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From California to Virginia, many states that faced devastating shortfalls in the depths of the pandemic recession now find themselves flush with tax revenues because of a rebounding economy and a soaring stock market, the New York Times reported. Lawmakers who worried about budget cuts are now proposing lucrative increases in school spending, tax cuts and direct payments to their residents. That turnaround is partly the product of strong income tax receipts, particularly in states that heavily tax high earners and the wealthy, whose finances have fared well in the crisis. The unexpectedly rosy picture is raising pressure on President Biden to repurpose hundreds of billions of dollars of federal aid approved this year, in order to help fund a potential bipartisan infrastructure deal. Last week, Sen. Mitt Romney (R-Utah) suggested that Biden and Republican negotiators look to “some of the funding that’s been sent to states already under the last few bills” to help pay for that agreement. “They don’t know how to use it,” Romney said. “They could use that money to finance part of the infrastructure relating to roads and bridges and transit.” Some economists and budget experts support that push, arguing that the money could be better spent elsewhere and that states’ spending plans could add to a risk of rapid inflation breaking out across the country. Other researchers and local budget officials say that the federal aid is rescuing harder-hit cities and states, like New York City and Hawaii, from a cascade of layoffs and spending cuts.

Big U.S. banks are prepared for credit-card balances to start ticking up again this year as pandemic restrictions ease and stimulus checks stop arriving, setting up the industry for a bump in one of its most profitable businesses, Reuters reported. Lenders, including Capital One, Citigroup and JPMorgan, have been sending out more promotions to enroll new customers and encourage borrowers to spend, said Andrew Davidson of marketing-tracker Mintel Comperemedia. Some 260 million offers were sent in March, the firm estimates. Banks have increased digital marketing, too, on Facebook, Instagram, video sites and podcasts, he said. "The big banks are ramping up in anticipation of the recovery post-pandemic," Davidson said. "They are really trying to make up lost ground from last year." At the same time, lenders have been easing credit standards, according to a recent Federal Reserve survey and public comments by bank executives, including from Bank of America Corp.

Up to 13,000 Black and other minority farmers could start to see thousands of dollars in loan forgiveness beginning in June, as a part of the federal stimulus package that aimed to help disadvantaged farmers but has been delayed for months, the Washington Post reported. Some $4 billion of the American Rescue Plan Act was allocated for debt relief for disadvantaged farmers of color to remedy centuries of government discrimination. Black farmers had accused the U.S. Department of Agriculture of dragging its feet on the program, because, so far, no money has gone out the door. However, the U.S. Department of Agriculture Farm Service Agency announced on Friday that notices to disadvantaged farmers are going out, explaining that the debt relief money is now available, and that the agency expects to start paying the Farm Service Agency direct loans in early June. Civil rights activists have said the debt relief program represents a big step toward righting a wrong after a century of mistreatment of farmers of color by the government and others. Meanwhile, White farmers and some lawmakers have criticized the program, calling it a form of reverse racism, and banks have warned it would financially harm lending institutions. Agriculture secretary Tom Vilsack said that he estimates that between 11,000 and 13,000 Black, American Indian, Hispanic, Alaskan Native, Asian American or Pacific Islander farmers will benefit from this program, with the entirety of their loans paid off by the U.S. Treasury. Eligible farmers and ranchers will also receive an additional 20 percent of that loan as a cash payment sent directly to them, to cover the tax burden that comes with such large debt relief.

Prospects look dim for bipartisan agreement on an infrastructure-spending bill as lawmakers argue over the basic questions of what should be included, how large it should be and how to pay for it, the Wall Street Journal reported. The infrastructure talks stalled after Republicans said the Biden administration’s Friday counteroffer to Senate Republicans didn’t go far enough toward the GOP position. If that stalemate continues, Democrats may attempt to move on their own, using budget reconciliation rules to pass a package without needing any Republican votes. The bipartisan discussions have had a soft Memorial Day deadline, perhaps leading to another week of back-and-forth before Democrats start trying to assemble votes on their own. A partisan strategy wouldn’t guarantee that the entire White House plan could become law; Democrats have slim majorities in the House and Senate, and they would need to figure out just how much taxing and spending those lawmakers can accept. “We would like bipartisanship, but I don’t think we have a seriousness on the part of the Republican leadership to address the major crisis facing this country,” Sen. Bernie Sanders (I-Vt.), the chairman of the Senate Budget Committee, which would assemble any one-party infrastructure spending package, said on CBS’s “Face the Nation” on Sunday. “If they’re not coming forward, we’ve got to go forward alone.” Sen. Susan Collins (R-Maine), a key Republican whose vote would likely be needed for any bipartisan deal, said the administration’s insistence on social spending makes an infrastructure bill difficult to reach.

More than three-quarters of Republican-led states plan to end an extra $300-a-week in federal jobless benefits early, as unemployment claims reach pandemic lows, likely triggering a decrease in the number of benefits recipients this summer, the Wall Street Journal reported. This week Texas, Oklahoma and Indiana joined the list of at least 21 states that are cutting off access to federal benefits early after a much weaker-than-expected April jobs report sparked concerns of labor shortages. States are opting out of the $300 supplemental benefit, extended payments and benefits for gig-economy and other workers not typically eligible for unemployment benefits. States have announced dates ranging from mid-June to mid-July for when they will stop processing pandemic-related benefits. That means nearly 3.5 million individuals could lose the $300 weekly benefits — which were set to expire in early September — beginning in mid-June, according to estimates by forecasting firm Oxford Economics. Of those, about 1.4 million will also lose pandemic benefits for gig workers, and about 1.1 million will no longer have access to extended benefits that kick in after claimants exhaust their regular state benefits.

Hospitality Investors Trust Inc., which has stakes in 100 U.S. hotels, filed for bankruptcy protection with a prearranged plan that would hand the company over to Brookfield Asset Management Inc., WSJ Pro Bankruptcy reported. The New York-based real-estate investment trust said yesterday that it would use the chapter 11 process to put its prepackaged agreement into effect. The proposal includes modifications to loans and to hotel management agreements after the hotel industry had its worst year on record in 2020. More than a year into the COVID-19 pandemic, many hotels are starting to find their footing again, and owners and investors expect bookings to revive as vaccination becomes more widespread and people regain their appetite to travel. Hospitality Investors continues to be among the industry players suffering from the pandemic, Chief Financial Officer Bruce Riggins said in a court filing. The company had $1.7 billion in assets and $1.36 billion in debt at the end of March.

Federal Reserve officials were optimistic about the economy at their April policy meeting as government aid and business reopenings paved the way for a rebound — so much so that “a number” of them began to tiptoe toward a conversation about dialing back some support for the economy, the New York Times reported. Fed policymakers have said they need to see “substantial” further progress toward their goals of inflation that averages 2 percent over time and full employment before slowing down their $120 billion in monthly bond purchases. The buying is meant to keep borrowing cheap and bolster demand, hastening the recovery from the pandemic recession. Officials said that “it would likely be some time” before their desired standard was met, minutes from the central bank’s April 27-28 meeting released yesterday showed. But the minutes also noted that a “number” of officials said that “if the economy continued to make rapid progress toward the committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases.” The line was among the clearest signals yet that some Fed officials had considered beginning a serious conversation about pulling back monetary help. Jerome H. Powell, the Fed’s chair, has been repeatedly asked whether the central bank is “talking about talking about” slowing its so-called quantitative easing program — and he has consistently said “no.”