thefiscaltimes--2020-03-31--Pelosi Floats Stimulus Idea That Would Benefit High Earners

House Speaker Nancy Pelosi has floated another suggestion for the next round of fiscal stimulus : A retroactive rollback of the 2017 Republican tax law ’ s limit on state and local tax deductions .
In an interview with The New York Times , Pelosi said that a stimulus plan should do more to get money directly to individuals and suggested that a rollback of the $ 10,000-a-year deduction limit would be one way to do that .
The Democratic-controlled House voted last year to repeal the cap , which has predominantly hurt top-earning households in high-tax blue states such @ @ @ @ @ @ @ , but the effort went nowhere in the Republican-led Senate .
“ A full rollback of the limit on the state and local tax deduction , or SALT , would provide a quick cash infusion in the form of increased tax rebates to an estimated 13 million American households — nearly all of which earn at least $ 100,000 a year , ” the Times ’ s Jim Tankersley and Emily Cochrane explain .
A Pelosi spokesman tweeted Monday night that “ action on SALT would be tailored to focus the benefits on @ @ @ @ @ @ @ the high-end.
” But it could be difficult to have any rollback benefit significant portions of the middle class .
As Tankersley and Cochrane note , the congressional Joint Committee on Taxation estimated last year that a repeal of the SALT limit for 2019 would have cut federal revenues by about $ 77 billion , with $ 40 billion of that going to taxpayers earning $ 1 million or more and most of the rest benefiting households with incomes of $ 200,00 or more .
The Tax Policy Center estimates that only 3 @ @ @ @ @ @ @ of American taxpayers would receive any benefit from the SALT cap repeal .
Republicans dismissed Pelosi ’ s proposal as part of a partisan wish list .
Tax experts and budget wonks , meanwhile , reacted with horror : • “ Nooooooooooooooooo , ” tweeted Nicole Kaeding , an economist with the National Taxpayers Union Foundation .
• “ It certainly gets money into hands .
But I ’ m not sure it ’ s the correct hands , ” Kyle Pomerleau , a resident fellow at the conservative American Enterprise Institute , @ @ @ @ @ @ @ or eliminating the SALT cap would be regressive , expensive , poorly targeted , and precisely the kind of political giveaway that compromises the credibility of emergency spending , ” Maya MacGuineas , president of the Committee for a Responsible Federal Budget , said in a statement .
“ As stimulus or economic relief goes , I ’ m not sure one could design a less targeted policy.
” • “ [ T ] here are about 1,000 better ways to get help to middle-income people right now , ” Michael Linden , @ @ @ @ @ @ @ of the Groundwork Collaborative , tweeted .
“ This is a road not worth going down .
”

House Speaker Nancy Pelosi has floated another suggestion for the next round of fiscal stimulus: A retroactive rollback of the 2017 Republican tax law’s limit on state and local tax deductions.
In an interview with The New York Times, Pelosi said that a stimulus plan should do more to get money directly to individuals and suggested that a rollback of the $10,000-a-year deduction limit would be one way to do that. The Democratic-controlled House voted last year to repeal the cap, which has predominantly hurt top-earning households in high-tax blue states such as New York, Illinois and California, but the effort went nowhere in the Republican-led Senate.
“A full rollback of the limit on the state and local tax deduction, or SALT, would provide a quick cash infusion in the form of increased tax rebates to an estimated 13 million American households — nearly all of which earn at least $100,000 a year,” the Times’s Jim Tankersley and Emily Cochrane explain.
A Pelosi spokesman tweeted Monday night that “action on SALT would be tailored to focus the benefits on middle class earners and include limitations on the high-end.” But it could be difficult to have any rollback benefit significant portions of the middle class.
As Tankersley and Cochrane note, the congressional Joint Committee on Taxation estimated last year that a repeal of the SALT limit for 2019 would have cut federal revenues by about $77 billion, with $40 billion of that going to taxpayers earning $1 million or more and most of the rest benefiting households with incomes of $200,00 or more. The Tax Policy Center estimates that only 3% of households in the middle quintile of American taxpayers would receive any benefit from the SALT cap repeal.
Republicans dismissed Pelosi’s proposal as part of a partisan wish list. Tax experts and budget wonks, meanwhile, reacted with horror:


