thefiscaltimes--2020-12-16--State and Local Tax Revenues Better Than Expected

Many economists worried that local tax revenues would fall sharply in the wake of the coronavirus pandemic , creating a long-lasting drag on the economy as payrolls shrank and public investment declined , but state and local finances have held up surprisingly well , according to a report out this week .
“ In the early stages of the pandemic we warned that a plunge in the tax receipts of state & local governments was likely to result in major budget shortfalls , which could total between $ 300bn and $ 400bn over the 2020 and 2021 fiscal years , @ @ @ @ @ @ @ in a research note Monday .
“ With most governments legally required to run balanced budgets , that raised the risk of severe cuts to spending , which could weigh on the recovery for years to come.
” But that dramatic fall in revenue hasn ’ t played out .
Tax receipts did fall sharply in the early days of the pandemic , but by less than economic models predicted , Hunter said .
Income tax revenues were particularly resilient , reflecting the skewed nature of job losses , which were – and @ @ @ @ @ @ @ , who pay less in taxes .
Additionally , the massive fiscal stimulus passed in the spring provided replacement incomes for millions of workers , and the economic rebound in the third quarter helped drive state and local tax revenues significantly higher – higher , in fact , than they were a year ago .
“ As a result , the revenues of state & local governments for FY2020 ( ending on 30th June ) were only about $ 30bn smaller than their pre-pandemic forecasts , ” Hunter wrote , adding that shortfalls @ @ @ @ @ @ @ level in the next fiscal year as well .
The politics of stimulus : With the shortfalls in tax revenue at the state and local levels coming in considerably smaller than predicted at the beginning of the pandemic , reducing the severity of the economic drag caused by cutbacks in public spending , some lawmakers are now supporting a smaller Covid-19 stimulus package , or one that provides little or no aid to state and local governments .
The bipartisan stimulus package unveiled Monday gives lawmakers the opportunity to provide $ 160 billion @ @ @ @ @ @ @ combines that aid in a bill with controversial liability protections for businesses , packaging the two provisions together in such a way that both could be rejected if negotiators are unable to reach an agreement .
Senate Majority Leader Mitch McConnell ( R-KY ) has previously spoken in favor of rejecting both items as a way to reach an agreement on a separate , broader package focused on aid to the unemployed and small businesses , and Democratic leaders in recent days appear to have backed away from the red line they have @ @ @ @ @ @ @ the drops in tax revenue are having a negative effect , Hunter said , noting that state and local employment is down by 1.3 million since February .
“ [ F ] urther fiscal support for state & local governments would still be worthwhile , ” Hunter wrote , even if the scale of the problem has proven to be smaller than first feared .

Many economists worried that local tax revenues would fall sharply in the wake of the coronavirus pandemic, creating a long-lasting drag on the economy as payrolls shrank and public investment declined, but state and local finances have held up surprisingly well, according to a report out this week.
“In the early stages of the pandemic we warned that a plunge in the tax receipts of state & local governments was likely to result in major budget shortfalls, which could total between $300bn and $400bn over the 2020 and 2021 fiscal years,” Andrew Hunter of Capital Economics said in a research note Monday. “With most governments legally required to run balanced budgets, that raised the risk of severe cuts to spending, which could weigh on the recovery for years to come.”
But that dramatic fall in revenue hasn’t played out. Tax receipts did fall sharply in the early days of the pandemic, but by less than economic models predicted, Hunter said. Income tax revenues were particularly resilient, reflecting the skewed nature of job losses, which were – and still are – concentrated among low-income workers, who pay less in taxes. Additionally, the massive fiscal stimulus passed in the spring provided replacement incomes for millions of workers, and the economic rebound in the third quarter helped drive state and local tax revenues significantly higher – higher, in fact, than they were a year ago.
“As a result, the revenues of state & local governments for FY2020 (ending on 30th June) were only about $30bn smaller than their pre-pandemic forecasts,” Hunter wrote, adding that shortfalls were expected to remain roughly at that level in the next fiscal year as well.
The politics of stimulus: With the shortfalls in tax revenue at the state and local levels coming in considerably smaller than predicted at the beginning of the pandemic, reducing the severity of the economic drag caused by cutbacks in public spending, some lawmakers are now supporting a smaller Covid-19 stimulus package, or one that provides little or no aid to state and local governments.
The bipartisan stimulus package unveiled Monday gives lawmakers the opportunity to provide $160 billion in state and local support, but combines that aid in a bill with controversial liability protections for businesses, packaging the two provisions together in such a way that both could be rejected if negotiators are unable to reach an agreement. Senate Majority Leader Mitch McConnell (R-KY) has previously spoken in favor of rejecting both items as a way to reach an agreement on a separate, broader package focused on aid to the unemployed and small businesses, and Democratic leaders in recent days appear to have backed away from the red line they have drawn on the issue.
Still, the drops in tax revenue are having a negative effect, Hunter said, noting that state and local employment is down by 1.3 million since February. “[F]urther fiscal support for state & local governments would still be worthwhile,” Hunter wrote, even if the scale of the problem has proven to be smaller than first feared.


thefiscaltimes--2020-12-15--Liability Shield Isn’t a Priority for Americans: Poll

Another round of individual stimulus checks is at the top of most Americans ’ lists for the next coronavirus relief @ @ @ @ @ new poll from Yahoo Finance-Harris .
Asked what they thought is most important to include @ @ @ @ @ bill , 66 % of the 2,027 people polled said stimulus checks – the only @ @ @ @ @ .
About 47 % cited aid for small businesses , while 38 % said expanded @ @ @ @ @ for businesses were less popular , cited by just 23 % of respondents , with @ @ @ @ @ less support , at 20 % .
Gbenga Ajilore , a senior economist at the @ @ @ @ @ told Yahoo that she wasn ’ t surprised by the results .
“ The liability @ @ @ @ @ sense to people .
People do n't understand why that would be a priority , @ @ @ @ @ A liability shield is not going to put food on the table , it ’ @ @ @ @ @ people in their homes .
”

Another round of individual stimulus checks is at the top of most Americans’ lists for the next coronavirus relief bill, according to a new poll from Yahoo Finance-Harris.
Asked what they thought is most important to include in the next coronavirus relief bill, 66% of the 2,027 people polled said stimulus checks – the only provision to win majority support.
About 47% cited aid for small businesses, while 38% said expanded unemployment benefits.
Liability protections for businesses were less popular, cited by just 23% of respondents, with only student loan forbearance earning less support, at 20%.
Gbenga Ajilore, a senior economist at the Center for American Progress, told Yahoo that she wasn’t surprised by the results. “The liability shield just doesn't make sense to people. People don't understand why that would be a priority,” Ajilore said. “A liability shield is not going to put food on the table, it’s not going to keep people in their homes.”


thefiscaltimes--2020-12-16--More Stimulus Checks May Be Coming Soon: Congress Closes In on Covid Aid Deal

After stumbling through months of partisan deadlock , congressional leaders said Wednesday that they are nearing agreement on a pandemic-relief package .
They might actually get this done : While details of the deal were not yet final , the roughly $ 900 billion agreement coming together would likely include $ 300 a week in enhanced federal unemployment payments through March and $ 600 to $ 700 in direct payments to Americans , Senate Majority Whip John Thune ( R-SD ) told reporters .
The package would reportedly also provide about $ 325 billion in small business relief , including @ @ @ @ @ @ @ Program of forgivable loans , as well as billions of dollars for coronavirus vaccine distribution and schools .
No liability shield or state and local aid : The deal reportedly omits the liability protections Republicans have sought or dedicated aid for state and local governments that Democrats have demanded , two provisions that have been the most contentious throughout negotiations .
The new round of stimulus checks will cost about $ 140 billion , Sen. Mark Warner ( D-VA ) told MSNBC , meaning the cost is roughly on par with the $ @ @ @ @ @ @ @ local governments that had been proposed as part of a $ 908 billion compromise framework put forth by a bipartisan group of lawmakers .
Republicans have pressed to keep the cost of any additional Covid aid below $ 1 trillion .
Democrats said that that while the package leaves out funding for state and local governments , it would still deliver aid to states in other ways .
Timing still in question : The progress comes after congressional leaders met in person Tuesday and continued their talks Wednesday as they race to finalize @ @ @ @ @ @ @ trillion federal spending bill before current government funding expires on Friday .
“ We made major headway toward hammering out a targeted pandemic relief package that would be able to pass both chambers with bipartisan majorities , ” Senate Majority Leader Mitch McConnell said Wednesday morning in a speech on the Senate floor .
“ We committed to continuing these urgent discussions until there ’ s an agreement .
And we agreed we should not leave town until we ’ ve made law.
” But negotiators were still haggling over various details of @ @ @ @ @ @ @ is a Democratic push to increase the Federal Emergency Management Agency matching rate for Covid-19 disasters from 90 % to 100 % , according to Bloomberg News .
Democrats say the change would cost $ 1 billion , but Republicans say it would cost $ 90 billion , based on the proposed legislative language , and object to what they see as an attempt to funnel more money to state and local governments .
While the House could still vote on a deal as soon as Thursday , the timeline could slip , @ @ @ @ @ @ @ — and , potentially , another short-term extension of federal funding to avoid a partial government shutdown after midnight on Friday .
`` If we don ’ t get done by Friday night , I don ’ t want to shut down government , '' House Majority Leader Steny Hoyer ( D-MD ) said , according to Politico .
`` If we need three or four more days , we ’ ll take the time that ’ s necessary . ''
The politics at play : Both sides have plenty of incentive to @ @ @ @ @ @ @ — and election politics are still part of the equation .
McConnell reportedly told Republican senators on a call Wednesday that passing a relief deal will help GOP Senators David Perdue and Kelly Loeffler of Georgia as they head for January 5 runoff elections that will determine control of the Senate .
In campaigning for Democratic candidates Jon Ossoff and Raphael Warnock on Tuesday , President-elect Joe Biden said he needs “ two senators from this state who want to get something done , not two senators who are just going to get @ @ @ @ @ @ @ economy needs help : U.S. retail sales fell 1.1 % in November , the Commerce Department said Wednesday , marking the first drop since the spring .
“ Economists said the decline was a ‘ warning sign ’ that the economy was entering a rough patch and in need of a jolt from another round of government stimulus , ” The New York Times reports .
Nearly 8 million Americans have fallen into poverty since June , according to data released Wednesday by researchers at the University of Chicago and the University of @ @ @ @ @ @ @ up 2.4 percentage points to 11.7 % .
And newly released Census Bureau survey data from late November and early December show that 85.4 million American adults , or 35.6 % , report having trouble paying for basics such as food , medicine and rent , up from 76.5 million , or 31.9 % , in early September .
What it all means : A deal now appears all but certain .
The price tag being discussed amounts to nearly double what Republicans had proposed but far less that the $ 2 trillion @ @ @ @ @ @ @ had sought for months .
Still , while the cost of the package has come down , it would still be the second largest emergency spending package in U.S. history , behind only the CARES Act passed in March .
And lawmakers are expected to renew their debates on state and aid a liability shield in the new year .
Biden reiterated Wednesday that more aid will be needed .
“ The stimulus package is encouraging .
Looks like they ’ re very , very close and it looks like there are going @ @ @ @ @ @ @ he told reporters .
“ But it ’ s a down payment , an important down payment on what ’ s going to have to be done at the end of January , the beginning of February .
”

