Tag: U.S. economy

GOP, Democrats debate scope of stimulus checks

The Hill logoRepublicans and Democrats are both interested in including a second round of stimulus checks in the next coronavirus relief bill, but they are looking at different parameters for the payments.

House Democrats passed legislation in May that would keep the same income limits as the payments that have already largely been distributed, while Republicans have suggested that they may provide for lower limits in a forthcoming proposal.

Under the law passed in March that established the first round of payments, individuals with incomes of up to $75,000 and married couples making up to $150,000 qualified for the full amount, with the amount reduced for those with higher incomes. Individuals with incomes above $99,000 and married couples with no children and incomes above $198,000 are not eligible for any payment. Continue reading.

Senate GOP starts to unveil coronavirus proposal amid deep discord

Steven Mnuchin, Mark Meadows and Richard Shelby also announced a deal Wednesday night on the spending portion of the new package.

Senate Republicans started unveiling pieces of their new coronavirus relief bill on Wednesday, but negotiators remain undecided on several key issues.

Republican leadership briefed Senate GOP aides on the proposed legislation Wednesday afternoon. The Republican initiative is expected to include a temporary flat payment for unemployment insurance for two months, although the exact amount of the federal contribution wasn’t finalized, according to sources on the call. Beefed-up $600 federal unemployment payments begin expiring at the end of this week, a deadline that has spurred GOP leaders into action.

But GOP leaders also didn’t reveal whether their proposal will include a payroll tax cut, a top priority for President Donald Trump. Several GOP sources said the payroll tax cut “was out,” but Majority Leader Mitch McConnell (R-Ky.) declined to confirm that as he walked out the Capitol on Wednesday night. Continue reading.

Is Trump Using Next Stimulus Package To Undermine Funding Of Social Security And Medicare?

Could a payroll tax cut be a Trojan horse to undercut Social Security and Medicare?

Trump Demands Payroll Tax Cut For Next Stimulus Bill

President Trump has thrown an unnecessary wrench into the next coronavirus stimulus package negotiations by demanding that it include a payroll tax cut. Earlier in the week, his advisor, Stephen Moore, foreshadowed Trump’s red-line. “High-ranking White House officials have told me that we will not sign a phase four deal without a payroll tax cut,” Stephen Moore, a White House economic adviser, told The Washington Post. “I have talked to several high-level people in the White House who said the president will not sign [the legislation] if it does not include a payroll tax cut.” Trump confirmed this view, although in his usual equivocal way, during an interview with Chris Wallace, saying, “I would consider not signing it if we don’t have a payroll tax cut.”

Payroll Tax Cut Are Effective, But Not Against Coronavirus Crisis

Republicans and Democrats alike have been lukewarm on a payroll tax holiday and for good reason. It’s an ineffective, policy tool that isn’t well suited for the current crisis. Continue reading.

Congress set for showdown on coronavirus relief legislation

The Hill logoA fight over the next round of coronavirus aid is coming to a head as lawmakers prepare to race the clock to get a deal.

Congress faces multiple hurdles to getting an agreement including the growing pull of the November election, a tight schedule and significant policy differences.

Both Senate Majority Leader Mitch McConnell (R-Ky.) and House Speaker Nancy Pelosi (D-Calif.) say they think they’ll be able to get a deal, but leaders haven’t yet started negotiating and both sides have appeared skeptical of the other side’s key priorities.  Continue reading.

Jobless claims raise stakes in battle over COVID-19 aid

The Hill logoThe U.S. is facing significant long-term economic damage from the coronavirus as lawmakers spar over boosted unemployment benefits amid stubbornly high weekly jobless claims.

More than 1 million Americans have filed new claims for unemployment benefits each week for the past four months. Those figures provide a grim backdrop to the fight unfolding in Washington over whether to extend enhanced unemployment insurance for millions of job-seekers.

Economists say the persistently high jobless claims coupled with the growing number of permanent job losses are troubling signs for both workers and the economy. Continue reading.

Ben Bernanke and Janet Yellen Give Republicans in Congress a Lesson on Coronavirus Economics

It was no real surprise to see Ben Bernanke and Janet Yellen, the past two chairs of the Federal Reserve, testifying to Congress on Friday about the economic-policy response to the coronavirus pandemic. Although neither of them has appeared before a congressional committee since leaving the Fed, they have both emerged in recent months as vocal supporters of using monetary and fiscal policy aggressively to support the stricken economy. Last month, they signed a public letter from more than a hundred and fifty economists that called on Congress to pass another big spending bill to extend and broaden the Coronavirus Aid, Relief, and Economic Security (cares) Act, which was enacted in March.

