President Joe Biden will push the case for his $2.3 trillion infrastructure plan in the reliably Republican state of Louisiana — directly challenging GOP lawmakers who say that low taxes for corporations and the wealthy will fuel economic growth.
Biden is leaning into the stagecraft of the presidency on Thursday by choosing to speak in the city of Lake Charles in front of a 70-year-old bridge that is 20 years past its designed lifespan.
Even as he engages with Republicans in Washington, Biden is trying to sell their voters on the idea that higher corporate taxes can provide $115 billion for roads and bridges and hundreds of billions of dollars more to upgrade the electrical grid, make the water system safer, rebuild homes and jump-start the manufacturing of electric vehicles.
A White House official, who insisted on anonymity to discuss the speech ahead of delivery, said Biden would pose a basic question to voters about whether tax cuts for big companies and CEOs will make the country stronger than programs designed to bolster the middle class.
Biden hinted at the theme when answering questions from reporters after a Wednesday speech at the White House that also emphasized his separate $1.8 trillion plan for education and children to be funded by higher taxes on the wealthiest Americans.
“What’s going to grow America more?” Biden said. “What’s going to help you and your security more? The super wealthy having to pay 3.9% less tax or having an entire generation of Americans having associate degrees?”
Biden then began to whisper: “Guess what. It grows the economy. Benefits everybody. Hurts nobody.”
Republican lawmakers have doubled down on low taxes as a core pillar of their ideology and partisan identity. Several GOP senators favor spending $568 billion on infrastructure over five years, a small fraction of what the Democratic president has proposed — a sign of how difficult a deal might be.
Senate Minority Leader Mitch McConnell of Kentucky said that Republicans would rather finance infrastructure through user fees such as tolls and gasoline taxes, though he declined to specify which fees he would back.
“We’re open to doing a roughly $600 billion package, which deals with what all of us agree is infrastructure and to talk about how to pay for that in any way other than reopening the 2017 tax reform bill,” McConnell said Monday at the University of Louisville.
The Biden administration is banking that its message could play in Louisiana, which last backed a Democratic presidential candidate in 1996. Louisiana has been barraged by 30 extreme weather events over the past decade that caused $50 billion worth of damage. Biden is seeking $50 billion to make infrastructure better able to withstand storms, winds and flooding.
Hurricanes battered Lake Charles, a city of 78,000 residents, twice last year over the course of six weeks. Biden also plans to tour a water plant in New Orleans.
His infrastructure package received support in a newspaper editorial last week by Lake Charles Mayor Nic Hunter, a Republican, and Shreveport Mayor Adrian Perkins, a Democrat.
“The unfortunate truth is that our aging infrastructure and local government budgets cannot withstand the strain of increasingly frequent storms,” they wrote. “As mayors of great American cities in the South, we lie awake at night dreading each forecasted storm.”
There is general agreement among Democrats and Republicans in Washington about the need for infrastructure spending. But there are two significant hurdles for Biden's proposal to garner Republican backing.
First, Republican lawmakers would prefer a narrower definition of infrastructure that is concentrated on roads, bridges, airports, transit and broadband rather than renewable energy and access to caregivers. Second, they object to Biden's proposal to pay for his plan by undoing the 2017 tax cuts signed into law by President Donald Trump. Biden is seeking to raise the corporate tax rate from 21% to 28%.
OMAHA, Neb. (AP) — Warren Buffett's company reported a steep drop in earnings Saturday because the paper value of its investments fell and it sold off part of its massive Apple stake, but the tens of thousands of shareholders filling an Omaha arena to hear Buffett answer questions at the annual meeting later can take heart that Berkshire Hathaway's many businesses performed well.
Berkshire reported a $12.7 billion profit, or $8.825 per Class A share, in the quarter. That's roughly one-third of the $35.5 billion, or $24,377 per A share, that Berkshire reported a year ago.
But those figures were heavily swayed by a large drop in the paper value of Berkshire's investments. That's why Buffett encourages investors to pay more attention to the conglomerate's operating earnings that exclude the investment figures. By that measure, Berkshire's operating earnings jumped 39% to $11.222 billion from last year's $8.065 billion as its insurance companies led a strong performance.
The three analysts surveyed by FactSet Research had predicted operating earnings of $6,701.87 per Class A share.