They’re getting close.
After stumbling through months of partisan deadlock, congressional leaders said Wednesday that they are nearing agreement on a pandemic-relief package.
They might actually get this done: While details of the deal were not yet final, the roughly $900 billion agreement coming together would likely include $300 a week in enhanced federal unemployment payments through March and $600 to $700 in direct payments to Americans, Senate Majority Whip John Thune (R-SD) told reporters.
The package would reportedly also provide about $325 billion in small business relief, including $257 billion for the Paycheck Protection Program of forgivable loans, as well as billions of dollars for coronavirus vaccine distribution and schools.
No liability shield or state and local aid: The deal reportedly omits the liability protections Republicans have sought or dedicated aid for state and local governments that Democrats have demanded, two provisions that have been the most contentious throughout negotiations. The new round of stimulus checks will cost about $140 billion, Sen. Mark Warner (D-VA) told MSNBC, meaning the cost is roughly on par with the $160 billion in aid to state and local governments that had been proposed as part of a $908 billion compromise framework put forth by a bipartisan group of lawmakers.
Republicans have pressed to keep the cost of any additional Covid aid below $1 trillion. Democrats said that that while the package leaves out funding for state and local governments, it would still deliver aid to states in other ways.
Timing still in question: The progress comes after congressional leaders met in person Tuesday and continued their talks Wednesday as they race to finalize the coronavirus package and a $1.4 trillion federal spending bill before current government funding expires on Friday.
“We made major headway toward hammering out a targeted pandemic relief package that would be able to pass both chambers with bipartisan majorities,” Senate Majority Leader Mitch McConnell said Wednesday morning in a speech on the Senate floor. “We committed to continuing these urgent discussions until there’s an agreement. And we agreed we should not leave town until we’ve made law.”
But negotiators were still haggling over various details of the plan. One reported sticking point is a Democratic push to increase the Federal Emergency Management Agency matching rate for Covid-19 disasters from 90% to 100%, according to Bloomberg News. Democrats say the change would cost $1 billion, but Republicans say it would cost $90 billion, based on the proposed legislative language, and object to what they see as an attempt to funnel more money to state and local governments.
While the House could still vote on a deal as soon as Thursday, the timeline could slip, requiring a Senate vote over the weekend — and, potentially, another short-term extension of federal funding to avoid a partial government shutdown after midnight on Friday. "If we don’t get done by Friday night, I don’t want to shut down government," House Majority Leader Steny Hoyer (D-MD) said, according to Politico. "If we need three or four more days, we’ll take the time that’s necessary."
The politics at play: Both sides have plenty of incentive to finalize a deal before they head home — and election politics are still part of the equation. McConnell reportedly told Republican senators on a call Wednesday that passing a relief deal will help GOP Senators David Perdue and Kelly Loeffler of Georgia as they head for January 5 runoff elections that will determine control of the Senate. In campaigning for Democratic candidates Jon Ossoff and Raphael Warnock on Tuesday, President-elect Joe Biden said he needs “two senators from this state who want to get something done, not two senators who are just going to get in the way.”
More signs the economy needs help: U.S. retail sales fell 1.1% in November, the Commerce Department said Wednesday, marking the first drop since the spring. “Economists said the decline was a ‘warning sign’ that the economy was entering a rough patch and in need of a jolt from another round of government stimulus,” The New York Times reports.
Nearly 8 million Americans have fallen into poverty since June, according to data released Wednesday by researchers at the University of Chicago and the University of Notre Dame, driving the poverty rate up 2.4 percentage points to 11.7%. And newly released Census Bureau survey data from late November and early December show that 85.4 million American adults, or 35.6%, report having trouble paying for basics such as food, medicine and rent, up from 76.5 million, or 31.9%, in early September.
What it all means: A deal now appears all but certain. The price tag being discussed amounts to nearly double what Republicans had proposed but far less that the $2 trillion or more that House Speaker Nancy Pelosi had sought for months. Still, while the cost of the package has come down, it would still be the second largest emergency spending package in U.S. history, behind only the CARES Act passed in March. And lawmakers are expected to renew their debates on state and aid a liability shield in the new year.
Biden reiterated Wednesday that more aid will be needed. “The stimulus package is encouraging. Looks like they’re very, very close and it looks like there are going to be direct cash payments,” he told reporters. “But it’s a down payment, an important down payment on what’s going to have to be done at the end of January, the beginning of February.”


thefiscaltimes--2020-12-19--Covid Relief Talks Hit Another Snag

Covid Relief Talks Hit Another Snag

Congress is cutting it close as lawmakers scramble to avoid a government shutdown just after midnight .
The House on Friday evening passed a two-day stopgap measure that would prevent government funding from lapsing and give negotiators another 48 hours to work out disagreements on a coronavirus relief package .
The Senate is expected to try to approve the stopgap spending bill by unanimous consent later Friday , but it ’ s not completely clear that it will be able to pass .
Any senator would be able to block it , and some have already expressed frustration about the @ @ @ @ @ @ @ D-HI ) told CNN Friday evening that she had been told no senator would object to the bill .
[ UPDATE : The Senate passed the short-term spending bill by voice vote on Friday evening . ]
‘ Significant issues outstanding ’ : Lawmakers appeared to be closing in on an agreement this week that would provide $ 1.4 trillion to fund the government for the rest of the fiscal year , as well as an additional roughly $ 900 billion in relief for the unemployed , small businesses , schools , Covid @ @ @ @ @ @ @ But talks have gotten bogged down repeatedly , with lawmakers unable to agree on several key provisions .
House Majority Leader Steny Hoyer ( D-MD ) said Friday evening that the negotiators were still trying to reach agreement on both the Covid relief deal and the full-year spending package .
“ We are hopeful that they will reach agreement in the near future .
They have not reached one yet .
There are still some significant issues outstanding , ” he said on the House floor .
Reining in the Fed : A @ @ @ @ @ @ @ Thursday , when Sen. Pat Toomey ( R-PA ) demanded that the relief package include language permanently shutting down several emergency lending programs at the Federal Reserve that were created by Congress in the early days of the pandemic .
“ What this does is it says that nobody can revive or create a duplicate of the programs that received Cares Act money , ” Toomey said .
“ It is not the role of our central bank , the Fed , to engage in fiscal policy , social policy or allocating credit.
@ @ @ @ @ @ @ Fed programs , see this Bloomberg piece . )
Democrats complained that Toomey was threatening to torpedo the burgeoning agreement by bringing up new issues , largely for political reasons .
“ Senate Republicans are once again holding up COVID negotiations , ” Sen. Sherrod Brown ( D-OH ) tweeted Friday .
“ Now they want to handicap the Federal Reserve 's ability to support our economy and struggling communities .
This has to stop .
Americans are suffering , and they 're trying to nickel-and-dime your COVID relief.
” President-elect Joe Biden @ @ @ @ @ @ @ , Brian Deese , released a statement criticizing Toomey ’ s effort and defending the Fed programs .
“ As we navigate through an unprecedented economic crisis , it is in the interests of the American people to maintain the Fed ’ s ability to respond quickly and forcefully , ” Deese said .
“ Undermining that authority could mean less lending to Main Street businesses , higher unemployment , and greater economic pain across the nation .
Congress ’ s good faith effort to deliver immediate relief should not be delayed by @ @ @ @ @ @ @ stability at risk.
” Seeking bigger checks : On Friday , a group of senators including Josh Hawley ( R-MO ) insisted on seeing the details of the relief package before agreeing to support it .
Hawley said he wants to be sure the measure includes direct payments for Americans , preferably worth up to $ 1,200 per adult – a level that is twice what is reportedly under consideration — before he agrees to the two-day stopgap spending bill .
“ We ’ ve been in the dark for days on end @ @ @ @ @ @ @ ’ s actually in this package … so I ’ m not willing to allow a [ spending bill ] to go through until I know what ’ s actually in the package .
Direct assistance has got to be in there , ” Hawley said .
Sen. Ron Johnson ( R-WI ) shut down Hawley ’ s effort to pass a bill calling for $ 1,200 checks , saying it would be too costly and claiming that the checks would amount to “ mortgaging our children 's future.
” Republicans have reportedly @ @ @ @ @ @ @ the Covid relief bill under $ 1 trillion , and checks larger than $ 600 would almost certainly push the measure over that level .
Trump , too , wants to see bigger checks : President Trump was on the verge of throwing a curveball into the negotiations Thursday by demanding direct payments of as much as $ 2,000 as part of the package , according to a report by Jeff Stein of The Washington Post .
Aides intervened , however , warning the president that his demand could upend the negotiations .
@ @ @ @ @ @ @ heavy lift ’ in Senate : The short-term extension may face some opposition in the Senate , where any member can block it .
Majority Whip Sen. John Thune ( R-SD ) said that a short government shutdown might be unavoidable , given that a unanimous voice vote in favor of an extension would be a “ heavy lift.
” Earlier in the week , Thune said that if a shutdown is “ for a short amount of time , on a weekend , hopefully it ’ s something that ’ s not @ @ @ @ @ @ @ ”

