Congressional leaders are making progress. Politico reports that negotiators are working on a roughly $900 billion deal that would include about $600 in stimulus payments and enhanced federal unemployment benefits of $300 per week through March. As of late yesterday, the negotiators appear to have dropped state and local assistance and a liability shield for firms sued by workers and customers who contracted COVID-19. President-elect Biden says negotiators are “very, very close” to an agreement, though they’ll still have to sell it to rank-and-file lawmakers. Sen. Bernie Sanders already is objecting to what he says is an insufficient package.
A check and a boost to unemployment are two imperfectly good ideas. TPC’s Howard Gleckman makes the case for both stimulus payments and extended federal unemployment benefits. Stimulus payments can provide can quickly put much-needed cash in people’s pockets. Extended and enhanced federal unemployment benefits will help those who need it most.
Missing from the deal: Aid to state and local governments. Recent reports that California, Connecticut, and New York are receiving unexpected tax revenues, due in part to the booming stock market, feeds GOP claims that state and local aid is unnecessary. But better-than-expected revenues have not eliminated actual revenue losses. States still have to balance their budgets, and the financial ill effects of the pandemic vary both in location and timing. TPC’s Lucy Dadayan cautioned, “it’s going to take at least a year or two before things go back to some kind of normalcy.”
Study: Fifty years of tax cuts for the rich…helped the rich. A new paper by David Hope of the London School of Economics and Julian Limberg of King’s College London reviews fiscal policies in 18 countries over 50 years. The researchers show that tax cuts for the wealthy benefited the individuals who were directly affected but did little to promote jobs or growth. Concluded Hope: “Policy makers shouldn’t worry that raising taxes on the rich to fund the financial costs of the pandemic will harm their economies.”
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