Fourth stimulus check news summary: Tuesday 22 June 2021
US stimulus relief latest news: Tue 22 June 2021
-White House responds to questions over labor shortages caused by generous federal unemployment benefits (Full details)
- VP Kamala Harris visits Pittsburgh to promote the Child Tax Credit
- Fourth stimulus check linked to decrease in retail spending (Find out more)
- Child Tax Credits: IRS launches new online portal to allow those who do not files taxes to claim the benefit
- May poll finds 53% of parents know "little to nothing" about child tax credit, with Data for Progress estimating that 4m children were not registered as of the tax deadline
- New Child Tax Credit online portal can be used to claim missing stimulus money (Details)
- Petition for recurring stimulus checks surpasses 2.37M signatures. Sign it here.
-Which organizations favor another round of stimulus checks? (Full details)
- Faster US wage rises will help entrench inflation
- IRS has confirmed that the monthly Child Tax Credit payments will begin on 15 July (Find out more)
- $10 billion fund for homeowner stimulus checks (How to apply)
- Many US taxpayers still waiting for tax refund (find out more)
- Louisiana announces it will end $300 unemployment compensation booster at the end of July, becoming the first Democrat -led state
- Twenty-five US states, all GOP-led, are ending supplementary unemployment insurance early (full story)
- You can track your third stimulus check by using the IRS' online Get My Payment tool
Have a read of some of our related news articles:
Are businesses offering higher wages to attract workers?
Departmetn of Labor finds that "Real average weekly earnings down 2.2 percent from May 2020 to May 2021."
This comes as business leaders create panic over labor shortages and make claims that they are offering higher wages to attract workers. However, the data shows that a year after the pandemic took hold of the US, actual weekly wages are down.
Stimulus program is not driving up inflation - Cecilia Rouse
President Biden's economic adviser Cecilia Rouse discussed fears that the US stimulus program could spark a rise in inflation. Chatting to BBC Radio 4, she said, "We know that the US economy was in crisis. We had a pandemic which had brought our economy to its knees. There was hunger in the United States, children were out of school, we had a medical system in crisis. And people were behind on their mortgage payments, unable to pay their student debt, unable to pay their rent. This president believed that the way to get us through this crisis, as safely as possible, where people could continue to spend, feed their families and remain in their homes, was with aggressive pandemic relief. There is always a risk, but all of the signs suggest that this inflation is transitory. This is going to be a bumpy recovery".
Powell says Fed won't raise rates for fear of inflation
The US dollar remained on the back foot against major peers on Wednesday after a two-day drop as Federal Reserve officials including Chair Jerome Powell reaffirmed that tighter monetary policy was still some way off. The dollar index, which measures the greenback versus six rivals, was at 91.775 in early Asian trading, off a two-month high of 92.408 reached at the end of last week. It has now given up about a third of its sharp gains posted since last Wednesday, when the Fed surprised markets by signalling much earlier rate hikes than investors previously expected.
Powell and New York Fed President John Williams warned that the economic recovery requires more time before a tapering of stimulus and higher borrowing costs are appropriate. "Latest smoke signals from the Fed ... all point to September as the meeting when the Fed is, on current trends, most likely to declare that substantial further progress towards their goals has been achieved, or is being achieved," Ray Attrill, head of foreign-exchange strategy at National Australia Bank in Sydney, wrote in a client note, forecasting tapering likely won't start until early next year.
"We will not raise interest rates pre-emptively because we fear the possible onset of inflation," Powell said on Tuesday in a hearing before a US House of Representatives panel. "We will wait for evidence of actual inflation or other imbalances."
Online tools to help families manage Child Tax Credit payments
On Tuesday, the Internal Revenue Service launched two new online tools designed to help families manage and monitor the advance monthly payments of Child Tax Credits. These two new tools are in addition to the Non-filer Sign-up Tool, announced last week, which helps families not normally required to file an income tax return to quickly register for the Child Tax Credit.
The new Child Tax Credit Eligibility Assistant allows families to answer a series of questions to quickly determine whether they qualify for the advance credit.
The Child Tax Credit Update Portal allows families to verify their eligibility for the payments and if they choose to, unenroll, or opt out from receiving the monthly payments so they can receive a lump sum when they file their tax return next year. This secure, password-protected tool is available to any eligible family with internet access and a smart phone or computer. Future versions of the tool planned for late summer will allow people to view their payment history, adjust bank account information or mailing addresses and other features. A Spanish version is also planned.