Congress is cutting it close as lawmakers scramble to avoid a government shutdown just after midnight.
The House on Friday evening passed a two-day stopgap measure that would prevent government funding from lapsing and give negotiators another 48 hours to work out disagreements on a coronavirus relief package.
The Senate is expected to try to approve the stopgap spending bill by unanimous consent later Friday, but it’s not completely clear that it will be able to pass. Any senator would be able to block it, and some have already expressed frustration about the process, but Sen. Mazie Hirono (D-HI) told CNN Friday evening that she had been told no senator would object to the bill.
[UPDATE: The Senate passed the short-term spending bill by voice vote on Friday evening.]
‘Significant issues outstanding’: Lawmakers appeared to be closing in on an agreement this week that would provide $1.4 trillion to fund the government for the rest of the fiscal year, as well as an additional roughly $900 billion in relief for the unemployed, small businesses, schools, Covid testing and tracing, and more. But talks have gotten bogged down repeatedly, with lawmakers unable to agree on several key provisions.
House Majority Leader Steny Hoyer (D-MD) said Friday evening that the negotiators were still trying to reach agreement on both the Covid relief deal and the full-year spending package. “We are hopeful that they will reach agreement in the near future. They have not reached one yet. There are still some significant issues outstanding,” he said on the House floor.
Reining in the Fed: A red flag for the negotiations went up Thursday, when Sen. Pat Toomey (R-PA) demanded that the relief package include language permanently shutting down several emergency lending programs at the Federal Reserve that were created by Congress in the early days of the pandemic.
“What this does is it says that nobody can revive or create a duplicate of the programs that received Cares Act money,” Toomey said. “It is not the role of our central bank, the Fed, to engage in fiscal policy, social policy or allocating credit.” (For more details on the Fed programs, see this Bloomberg piece.)
Democrats complained that Toomey was threatening to torpedo the burgeoning agreement by bringing up new issues, largely for political reasons. “Senate Republicans are once again holding up COVID negotiations,” Sen. Sherrod Brown (D-OH) tweeted Friday. “Now they want to handicap the Federal Reserve's ability to support our economy and struggling communities. This has to stop. Americans are suffering, and they're trying to nickel-and-dime your COVID relief.”
President-elect Joe Biden’s incoming National Economic Council Director, Brian Deese, released a statement criticizing Toomey’s effort and defending the Fed programs. “As we navigate through an unprecedented economic crisis, it is in the interests of the American people to maintain the Fed’s ability to respond quickly and forcefully,” Deese said. “Undermining that authority could mean less lending to Main Street businesses, higher unemployment, and greater economic pain across the nation. Congress’s good faith effort to deliver immediate relief should not be delayed by provisions that could put our future financial stability at risk.”
Seeking bigger checks: On Friday, a group of senators including Josh Hawley (R-MO) insisted on seeing the details of the relief package before agreeing to support it. Hawley said he wants to be sure the measure includes direct payments for Americans, preferably worth up to $1,200 per adult – a level that is twice what is reportedly under consideration — before he agrees to the two-day stopgap spending bill.
“We’ve been in the dark for days on end, we have absolutely no idea what’s actually in this package … so I’m not willing to allow a [spending bill] to go through until I know what’s actually in the package. Direct assistance has got to be in there,” Hawley said.
Sen. Ron Johnson (R-WI) shut down Hawley’s effort to pass a bill calling for $1,200 checks, saying it would be too costly and claiming that the checks would amount to “mortgaging our children's future.” Republicans have reportedly been seeking to keep the cost of the Covid relief bill under $1 trillion, and checks larger than $600 would almost certainly push the measure over that level.
Trump, too, wants to see bigger checks: President Trump was on the verge of throwing a curveball into the negotiations Thursday by demanding direct payments of as much as $2,000 as part of the package, according to a report by Jeff Stein of The Washington Post. Aides intervened, however, warning the president that his demand could upend the negotiations.
Spending bill may still be a ‘heavy lift’ in Senate: The short-term extension may face some opposition in the Senate, where any member can block it. Majority Whip Sen. John Thune (R-SD) said that a short government shutdown might be unavoidable, given that a unanimous voice vote in favor of an extension would be a “heavy lift.” Earlier in the week, Thune said that if a shutdown is “for a short amount of time, on a weekend, hopefully it’s something that’s not going to be all that harmful.”


thefiscaltimes--2020-12-18--Why the Stimulus Deal Isn't Done Yet

Why the Stimulus Deal Isn't Done Yet

Congress is still scrambling to finalize another Covid relief deal , with negotiators haggling over elements of the legislation and billions in spending ahead of a Friday night deadline , when lawmakers had hoped to pass a $ 900 billion aid package paired with a $ 1.4 trillion omnibus government spending bill .
Senate Minority Leader Chuck Schumer ( D-NY ) said Thursday that , while a deal is close , “ a few final issues must be hammered out.
” Senate Majority Leader Mitch McConnell ( R-KY ) said members of Congress were now “ highly likely ” to @ @ @ @ @ @ @ the rescue package and that lawmakers may have to buy some more time by passing a stopgap government-funding bill to prevent a partial government shutdown when current funding lapses at 12:01 a.m .
ET on Saturday .
The sticking points on a Covid rescue deal reportedly include which Americans would be eligible for direct relief payments and disagreements over an extending an eviction moratorium and health care and disaster relief funds as well as money for entertainment venues .
Republicans are also pushing to formally end the emergency Federal Reserve lending programs created @ @ @ @ @ @ @ .
Emily Cochrane reports in The New York Times : “ Democrats were making a last-ditch effort to provide emergency aid to states , which they argued was critical to helping states weather the pandemic and avoid huge layoffs and cuts in services that could reverberate through the economy .
Republicans were working to limit the power of the Federal Reserve to bail out businesses , municipalities or other institutions in the future.
” Republican Sens .
Pat Toomey on Pennsylvania and Mike Crapo of Idaho are reportedly pressing for language that would @ @ @ @ @ @ @ Fed lending programs for small and midsized businesses as well as state and local governments .
Those programs are set to end this month .
“ In the future , if some kind of dire emergency occurs , at that point the Fed and Treasury should come to Congress if they believe any kind of extraordinary program is needed , ” Toomey told reporters Thursday .
“ What this does is that nobody can revive or create a duplicate of the programs that received Cares Act money.
” Democrats warn that the proposal @ @ @ @ @ @ @ s paths for promoting economic recovery .
“ They are trying to take away some options for the new president to deal with some challenges to the economy , ” Senator Ron Wyden , the top ranking Democrat on the Senate Finance Committee , told reporters , according to Bloomberg News .
Toomey told reporters that his push was not meant to hamstring the Biden administration or hurt the economy , noting that he ’ s sought to ensure that the programs end this year since well before November ’ s election .
@ @ @ @ @ @ @ : Any senator could block quick passage of a stopgap spending bill , and — in what could be seen as a sign of how Congress now works , or doesn ’ t —Democrats are wary of a measure that would ease pressure on negotiators to finalize a Covid relief package , according to Politico .
`` I know people who are going to object to that , that want to keep pressure on the process until we get a deal , '' Senate Majority Whip John Thune ( R-SD ) told Politico @ @ @ @ @ @ @ .
If it 's for a very short amount of time on a weekend hopefully it 's not going to be something that would be all that harmful . ''
The bottom line : Congressional leader remain optimistic that they ’ ll get a deal done , but the process is likely to spill over into the weekend .