There is no time to lose. About this time next week, the supplementary unemployment benefits of six hundred dollars a week that were introduced as part of the cares Act will start to expire. If Congress doesn’t extend the benefits, this will have a hugely negative impact on the roughly thirty-three million Americans who are out of work and claiming benefits from local or federal programs. Many of these people, who lost their jobs through no fault of their own, will be plunged into poverty, and the damage won’t end there. As they cut back on spending because their income has been slashed, the effects will ripple through the rest of the economy, causing further job losses. Exactly how many more jobs will go is difficult to say in advance, but Harvard’s Jason Furman, who headed the White House Council of Economic Advisers during the second term of the Obama Administration, recently estimated that over the course of the next year it could be around two million.

Appearing at the hearing of a coronavirus subcommittee that was set up by the House Committee on Oversight and Reform, Bernanke and Yellen didn’t get into that level of detail. Drawing on some basic economics and their experiences dealing with a previous crisis—the Great Recession and its aftermath—they did persuasively explain why Congress should act urgently on three fronts: extending the supplementary unemployment payments; providing additional financial support to state and local governments; and developing a comprehensive plan to make available adequate testing, medical equipment, and contact tracing. The two former policymakers, who are both highly regarded academic economists, also pushed back against recent suggestions from the White House that the new spending should be limited to a trillion dollars. Yellen said it was hard to tell precisely how much financial support might be needed, so it would be unwise to impose a spending cap. Bernanke said, “Whatever it takes is probably what we need to be thinking now.”

White House warns stimulus package ‘must’ include Trump payroll tax cut proposal

Washington Post logoSenate Republicans have resisted the move, but the president continues to demand it

The White House is insisting that Congress include a payroll tax cut as part of the next coronavirus stimulus package, potentially complicating talks with lawmakers by pushing a measure that President Trump has tried but failed to advance for almost a year.

“As he has done since the beginning of this pandemic, President Trump wants to provide relief to hardworking Americans who have been impacted by this virus and one way of doing that is with a payroll tax holiday,” White House spokesman Judd Deere said in a statement. “He’s called on Congress to pass this before and he believes it must be part of any phase four package.”

Trump’s renewed push for a payroll tax holiday comes as Senate Majority Leader Mitch McConnell (R-Ky.) prepares to unveil legislation next week that he hopes will launch negotiations on the next major coronavirus bill. Continue reading.

White House tells 18 million unemployed workers to ‘Find Something New’ in ad campaign

Washington Post logoThe initiative — complete with a virtual roundtable featuring Apple CEO Tim Cook — was swiftly derided as “tone-deaf” on social media.

Ivanka Trump urged out-of-work Americans to “find something new” Tuesday as part of a new jobs initiative designed to tout the benefits of skills training and career paths that don’t require a college degree.

But the effort — complete with a website, advertising campaign and virtual roundtable featuring Apple CEO Tim Cook and IBM chair Ginni Rometty — was swiftly derided on social media as “clueless” and “tone-deaf” given the pandemic, recession and Trump’s own familial employment history.

“This initiative is about challenging the idea the traditional 2 and 4 yr college is the only option to acquire the skills needed to secure a job,” President Trump’s eldest daughter and White House adviser said in a Twitter post. “This work has never been more urgent.” Continue reading.

Biden seeks to take on Trump over economy

The Hill logoJoe Biden is taking aim at President Trump on the economy, hoping to undercut Trump’s strongest argument in his reelection bid. 

With COVID-19 wreaking havoc on the economy and unemployment at its highest level in years, Team Biden believes it can go on offense on the issue, which had long been a strength for Trump.

Polls continue to show that a majority approve of Trump’s handling of the economy, but Democrats see a vulnerability. Continue reading.

Yale Economists: Defeating Virus Is The Only Way To Restore Prosperity

Many far-right allies of President Donald Trump, from Sen. John Kennedy of Louisiana to Texas Lt. Gov. Dan Patrick to radio host Glenn Beck, have railed against Democratic stay-at-home orders and argued that too much social distancing is strangling the U.S. economy. But economists Steven Berry and Zack Cooper, in a Politico op-ed, argue that the only way to “restore” the U.S. economy is to seriously slow down the spread of coronavirus — and doing so is going to require aggressively funding anti-coronavirus measures.

“Unfortunately, Congress and the (Trump) Administration seem poised to return to a tired playbook which isn’t working: ramping up government spending as if we are stuck in a pure financial crisis,” explain Berry and Cooper, both of whom teach economics at Yale University. “Financial aid, while vitally important for reducing the economic pain caused by COVID-19, will not hasten the end of the pandemic.”

Congress, according to Berry and Cooper, needs to fund “solutions that would shorten or mitigate the virus itself” — for example, “measures like increasing the supply of PPE, expanding testing, developing treatments, standing up contact tracing, or developing a vaccine.” Continue reading.