Oregon lawmakers throw out essential workers stimulus bill
Oregon Democrats won’t fund an additional stimulus bill for the state’s essential workers this year. The bill has been deferred until 2022, but it’s not clear there will be sufficient funding in place to carry it through next year. Under House Bill 3409, frontline and essential workers could have received up to $2,000 in stimulus money if they worked through the pandemic, or $1,200 if they returned to work after collecting unemployment during the pandemic.
Oregon received $2.6 billion in state government funding from the $1.9 trillion federal stimulus bill Congress approved in March. House Speaker Tina Kotek didn’t say how much federal stimulus money lawmakers expect still will be available when they return next year.
In a statement, Kotek explained, "Essential workers have been risking their lives every day during the pandemic. We must continue to put working families first as we recover from this public health and economic crisis in the short term — and as we rebuild our economy in the long-term. That’s why my top priority for the remainder of Oregon’s share of federal American Rescue Plan dollars will be additional support for frontline workers in 2022".
How has household income increased/decreased since January?
The US Department of Commerce will be releasing data on how household income changed compared to April levels on 25 June.
This year, incomes in the US have shifted up and down as the federal government has intervened and passed trillions of dollars in stimulus; a good portion of which ended up in the pockets of families and individuals.
After the American Rescue Plan was passed in March 2021, personal income increased almost 21% over February levels. But in April, that figure dropped to -13.1, showing that stimulus checks drove the increase in very significant ways. If this trend is any indication, May data will also continue the downward trend compared to the March numbers, however, the decrease may not be so severe.
How do child care responsibilities impact worker reentry into the labor market?
A recent study from the National Bureau of Economic Research found that "parents of young children did not leave the workforce substantially more than other comparable individuals."
According to their modeling, the research team believes that slow reentry could be due to "continued concern about the threat of getting COVID-19 at work or expanded unemployment insurance benefits and eligibility."
However, the experts stated that although they did not find that mothers with young children left the workplace at disproportionate rates, it does not mean that they were not "especially burdened over the past year." When breaking down child care responsibilities the data does not provide enough detail to know exactly how child care tasks were divided.
Read the report here.
Many residents of the Golden State are asking the same question: Will there be a second Golden State stimulus check in California?
In April California Governor Gavin Newsom announced a historic budget surplus. With these funds in hand, Newsom announced the California Comeback Plan which includes major investments in social programs throughout the state.
The package expanded eligibility to the $600 stimulus checks to two-thirds of all California residents, with billions of extra support for the pandemic-hit state.
Read our full coverage for details on who could receive a check.
Are businesses offering higher wages to attract workers?
Departmetn of Labor finds that "Real average weekly earnings down 2.2 percent from May 2020 to May 2021."
This comes as business leaders create panic over labor shortages and make claims that they are offering higher wages to attract workers. However, the data shows that a year after the pandemic took hold of the US, actual weekly wages are down.
When will some states be ending federal pandemic unemployment benefits?
To date eleven states including, Alaska, Iowa, Mississippi, and Missouri, Alabama, Idaho, Indiana, New Hampshire, North Dakota, West Virginia, and Wyoming have ended the additional benefits; this includes the $300 topper paid with state benefits.
-Arkansas, Georgia, Texas, Ohio, Oklahoma, South Dakota, and Utah
How has the pandemic impacted wages?
The US Department of Labor has released new data showing, the average cost employers pay to compensate their workers has increased.
March 2018 -- $36.32
March 2019 -- $36.77
March 2020 -- $37.73
March 2021 -- $39.01
This is one of the largest increases seen in the past decade. One of the key motivating factors behind the increase is the challenges many businesses are having in hiring workers. With enhanced unemployment benefits as a cushion, low-wage workers are in no rush to return to jobs with poor conditions and compensation.
How have labor shortages impacted the hospitality and hotel sector?
CNN program, Quest Means Business covers the difficulty some hotel chains are having in finding workers. In some cases, bosses having their workers work twice as many shifts to cover the gaps, leaving some workers burntout and with the hope of greater pay.
The President of the American Hotel & Lodging Association, Chip Rogers, acknowledges that part of the hiring challenge stems from the fact that many workers in this sector had to find other work; they could "not wait 14 or 15 months."