Congress is still scrambling to finalize another Covid relief deal, with negotiators haggling over elements of the legislation and billions in spending ahead of a Friday night deadline, when lawmakers had hoped to pass a $900 billion aid package paired with a $1.4 trillion omnibus government spending bill.
Senate Minority Leader Chuck Schumer (D-NY) said Thursday that, while a deal is close, “a few final issues must be hammered out.” Senate Majority Leader Mitch McConnell (R-KY) said members of Congress were now “highly likely” to be working through the weekend to pass the rescue package and that lawmakers may have to buy some more time by passing a stopgap government-funding bill to prevent a partial government shutdown when current funding lapses at 12:01 a.m. ET on Saturday.
The sticking points on a Covid rescue deal reportedly include which Americans would be eligible for direct relief payments and disagreements over an extending an eviction moratorium and health care and disaster relief funds as well as money for entertainment venues. Republicans are also pushing to formally end the emergency Federal Reserve lending programs created by the CARES Act passed in March.
Emily Cochrane reports in The New York Times:
“Democrats were making a last-ditch effort to provide emergency aid to states, which they argued was critical to helping states weather the pandemic and avoid huge layoffs and cuts in services that could reverberate through the economy. Republicans were working to limit the power of the Federal Reserve to bail out businesses, municipalities or other institutions in the future.”
Republican Sens. Pat Toomey on Pennsylvania and Mike Crapo of Idaho are reportedly pressing for language that would prevent the Treasury Secretary from restarting the Fed lending programs for small and midsized businesses as well as state and local governments. Those programs are set to end this month.
“In the future, if some kind of dire emergency occurs, at that point the Fed and Treasury should come to Congress if they believe any kind of extraordinary program is needed,” Toomey told reporters Thursday. “What this does is that nobody can revive or create a duplicate of the programs that received Cares Act money.”
Democrats warn that the proposal would limit the incoming Biden administration’s paths for promoting economic recovery. “They are trying to take away some options for the new president to deal with some challenges to the economy,” Senator Ron Wyden, the top ranking Democrat on the Senate Finance Committee, told reporters, according to Bloomberg News.
Toomey told reporters that his push was not meant to hamstring the Biden administration or hurt the economy, noting that he’s sought to ensure that the programs end this year since well before November’s election.
A short government shutdown might be possible: Any senator could block quick passage of a stopgap spending bill, and — in what could be seen as a sign of how Congress now works, or doesn’t —Democrats are wary of a measure that would ease pressure on negotiators to finalize a Covid relief package, according to Politico.
"I know people who are going to object to that, that want to keep pressure on the process until we get a deal," Senate Majority Whip John Thune (R-SD) told Politico. "Government shutdowns are never good. If it's for a very short amount of time on a weekend hopefully it's not going to be something that would be all that harmful."
The bottom line: Congressional leader remain optimistic that they’ll get a deal done, but the process is likely to spill over into the weekend.


thefiscaltimes--2020-12-18--Economy Sending More Distress Signals: Layoffs Jump, Personal Income Drops

The resurgence of the coronavirus is weighing heavily on the labor market , with more than 1.3 million people making new unemployment claims last week , an unexpected increase of 63,000 from the week before .
About 885,000 people applied for initial unemployment benefits at the state level , the Labor Department announced Thursday , the highest weekly total since September .
Another 455,000 made initial claims for Pandemic Unemployment Assistance , the federal program that aids self-employed and gig workers – and that is scheduled to expire at the end of the month if Congress fails to renew it @ @ @ @ @ @ @ .
All told , more than 20 million people were receiving some kind of unemployment aid as of November 28 , the Labor Department said .
Some comments on the report ( with emphasis added ) : • “ The labor market is showing clear signs of deterioration .
... We expect the trend to persist amid a sharp rise in virus cases and subsequent business restrictions weighing on employment conditions.
” – Eliza Winger , Bloomberg • “ U.S .
weekly jobless claims continue to head in the wrong direction .
The @ @ @ @ @ @ @ winter wave of the virus is going to lead to more shutdowns.″ – Edward Moya of the currency trading firm OANDA , via AP • “ [ L ] ast week was the 39th straight week total initial claims were greater than the worst week of the Great Recession .
– Heidi Shierholz of the Economic Policy Institute • “ Bottom line : Unemployment claims are rising again , a key sign the economic recovery is in trouble .
... 14 million unemployed Americans will lose unemployment aid by January 1 unless Congress @ @ @ @ @ @ @ Washington Post In another sign that the economy is heading in the wrong direction , the Bureau of Economic Analysis announced Thursday that personal income fell in every state during the third quarter .
“ State personal income decreased 10.0 percent at an annual rate in the third quarter of 2020 , after increasing 35.8 percent in the second quarter , ” the agency said .
“ Personal income decreased in every state and the District of Columbia , ranging from –29.9 percent in West Virginia to –0.6 percent in Georgia.
” A @ @ @ @ @ @ @ the decline , the BEA said , with transfer receipts for programs related to unemployment and health care falling by $ 1.3 trillion , following a $ 2.4 trillion increase in the quarter before .
“ The data highlight the benefits of economic stimulus at a time when unemployment is high and a spike in U.S. coronavirus cases coupled with fresh restrictions keeping businesses closed are weighing on hiring , ” Bloomberg ’ s Katia Dmitrieva wrote .

The resurgence of the coronavirus is weighing heavily on the labor market, with more than 1.3 million people making new unemployment claims last week, an unexpected increase of 63,000 from the week before.
About 885,000 people applied for initial unemployment benefits at the state level, the Labor Department announced Thursday, the highest weekly total since September. Another 455,000 made initial claims for Pandemic Unemployment Assistance, the federal program that aids self-employed and gig workers – and that is scheduled to expire at the end of the month if Congress fails to renew it in the relief package currently under negotiation.
All told, more than 20 million people were receiving some kind of unemployment aid as of November 28, the Labor Department said.
Some comments on the report (with emphasis added):
“The labor market is showing clear signs of deterioration. ... We expect the trend to persist amid a sharp rise in virus cases and subsequent business restrictions weighing on employment conditions.” – Eliza Winger, Bloomberg
“U.S. weekly jobless claims continue to head in the wrong direction. The labor market outlook is bleak as the winter wave of the virus is going to lead to more shutdowns.″ – Edward Moya of the currency trading firm OANDA, via AP
“[L]ast week was the 39th straight week total initial claims were greater than the worst week of the Great Recession. – Heidi Shierholz of the Economic Policy Institute
“Bottom line: Unemployment claims are rising again, a key sign the economic recovery is in trouble. ... 14 million unemployed Americans will lose unemployment aid by January 1 unless Congress acts swiftly.” – Heather Long, Washington Post
In another sign that the economy is heading in the wrong direction, the Bureau of Economic Analysis announced Thursday that personal income fell in every state during the third quarter. “State personal income decreased 10.0 percent at an annual rate in the third quarter of 2020, after increasing 35.8 percent in the second quarter,” the agency said. “Personal income decreased in every state and the District of Columbia, ranging from –29.9 percent in West Virginia to –0.6 percent in Georgia.”
A huge reduction in Covid-related relief payments drove the decline, the BEA said, with transfer receipts for programs related to unemployment and health care falling by $1.3 trillion, following a $2.4 trillion increase in the quarter before.
“The data highlight the benefits of economic stimulus at a time when unemployment is high and a spike in U.S. coronavirus cases coupled with fresh restrictions keeping businesses closed are weighing on hiring,” Bloomberg’s Katia Dmitrieva wrote.


thefiscaltimes--2020-12-17--Chart of the Day: CBO's Estimates for Interest Costs

How much will the growing pile of national debt cost the federal government in the years ahead ?
According to a new analysis released by the Congressional Budget Office , the answer depends in large part on what happens to interest rates .
In its latest report , the CBO projects rising interest rates by the end of the decade : “ Over the long term , CBO projects a substantial increase in interest costs , in part from a projected rise in interest rates .
Because debt is already high , even moderate increases in interest rates would lead @ @ @ @ @ @ @ , federal borrowing is projected to rise significantly , further driving up interest costs.
” Relative to the size of the economy , interest costs are projected to rise from the current 1.4 % of GDP to 2.2 % of GDP by 2030 – a level that is “ generally in line with the 50-year average of 2.0 percent.
” Deficit hawks warn that it ’ s extremely risky to bet that interest rates won ’ t rise , and that if rates rise even slightly more than projected , the long-term costs @ @ @ @ @ @ @ critics have long pointed out , CBO ’ s track record on interest rate projections is pretty bad , and the new report admits as much : “ CBO ’ s forecasts of interest rates have exhibited larger mean errors than its forecasts of other economic indicators .
In particular , CBO has overestimated interest rates during their persistent downward trend that began in the early 1980s.
” CBO could be wrong in the same way again , as some economists argue , and interest rates could remain stuck at historically low levels @ @ @ @ @ @ @ , interest costs for the federal government could continue to fall ( see the bottom line in the chart below ) .

How much will the growing pile of national debt cost the federal government in the years ahead? According to a new analysis released by the Congressional Budget Office, the answer depends in large part on what happens to interest rates.
In its latest report, the CBO projects rising interest rates by the end of the decade: “Over the long term, CBO projects a substantial increase in interest costs, in part from a projected rise in interest rates. Because debt is already high, even moderate increases in interest rates would lead to significantly higher interest costs. Moreover, federal borrowing is projected to rise significantly, further driving up interest costs.”
Relative to the size of the economy, interest costs are projected to rise from the current 1.4% of GDP to 2.2% of GDP by 2030 – a level that is “generally in line with the 50-year average of 2.0 percent.”
Deficit hawks warn that it’s extremely risky to bet that interest rates won’t rise, and that if rates rise even slightly more than projected, the long-term costs would be tremendous.
However, as critics have long pointed out, CBO’s track record on interest rate projections is pretty bad, and the new report admits as much: “CBO’s forecasts of interest rates have exhibited larger mean errors than its forecasts of other economic indicators. In particular, CBO has overestimated interest rates during their persistent downward trend that began in the early 1980s.”
CBO could be wrong in the same way again, as some economists argue, and interest rates could remain stuck at historically low levels for years to come. If so, interest costs for the federal government could continue to fall (see the bottom line in the chart below).


thefiscaltimes--2020-12-16--Reviving the Pandemic Economy

Reviving the Pandemic Economy

With the U.S. economy headed for another slowdown as the coronavirus surges to record levels , The New York Times gathered a group of experts “ to debate the priorities for economic policy in the months and years ahead.
” Topics included the damage the pandemic is causing to the economy , the size of the coronavirus stimulus package , and what to do with the trillions in new debt being issued to help fight the recession .
Some highlights from the discussion : It ’ s going to be a bleak winter : “ We ’ re about to @ @ @ @ @ @ @ of like we had in the second quarter .
It ’ s going to be very serious .
And we need to sort of bridge to the other side of that.
” – Kevin Hassett , former chair of the Council of Economic Advisers under President Trump .
The economy has a big hole to fill : “ By my estimate , the gap between where GDP is going to be in 2021 and where it would have been if we had stayed on the path where we were pre-pandemic ... is about @ @ @ @ @ @ @ fiscal relief , and I think it will be about a half-trillion dollars in 2022 .
So , for us to fill that hole and get us back onto the pre-pandemic path by the middle of next year , we need a package of about $ 2 trillion.
” – Wendy Edelberg , senior fellow at the Brookings Institution .
Infrastructure is a good place to start : “ [ Infrastructure investment ] has the advantage that it touches upon many of the subjects that we discuss here — in the ways that @ @ @ @ @ @ @ of bringing additional wealth equality and things like that .
There are the obvious things , which everybody mentions when they think about infrastructure , which are roads , tunnels and things like that .
I think that you have to add our I.T .
infrastructure , which in the pandemic we saw how reliant we are on it and how those gaps really come back to haunt us , for the business community , for the educational community , for all sectors of society and the economy.
” – Félix V. Matos @ @ @ @ @ @ @ of New York .
It 's time to borrow more , and deal with the debt later : “ Responsible fiscal policy is borrowing like crazy right now .
Things that are targeted , things that are smart , to goose the economy .
But once we stabilize the economy , be willing to bring that debt back down so it ’ s not growing faster than the economy.
” – Maya MacGuineas , president of the Committee for a Responsible Federal Budget .

