo’s Leon Black received $211 million, according to Equilar, an executive compensation consulting firm.

now advising clients on techniques to circumvent the three-year holding period.

The most popular is known as a “carry waiver.” It enables private equity managers to hold their carried interests for less than three years without paying higher tax rates. The technique is complicated, but it involves temporarily moving money into other investment vehicles. That provides the industry with greater flexibility to buy and sell things whenever it wants, without triggering a higher tax rate.

Private equity firms don’t broadcast this. But there are clues. In a recent presentation to a Pennsylvania retirement system by Hellman & Friedman, the California private equity giant included a string of disclaimers in small font. The last one flagged the firm’s use of carry waivers.

The Biden administration is negotiating its tax overhaul agenda with Republicans, who have aired advertisements attacking the proposal to increase the I.R.S.’s budget. The White House is already backing down from some of its most ambitious proposals.

Even if the agency’s budget were significantly expanded, veterans of the I.R.S. doubt it would make much difference when it comes to scrutinizing complex partnerships.

“If the I.R.S. started staffing up now, it would take them at least a decade to catch up,” Mr. Jackel said. “They don’t have enough I.R.S. agents with enough knowledge to know what they are looking at. They are so grossly overmatched it’s not funny.”

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May 2021 Consumer Price Index Shows Fastest Inflation Since 2008

The discussion could shape the path ahead for economic policy, helping to determine how much support President Biden has for infrastructure spending proposals and how patient the Fed can be in removing emergency monetary policy supports.

“This is the largest year-over-year increase in prices since the Great Recession, and massive stimulus spending is a contributing factor,” Senator Mike Crapo, Republican of Idaho, wrote on Twitter. “Proposals for further federal spending, coupled with job-killing tax hikes, are not the remedy for economic recovery.”

The White House has been focused on alleviating bottlenecks where it can, reviewing the supply chain for semiconductors and critical minerals used in all sorts of products. But controlling inflation falls largely to the Fed.

The data comes less than a week before the central bank’s June meeting, which will give the Fed chair, Jerome H. Powell, another opportunity to address how he and his colleagues plan to achieve their two key goals — stable prices and full employment — in the tricky post-pandemic economic environment.

“The Fed has never said how big a reopening spike it expected, but we’re guessing that policymakers have been surprised by the past two months’ numbers,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note following the release.

The big policy question facing the Fed is when, and how quickly, it will begin to slow its $120 billion in monthly government-backed bond purchases. That policy is meant to keep borrowing of all kinds cheap and stoke demand, and because it bolsters stock prices, markets are very attuned to when central bankers will taper it.

Mr. Powell and his colleagues have repeatedly said that they need to see “substantial” further progress toward maximum employment and stable inflation that averages 2 percent over time before they pull back from that policy.

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Offshore Wind Farms Show What Biden’s Climate Plan Is Up Against

A constellation of 5,400 offshore wind turbines meet a growing portion of Europe’s energy needs. The United States has exactly seven.

With more than 90,000 miles of coastline, the country has plenty of places to plunk down turbines. But legal, environmental and economic obstacles and even vanity have stood in the way.

President Biden wants to catch up fast — in fact, his targets for reducing greenhouse gas emissions depend on that happening. Yet problems abound, including a shortage of boats big enough to haul the huge equipment to sea, fishermen worried about their livelihoods and wealthy people who fear that the turbines will mar the pristine views from their waterfront mansions. There’s even a century-old, politically fraught federal law, known as the Jones Act, that blocks wind farm developers from using American ports to launch foreign construction vessels.

Offshore turbines are useful because the wind tends to blow stronger and more steadily at sea than onshore. The turbines can be placed far enough out that they aren’t visible from land but still close enough to cities and suburbs that they do not require hundreds of miles of expensive transmission lines.

approved a project near Martha’s Vineyard that languished during the Trump administration and in May announced support for large wind farms off California’s coast. The $2 trillion infrastructure plan that Mr. Biden proposed in March would also increase incentives for renewable energy.

The cost of offshore wind turbines has fallen about 80 percent over the last two decades, to as low as $50 a megawatt-hour. While more expensive per unit of energy than solar and wind farms on land, offshore turbines often make economic sense because of lower transmission costs.

“Solar in the East is a little bit more challenging than in the desert West,” said Robert M. Blue, the chairman and chief executive of Dominion Energy, a big utility company that is working on a wind farm with nearly 200 turbines off the coast of Virginia. “We’ve set a net-zero goal for our company by 2050. This project is essential to hitting those goals.”

rely on European components, suppliers and ships for years.