Second, Rogers highlights what many business leaders have pointed to -- a "labor shortage" caused by generous federal unemployment benefits. Rogers said to combat this issue, wages have had to increase. This year the wage for housekeepers has gone by 25%.
Are the White House and Senators getting close to reaching a deal over the emerging bipartisan infrastructure bill?
According to Manu Raju from CNN, no. After a long day of negotiations, the two sides are still at odds over how to pay for the package.
President Biden has stated that he will not support any legislation that increases taxes for those in the US making less than $400,000. To cover the costs of his plan he proposed increasing the corporate tax rate to a level still lower than what was paid before the 2017 tax cut bill.
Senators have compiled a list of potential funding sources, some of which include a tax increases on gasoline or charging fees to drivers of electric cars.
For more details on how the funding of the bills differ, see our full coverage.
What has the White House said about the more than half of states that have or plan to end all federal pandemic unemployment benefits before the federal deadline in September?
More than half of all states, including Louisiana which is led by a Democrat have or plan to end federal pandemic-related unemployment benefits. This move includes the $300 sent in addition to state benefits.
Meanwhile, the Bureau of Labor Statistics has reported that unemployment benefit claims are decreases. For some, this means that the move by many GOP leaders is null, while others believe the decision to cut benefits is driving these decreases. On 17 June, the BLS reported that around 2.5% of the US labor force is claiming benefits, down significantly from a year ago when the number was recorded at over thirteen percent.
Read our full coverage to learn how the White House responded.
Huffington Post reports on the major increases in household income seen in the US after the passage of the American Rescue Plan. A new study from the Bureau of Economic Analysis found that "personal income rose at an annual rate of 59.7% in the first three months of 2021."
Many states where GOP leaders voted against the package saw the largest increases.
Does the housing market currently benefit buyers or sellers?
The Bay Area which includes San Fransisco and the surrounding area is one of the most expensive housing markets in the country. As the housing market continues to pick up value, buyers are finding themselves paying well above the market value of houses.
San Fransisco Chronicle reports on this emerging phenomenon. Reporters looked at the data and on average this Spring, buyers paid 12% more for houses compared to their listing prices.
How has housing construction been impacted by the pandemic?
On 16 June, the US Department of Commerce released a report showing that the "New Residential Constriction" was up 3.6% over the previous month. The agency defines "New Residential Construction" as the number of building permits issued, housing projects started, and housing projects completed.
All of these numbers dipped around a year ago because of the pandemic, but have since surpassed their pre-pandemic levels showing that money in the economy is flowing towards new housing and renovation.
Read the full report here.
Is there a credit card that provides benefits for paying rent?
The Wall Street Journal reports on a credit card that could allow renters to "accumulate rewards points through rent and other spending, with no fees charged to the tenant or the landlord when paying rent on the card, "
The points could also be used as part of a downpayment on a house. The company, BLIT that is working on the new card acknowledges that "Many landlords already accept credit cards, but they typically pass on processing fees to renters, often totaling about 3%. For landlords that don’t accept plastic, Bilt says it will mail landlords paper checks on behalf of the tenant, then charge the renter’s credit card account, with no fee."
Humanity Forward an organization that advocates for the implementation of a national universal basic income program have a new idea: "Stimulus checks that kick in when economic crisis strikes."
The organization is also one of a handful that is calling on the federal government to send another round of stimulus checks. Read our full coverage to find out what other organizations have taken this position.
What is the latest state to announce a vaccine lottery?
Louisiana is the latest state to encourage its residents to get vaccinated against covid-19 by offering them a chance to win one million dollars. The governor hopes that this program will help to increase the declining rate of vaccination to help the state open up the economy.
President Biden is hoping to see at least seventy percent of adults at least partially vaccinated by the Fourth of July. At 47.8% of adults having received one dose, the state is far from reaching this goal. Since the program was announced, about .10% of the adult population has gotten their shot each day. This rate is roughly the same as the week before the lottery was announced.
Read our full coverage for details on how to enter.
What is the status of talks between the White House and the group of Senators pushing their infrastructure bill? Reporter Natalie Brand outlines where the negotiations stand.
What changes does President want to make to the "death tax" in the US?