With the U.S. economy headed for another slowdown as the coronavirus surges to record levels, The New York Times gathered a group of experts “to debate the priorities for economic policy in the months and years ahead.” Topics included the damage the pandemic is causing to the economy, the size of the coronavirus stimulus package, and what to do with the trillions in new debt being issued to help fight the recession.
Some highlights from the discussion:
It’s going to be a bleak winter: “We’re about to have a crater, again, sort of like we had in the second quarter. It’s going to be very serious. And we need to sort of bridge to the other side of that.” – Kevin Hassett, former chair of the Council of Economic Advisers under President Trump.
The economy has a big hole to fill: “By my estimate, the gap between where GDP is going to be in 2021 and where it would have been if we had stayed on the path where we were pre-pandemic ... is about a trillion dollars next year without more fiscal relief, and I think it will be about a half-trillion dollars in 2022. So, for us to fill that hole and get us back onto the pre-pandemic path by the middle of next year, we need a package of about $2 trillion.” – Wendy Edelberg, senior fellow at the Brookings Institution.
Infrastructure is a good place to start: “[Infrastructure investment] has the advantage that it touches upon many of the subjects that we discuss here — in the ways that you can do it, in terms of bringing additional wealth equality and things like that. There are the obvious things, which everybody mentions when they think about infrastructure, which are roads, tunnels and things like that. I think that you have to add our I.T. infrastructure, which in the pandemic we saw how reliant we are on it and how those gaps really come back to haunt us, for the business community, for the educational community, for all sectors of society and the economy.” – Félix V. Matos Rodríguez, chancellor of the City University of New York.
It's time to borrow more, and deal with the debt later: “Responsible fiscal policy is borrowing like crazy right now. Things that are targeted, things that are smart, to goose the economy. But once we stabilize the economy, be willing to bring that debt back down so it’s not growing faster than the economy.” – Maya MacGuineas, president of the Committee for a Responsible Federal Budget.


thefiscaltimes--2020-12-22--Airlines Get $15 Billion in Aid — or $500,000 for Each Rehired Worker

The new Covid-19 relief package will give U.S. airlines $ 15 billion , with the money intended to be used to bring about 32,000 workers back onto payrolls .
But the airline business is in terrible shape thanks to the virus , with traffic down by two-thirds , and the industry doesn ’ t see it coming back any time soon , which means many of those rehired workers could lose their jobs again , perhaps as soon as March .
“ That ’ s right : The American taxpayer is putting up almost $ 500,000 for each airline worker @ @ @ @ @ @ @ , ” says Bloomberg ’ s Joe Nocera in an op-ed piece Tuesday .
The major players in the airline industry seem to have enough capital to weather the downturn on their own , Nocera says : “ United Airlines Holdings Inc. and American Airlines Group Inc. , which laid off the vast majority of those 32,000 employees , are both burning between $ 25 million and $ 30 million in cash a day — but each has more than $ 15 billion in liquidity.
” The remarkable level of support for a @ @ @ @ @ @ @ have something to do with their political influence in Washington , Nocera says , not least their ability to hire lobbyists .

The new Covid-19 relief package will give U.S. airlines $15 billion, with the money intended to be used to bring about 32,000 workers back onto payrolls.
But the airline business is in terrible shape thanks to the virus, with traffic down by two-thirds, and the industry doesn’t see it coming back any time soon, which means many of those rehired workers could lose their jobs again, perhaps as soon as March.
“That’s right: The American taxpayer is putting up almost $500,000 for each airline worker to have three months worth of employment,” says Bloomberg’s Joe Nocera in an op-ed piece Tuesday.
The major players in the airline industry seem to have enough capital to weather the downturn on their own, Nocera says: “United Airlines Holdings Inc. and American Airlines Group Inc., which laid off the vast majority of those 32,000 employees, are both burning between $25 million and $30 million in cash a day — but each has more than $15 billion in liquidity.”
The remarkable level of support for a relatively small group of multi-billion-dollar companies may have something to do with their political influence in Washington, Nocera says, not least their ability to hire lobbyists.


thefiscaltimes--2020-12-22--Too Little, Too Late? Covid Relief Bill Meets Its Critics

As expected , the House and Senate both passed the $ 900 billion coronavirus relief package and a $ 1.4 trillion catchall spending bill on Monday night .
The House approved the measures by a 359-53 vote .
The Senate tally was 92-6 , with six Republicans voting against the bill : Marsha Blackburn of Tennessee , Ted Cruz of Texas , Ron Johnson of Wisconsin , Mike Lee of Utah , Rand Paul of Kentucky and Rick Scott of Florida .
President Trump signed a stopgap spending bill passed by Congress to keep the government open until December 28 @ @ @ @ @ @ @ stopgap allows time for the paperwork on the massive package approved by Congress on Monday night to be processed and sent to the White House for Trump to sign into law .
At nearly 5,593 pages , the bill is believed to be the longest ever passed by Congress , and the Covid relief measure is the second largest emergency spending package ever , behind only the Cares Act passed in March .
You can read more about the behind-the-scenes process that led to the stimulus deal finally getting done at The New @ @ @ @ @ @ @ Politico .
In all , the federal response to the pandemic now totals nearly $ 4 trillion , Politico notes — and still more may be needed , as lawmakers in both parties acknowledged that the latest legislation was far from perfect and some economists warn that it may have been too little or come too late to prevent a double-dip recession .
“ The legislation was passed too late , is too limited , and expires too soon to offset the adverse economic impact caused by the intensification of the pandemic and @ @ @ @ @ @ @ lockdowns around the economy in the current quarter , ” wrote Joseph Brusuelas , chief economist at consulting firm RSM .
“ As a result , the aid package is not a stimulus bill , it is a rescue bill , and the economy will likely require another round of aid as early as next year.
” The process was ridiculous : More than a few lawmakers in both parties expressed frustration with the process and the fact that after months of delay they were given just hours to consider a massive piece @ @ @ @ @ @ @ have not read this bill .
It 's over 5000 pages , arrived at 2pm today , and we are told to expect a vote on it in 2 hours , ” wrote Rep. Alexandria Ocasio-Cortez ( D-NY ) .
“ This is n't governance .
It 's hostage-taking . ''
And Republican Florida Sen. Rick Scott said in a statement : “ Early this afternoon , we were finally provided the text of the combined $ 1.4 trillion omnibus spending bill and $ 900 billion COVID relief bill .
It is almost @ @ @ @ @ @ @ expected to vote on it tonight .
Who in their right mind thinks that this is a responsible way of governing ?
” Maya MacGuineas , president of the Committee for a Responsible Federal Budget said that the overall process took far too long : “ We should have funded the government before the beginning of the fiscal year on October 1 , and we should have passed economic relief before that .
The time wasted on political bickering cost jobs and it may have cost lives.
” She also said that it @ @ @ @ @ @ @ “ extraneous measures like wasteful tax extenders , clean energy tax credits , and a 100 percent tax deduction for business meals ” to get a deal done : “ While a crisis like this is exactly the right time for the government to borrow , these unnecessary political pet projects waste vital emergency funds and could undermine support for crisis response efforts in the future.
” Bloomberg ’ s Editorial Board summed it up neatly : “ From start to finish , this effort has followed every rubric of how not to @ @ @ @ @ @ @ is a lot better than nothing .
It will do for now .
But Congress really ought to conduct its affairs with some small semblance of competence — and at the earliest opportunity , the Biden administration needs to look afresh at further relief measures . ''
What about the deficit ?
Some Republicans also objected to the deficit-increasing effects of the legislation , even as other budget analysts have said that the U.S. can and should borrow now to address the coronavirus crisis .
Scott complained that “ in classic Washington style @ @ @ @ @ @ @ an omnibus spending bill that mortgages our children and grandchildren ’ s futures without even giving members a chance to read it .
We are not spending money we have in the bank or anticipate we will collect in taxes .
Washington doesn ’ t seem to understand that new spending today will be paid for by increased federal debt and result in a tax increase on families down the road .
”