thefiscaltimes--2020-03-31--Trump's ‘Big & Bold’ Idea for the Next Stimulus Bill

As lawmakers set their sights on a fiscal stimulus plan to follow their $ 2 trillion coronavirus relief package , President Trump on Tuesday said that a $ 2 trillion infrastructure program should be part of Congress ’ s agenda .
“ With interest rates for the United States being at ZERO , this is the time to do our decades long awaited Infrastructure Bill , ” Trump wrote on Twitter .
“ It should be VERY BIG & BOLD , Two Trillion Dollars , and be focused solely on jobs and rebuilding the once great infrastructure of our Country @ @ @ @ @ @ @ There ’ s widespread agreement that the United States needs to address its infrastructure .
“ The American Society of Civil Engineers has said more than $ 2 trillion in additional funding is needed for U.S. infrastructure by 2025 alone , ” Bloomberg ’ s Mark Niquette reports .
“ The World Economic Forum this year ranked the U.S. 13th in matters of infrastructure , according to its global competitiveness report .
Nations listed higher included Singapore , Hong Kong , Switzerland , Japan , Korea and Spain.
” The politics : Trump @ @ @ @ @ @ @ plan — and , in principle at least , it was one area where the White House and Democrats both wanted progress .
But the administration ’ s repeated “ infrastructure weeks ” evolved into a joke on Capitol Hill as they routinely got overshadowed by Trump-related scandals other developments .
Trump ’ s talks with Democratic leaders for a potential $ 2 trillion infrastructure package collapsed last May when the president walked out of a meeting at the White House , fuming over comments House Speaker Nancy Pelosi had made regarding investigations @ @ @ @ @ @ @ including Pelosi , have also suggested in recent weeks that infrastructure spending should be part of the economic response to the coronavirus pandemic , so there may be room for compromise .
The big question : The issue , as always , remains how to finance that additional spending .
The Trump administration had proposed to have the federal government provide seed funding , with states , municipalities and private investors ponying up the vast majority of the money needed for a variety of projects .
But state and local government budgets are @ @ @ @ @ @ @ pandemic and the resulting economic downturn .
Will the administration be open to having the federal government pick up more of the tab ?
Trump ’ s tweet suggests he ’ d favor borrowing to finance new projects , but other Republicans may be less amenable to adding more debt .
“ Democrats have historically suggested raising the gas tax .
Republicans , by and large , have resisted that .
Has that changed ?
” Politico ’ s Playbook team asks .
“ Trump would have to change the minds of almost @ @ @ @ @ @ @ Or does he want to skip revenue increases , and just pay for this by adding it to the nation ’ s debt ?
If so , is that a politically palatable option in the middle of an election year -- even given the dire circumstances ?
” Other questions : There are plenty , including whether Democrats and Republicans can agree on the kinds of projects to be included in any package .
Timing is another key consideration .
“ Some experts pointed out that a pandemic may be a poor time @ @ @ @ @ @ @ that federal health officials are urging workers to stay home if possible and avoid personal contact , ” The Washington Post noted .