Since taking office President Biden has pursued a more ambitious agenda than many had expected. Nowhere is the more clear than his administration's approach to tax policy in the US.
One of the key changes will be made to the so-called ‘death tax’, which is essentially a capital gains tax applied at death. Also known as estate tax or inheritance tax, Biden wants to prevent wealthy Americans from avoiding paying tax on appreciated value when passing assets down to their decedents.
The White House fact sheet claims the new proposals will “eliminate long-standing loopholes, including lower taxes on capital gains and dividends for the wealthy, that reward wealth over work.”
The Center on Budget and Policy Priorities has made its position clear -- the Child Tax Credit enhancements should be made permanent.
Around 90% of families and 65 million children will begin receiving payments associated with Child Tax Credit next month. These payments will seriously reduce child poverty in the US, an issue that most people across the political spectrum would like to see eliminated. In order for that to happen, the CBPP believes the changes to the credit should be made permanent.
Why have some tenants not paid rent this year when they were receiving unemployment benefits?
Western Journal reports that according to the National Equity Atlas "758,000 California households were behind on rent the week ending May 24, with each household owing approximately $4,700."
To help families catch up on these payments, Governor Newsom announced the California Comeback Plan which would allocate nearly $5.2 billion to cover "back rent — and utilities — for millions of renters who fell behind during the pandemic." Newsom has also announced that he may extend the eviction moratorium that is set to expire at the end of this month.
However, critics of this plan say argue that these benefits should not apply across the board, especially to units that were never put on the market. While for families who suffered severe income losses, government action is needed. The government should not be covering the rent of landlords who chose to keep their unit unoccupied throughout the pandemic.
Federal Reserve Chairmen Jerome Powell continues his testimony on Capitol Hill. Follow it live below.
Biden "encouraged" by ongoing talks on bipartisan infrastructure plan, White House says
President Joe Biden’s administration continued to express optimism on a bipartisan infrastructure bill, as several White House officials met with the lawmakers trying to hammer out the legislation this Tuesday.
“The president is encouraged by the ongoing talks and discussions that are continuing with Democrats and Republicans,” White House press secretary Jen Psaki told reporters.
“Once they conclude that meeting, we’ll assess what the next steps are,” she said.
Analyst Lauren Hill expresses confidence on last stimulus
Speaking to Yahoo Finance, analyst Lauren Hill expressed optimism over the Joe Biden's stimulus bill. “There’s a lot of concern in the market that this last round of stimulus was kind of one and done. I actually think spending is going to be more sustained," she said. You can check out more of the interview below...
NRCC blame Biden's "socialist stimulus bill" for rising inflation concerns among Americans
The National Republican Congressional Committee (NRCC) was quick to point the finger at Democrats and their "socialist stimulus bill" after a Harvard CAPS/Harris poll found that 85% of Americans surveyed were concerned about inflation.
In total, 85% of respondents say that they’re at least somewhat concerned about inflation, including 45% who say that they’re “very concerned.”
Nevertheless, 58% of those surveyed said they trusted the Federal Reserve to keep inflation in check. The consumer price index rose 0.6 percent last month as the economy continues to recover from the worst days of the pandemic.
The American Rescue Plan included a complete overhaul of the Child Tax Credit, but the IRS focused on the stimulus check distribution before sending out the payments.
Dollar edges higher before Powell
The dollar edged higher on Tuesday before Federal Reserve Chair Jerome Powell will testify before Congress, with investors anxious to see whether Powell pushes back against the view that the Fed is likely to raise rates sooner than previously expected as inflation rises.
The dollar has surged since the U.S. central bank on Wednesday said that policymakers are forecasting two rate hikes in 2023. That led investors to re-evaluate bets that the U.S. central bank will let inflation run at higher levels for a longer time before hiking rates.
“I think today Powell is going to be able to reset his message,” said Edward Moya, senior market analyst at OANDA in New York. “Investors want to get a better view to see whether or not Powell does pull back a little bit of that extra hawkishness that we got last week.”
IRS support equal opportunity
Coinciding with Gay Pride month, the Internal Revenue Service reiterates it's diverse recruitment policy.
Bipartisan group meet today to discuss infrastructure bill
Fox News's Jason Donner reports that the bipartisan group created to iron out the latest $1trn infrastructure bill are meeting White House staff today in Senator Kyrsten Sinema’s office.