As expected, the House and Senate both passed the $900 billion coronavirus relief package and a $1.4 trillion catchall spending bill on Monday night.
The House approved the measures by a 359-53 vote. The Senate tally was 92-6, with six Republicans voting against the bill: Marsha Blackburn of Tennessee, Ted Cruz of Texas, Ron Johnson of Wisconsin, Mike Lee of Utah, Rand Paul of Kentucky and Rick Scott of Florida.
President Trump signed a stopgap spending bill passed by Congress to keep the government open until December 28, the White House said. The stopgap allows time for the paperwork on the massive package approved by Congress on Monday night to be processed and sent to the White House for Trump to sign into law.
At nearly 5,593 pages, the bill is believed to be the longest ever passed by Congress, and the Covid relief measure is the second largest emergency spending package ever, behind only the Cares Act passed in March. You can read more about the behind-the-scenes process that led to the stimulus deal finally getting done at The New York Times, The Washington Post or Politico.
In all, the federal response to the pandemic now totals nearly $4 trillion, Politico notes — and still more may be needed, as lawmakers in both parties acknowledged that the latest legislation was far from perfect and some economists warn that it may have been too little or come too late to prevent a double-dip recession.
“The legislation was passed too late, is too limited, and expires too soon to offset the adverse economic impact caused by the intensification of the pandemic and the resulting pullback by the public and lockdowns around the economy in the current quarter,” wrote Joseph Brusuelas, chief economist at consulting firm RSM. “As a result, the aid package is not a stimulus bill, it is a rescue bill, and the economy will likely require another round of aid as early as next year.”
The process was ridiculous: More than a few lawmakers in both parties expressed frustration with the process and the fact that after months of delay they were given just hours to consider a massive piece of legislation. "Members of Congress have not read this bill. It's over 5000 pages, arrived at 2pm today, and we are told to expect a vote on it in 2 hours,” wrote Rep. Alexandria Ocasio-Cortez (D-NY). “This isn't governance. It's hostage-taking."
And Republican Florida Sen. Rick Scott said in a statement: “Early this afternoon, we were finally provided the text of the combined $1.4 trillion omnibus spending bill and $900 billion COVID relief bill. It is almost 5,600 pages long and we’re expected to vote on it tonight. Who in their right mind thinks that this is a responsible way of governing?”
Maya MacGuineas, president of the Committee for a Responsible Federal Budget said that the overall process took far too long: “We should have funded the government before the beginning of the fiscal year on October 1, and we should have passed economic relief before that. The time wasted on political bickering cost jobs and it may have cost lives.”
She also said that it was unfortunate that lawmakers had to add “extraneous measures like wasteful tax extenders, clean energy tax credits, and a 100 percent tax deduction for business meals” to get a deal done: “While a crisis like this is exactly the right time for the government to borrow, these unnecessary political pet projects waste vital emergency funds and could undermine support for crisis response efforts in the future.”
Bloomberg’s Editorial Board summed it up neatly: “From start to finish, this effort has followed every rubric of how not to run a government. … The deal is a lot better than nothing. It will do for now. But Congress really ought to conduct its affairs with some small semblance of competence — and at the earliest opportunity, the Biden administration needs to look afresh at further relief measures."
What about the deficit? Some Republicans also objected to the deficit-increasing effects of the legislation, even as other budget analysts have said that the U.S. can and should borrow now to address the coronavirus crisis.
Scott complained that “in classic Washington style, vital programs are being attached to an omnibus spending bill that mortgages our children and grandchildren’s futures without even giving members a chance to read it. We are not spending money we have in the bank or anticipate we will collect in taxes. Washington doesn’t seem to understand that new spending today will be paid for by increased federal debt and result in a tax increase on families down the road.”


thefiscaltimes--2020-12-21--Congress Set to Pass $900 Billion Covid Relief Deal and $1.4 Trillion Spending Package

More help , at long last , is on the way .
After months of partisan gridlock and inaction — even as hundreds of thousands of Americans were dying due to Covid-19 and millions more were falling into poverty — congressional leaders have finally agreed on another $ 900 billion coronavirus relief package .
On Monday afternoon , mere hours ahead of planned votes , lawmakers released the text of the legislation , 5,593 pages combining pandemic relief and $ 1.4 trillion in funding for government operations for the full 2021 fiscal year .
“ We ’ re going to @ @ @ @ @ @ @ ” Senate Majority Leader Mitch McConnell ( R-KY ) said .
The House and Senate late Sunday passed a one-day stopgap government funding measure , averting a partial shutdown and allowing more time for the legislative text to be finalized and passed .
The deal came together after lawmakers settled a last-minute clash over the Federal Reserve ’ s emergency lending authority .
The House is now expected to vote on the package Monday night , followed by the Senate .
Congress is also set to approve a week-long stopgap spending measure to @ @ @ @ @ @ @ year-end legislation printed and signed into law by President Trump .
Here ’ s what in the Covid relief package , what isn ’ t , and what it all means : What ’ s in the Relief Bill The Committee for a Responsible Federal Budget has provided a preliminary analysis of its provisions based on legislative summaries and press releases : “ Stimulus checks ” – as soon as next week : Individuals earning up to $ 75,000 a year will receive $ 600 payments , including both adults and children , @ @ @ @ @ @ @ , at a total cost of $ 166 billion .
Treasury Secretary Steven Mnuchin said Monday that Americans will start seeing those payments within days .
“ This is a very , very fast way of getting money into the economy , ” he told CNBC .
“ Let me emphasize : People are going to see this money at the beginning of next week.
” But while direct-deposit payments will arrive quickest and could hit bank accounts as soon as next week , checks sent by mail could reportedly take until late @ @ @ @ @ @ @ .
Unemployment benefits : Temporary unemployment aid programs ( Pandemic Emergency Unemployment and Pandemic Emergency Unemployment Compensation ) will be extended for 11 weeks , through March 14 , and state unemployment payments will be enhanced by $ 300 per week for the same period of time , at a cost of $ 120 billion .
Small business aid : The deal revives the Paycheck Protection Program , which provides forgivable loans to small businesses to keep staff on the payroll , at a cost of $ 284 billion .
Arts and entertainment @ @ @ @ @ @ @ billion , and the Economic Injury Disaster Loan Advances programs gets $ 20 billion .
Total cost of small business assistance : $ 325 billion .
Education : Education grants will provide $ 54 billion for K-12 schools and $ 20 billion for higher education .
Total cost of education assistance : $ 82 billion .
Health care : The package includes $ 63 billion for health care , including money for Covid-19 testing , tracing and mitigation ( $ 22 billion ) ; vaccine procurement ( $ 20 billion ) ; vaccine @ @ @ @ @ @ @ and support for health care providers ( $ 9 billion ) .
Transportation : The airline industry gets $ 16 billion for payrolls , while airports get $ 2 billion and Amtrak gets $ 1 billion .
Transit infrastructure is targeted with $ 14 billion in grants , and highways get $ 10 billion .
Total cost of transportation spending : $ 45 billion .
Rental assistance : $ 25 billion , with the current eviction moratorium extended until January 31 .
Nutrition and agricultural programs : $ 26 billion .
Child care @ @ @ @ @ @ @ : All told , the relief package includes tax cuts worth roughly $ 30 billion ( see more below ) .
Broadband : $ 7 billion in grants and investments .
For more on the details and how the bill might affect you , see this analysis at The New York Times .
What ’ s Not in the Relief Bill Lawmakers dropped a Republican demand for a “ liability shield ” to protect businesses and hospitals from virus-related lawsuits and a Democratic demand for new money to help state and local governments @ @ @ @ @ @ @ , however , extend the deadline for states and cities to use unspent money provided as part of the relief package passed in March .
A Tax Break Tradeoff The tax break for the three-martini lunch is back , with 100 % tax deductibility of the cost of business meals in 2021 and 2022 ( up from the current 50 % ) , at a cost of $ 5 billion .
Tax experts have criticized the idea as ineffective and poorly targeted for the current crisis .
Democrats had also objected to the @ @ @ @ @ @ @ it in exchange for expansion of the Earned Income Tax Credits and Child Tax Credit for low-income families .
“ It 's sad to see the price extracted but this EITC/Child Tax Credit provision is important to millions of people who work for low wages & have been hammered by the economic fallout , ” Chuck Marr of the liberal Center on Budget and Policy Priorities said .
Bloomberg ’ s Jonathan Bernstein called the return of the business meal tax break a rare legislative win for President Trump , who had pushed @ @ @ @ @ @ @ “ And surely it ’ s a coincidence that restoring this deduction will once again subsidize high-priced establishments such as those Trump owns , ” Bernstein noted . )
Ending ‘ Surprise ’ Medical Bills The year-end package will also include legislation to protect patients from being hit with “ surprise ” medical bills , a bipartisan priority that had gotten bogged down by disagreements among lawmakers over who should cover the medical bills .
Insurers and hospital and doctors ’ groups had lobbied intensely on the issue .
“ The compromise deal @ @ @ @ @ @ @ considered largely a win for hospitals and doctors —and tweaks made in the final legislation are even friendlier to providers , ” Politico reported .
What It All Means Bloomberg ’ s Bernstein offered some useful perspective on the politics : “ Democrats got a whole lot less than they wanted and are getting it more than six months after they wanted it .
But on the other hand , this is a package similar in size to the 2009 stimulus bill , and that one ( passed by large Democratic majorities in @ @ @ @ @ @ @ and popular Democratic president ) had a lot more tax cuts and a lot less spending .
In other words , anyone who claims this was a total win for either side is surely wrong.
” The relief package is a case where , to paraphrase a line often mistakenly attributed to Sir Winston Churchill , Congress is doing the right thing after exhausting all the other possibilities .
It ’ s the right thing because , as many economists and others have been warning for months , the surging Covid case counts @ @ @ @ @ @ @ additional fiscal policy response .
Economists expect the package to provide a sizable boost to the economy , though it ’ s not yet clear whether the $ 908 billion package — meant to provide a few months of support until vaccines can rein in the virus and allow some sense of normalcy and recovery to take root — is sufficient for the task .
“ This is better than nothing , and there ’ s some good news that we ’ re finally getting a deal , ” Kathy Bostjancic , chief @ @ @ @ @ @ @ , told The Washington Post .
“ The bad news is it ’ s less stimulative than the prior packages , and the relief measures are short-lived.
” ‘ More needs to be done ’ : Democratic leaders lauded their deal Sunday , but they ’ ve already made clear they will be looking to pass additional legislation next year .
“ We consider this a first step .
And that , again , more needs to be done , ” House Speaker Nancy Pelosi told reporters Sunday evening .
“ And we @ @ @ @ @ @ @ happening under the Biden-Harris Administration , about 700 hours from now.
” Pelosi said she believes it will be “ much easier ” to pass another package next year , arguing that a President Joe Biden will be able to use the power of the bully pulpit to rally support for more action .
It ’ s also not clear yet whether that ’ s true , given that Pelosi ’ s Democrats are set to have a narrower majority in the next Congress and would have to win both runoffs for Georgia @ @ @ @ @ @ @ of that chamber .
The spirit of bipartisan cooperation and rush to pass a rescue package may not extend into the new Congress .
Even as they touted their agreement , congressional leaders were also still trading shots over why it took so long .
McConnell said Republicans had for months pushed for a package under $ 1 trillion much like the one set to pass .
“ The progress of this past week could have happened in July , or in August , or in September , or in October .
Senate @ @ @ @ @ @ @ like this one , all along , in real time , ” he said .
“ I just wish our partners on the other side had put political calculations aside and worked with us to make this happen a long time ago.
” For their part , Pelosi and Senate Minority Leader Chuck Schumer ( D-NY ) continued to decry Republican resistance to efforts to “ crush the virus ” and provide aid to states .
“ Ideology gets in the way , ideology gets in the way , ” Schumer said .
@ @ @ @ @ @ @ for months are likely to be revisited whenever another package is considered .