As lawmakers set their sights on a fiscal stimulus plan to follow their $2 trillion coronavirus relief package, President Trump on Tuesday said that a $2 trillion infrastructure program should be part of Congress’s agenda.
“With interest rates for the United States being at ZERO, this is the time to do our decades long awaited Infrastructure Bill,” Trump wrote on Twitter. “It should be VERY BIG & BOLD, Two Trillion Dollars, and be focused solely on jobs and rebuilding the once great infrastructure of our Country! Phase 4.”
The need: There’s widespread agreement that the United States needs to address its infrastructure. “The American Society of Civil Engineers has said more than $2 trillion in additional funding is needed for U.S. infrastructure by 2025 alone,” Bloomberg’s Mark Niquette reports. “The World Economic Forum this year ranked the U.S. 13th in matters of infrastructure, according to its global competitiveness report. Nations listed higher included Singapore, Hong Kong, Switzerland, Japan, Korea and Spain.”
The politics: Trump has long sought to enact an infrastructure plan — and, in principle at least, it was one area where the White House and Democrats both wanted progress. But the administration’s repeated “infrastructure weeks” evolved into a joke on Capitol Hill as they routinely got overshadowed by Trump-related scandals other developments. Trump’s talks with Democratic leaders for a potential $2 trillion infrastructure package collapsed last May when the president walked out of a meeting at the White House, fuming over comments House Speaker Nancy Pelosi had made regarding investigations into his administration.
House Democrats, including Pelosi, have also suggested in recent weeks that infrastructure spending should be part of the economic response to the coronavirus pandemic, so there may be room for compromise.
The big question: The issue, as always, remains how to finance that additional spending. The Trump administration had proposed to have the federal government provide seed funding, with states, municipalities and private investors ponying up the vast majority of the money needed for a variety of projects. But state and local government budgets are bound to be hit hard by the pandemic and the resulting economic downturn. Will the administration be open to having the federal government pick up more of the tab?
Trump’s tweet suggests he’d favor borrowing to finance new projects, but other Republicans may be less amenable to adding more debt.
“Democrats have historically suggested raising the gas tax. Republicans, by and large, have resisted that. Has that changed?” Politico’s Playbook team asks. “Trump would have to change the minds of almost every elected Republican on this topic. Or does he want to skip revenue increases, and just pay for this by adding it to the nation’s debt? If so, is that a politically palatable option in the middle of an election year -- even given the dire circumstances?”
Other questions: There are plenty, including whether Democrats and Republicans can agree on the kinds of projects to be included in any package. Timing is another key consideration. “Some experts pointed out that a pandemic may be a poor time to ramp up construction projects, given that federal health officials are urging workers to stay home if possible and avoid personal contact,” The Washington Post noted.


thefiscaltimes--2020-03-30--Insurance Rates Could Spike 40% Next Year: Report

The coronavirus pandemic could cost commercial insurers in the U.S. anywhere from $ 34 billion to $ 251 billion , and possibly more , according to a new analysis by Covered California , which runs that state ’ s public health insurance marketplace .
The surge in costs could mean higher insurance premiums in 2021 for the roughly 170 million Americans who are covered by private plans , with increases ranging from 4 % to 40 % – or even higher .
“ Health plans went into 2020 with no hint of coronavirus on the horizon , ” Peter V. @ @ @ @ @ @ @ , told The New York Times .
“ No insurer , no state , planned and put money away for something of this significance.
” Enormous uncertainty : The range of possible cost increases is huge , but some actuaries say that expenses for insurers may not soar when all is said and done .
While spending on testing and treatment for Covid-19 will almost certainly increase , spending on just about everything else , from heart surgery to hip replacements , will likely fall as hospitals cancel procedures in order to focus @ @ @ @ @ @ @ , some patients may not be able to receive care in hospitals flooded with patients .
For those who are able to receive treatment , costs could range anywhere from $ 20,000 to more than $ 70,000 per patient .
Insurance for insurers : The insurance industry is pushing Congress to create a new reinsurance program to cover some portion of the cost of coronavirus claims , in order to limit the increase in premiums next year , the Times ’ Reed Abelson says .
A group representing employers and health care companies @ @ @ @ @ @ @ Care , which recently scored a victory in its battle to keep the so-called Cadillac tax in the Affordable Care Act from taking effect , has also expressed interest in some kind reinsurance program .
Lawmakers need to act fast : Insurers will submit their proposed rate hikes in May , with approval typically occurring by July 1 .
While some states will likely push back against unusually large increases , others may allow them if insurers are hit with huge costs increases .
Without significant federal intervention , Lee says , “ @ @ @ @ @ @ @ costs through higher out-of-pocket expenses and premiums , as well as the potential of employers dropping coverage or shifting more costs to employees.
” Critics take aim : The report of potential 40 % price increases for premiums gave opponents of the for-profit health care system a new talking point , with Sen. Bernie Sanders and others suggesting that the crisis reinforces their calls for a single-payer system .