"Going into the meeting Senator Mark Warner called it a 'critical day' for the bipartisan infrastructure proposal," Donner tweeted from Capitol Hill.
The bipartisan group are looking to create an infrastructure bill that both parties can agree on, however progressive Democrats like Alexandria Ocasio Cortez have criticized the bipartisan bill, claiming it offers very little to help those most in need and fails to properly tackle issues like climate change. This new bill is some $900bn less than the $1.9trn bill originally proposed by President Joe Biden.
No stimulus pay for essential workers: Oregon
Oregon Democrats have said that they won’t fund an additional stimulus bill for the state’s essential workers this session. They pledged to revive the idea during the Legislature’s short session in 2022, but it’s not clear there will be a ready funding source for the proposal next year.
Last week, 23 legislative Democrats signed on to co-sponsor House Bill 3409, which would have dedicated $450 million from Oregon’s share of federal stimulus money to pay bonuses and a back-to-work incentive to thousands of frontline workers.
Those workers could have received up to $2,000 in stimulus money if they worked through the pandemic, or $1,200 if they returned to work after collecting unemployment during the pandemic.
Mike Rogoway reports on the latest situation.
Colorado Comeback stimulus planning
After a record-setting $76 million in funds was appropriated to the Colorado Department of Agriculture as part of the Colorado Comeback stimulus, the Department is seeking input from stakeholders on how to invest the funding.
The Department and Governor Polis have been focused on securing funding for agriculture as part of the Colorado Comeback initiative, the state’s stimulus plan aimed to help our state recover faster and build back stronger. In order to determine how best to invest the funding, the Department will hold several initial virtual listening sessions for each of the stimulus funding programs.
Find out more on the planning taking place.
VP Harris on Child Tax Credit tour
We told you earlier about Vice President Kamala Harris visiting Brookline Memorial Recreation Center in Pittsburgh to talk about the child tax credit.
You can watch and listen to what the VP had to say here.
The extent and speed of the new stimulus program was surprising and was guaranteed to help a bubble keep going as was equally the surprising success of the vaccination program in much of the developed world.
Together this should make the bubble longer lived & bigger.
Today's primary election for New York City mayor could be the most momentous in a generation, as the Big Apple struggles to emerge from a devastating pandemic, with stimulus relief continuing to play a major role.
The most populous US city is recovering from a coronavirus pandemic that killed more than 30,000 residents and infected nearly one million, but stark challenges remain. It suffers from economic inequality, a lack of affordable housing, a growing homelessness problem and effectively segregated schools.
We bring you everything you need to know.
This tax cut will give our nation’s hardworking families with children a little more breathing room when it comes to putting food on the table, paying the bills, and making ends meet. Nearly every working family with children is going to feel this tax cut make a difference in their lives, and we need to spread the word so that eligible families get the full credit.”
Poll finds 53% of parents "know little to nothing" about child tax credit
A May poll conducted by Data for Progress found that 53% of parents "know little to nothing about the expanded child tax credit". "We estimate about 4 million eligible children weren’t enrolled as of the tax filing deadline," said the agency.
Child Tax Credits are VP Harris focus in Pittsburgh
Vice President Kamala Harris visited Pittsburgh yesterday, meeting with union organizers in the South Side. She visited Brookline Recreation Center as the backdrop for promoting the Child Tax Credit, part of the American Rescue Plan.
“The American Rescue Plan will lift half of America’s children out of poverty,” Harris said to applause.
She visited Brookline, not only to promote the plan, but to educate people about it and to get them to sign up for it if they haven’t paid taxes or applied for a stimulus check. The credit provides up to $3,600 per year per child for families making less than $150,000.
Read more about the VP's Pittsburgh visit below.
Tax credit analysis: post-recession gains lost in pandemic
As the White House spreads the word this week about the new child tax credit slated to begin next month, a study released Monday finds that post-recession gains for struggling Illinois families could be reversed by financial hardships wrought by the covid-19 pandemic.
The Annie E. Casey Foundation’s annual KIDS COUNT Data Book, which was released Monday to coincide with Child Tax Credit Awareness Day, shows that “an insufficient response to the crisis could erase nearly a decade of progress in child well-being following the Great Recession,” officials at the nonprofit said in a Monday statement.
