JPMorgan gives recovery policy recommendations to Biden team
JPMorgan Chase & Co. has shared policy recommendations for economic recovery, including calls for further stimulus, with key members of President-elect Joe Biden’s transition team, The Hill has confirmed.
The JPMorgan Chase PolicyCenter, a year-old policy shop headed by former Obama adviser Heather Higginbottom, compiled the list of recommendations based on an analysis of anonymized data from its clients, which it says are good, real-time indicators of how the economy is faring. Parts of Biden’s transition team have actively reached out to ask for the proposals as well. CNBC first reported the story.
In arguing for further stimulus and reinstating expanded unemployment insurance, for example, the document points to the fact that the payments were used up quickly, especially by low-income households. Economists often look to whether economic support is spent, which stimulates the economy, rather than being stashed aside for later.
The report also noted that after $600 in extra weekly unemployment payments from March’s CARES Act expired at the end of July, spending dropped quickly among the unemployed.
“While the unemployed roughly doubled their liquid savings over the four-month period between March and July 2020, they spent two-thirds of the accumulated savings in August alone,” the paper noted.
Higginbottom says the bank’s data gave unique insights into how the extra unemployment and its expiration affected families during the crisis.
“What our research shows is that the families needed it, they saved it, they have been rapidly spending it down, and without it they’re in dire trouble,” she said.
The policy list also endorsed long-term recommendations for helping people create financial buffers, such as special retirement-like accounts for rainy days and baby bonds, a policy Sen. Cory Booker (D-N.J.) championed in his presidential run.
The policy paper homed in on African American and Hispanic communities as particularly vulnerable and called for affordable housing and homeownership programs for underserved communities.
It called for extending forbearance on student loans during the COVID-19 crisis but not forgiving them, as advocates such as Sen. Elizabeth Warren (D-Mass.) have called on Biden to do through executive order, and restoring small-business relief.
The Hill has reached out to the Biden transition team.
Some of the more immediate recommendations could be signed into law before year’s end, if Congress manages to strike a deal on a fifth bipartisan COVID-19 relief package. Congressional leaders have backed a $908 billion proposal that includes $300 in additional weekly unemployment benefits, additional small business loans and extensions on key expiring programs as the basis for talks.
A second round of $1,200 stimulus checks, on the other hand, is being left aside for potential consideration after Biden takes office.
Updated at 6:05 p.m.