The coronavirus pandemic could cost commercial insurers in the U.S. anywhere from $34 billion to $251 billion, and possibly more, according to a new analysis by Covered California, which runs that state’s public health insurance marketplace. The surge in costs could mean higher insurance premiums in 2021 for the roughly 170 million Americans who are covered by private plans, with increases ranging from 4% to 40% – or even higher.
“Health plans went into 2020 with no hint of coronavirus on the horizon,” Peter V. Lee, executive director of Covered California, told The New York Times. “No insurer, no state, planned and put money away for something of this significance.”
Enormous uncertainty: The range of possible cost increases is huge, but some actuaries say that expenses for insurers may not soar when all is said and done. While spending on testing and treatment for Covid-19 will almost certainly increase, spending on just about everything else, from heart surgery to hip replacements, will likely fall as hospitals cancel procedures in order to focus on the pandemic. And, gruesomely, some patients may not be able to receive care in hospitals flooded with patients. For those who are able to receive treatment, costs could range anywhere from $20,000 to more than $70,000 per patient.
Insurance for insurers: The insurance industry is pushing Congress to create a new reinsurance program to cover some portion of the cost of coronavirus claims, in order to limit the increase in premiums next year, the Times’ Reed Abelson says. A group representing employers and health care companies, the Alliance to Fight for Health Care, which recently scored a victory in its battle to keep the so-called Cadillac tax in the Affordable Care Act from taking effect, has also expressed interest in some kind reinsurance program.
Lawmakers need to act fast: Insurers will submit their proposed rate hikes in May, with approval typically occurring by July 1. While some states will likely push back against unusually large increases, others may allow them if insurers are hit with huge costs increases. Without significant federal intervention, Lee says, “[c]onsumers will feel these costs through higher out-of-pocket expenses and premiums, as well as the potential of employers dropping coverage or shifting more costs to employees.”
Critics take aim: The report of potential 40% price increases for premiums gave opponents of the for-profit health care system a new talking point, with Sen. Bernie Sanders and others suggesting that the crisis reinforces their calls for a single-payer system.


thefiscaltimes--2020-04-02--States Prepare for Coronavirus Fiscal Storm

State budgets will be crushed by the coronavirus crisis as millions of workers and businesses stop paying taxes , says Josh Goodman of Pew Charitable Trusts .
But state officials are going to have to wait a few more weeks until they know just how bad their fiscal situations will be .
Personal income taxes and sales taxes are the two largest sources of revenue at the state level , and both will take a serious hit as businesses reduce hours or close up shop entirely and workers lose their jobs .
Federal aid is in the pipeline , with @ @ @ @ @ @ @ and localities in the $ 2.2 trillion aid package signed into law last week .
But some governors are saying that won ’ t be enough .
Colorado is one state seeing a rapidly deteriorating fiscal picture , according to Bloomberg Tax .
Two weeks ago , state officials projected a $ 750 million shortfall in revenue this fiscal year and next as a result of the pandemic .
A week later , that number nearly doubled to $ 1.4 billion .
New York , at the epicenter of the crisis , is @ @ @ @ @ @ @ Andrew Cuomo says the state expects to lose between $ 10 billion and $ 15 billion in revenues in the fiscal year starting April 1 .
In just one week , the state spent $ 600 million on medical supplies , according to Bloomberg News .
States face legal limits : Most states are required to balance their budgets , and only a handful can carry debt from one year in the next .
That leaves three options when the economy craters : using federal aid to replace lost revenues ; dipping into @ @ @ @ @ @ @ that they exist ( see the Tax Foundation ’ s review here ) ; and enacting budgetary austerity in the form of reduced spending on everything from education to highway repair .
Accounting tricks such as shifting the schedule of payments can provide a cushion , but the wiggle room is limited .
The timing is terrible : States tend to have low cash balances in March as they prepare for an influx of tax payments in April , but as many states follow the IRS in delaying tax day until July , @ @ @ @ @ @ @ .
In addition to the operational challenges , the shortfalls will make it harder to create budgets for the next fiscal year , which starts on July 1 in most states .
Budget committees typically rely on revenues in January and February as the basis for the next year ’ s budget , but that won ’ t work in this context .
“ It ’ s been challenging , ” said Colorado state senator Rachel Zenzinger .
“ We had the budget about 98 % done before the virus hit , so @ @ @ @ @ @ @ more or less scrap many of the decisions we already made and start over.
” Social distancing requirements in state legislatures will make the process that much harder .
Time for a debt jubilee ?
The size of the problem is so great that some experts are kicking around the idea of large-scale debt forgiveness .
Michael Hudson , an economist at the University of Missouri at Kansas City , told Marketplace Thursday about the ancient tradition of the debt jubilee , in which all debts are forgiven on a regular basis in @ @ @ @ @ @ @ disorder .
“ The reason your cancel the debts is you want to preserve stability , ” Hudson said .
“ The states and localities , New York City and New York state , have to pay unemployment insurance , and all the other costs associated with the coronavirus out of their own revenues , and yet they have to balance the budget .
If New York state and City have to repay all of the debts that they run up , then you ’ re going to have the whole character of @ @ @ @ @ @ @ prevent the economy from being distorted , you have to adjust [ and ] simply say these debts won ’ t be paid.
” Until then : Short of a revolutionary debt holiday , states will have to start adjusting to the mounting revenue shortfalls and rising social welfare expenditures , with cutbacks being one likely result .
“ Lower taxes and increased demands for funding will impose severe strains on state and local budgets , ” researchers at the Brookings Institution wrote last week .
“ Furthermore , with most state fiscal @ @ @ @ @ @ @ most states required to enact budgets that they expect to balance , it is likely that state and local governments will start paring back spending relatively soon .
”