The report ranks the states from 1 to 50 in terms of child well-being on the eve of the pandemic and “shows how the covid-19 crisis exacerbated inequality, with Black and Latino kids and families struggling the most,” foundation officials said.
Find out more from Karen Ann Cullotta.
California considers extending eviction ban past 30 June
California Governor Gavin Newsom has already said the state will pay off all the past-due rent accumulated by struggling residents. Newsom signed the eviction moratorium into legislation last year and passed a six-month extension in January. Newsom and legislative leaders are meeting this week to decide what to do about evictions. Some officials are asking the state to keep the eviction ban in place until the unemployment rate among low-wage workers has fallen to pre-pandemic levels. California has $5.2 billion to pay off people's rent, money from multiple aid packages approved by Congress.
12 states have ended unemployment benefits and $300 weekly bonus
A further eight US states ended enhanced unemployment benefits such as the Federal $300 bonus payment (FPUC) and Federal $100 bonus payment (MEUC) over the weekend, with another eight planning to follow suit by the end of this week - Arkansas, Florida, Georgia, Ohio, South Carolina, South Dakota, Texas and Utah. So far, 26 states have pledged to end participation in federal unemployment programs before the 6 September cutoff. Some states will offer unemployed citizens financial incentives to look for work. New Hampshire have been running the Summer Stipend Program Return to Work Bonus since May - those who have remained in full-time employment for eight weeks could be eligible for a $1,000 bonus and people returning to part-time employment may be eligible for a $500 bonus.
White House Press Secretary Jen Psaki was asked about enhanced unemployment benefits coming to an end in yesterday's press briefing. She replied, "We have continued to implement — or are continuing to advocate to implement these unemployment benefits for the remainder of their tenure, which is just a couple of months. We don’t actually know, because the data doesn’t exist yet, what the impact of the implementation in these states is. Our view is that American families — there are still millions of people out of work. They still need a little bit of extra assistance. We also don’t think that these benefits should be never-ending. Hence, they’re going to expire in early September".
So we know governors are going to make their decisions. We continue to believe that, with more than 7 million people out of work, that there’s still additional assistance we should give to the American public.
Biden’s goal is to make the expanded child tax credit "long-lasting"
White House Domestic Policy Advisor Susan Rice spoke to MSNBC about the expanded Child Tax Credit which begins next month and runs up until December although President Biden plans to keep CTC going beyond 2022.
"This cash money in people's bank accounts that they can plan for and spend against. It's vitally important because children are the most vulnerable in our society - they need this support. This will help over 90% of American children," she explained. "The money will show up in your bank account through direct deposit or a check in the mail - if you have filed tax returns in the last two tax years. There is a substantial segment of Americans who don't earn enough money to file taxes; for those Americans, who are also eligible for the same Tax Credit, it's very important that they know that they need to sign up in order to get these checks coming to them directly. They need to go to childtaxcredit.gov and you are as eligible as anybody who has filed their taxes in the last two years".
She continued, "What Congress passed in the American Rescue Plan, extended and expanded the Child Tax Credit for this year. What President Biden wants to do, and he has proposed this though his American Families Plan, is to extend this same benefit, the same $3600 every year for every child under six, the same $3000 every year for every child aged six to 17 for years and years to come. So it's not just a one-year benefit, it becomes something Americans can count on going forward".
New Jersey lawmakers unveil spending plan for stimulus cash
In Monday's NJ Budget address, lawmakers gave details about a proposal to boost the state's public pension system plus economic aid within state spending for the 12 months beginning 1 July. The budget includes some of the first major allocations from the state's more than $6 billion share of President Joe Biden's $1.9 trillion American Rescue Plan. It includes $500 million set aside for rental assistance, $250 million to help residents pay utility bills and $100 million to help childcare facilities.
Secretary Yellen explains how expanded Child Tax Credit works
From 15 July, eligible families will receive $300 per month for each child under the age of six and $250 per month for each child aged over six to 17 for the remainder of 2021. Payments will go out on the 15th of every month - apart from August, when the payment will go out on Friday 13 August as the 15th falls on a weekend.
Most families will automatically receive monthly payments without having to take any action. Previously, low-income families did not get the same amount or any of the Child Tax Credit. Under the American Rescue Plan, all families in need will get the full amount.
The Biden administration has estimated that payments will go to about 39 million US households, around 88% of American families with children.
