The House Budget Committee yesterday advanced President Biden's $1.9 trillion COVID-19 relief bill on a 19-16 party-line vote, The Hill reported. The bill must be marked up by the House Rules Committee before consideration on the House floor, likely on Friday or Saturday. The legislation will then have to be taken up in the Senate, where it is expected to face considerable procedural and political challenges. "We are in a race against time. Aggressive, bold action is needed before our nation is more deeply and permanently scarred by the human and economic costs of inaction," Committee Chairman John Yarmuth (D-Ky.) said at the hearing. The bill includes $1,400 stimulus checks, extensions to emergency unemployment benefits, funding for vaccinations and testing, $129 billion for schools, increases to child tax credits and earned income tax credits, and a plan to increase the minimum wage to $15 an hour by 2025. Rep. Brendan Boyle (D-Pa.) noted that the legislation is widely popular, with some 70 percent public support, including half of Republicans.
Democrats begin the final push for President Joe Biden’s $1.9 trillion stimulus bill this week, dropping any pretense of bipartisanship to quickly pass the package before an earlier round of benefits runs out, Bloomberg News reported. The House plans to vote as soon as Friday on Democrats’ stimulus package, setting up a Senate vote as soon as next week. Resolving the final hurdles, especially disagreement among Senate Democrats about a provision phasing in a $15 per hour federal minimum wage, would clear the way for Biden to give his first address to a joint session of Congress in March outlining his next policy goals, including a multi-trillion dollar infrastructure bill. “The Senate is on track to send a robust $1.9 trillion package to the president’s desk before the March 14 expiration of unemployment insurance benefits” from the last round of stimulus, Senate Majority Leader Chuck Schumer said in a Friday letter to colleagues. “We will meet this deadline.” In public, the focus will be on the House this week with a Budget Committee vote Monday and a floor vote on the bill as soon as Friday. The content of the bill is mostly locked in — the Budget Committee isn’t even allowed to make substantive changes — and there’s no sign of a rebellion by the few remaining Democratic deficit hawks imperiling the bill on the floor. The real action will be behind closed doors in the Senate, where Democratic leaders are hammering out the changes needed to get all 50 Senate Democrats and independents on board. Biden initially sought some GOP support for his stimulus proposal, which includes $1,400 checks for individuals making less than $75,000, resources for vaccine distribution, funds for schools to reopen, and $400 per week in supplemental unemployment insurance. But Republicans said that the plan was too expensive, coming after last year’s $2 trillion and $900 billion virus-relief packages enacted in March and late December, respectively.
Treasury Secretary Janet Yellen urged on CNBC yesterday that it's crucial to go big on the next round of coronavirus relief legislation, The Hill reported. “We think it’s very important to have a big package [that] addresses the pain this has caused — 15 million Americans behind on their rent, 24 million adults and 12 million children who don’t have enough to eat, small businesses failing,” Yellen said. “I think the price of doing too little is much higher than the price of doing something big. We think that the benefits will far outweigh the costs in the longer run,” she added, repeating a phrase she has frequently used to argue for a larger stimulus. The administration has been working with lawmakers, business groups and others on President Biden's $1.9 trillion COVID-19 aid and stimulus package. Republicans have balked at the price tag, but Democrats are increasingly indicating their willingness to pass legislation with or without GOP support.
U.S. state pension funds that invested in Ant Group Co. were stung when the financial technology firm’s initial public offering was suddenly pulled on orders of China’s president. But few of these investors are swearing off Chinese private markets, where they still hope to reap big returns, the Wall Street Journal reported. Shock waves rippled through the investment world when China halted the initial public offering of Ant, which would have been the world’s biggest. The decision was signed off by President Xi Jinping after controlling shareholder Jack Ma infuriated government leaders by criticizing government financial regulation in an October speech, The Wall Street Journal reported. For the past several years, the retirement savings of America’s police, firefighters and teachers have increasingly found their way to private companies in China such as Ant. Anxious to meet ambitious return targets in a low-yield world, large North American pension funds have committed growing sums to both global private-equity managers active in China and managers local to China, according to pension officials and their advisers and investment reports. This has contributed to a larger boom in Chinese deal making for U.S. institutional investors. Private-equity-backed deals of $300 million or more in China involving exclusively U.S.-based investment managers totaled nearly $13 billion between 2010 and 2019, according to Preqin data. Deal activity peaked in 2018 at $3.78 billion. For investors and investment managers world-wide in 2020, private-equity investment in internet and technology in China was $52 billion, according to consulting firm Bain & Co.