State budgets will be crushed by the coronavirus crisis as millions of workers and businesses stop paying taxes, says Josh Goodman of Pew Charitable Trusts. But state officials are going to have to wait a few more weeks until they know just how bad their fiscal situations will be.
Personal income taxes and sales taxes are the two largest sources of revenue at the state level, and both will take a serious hit as businesses reduce hours or close up shop entirely and workers lose their jobs.
Federal aid is in the pipeline, with $150 billion set aside for states and localities in the $2.2 trillion aid package signed into law last week. But some governors are saying that won’t be enough.
Colorado is one state seeing a rapidly deteriorating fiscal picture, according to Bloomberg Tax. Two weeks ago, state officials projected a $750 million shortfall in revenue this fiscal year and next as a result of the pandemic. A week later, that number nearly doubled to $1.4 billion.
New York, at the epicenter of the crisis, is facing even larger shortfalls. Gov. Andrew Cuomo says the state expects to lose between $10 billion and $15 billion in revenues in the fiscal year starting April 1. In just one week, the state spent $600 million on medical supplies, according to Bloomberg News.
States face legal limits: Most states are required to balance their budgets, and only a handful can carry debt from one year in the next. That leaves three options when the economy craters: using federal aid to replace lost revenues; dipping into rainy day funds, to the extent that they exist (see the Tax Foundation’s review here); and enacting budgetary austerity in the form of reduced spending on everything from education to highway repair. Accounting tricks such as shifting the schedule of payments can provide a cushion, but the wiggle room is limited.
The timing is terrible: States tend to have low cash balances in March as they prepare for an influx of tax payments in April, but as many states follow the IRS in delaying tax day until July, those payments are now just a trickle.
In addition to the operational challenges, the shortfalls will make it harder to create budgets for the next fiscal year, which starts on July 1 in most states. Budget committees typically rely on revenues in January and February as the basis for the next year’s budget, but that won’t work in this context. “It’s been challenging,” said Colorado state senator Rachel Zenzinger. “We had the budget about 98% done before the virus hit, so we’re going to have to more or less scrap many of the decisions we already made and start over.” Social distancing requirements in state legislatures will make the process that much harder.
Time for a debt jubilee? The size of the problem is so great that some experts are kicking around the idea of large-scale debt forgiveness. Michael Hudson, an economist at the University of Missouri at Kansas City, told Marketplace Thursday about the ancient tradition of the debt jubilee, in which all debts are forgiven on a regular basis in order to reduce economic volatility and social disorder.
“The reason your cancel the debts is you want to preserve stability,” Hudson said. “The states and localities, New York City and New York state, have to pay unemployment insurance, and all the other costs associated with the coronavirus out of their own revenues, and yet they have to balance the budget. If New York state and City have to repay all of the debts that they run up, then you’re going to have the whole character of government change. And in order to prevent the economy from being distorted, you have to adjust [and] simply say these debts won’t be paid.”
Until then: Short of a revolutionary debt holiday, states will have to start adjusting to the mounting revenue shortfalls and rising social welfare expenditures, with cutbacks being one likely result. “Lower taxes and increased demands for funding will impose severe strains on state and local budgets,” researchers at the Brookings Institution wrote last week. “Furthermore, with most state fiscal years ending June 30, and with most states required to enact budgets that they expect to balance, it is likely that state and local governments will start paring back spending relatively soon.”