Fed expecting US inflation to ease
New York Fed President John Williams said that he expects inflation to ease from about 3% this year to close to 2% in 2022 and 2023 - leaving markets none the wiser.
"The Fed is nearly always late on such things," said RBC Capital Markets' chief economist Tom Porcelli, who thinks core inflation could be higher - just under 3% - by the end of 2022. "That is not 2% inflation," he said in a note, adding it is going to eventually apply pressure to the Fed to move on rates. In the meantime, we have no doubt with that 2% forecast as cover, Powell will attempt to play down the likelihood of a rate hike next year. But just as he eventually relented on taper talk, he will relent on dismissing talk about hiking rates too. Just give it more time."
Biden says he has concerns about bipartisan infrastructure plan
(Reuters) US President Joe Biden held separate talks on Monday with two key Democratic senators about a bipartisan infrastructure plan and told them he was encouraged by the proposal but still had questions about how to pay for the bill, the White House said.
A bipartisan infrastructure plan costing a little over $1 trillion, only about a fourth of what Biden initially proposed, has been gaining support in the US Senate, but disputes continue over how it should be funded.
Biden met separately with Senators Joe Manchin and Kyrsten Sinema and "told them he was encouraged by what has taken shape but that he still has questions about the policy as well as the means for financing the bipartisan group’s proposal," the White House said.
Biden also told the senators that he was "focused on budget resolution discussions in the Senate," it said, an apparent reference to Democratic preparations to pass parts of his broader infrastructure plans opposed by Republicans using a procedure called reconciliation that requires only a simple majority.
There are 50 Republicans, 48 Democrats and two independents who caucus with Democrats in the 100-seat Senate and Vice President Kamala Harris has the tie-breaking vote for the Democrats.
Manchin and Sinema have been noncommittal when asked if they would support a reconciliation bill.
Among other measures, members of the bipartisan group have discussed indexing the gas tax to inflation to help pay for the bill, a provision that Biden has consistently rejected.
"We still have some sticking points, particularly around how we pay for this," Brian Deese, director of the White House National Economic Council, told CNN on Monday.
Twenty-one of the 100 US senators - including 11 Republicans, nine Democrats and one independent who caucuses with Democrats - are working on the framework to rebuild roads, bridges and other traditional infrastructure that sources said would cost $1.2 trillion over eight years.
One of the 21 senators, Republican Senator Lindsey Graham, said on Fox News Sunday that if Biden wanted a $1 trillion infrastructure deal, "it's there for the taking. You just need to get involved and lead."
White House press secretary Jen Psaki said on Monday that Biden is expected to talk to lawmakers as soon as Monday, but she added that there's not many weeks left for negotiations before Democrats decide to move forward on a party-line vote.
Biden, seeking to fuel economic growth after the pandemic, had initially proposed about $4 trillion be spent on a broader range of infrastructure that included fighting climate change and providing care for children and the elderly.
The White House trimmed the offer to about $1.7 trillion in talks with senators in a bid to win Republican support in the closely divided U.S. Senate.
Psaki said on Monday that the White House has not ditched its plan for additional spending on items like free pre-kindergarten and paid family leave. She said the White House never saw the infrastructure negotiations as "one step. There is a reconciliation process that’s ongoing, and that addresses and includes a number of the president’s priorities".
US economy is improving, says Fed chief
US Federal Reserve Chair Jerome Powell has said the US economy is making "sustained improvement". Powell added that inflation has increased notably in recent months, adding that the Federal Reserve thinks the current spike will soon fade away. He gave little away on monetary policy, keeping it ambiguous if the central bank would withdraw the stimulus support for the economy in the near future.
"Progress on vaccinations has limited the spread of Covid-19 and will likely continue to reduce the effects of the public health crisis on the economy," Powell said. "However, the pace of vaccinations has slowed and new strains of the virus remain a risk. Continued progress on vaccinations will support a return to more normal economic conditions".
Pandemic stimulus was front-loaded
Both the $1.9 trillion American Rescue Plan which was passed in March and the $900 billion pandemic aid package passed in December, were heavily front-loaded. They were set up to get money out to the public as fast as possible. But one consequence of that strategy is that fiscal policy in the quarters ahead will subtract from economic growth, the New York Times reports.