Buffett did sell off nearly $6 billion in stocks during the quarter, including trimming about 13% of Berkshire's massive Apple stake. The investment in the iPhone maker is still the biggest one in the $364 billion portfolio at $135.4 billion, and Buffett said he expects Apple to remain the biggest investment for years — even up to when his successor takes over.
But the estimated value of Berkshire's Apple stake suggests that Buffett sold off more than 100 million shares. Buffett has said he invested in Apple's stock because of how devoted consumers are to the iPhone and other Apple products.
Apple CEO Tim Cook, who is at the Berkshire meeting, told CNBC that he still considers it a privilege to have Berkshire as a major shareholder, and he knew about the sales before Berkshire disclosed them Saturday.
Berkshire reported a $2.6 billion underwriting profit at its insurers, up from $911 million a year ago.
BNSF railroad's profits did disappoint and drop 8% to $1.143 billion, but most of its many other companies delivered solid results, including a 72% jump in operating profits at the utility unit that added $717 million to Berkshire's total.
Berkshire's revenue grew 5% to $89.87 billion in the quarter. The two analysts who reported estimates to FactSet predicted $87.044 billion revenue.
With no major acquisitions in sight, Berkshire's massive cash pile continued to grow to a record $188.993 billion in the quarter. Berkshire even spent $2.6 billion repurchasing shares during the first three months of the year, but its companies that include Geico insurance, BNSF railroad, several major utilities and an assortment of dozens of others keep generating mountains of cash.
“We’d love to spend it but we won’t spend it unless we’re doing something with very little risk that will make us a lot of money,” Buffett said.
Tens of thousands filled the arena eager to vacuum up tidbits of wisdom from billionaire Warren Buffett, who famously dubbed the meeting ‘Woodstock for Capitalists.’
But a key ingredient is missing this year: It’s the first meeting since Vice Chairman Charlie Munger died.
The meeting opened with a video tribute to Munger recounting his life and highlighting some of his best known quotes from the meetings over the years that drew applause, including classic lines like “If people weren't so often wrong, we wouldn't be so rich.” The video also featured old interviews with Buffett and Munger talking about their epic friendship.
The video also featured several of the classic skits the investors made for meetings over the years with hoiliday stars like a “Desperate Housewives” spoof where one of the women introduced Munger as her boyfriend and another video where Jaimie Lee Curtis swooned over Munger.
As the video ended, everyone in the arena gave Munger a prolonged standing ovation to thank him for being what Buffett called "the architect of Berkshire Hathaway.
For decades, Munger shared the stage with Buffett every year for the marathon question and answer session that is the event's centerpiece. Munger routinely let Buffett take the lead with expansive responses that went on for several minutes. Then Munger himself would cut directly to the point. He is remembered for calling cryptocurrencies stupid, telling people to “marry the best person that will have you” and comparing many unproven internet businesses in 2000 to “turds.”
He and Buffett functioned as a classic comedy duo, with Buffett offering lengthy setups to Munger's witty one-liners. Together, they transformed Berkshire from a floundering textile mill into a massive conglomerate made up of a variety of interests, from insurance companies such as Geico to BNSF railroad to several major utilities and an assortment of other companies.
Munger often summed up the key Berkshire’s success as “trying to be consistently not stupid, instead of trying to be very intelligent.” He and Buffett also were known for sticking to businesses they understood well.
“Warren always did at least 80% of the talking. But Charlie was a great foil,” said Stansberry Research analyst Whitney Tilson, who was looking forward to his 27th consecutive meeting with a bit of a heavy heart because of Munger's absence.
That absence, however, may well create space for shareholders to get to know better the two executives who directly oversee Berkshire's companies: Ajit Jain, who manages the insurance units, and Greg Abel, who handles everything else. Abel will one day replace the 93-year-old Buffett as CEO. Abel and Jain are sharing the main stage with Buffett for the first time this year in the spot Munger used to occupy.
The first time Buffett kicked a question to Abel, he mistakenly said “Charlie?” out of habit.
Morningstar analyst Greggory Warren said he hopes Abel will speak up more this year and let shareholders see some of the brilliance Berkshire executives talk about. Ever since Munger let it slip at the annual meeting three years ago that Abel would be the successor, Buffett has repeatedly reassured investors that he's confident in the pick.