Installing giant offshore wind turbines — the largest one, made by General Electric, is 853 feet high — is difficult work. Ships with cranes that can lift more than a thousand tons haul large components out to sea. At their destinations, legs are lowered into the water to raise the ships and make them stationary while they work. Only a few ships can handle the biggest components, and that’s a big problem for the United States.

Government Accountability Office report published in December. That is far too small for the giant components that Mr. Eley’s team was working with.

So Dominion hired three European ships and operated them out of the Port of Halifax in Nova Scotia. One of them, the Vole au Vent from Luxembourg, is 459 feet (140 meters) long and can lift 1,654 tons.

Mr. Eley’s crew waited weeks at a time for the European ships to travel more than 800 miles each way to port. The installations took a year. In Europe, it would have been completed in a few weeks. “It was definitely a challenge,” he said.

The U.S. shipping industry has not invested in the vessels needed to carry large wind equipment because there have been so few projects here. The first five offshore turbines were installed in 2016 near Block Island, R.I. Dominion’s two turbines were installed last year.

Had the Jones Act not existed — it was enacted after World War I to ensure that the country had ships and crews to mobilize during war and emergencies — Dominion could have run European vessels out of Virginia’s ports. The law is sacrosanct in Congress, and labor unions and other supporters argue that repealing it would eliminate thousands of jobs at shipyards and on boats, leaving the United States reliant on foreign companies.

Demand for large ships could grow significantly over the next decade because the United States, Europe and China have ambitious offshore wind goals. Just eight ships in the world can transport the largest turbine parts, according to Dominion.

200 more turbines by 2026. Dominion spent $300 million on its first two but hopes the others will cost $40 million each.

For the last 24 years, Tommy Eskridge, a resident of Tangier Island, has made a living catching conchs and crabs off the Virginia coast.

One area he works is where Dominion plans to place its turbines. Federal regulators have adjusted spacing between turbines to one nautical mile to create wider lanes for fishing and other boats, but Mr. Eskridge, 54, worries that the turbines could hurt his catch.

The area has yielded up to 7,000 pounds of conchs a day, though Mr. Eskridge said a typical day produced about half that amount. A pound can fetch $2 to $3, he said.

Mr. Eskridge said the company and regulators had not done enough to show that installing turbines would not hurt his catch. “We just don’t know what it’s going to do.”

who died in 2009, and William I. Koch, an industrialist.

Neither wanted the turbines marring the views of the coast from their vacation compounds. They also argued that the project would obstruct 16 historical sites, disrupt fishermen and clog up waterways used by humpback, pilot and other whales.

the developer of Cape Wind gave up in 2017. But well before that happened, Cape Wind’s troubles terrified energy executives who were considering offshore wind.

Projects up and down the East Coast are mired in similar fights. Residents of the Hamptons, the wealthy enclave, opposed two wind development areas, and the federal government shelved the project. On the New Jersey shore, some homeowners and businesses are opposing offshore wind because they fear it will raise their electricity rates, disrupt whales and hurt the area’s fluke fishery.

Energy executives want the Biden administration to mediate such conflicts and speed up permit approval.

“It’s been artificially, incrementally slow because of some inefficiencies on the federal permitting side,” said David Hardy, chief executive of Orsted North America.

Renewable-energy supporters said they were hopeful because the country had added lots of wind turbines on land — 66,000 in 41 states. They supplied more than 8 percent of the country’s electricity last year.

Ms. Lefton, the regulator who oversees leasing of federal waters, said future offshore projects would move more quickly because more people appreciated the dangers of climate change.

“We have a climate crisis in front of us,” she said. “We need to transition to clean energy. I think that will be a big motivator.”

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U.S. Aid to Central America Hasn’t Slowed Migration. Can Kamala Harris?

SAN ANTONIO HUISTA, Guatemala — An American contractor went to a small town in the Guatemalan mountains with an ambitious goal: to ignite the local economy, and hopefully even persuade people not to migrate north to the United States.

Half an hour into his meeting with coffee growers, the contractor excitedly revealed the tool he had brought to change their lives: a pamphlet inviting the farmers to download an app to check coffee prices and “be a part of modern agriculture.”

Pedro Aguilar, a coffee farmer who hadn’t asked for the training and didn’t see how it would keep anyone from heading for the border, looked confused. Eyeing the U.S. government logo on the pamphlet, he began waving it around, asking if anyone had a phone number to call the Americans “and tell them what our needs really are.”

soared in 2019 and is on the upswing once more.

have risen, malnutrition has become a national crisis, corruption is unbridled and the country is sending more unaccompanied children to the United States than anywhere else in the world.