thefiscaltimes--2020-04-02--Pelosi Announces Committee to Oversee Coronavirus Funds

House Speaker Nancy Pelosi on Thursday announced the creation of a special bipartisan committee to oversee the Trump administration ’ s coronavirus response and its handling of the $ 2 trillion economic relief package passed last week .
“ Congress has taken an important step in meeting this crisis by passing three bills with over $ 2 trillion dollars in emergency relief , ” Pelosi said in a letter to House members .
“ We need to ensure those tax dollars are spent carefully and effectively.
” Pelosi said the House Select Committee on the Coronavirus , to be led @ @ @ @ @ @ @ D-SC ) , “ will root out waste , fraud , and abuse .
It will protect against price gouging and profiteering .
It will press to ensure that the federal response is based on the best possible science and guided by the nation ’ s best health experts.
” Clashes over oversight : Congressional Democrats worked to include oversight measures in the rescue package , including a requirement for a special inspector general , appointed by the president and confirmed by the Senate , to report to lawmakers on business loans made @ @ @ @ @ @ @ signing statement issued when he signed the bill into law , President Trump pushed back on the oversight provisions and indicated that he believes the new inspector general needs his permission in order to provide reports to Congress .
Republicans also questioned Pelosi ’ s move to create a new committee .
“ This seems really redundant , ” House Minority Leader Kevin McCarthy ( R-CA ) told reporters on a call Thursday , noting that the House already has several committees with jurisdiction over the coronavirus package .
“ Does the speaker @ @ @ @ @ @ @ Committee ?
” McCarthy reportedly asked .
McCarthy also raised concerns about Pelosi ’ s selection of Clyburn to head the panel , since the South Carolina Democrats reportedly had told colleagues that negotiations over a third coronavirus bill were “ a tremendous opportunity to restructure things to fit our vision.
” McCarthy also expressed concerns about how the new committee would be created and said that there needs to be a floor vote on the new panel , which could be a problem since lawmakers are away until at least April 20 @

House Speaker Nancy Pelosi on Thursday announced the creation of a special bipartisan committee to oversee the Trump administration’s coronavirus response and its handling of the $2 trillion economic relief package passed last week.
“Congress has taken an important step in meeting this crisis by passing three bills with over $2 trillion dollars in emergency relief,” Pelosi said in a letter to House members. “We need to ensure those tax dollars are spent carefully and effectively.”
Pelosi said the House Select Committee on the Coronavirus, to be led by House Majority Whip Jim Clyburn (D-SC), “will root out waste, fraud, and abuse. It will protect against price gouging and profiteering. It will press to ensure that the federal response is based on the best possible science and guided by the nation’s best health experts.”
Clashes over oversight: Congressional Democrats worked to include oversight measures in the rescue package, including a requirement for a special inspector general, appointed by the president and confirmed by the Senate, to report to lawmakers on business loans made under the legislation. But in a signing statement issued when he signed the bill into law, President Trump pushed back on the oversight provisions and indicated that he believes the new inspector general needs his permission in order to provide reports to Congress.
Republicans also questioned Pelosi’s move to create a new committee. “This seems really redundant,” House Minority Leader Kevin McCarthy (R-CA) told reporters on a call Thursday, noting that the House already has several committees with jurisdiction over the coronavirus package. “Does the speaker not trust the [House] Oversight Committee?” McCarthy reportedly asked.
McCarthy also raised concerns about Pelosi’s selection of Clyburn to head the panel, since the South Carolina Democrats reportedly had told colleagues that negotiations over a third coronavirus bill were “a tremendous opportunity to restructure things to fit our vision.” McCarthy also expressed concerns about how the new committee would be created and said that there needs to be a floor vote on the new panel, which could be a problem since lawmakers are away until at least April 20.