Experts say the company has a solid culture built on integrity, trust, independence and an impressive management roster ready to take over.
“Greg's a rock star,” said Chris Bloomstran, president of Semper Augustus Investments Group. "The bench is deep. He won’t have the same humor at the meeting. But I think we all come here to get a reminder every year to be rational.”
For more AP coverage of Warren Buffett look here: https://apnews.com/hub/warren-buffett. For Berkshire Hathaway news, see here: https://apnews.com/hub/berkshire-hathaway-inc. Follow Josh Funk online at https://www.twitter.com/funkwrite and https://www.linkedin.com/in/funkwrite.
From left, D'Ann Rhoten takes a photo of Brittany Thornton and Melissa Shapiro in the exhibit hall of the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
Amy Keady of Frederick, Maryland, holds her son, Ben, 11, as they wait in line outside the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
Jennifer Cua of Las Vegas sits with her purchases from Squishmallows during the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
Shareholder Tina Schmidt of Cozad, Neb., wears a shirt with Warren Buffett's portrait in the style of an Andy Warhol painting at he Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
See's Candies associates, including Holly Pellicano of San Francisco, center, do yoga together before shareholders arrive for the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
Bart Macdonald of New York City takes photos of the BNSF Railway model train display during the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
Valerie Deichert of Omaha, left, assists shareholders with their purchases from the Oriental Trading booth during the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
Shareholders find their seats for the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
Harold and Caroline Ernst of St. Louis chat with fellow shareholders as they wait for the Berkshire Hathaway annual meeting to begin on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
Michelle King of San Francisco does yoga in the See's Candies booth before the arrival of shareholders for the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
Berkshire Hathaway shareholders pose with the mascot for one of its companies, Oriental Trading, while the more famous spokeslizard for Geico insurance looms over their shoulder, Friday, May 3, 2024, in Omaha, Neb. CEO Warren Buffett will spend hours answering questions at the meeting on Saturday. (AP Photo/Josh Funk)
Berkshire Hathaway shareholders pose with a cutout poster of CEO Warren Buffett Friday, May 3, 2024, in Omaha, Neb., inside the exhibit hall in Omaha where Berkshire companies sell their products. Buffett will spend hours answering questions at the meeting Saturday. (AP Photo/Josh Funk)
Daegwon Kim of South Korea, who arrived in line at 3:30 a.m., takes photos of the crowd behind him outside the Berkshire Hathaway annual meeting on Saturday, May 4, 2024, in Omaha, Neb. (AP Photo/Rebecca S. Gratz)
Berkshire Hathaway Vice Chairman Greg Abel poses with shareholders Friday, May 3, 2024, in Omaha, Neb. Abel is set to be the next CEO after Warren Buffett is gone. (AP Photo/Josh Funk)
Berkshire Hathaway shareholders watch a model BNSF train run past a model town filled with other Berkshire companies Friday, May 3, 2024, in Omaha, Neb. Buffett will spend hours answering questions at a meeting Saturday. (AP Photo/Josh Funk)
Berkshire Hathaway shareholders line up to take selfies with Greg Abel Friday, May 3, 2024, in Omaha, Neb. Abel will one day replace Warren Buffett as CEO. (AP Photo/Josh Funk)
Berkshire Hathaway investment manager Ted Weschler, center, talks with Brooks Running CEO Dan Sheridan, Friday, May 3, 2024, in Omaha, Neb., one day ahead of the annual shareholders meeting. (AP Photo/Josh Funk)
Berkshire Hathaway shareholders pose with a cutout poster of CEO Warren Buffett, Friday, May 3, 2024, in Omaha, Neb., one day ahead of the annual shareholders meeting. (AP Photo/Josh Funk)
Berkshire Hathaway Vice Chairman Greg Abel poses for pictures with shareholders while touring the booths Berkshires companies set up, Friday, May 3, 2024, in Omaha, Neb. Abel will succeed Warren Buffett as CEO one day. (AP Photo/Josh Funk)
Berkshire Hathaway Vice Chairman Greg Abel checks out the flight simulators offered by one of Berkshires companies, Flight Safety as he toured the exhibit hall Friday, May 3, 2024, in Omaha, Neb. ahead of Saturday's meeting. Abel is set to succeed Warren Buffett as CEO one day. (AP Photo/Josh Funk)