That is the stark reality facing Ms. Harris as she assumes responsibility for expanding the same kind of aid programs that have struggled to stem migration in the past. It is a challenge that initially frustrated her top political aides, some of whom viewed the assignment from Mr. Biden as one that would inevitably set her up for failure in the first months of her tenure.

Her allies worried that she would be expected to solve the entire immigration crisis, irked that the early reports of her new duties appeared to hold her responsible for juggling the recent surge of children crossing the border without adults.

linked to drug traffickers and accused of embezzling American aid money, the leader of El Salvador has been denounced for trampling democratic norms and the government of Guatemala has been criticized for persecuting officials fighting corruption.

Even so, Ms. Harris and her advisers have warmed to the task, according to several people familiar with her thinking in the White House. They say it will give her a chance to dive squarely into foreign policy and prove that she can pass the commander-in-chief test, negotiating with world leaders on a global stage to confront one of America’s most intractable issues.

critics denounced as unlawful and inhumane. Moreover, members of the current administration contend that Mr. Trump’s decision to freeze a portion of the aid to the region in 2019 ended up blunting the impact of the work being done to improve conditions there.

But experts say the reasons that years of aid have not curbed migration run far deeper than that. In particular, they note that much of the money is handed over to American companies, which swallow a lot of it for salaries, expenses and profits, often before any services are delivered.

Record numbers of Central American children and families were crossing, fleeing gang violence and widespread hunger.

independent studies have found.

“All activities funded with U.S.A.I.D.’s foreign assistance benefit countries and people overseas, even if managed through agreements with U.S.-based organizations,” said Mileydi Guilarte, a deputy assistant administrator at U.S.A.I.D. working on Latin America funding.

But the government’s own assessments don’t always agree. After evaluating five years of aid spending in Central America, the Government Accountability Office rendered a blunt assessment in 2019: “Limited information is available about how U.S. assistance improved prosperity, governance, and security.”

One U.S.A.I.D. evaluation of programs intended to help Guatemalan farmers found that from 2006 to 2011, incomes rose less in the places that benefited from U.S. aid than in similar areas where there was no intervention.

Mexico has pushed for a more radical approach, urging the United States to give cash directly to Central Americans affected by two brutal hurricanes last year. But there’s also a clear possibility — that some may simply use the money to pay a smuggler for the trip across the border.

The farmers of San Antonio Huista say they know quite well what will keep their children from migrating. Right now, the vast majority of people here make their money by selling green, unprocessed coffee beans to a few giant Guatemalan companies. This is a fine way to put food on the table — assuming the weather cooperates — but it doesn’t offer much more than subsistence living.

Farmers here have long dreamed of escaping that cycle by roasting their own coffee and selling brown beans in bags to American businesses and consumers, which brings in more money.

“Instead of sending my brother, my father, my son to the United States, why not send my coffee there, and get paid in dollars?” said Esteban Lara, the leader of a local coffee cooperative.

But when they begged a U.S. government program for funding to help develop such a business, Ms. Monzón said, they were told “the money is not designed to be invested in projects like that.”

These days, groups of her neighbors are leaving for the United States every month or two. So many workers have abandoned this town that farmers are scrambling to find laborers to harvest their coffee.

One of Ms. Monzón’s oldest employees, Javier López Pérez, left with his 14-year-old son in 2019, during the last big wave of Central American migration to the United States. Mr. López said he was scaling the border wall with his son when he fell and broke his ankle.

“My son screamed, ‘Papi, no!’ and I said to him, ‘Keep going, my son,’” Mr. López said. He said his son made it to the United States, while he returned to San Antonio Huista alone.

His family was then kicked out of their home, which Mr. López had given as collateral to the person who smuggled him to the border. The house they moved into was destroyed by the two hurricanes that hit Guatemala late last year.

Ms. Monzón put Mr. López in one of her relatives’ houses, then got the community to cobble together money to pay for enough cinder blocks to build the family a place to live.

While mixing cement to bind the blocks together, one of Mr. López’s sons, Vidal, 19, confessed that he had been talking to a smuggler about making the same journey that felled his father, who was realistic at the prospect.

“I told him, ‘Son, we suffered hunger and thirst along the way, and then look at what happened to me, look at what I lost,’” Mr. López said, touching his still-mangled ankle. “But I can’t tell him what to do with his life — he’s a man now.”

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