Republicans are zeroing in on potentially hundreds of billions in unspent funds from previous rescue packages in their criticisms of President Biden’s $1.9 trillion relief plan, The Hill reported. GOP lawmakers, who are in favor of a coronavirus measure that carries a smaller price tag, say the combination of unobligated funds and an improving economic outlook mean Democrats need to scale back their ambitions for the latest relief bill. “It is estimated that approximately $1 trillion in existing COVID-19 funding has yet to be spent,” said Rep. Jason Smith (Mo.), the top Republican on the House Budget Committee. “Before President Biden and congressional Democrats try to pass trillions more in spending, the American people need, at the very least, a thorough and accurate accounting of the trillions of dollars already approved.” The funding argument has popped up at both committee hearings and on the Senate floor. "Now we're to a point where the Biden administration is proposing $1.9 trillion of additional spending,” Sen. Lindsey Graham (R-S.C.), ranking member on the Senate Budget Committee, said earlier this month. “We haven't spent the money we've allocated, nowhere near the money we've allocated." Biden, stung by the experience of a scaled-down stimulus package in 2009 that contributed to a slow recovery from the Great Recession, says it’s riskier to do a smaller relief bill than a big one, a position backed by Federal Reserve Chair Jerome Powell.
The House Ways and Means Committee yesterday advanced a key portion of Democrats’ coronavirus relief package that includes stimulus payments of up to $1,400 per person and an expansion of the child tax credit, The Hill reported. The committee approved the tax-related portion of the relief package by a party-line vote of 24-18. It now heads to the House Budget Committee, which will combine the portions of the relief package that are approved by a wide array of House panels. House Democrats started unveiling their relief package on Monday and have been spending the week moving the measure through relevant committees. The relief package is based on a $1.9 trillion proposal that President Biden floated last month. The tax-focused portion of the bill that the Ways and Means Committee advanced yesterday contains some of the provisions in the bill that have received the most attention from lawmakers and members of the public. The measure proposes direct payments of up to $1,400 per person, including adult dependents such as college students and elderly parents, who were not eligible for the first two rounds of payments. Ahead of the bill’s release, lawmakers had debated what the eligibility requirements should be for the $1,400 payments. The bill includes the same income limits for receiving full payment amounts as the first two rounds of payments, but changes how the payment amounts would phase out above those thresholds in an effort to prevent high-income households from getting the payments. Read more.
In related news, a U.S. House committee yesterday approved a proposal to give airlines another $14 billion in payroll assistance as part of a broader COVID-19 relief package that is working its way through Congress, Reuters reported. It would be the third round of support for the pandemic-hit industry. American Airlines and United Airlines have warned of some 27,000 furloughs without an extension of the current package that expires on April 1. The House of Representatives Financial Services Committee on a 29-24 vote approved the $14 billion for airlines and $1 billion for contractors to cover payroll through September. The funds will be included in the $1.9 trillion COVID-19 relief bill proposed by President Joe Biden, whose initial plan did not include new money for airlines. House Speaker Nancy Pelosi said on Thursday that she expects lawmakers to complete legislation based on the bill by the end of February. Read more.
The $600 weekly boost to jobless benefits included in the CARES Act did little to discourage the unemployed from attempting to return to work, according to a study released yesterday by the JPMorgan Chase Research Institute, The Hill reported. Economists from JPMorgan Chase and the University of Chicago found no sustained increase in the number of people who returned to work after receiving unemployment benefits once the $600 weekly increase expired at the end of July. Just 3.7 percent of people that returned to work after the $600 boost expired likely did so because they’d be receiving less money in jobless benefits, the researchers said. More than half of workers who received the $600 weekly boost returned to work before it expired, raising further doubts that the extra benefit convinced people to stay unemployed, a common statement by some critics of the increased aid. “We find that the $600 supplement likely played little role in discouraging people from finding work. Rather, expanded UI boosted the spending and saving among jobless workers, many of whom are facing extended or repeated unemployment spells,” the researchers wrote.