More help, at long last, is on the way.
After months of partisan gridlock and inaction — even as hundreds of thousands of Americans were dying due to Covid-19 and millions more were falling into poverty — congressional leaders have finally agreed on another $900 billion coronavirus relief package.
On Monday afternoon, mere hours ahead of planned votes, lawmakers released the text of the legislation, 5,593 pages combining pandemic relief and $1.4 trillion in funding for government operations for the full 2021 fiscal year.
“We’re going to stay here until we finish tonight,” Senate Majority Leader Mitch McConnell (R-KY) said. The House and Senate late Sunday passed a one-day stopgap government funding measure, averting a partial shutdown and allowing more time for the legislative text to be finalized and passed.
The deal came together after lawmakers settled a last-minute clash over the Federal Reserve’s emergency lending authority.
The House is now expected to vote on the package Monday night, followed by the Senate. Congress is also set to approve a week-long stopgap spending measure to give lawmakers time to get the massive year-end legislation printed and signed into law by President Trump.
Here’s what in the Covid relief package, what isn’t, and what it all means:
What’s in the Relief Bill
The Committee for a Responsible Federal Budget has provided a preliminary analysis of its provisions based on legislative summaries and press releases:
“Stimulus checks” – as soon as next week: Individuals earning up to $75,000 a year will receive $600 payments, including both adults and children, with amounts declining above that income level, at a total cost of $166 billion.
Treasury Secretary Steven Mnuchin said Monday that Americans will start seeing those payments within days. “This is a very, very fast way of getting money into the economy,” he told CNBC. “Let me emphasize: People are going to see this money at the beginning of next week.”
But while direct-deposit payments will arrive quickest and could hit bank accounts as soon as next week, checks sent by mail could reportedly take until late January to start reaching Americans’ mailboxes.
Unemployment benefits: Temporary unemployment aid programs (Pandemic Emergency Unemployment and Pandemic Emergency Unemployment Compensation) will be extended for 11 weeks, through March 14, and state unemployment payments will be enhanced by $300 per week for the same period of time, at a cost of $120 billion.
Small business aid: The deal revives the Paycheck Protection Program, which provides forgivable loans to small businesses to keep staff on the payroll, at a cost of $284 billion. Arts and entertainment venues are slated to receive $15 billion, and the Economic Injury Disaster Loan Advances programs gets $20 billion. Total cost of small business assistance: $325 billion.
Education: Education grants will provide $54 billion for K-12 schools and $20 billion for higher education. Total cost of education assistance: $82 billion.
Health care: The package includes $63 billion for health care, including money for Covid-19 testing, tracing and mitigation ($22 billion); vaccine procurement ($20 billion); vaccine distribution ($9 billion); and support for health care providers ($9 billion).
Transportation: The airline industry gets $16 billion for payrolls, while airports get $2 billion and Amtrak gets $1 billion. Transit infrastructure is targeted with $14 billion in grants, and highways get $10 billion. Total cost of transportation spending: $45 billion.
Rental assistance: $25 billion, with the current eviction moratorium extended until January 31.
Nutrition and agricultural programs: $26 billion.
Child care: $10 billion.
Tax breaks: All told, the relief package includes tax cuts worth roughly $30 billion (see more below).
Broadband: $7 billion in grants and investments.
For more on the details and how the bill might affect you, see this analysis at The New York Times.
What’s Not in the Relief Bill
Lawmakers dropped a Republican demand for a “liability shield” to protect businesses and hospitals from virus-related lawsuits and a Democratic demand for new money to help state and local governments deal with budget shortfalls. They did, however, extend the deadline for states and cities to use unspent money provided as part of the relief package passed in March.
A Tax Break Tradeoff
The tax break for the three-martini lunch is back, with 100% tax deductibility of the cost of business meals in 2021 and 2022 (up from the current 50%), at a cost of $5 billion.
Tax experts have criticized the idea as ineffective and poorly targeted for the current crisis. Democrats had also objected to the expanded break but reportedly agreed to include it in exchange for expansion of the Earned Income Tax Credits and Child Tax Credit for low-income families. “It's sad to see the price extracted but this EITC/Child Tax Credit provision is important to millions of people who work for low wages & have been hammered by the economic fallout,” Chuck Marr of the liberal Center on Budget and Policy Priorities said.
Bloomberg’s Jonathan Bernstein called the return of the business meal tax break a rare legislative win for President Trump, who had pushed for the provision for months. (“And surely it’s a coincidence that restoring this deduction will once again subsidize high-priced establishments such as those Trump owns,” Bernstein noted.)
Ending ‘Surprise’ Medical Bills
The year-end package will also include legislation to protect patients from being hit with “surprise” medical bills, a bipartisan priority that had gotten bogged down by disagreements among lawmakers over who should cover the medical bills. Insurers and hospital and doctors’ groups had lobbied intensely on the issue. “The compromise deal congressional committees struck earlier this month was considered largely a win for hospitals and doctors —and tweaks made in the final legislation are even friendlier to providers,” Politico reported.
What It All Means
Bloomberg’s Bernstein offered some useful perspective on the politics: “Democrats got a whole lot less than they wanted and are getting it more than six months after they wanted it. But on the other hand, this is a package similar in size to the 2009 stimulus bill, and that one (passed by large Democratic majorities in both chambers, and with a new and popular Democratic president) had a lot more tax cuts and a lot less spending. In other words, anyone who claims this was a total win for either side is surely wrong.”
The relief package is a case where, to paraphrase a line often mistakenly attributed to Sir Winston Churchill, Congress is doing the right thing after exhausting all the other possibilities. It’s the right thing because, as many economists and others have been warning for months, the surging Covid case counts and renewed economic restrictions clearly necessitated some additional fiscal policy response. Economists expect the package to provide a sizable boost to the economy, though it’s not yet clear whether the $908 billion package — meant to provide a few months of support until vaccines can rein in the virus and allow some sense of normalcy and recovery to take root — is sufficient for the task.
“This is better than nothing, and there’s some good news that we’re finally getting a deal,” Kathy Bostjancic, chief U.S. financial market economist at Oxford Economics, told The Washington Post. “The bad news is it’s less stimulative than the prior packages, and the relief measures are short-lived.”
‘More needs to be done’: Democratic leaders lauded their deal Sunday, but they’ve already made clear they will be looking to pass additional legislation next year. “We consider this a first step. And that, again, more needs to be done,” House Speaker Nancy Pelosi told reporters Sunday evening. “And we're so excited that that will be happening under the Biden-Harris Administration, about 700 hours from now.” Pelosi said she believes it will be “much easier” to pass another package next year, arguing that a President Joe Biden will be able to use the power of the bully pulpit to rally support for more action.
It’s also not clear yet whether that’s true, given that Pelosi’s Democrats are set to have a narrower majority in the next Congress and would have to win both runoffs for Georgia Senate seats next month to take control of that chamber. The spirit of bipartisan cooperation and rush to pass a rescue package may not extend into the new Congress. Even as they touted their agreement, congressional leaders were also still trading shots over why it took so long.
McConnell said Republicans had for months pushed for a package under $1 trillion much like the one set to pass. “The progress of this past week could have happened in July, or in August, or in September, or in October. Senate Republicans were advocating for a package just like this one, all along, in real time,” he said. “I just wish our partners on the other side had put political calculations aside and worked with us to make this happen a long time ago.”
For their part, Pelosi and Senate Minority Leader Chuck Schumer (D-NY) continued to decry Republican resistance to efforts to “crush the virus” and provide aid to states. “Ideology gets in the way, ideology gets in the way,” Schumer said.
So the fights that stalled this package for months are likely to be revisited whenever another package is considered.


thefiscaltimes--2020-12-28--House GOP Blocks $2,000 Relief Checks Sought by Trump