There is a real risk, as recently acknowledged by a top Federal Reserve official, that if pandemic-era savings are disproportionately held by the affluent, they will sit on that cash rather than spend it.
President Biden tweets out videos explaining the benefits of the enhanced Child Tax Credit
Families who have filed a tax return with the IRS this year do not have to take any steps to receive the payments. Those who do not normally file should do so this year or check to ensure the IRS has the information necessary to make the payments.
For more information on households can provide this information head to ChildTaxCredit.gov
What will Federal Reserve Chairmen Jerome Powell say when he testifies before the US House of Representatives, Select Subcommittee on the Coronavirus Crisis later today?
Tomorrow, Chairman Powell will testify before Congress but his opening remarks are available now. The hearing will take place on 6/22/2021 at 2:00pm EST.
The Chairmen will open his remarks touting the strides made in the economic recovery by saying, "Since we last met, the economy has shown sustained improvement. Widespread vaccinations have joined unprecedented monetary and fiscal policy actions in providing strong support to the recovery. Indicators of economic activity and employment have continued to strengthen, and real GDP this year appears to be on track to post its fastest rate of increase in decades."
He will note that some of the hardest hit sectors remain weak but that some improvements can be seen. Additionally, he plans to highlight the major increases in household spending, which in the retail sector have surpassed pre-pandemic levels.
Based on the trillion-dollar stimulus package -- the American Rescue Plan -- passed in March, the US economy is expected to grow more than 7% this year. Of course, this comes after the pandemic shrank the US economy in significant ways in 2020.
Before the pandemic, most families in the US only had around $400 in savings. A year later, this number has increased as households increased their total savings by more than 2.6 trillion according to the Federal Reserve.
What did Press Secretary Jen Psaki say when asked by reporters if the President would support a gas tax to fund the bipartisan infrastructure bill?
"Well, first, let me say that, you know, the President’s pledge was not to raise taxes on Americans making less than $400,000 a year. And the proposed gas tax or vehicle mileage tax would do exactly that. So that is a nonstarter for him. I’d also note, for the mathematicians in the room: That only raises $40 billion, which is a fraction of what this proposal would cost."
- Press Secretary Jen Psaki -- Press Briefing on 21 June 2021
Which Democratic states have ended federal pandemic-related unemployment payments?
Louisiana has become the latest state to announce that they will remove the $300-a-week additional unemployment benefits payments, becoming the first Democrat-led state to do so.
Gov. John Bel Edwards had said previously that he was considering canceling the additional, federally-funded payment and he signed the legislation into law on Wednesday. For Louisiana residents, the extra support will only be available until 31 July, the date on which the state’s schools are reopening.
Will the Child Tax Credit be reduced to its original value?
According to a leader at the conservative-learning American Enterprise Institute, the answer is no. Good news for families, however, for this to be true, Congress will need to act to make the extension of the enhanced benefits permanent.
Read Market Watch's full coverage for more details on the comments made by Arthur F. Burns.
Fourth Stimulus Check: Does the bipartisan infrastructure bill include a stimulus check?
Over twenty Democratic and Republican Senators are coalescing around a bipartisan infrastructure plan. Does it include funding for a fourth stimulus check? Read our full coverage to find out.
How does the bipartisan infrastructure bill compare to Biden's American Jobs Plan?
More details on the bipartisan infrastructure bill are expected in the coming days. In the meantime, our team took a look at how the bill compares to Biden's much larger infrastructure proposal, the American Jobs Plan.
When looking at the two proposals, there is a 721 billion dollar gap. This is primarily motivated by the lack of funding for public housing, schools, and Veterans Affairs hospitals in the new Senate proposal.
Areas, where the largest gaps exist, include rail and freight infrastructure, where the President proposed $66 billion more than the group of Senators. The differences between the proposals related to clean water and broadband access also totaled more than $60 billion.
Read our full coverage for a detailed breakdown as well as how the plans differ in relation to funding.
Stimulus checks live updates: welcome
Hello and welcome to our live stimulus checks blog for today, Tuesday 22 June 2021. We'll be bringing you updates on a possible fourth direct payment, in addition to information on the third round of checks, which has seen around $395 billion go out to eligible people in the US.
We'll also be providing news on other economic-aid schemes such as the expanded Child Tax Credit, which will see monthly payments of up to $300 distributed to qualifying households.