President Biden said yesterday that he agrees with a proposal from House Democrats to begin phasing out the next round of direct coronavirus relief payments to Americans who make more than $75,000, a key sticking point among some in the party, The Hill reported. Biden signaled his support for the threshold during a meeting with the heads of several major corporations in the Oval Office. He hosted the business leaders to solicit buy-in on his $1.9 trillion relief proposal as well as to discuss future economic measures such as an infrastructure package and an increase to the minimum wage. Biden was joined in the Oval Office by Vice President Harris and Treasury Secretary Janet Yellen. The meeting comes as the White House and congressional Democrats work to push through Biden's economic relief package, which would send direct payments to millions of Americans, provide funding for schools as well as state and local governments, and boost money for vaccine distribution. House Democrats on Monday night released key portions of their coronavirus relief bill. The proposal called for direct payments of $1,400 to single taxpayers with annual income up to $75,000 and married couples that make up to $150,000.
House Democrats yesterday released key portions of their coronavirus relief package, including a section that would provide $1,400 checks to most Americans, The Hill reported. As with previous rounds of direct payments, single taxpayers with annual income up to $75,000 and married couples that make up to $150,000 would qualify for the full payment amounts. However, the payment amounts above those thresholds would phase out at a faster rate than the payments from the first two rounds. Single filers with income above $100,000 and married couples with income above $200,000 would not be eligible for any payments. The release of bill text came after policymakers and economists debated what the income eligibility requirements should be for the payments. Republicans and some centrist Democrats argued that the payments should be more targeted to lower-income households because those households are most in need of relief and most likely to spend the money quickly. But progressives argued that the income requirements shouldn't be tightened so people who lost substantial amounts of income during the pandemic could quickly receive their payments. Eligible households would be able to receive payments of up to $1,400 per person, including for adult dependents, who were left out of the previous rounds. The bill directs the Treasury Department to issue payments to people based on their 2019 or 2020 tax returns, and it allows the department to make payments to non-filers based on information available to it. Read more.
In related news, Democrats yesterday released a sweeping plan to provide more than $50 billion in additional assistance to U.S. airlines, transit systems, airports and passenger railroad Amtrak and create a $3 billion program to assist aviation manufacturers with payroll costs, Reuters reported. The $1.9 trillion COVID-19 relief proposal will provide $30 billion to transit agencies, $14 billion for passenger airlines, $8 billion to U.S. airports, $1 billion for airline contractors and $1.5 billion to Amtrak, the draft legislation says. U.S. House committees are set to vote on the legislation on Wednesday. President Joe Biden had proposed $20 billion for struggling U.S. transit agencies — and nothing for airlines — while Democrats had pushed for more transit help, citing the collapse in travel demand as a result of the COVID-19 pandemic. Transit agencies have previously been awarded $39 billion in emergency assistance by Congress. New York’s Metropolitan Transit Agency says daily subway travel has recently been down 70% or more. Read more.
Also, Democrats are furthering their efforts to expand the child tax credit in an attempt to reduce poverty and provide more assistance to families amid the coronavirus pandemic, The Hill reported. House Ways and Means Committee Chairman Richard Neal (D-Mass.) introduced his panel’s portion of House Democrats’ broader coronavirus relief package, which is expected to include a one-year expansion of the child tax credit. Additionally, Reps. Rosa DeLauro (D-Conn.), Suzan DelBene (D-Wash.) and Ritchie Torres (D-N.Y.) yesterday reintroduced a bill to permanently expand the credit. Both measures would make the credit fully refundable, so that lower-income families can receive the full credit amount. They would increase the annual credit amounts from $2,000 to $3,600 for children under age 6 and $3,000 for older children. The expanded credit amounts would phase out for higher earners, though the thresholds are slightly different in the two proposals. Additionally, the measures call for the IRS to make advance payments of the credits on a monthly basis, so that families could receive payments of $300 per month for children under 6 and $250 per month for older children. Each bill directs the IRS to establish an online portal in which taxpayers can notify the agency about changes that occur during the year pertaining to income, number of children and marital status. Read more.