In a final bit of pre-Christmas political theater , House Republicans on Thursday blocked an attempt by Democrats to approve the $ 2,000 stimulus payments President Trump demanded this week .
After Trump on Tuesday abruptly cast doubt over a compromise Covid relief package negotiated by Congress , including $ 600 payments for millions of Americans , Democrats tried to advance legislation to more than triple those payments .
But Republicans rejected the move to pass the change by unanimous consent .
They countered with their own attempt to force changes to foreign aid spending , another part of the @ @ @ @ @ @ @ though many of the programs he highlighted were also in his own budget request .
That GOP move was blocked by Democrats .
House rules meant that each unanimous consent request could not be considered without the approval of the floor and committee leaderships of the other party .
The spending Trump had highlighted as “ wasteful and unnecessary ” reportedly amounts to $ 3.8 billion , while raising the direct payments from $ 600 to $ 2,000 would cost about $ 370 billion .
“ The Democratic gambit on the House floor @ @ @ @ @ @ @ Democratic leaders had hoped to put Republicans in a bind — forcing them to choose between the president ’ s wishes for far more largess and their own inclinations for modest relief — while possibly flushing the president out on his intentions , ” The New York Times reports .
The show was all over in less than two minutes , and the House then adjourned until Monday .
Pelosi sets new vote for Monday : House Speaker Nancy Pelosi ( D-CA ) said Democrats will try to pass the $ 2,000 payments @ @ @ @ @ @ @ bill that will be put to a full vote on the House floor .
“ Hopefully by then the President will have already signed the bipartisan and bicameral legislation to keep government open and to deliver coronavirus relief , ” she said in a statement .
In limbo : It ’ s not at all clear what Trump will do on the $ 900 billion Covid relief package and a related $ 1.4 trillion spending bill needed to keep the government open beyond the beginning of next week .
“ Mr .
Trump @ @ @ @ @ @ @ on Wednesday without saying another word on the matter , ” The Times notes , “ leaving both parties to guess whether he really intends to veto the long-delayed measure , which includes the coronavirus relief as well as funding to keep the government funded past Monday.
” The legislation is reportedly being sent to Florida , where Trump was seen golfing on Thursday .
Sen. Roy Blunt ( R-MO ) told reporters that there wouldn ’ t be enough votes in the Senate to pass the $ 2,000 payments and urged Trump @ @ @ @ @ @ @ .
“ I hope the president looks at this again and reaches that conclusion that the best thing to do is to sign the bill , ” he said .
Blunt also said that reopening the spending bill to reconsider the foreign aid provisions would be a mistake , indicating a potential split within the Republican Party on the issue .
If Trump doesn ’ t sign off on the legislation , the House could still attempt to pass another stopgap funding measure on Monday to prevent a partial shutdown .
But that @ @ @ @ @ @ @ the roughly 12 million Americans who are set to see their expanded federal unemployment benefits end on Saturday .
Other relief provisions provided as part of the $ 2.2 trillion CARES Act passed in March — including an eviction moratorium reportedly protecting as many as 30 million Americans — are scheduled to expire at the end of the month .
“ Republicans in Congress and the White House can ’ t agree on what they want , ” Hoyer told reporters Thursday , according to Bloomberg News .
“ Surely , the president @ @ @ @ @ @ @ is in Mar-a-Lago or someplace else , ought to empathize with the suffering and apprehension and deep angst people are feeling this Christmas Eve .
”

In a final bit of pre-Christmas political theater, House Republicans on Thursday blocked an attempt by Democrats to approve the $2,000 stimulus payments President Trump demanded this week.
After Trump on Tuesday abruptly cast doubt over a compromise Covid relief package negotiated by Congress, including $600 payments for millions of Americans, Democrats tried to advance legislation to more than triple those payments. But Republicans rejected the move to pass the change by unanimous consent.
They countered with their own attempt to force changes to foreign aid spending, another part of the year-end package that Trump had criticized even though many of the programs he highlighted were also in his own budget request. That GOP move was blocked by Democrats. House rules meant that each unanimous consent request could not be considered without the approval of the floor and committee leaderships of the other party.
The spending Trump had highlighted as “wasteful and unnecessary” reportedly amounts to $3.8 billion, while raising the direct payments from $600 to $2,000 would cost about $370 billion.
“The Democratic gambit on the House floor was never meant to pass, but Democratic leaders had hoped to put Republicans in a bind — forcing them to choose between the president’s wishes for far more largess and their own inclinations for modest relief — while possibly flushing the president out on his intentions,” The New York Times reports. The show was all over in less than two minutes, and the House then adjourned until Monday.
Pelosi sets new vote for Monday: House Speaker Nancy Pelosi (D-CA) said Democrats will try to pass the $2,000 payments again on Monday with a new stand-alone bill that will be put to a full vote on the House floor. “Hopefully by then the President will have already signed the bipartisan and bicameral legislation to keep government open and to deliver coronavirus relief,” she said in a statement.
In limbo: It’s not at all clear what Trump will do on the $900 billion Covid relief package and a related $1.4 trillion spending bill needed to keep the government open beyond the beginning of next week. “Mr. Trump decamped for his Florida home in Mar-a-Lago on Wednesday without saying another word on the matter,” The Times notes, “leaving both parties to guess whether he really intends to veto the long-delayed measure, which includes the coronavirus relief as well as funding to keep the government funded past Monday.”
The legislation is reportedly being sent to Florida, where Trump was seen golfing on Thursday.
Sen. Roy Blunt (R-MO) told reporters that there wouldn’t be enough votes in the Senate to pass the $2,000 payments and urged Trump to approve the deal passed by Congress. “I hope the president looks at this again and reaches that conclusion that the best thing to do is to sign the bill,” he said. Blunt also said that reopening the spending bill to reconsider the foreign aid provisions would be a mistake, indicating a potential split within the Republican Party on the issue.
If Trump doesn’t sign off on the legislation, the House could still attempt to pass another stopgap funding measure on Monday to prevent a partial shutdown. But that wouldn’t provide any relief to the roughly 12 million Americans who are set to see their expanded federal unemployment benefits end on Saturday. Other relief provisions provided as part of the $2.2 trillion CARES Act passed in March — including an eviction moratorium reportedly protecting as many as 30 million Americans — are scheduled to expire at the end of the month.
“Republicans in Congress and the White House can’t agree on what they want,” Hoyer told reporters Thursday, according to Bloomberg News. “Surely, the president of the United States, whether he is in Mar-a-Lago or someplace else, ought to empathize with the suffering and apprehension and deep angst people are feeling this Christmas Eve.”


thefiscaltimes--2020-12-23--Economy Losing Momentum as Year Ends

Economy Losing Momentum as Year Ends

As Washington teeters on the edge of chaos , the U.S. economy continues to send signals that it needs help , with more than 1 million people filing new jobless claims last week .
About 869,000 people filed for unemployment benefits in state programs last week , the Labor Department said Wednesday , while another 398,000 applied for Pandemic Unemployment Assistance , the temporary federal program that provides benefits for self-employed and gig workers – and that is scheduled to expire in a matter of days if the $ 900 billion relief package passed by Congress fails to become law @ @ @ @ @ @ @ on a week-over-week basis but remain at exceptionally high levels .
“ The economy is still pretty soft , ” Scott Brown , chief economist at Raymond James Financial , told Bloomberg .
“ The level of jobless claims suggests there ’ s still labor-market weakness.
” Incomes and spending drop : Total personal income fell by 1.1 % in November , the Bureau of Economic Analysis announced Wednesday , marking the second month in a row with a decline .
Spending fell , as well , with personal consumption expenditures decreasing by @ @ @ @ @ @ @ .
“ The income and spending data was just the latest evidence that after rapid gains in the spring and summer , the recovery has stalled and could be going into reverse , ” wrote Ben Casselman of The New York Times .
Brown of Raymond James said the data shows “ the pandemic ’ s impact on the season : There ’ s less seasonal shopping than usual , there ’ s less seasonal travel.
” Dione Swonk , chief economist at Grant Thornton , said the coronavirus is still calling the @ @ @ @ @ @ @ are losing momentum at a critical time , ” she told Bloomberg .
“ Consumer spending is pulling back or slowing down at a time when we should be ramping up , and that ’ s because of the surge in Covid cases .
”

As Washington teeters on the edge of chaos, the U.S. economy continues to send signals that it needs help, with more than 1 million people filing new jobless claims last week.
About 869,000 people filed for unemployment benefits in state programs last week, the Labor Department said Wednesday, while another 398,000 applied for Pandemic Unemployment Assistance, the temporary federal program that provides benefits for self-employed and gig workers – and that is scheduled to expire in a matter of days if the $900 billion relief package passed by Congress fails to become law.
The numbers show a modest decrease on a week-over-week basis but remain at exceptionally high levels. “The economy is still pretty soft,” Scott Brown, chief economist at Raymond James Financial, told Bloomberg. “The level of jobless claims suggests there’s still labor-market weakness.”
Incomes and spending drop: Total personal income fell by 1.1% in November, the Bureau of Economic Analysis announced Wednesday, marking the second month in a row with a decline. Spending fell, as well, with personal consumption expenditures decreasing by $63.3 billion, or 0.4%.
“The income and spending data was just the latest evidence that after rapid gains in the spring and summer, the recovery has stalled and could be going into reverse,” wrote Ben Casselman of The New York Times. Brown of Raymond James said the data shows “the pandemic’s impact on the season: There’s less seasonal shopping than usual, there’s less seasonal travel.”
Dione Swonk, chief economist at Grant Thornton, said the coronavirus is still calling the shots in the economy. “We are losing momentum at a critical time,” she told Bloomberg. “Consumer spending is pulling back or slowing down at a time when we should be ramping up, and that’s because of the surge in Covid cases.”