On The Money: Pessimism grows as coronavirus talks go down to the wire | Jobs report poised to light fire under COVID-19 talks | Tax preparers warn unemployment recipients could owe IRS

On The Money: Pessimism grows as coronavirus talks go down to the wire | Jobs report poised to light fire under COVID-19 talks | Tax preparers warn unemployment recipients could owe IRS
© Greg Nash

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THE BIG DEAL — Pessimism grows as coronavirus talks go down to the wire: Lawmakers are increasingly pessimistic about the chances of a quick agreement as negotiations over a fifth coronavirus relief bill continue down to the wire. 

Congress and the White House are barreling toward an end-of-the-day Friday deadline set by the main negotiators: House Speaker Nancy PelosiNancy PelosiDemocratic senator to party: 'A little message discipline wouldn't kill us' Overnight Health Care: New wave of COVID-19 cases builds in US | Florida to lift all coronavirus restrictions on restaurants, bars | Trump stirs questions with 0 drug coupon plan Overnight Defense: Appeals court revives House lawsuit against military funding for border wall | Dems push for limits on transferring military gear to police | Lawmakers ask for IG probe into Pentagon's use of COVID-19 funds MORE (D-Calif.), Senate Minority Leader Charles SchumerChuck SchumerPelosi slams Trump executive order on pre-existing conditions: It 'isn't worth the paper it's signed on' 3 reasons why Biden is misreading the politics of court packing Cruz blocks amended resolution honoring Ginsburg over language about her dying wish MORE (D-N.Y.), White House chief of staff Mark MeadowsMark Randall MeadowsWhite House chief of staff knocks FBI director over testimony on election fraud Anxious Democrats amp up pressure for vote on COVID-19 aid Pelosi hopeful COVID-19 relief talks resume 'soon' MORE and Treasury Secretary Steven MnuchinSteven Terner MnuchinThe Hill's Morning Report - Sponsored by Facebook - Republicans lawmakers rebuke Trump on election On The Money: Anxious Democrats push for vote on COVID-19 aid | Pelosi, Mnuchin ready to restart talks | Weekly jobless claims increase | Senate treads close to shutdown deadline Vulnerable Democrats tell Pelosi COVID-19 compromise 'essential' MORE

But despite weeks of near-daily meetings, the four are struggling to overcome steep political headwinds and policy differences to reach an agreement and have little progress to show so far, raising the probability that they will blow past their self-imposed timeline. The Hill’s Jordain Carney updates us here.

What lawmakers are saying: 

Though the Senate will technically be in session next week, members were not told when they should expect to return. The House left Washington last week, with House Majority Leader Steny HoyerSteny Hamilton HoyerHouse to vote on resolution affirming peaceful transition of power On The Money: Anxious Democrats push for vote on COVID-19 aid | Pelosi, Mnuchin ready to restart talks | Weekly jobless claims increase | Senate treads close to shutdown deadline Vulnerable Democrats tell Pelosi COVID-19 compromise 'essential' MORE (D-Md.) planning to give his members a 24-hour heads up.

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Jobs report poised to light fire under COVID-19 talks: As talks lag, the July jobs report is poised to shake up stalled negotiations between the White House and Democrats over another coronavirus stimulus bill as Republicans threaten to walk away from the table.

  • The national employment report from the Labor Department on Friday morning is projected to show a sharp slowdown after two months of strong job gains. 
  • Expectations range from a gain of roughly 1 million jobs to a loss of several thousand following the 8 million added during May and June.

An unexpectedly positive report could buy Trump administration officials more time to negotiate, and even give them some leverage, as President TrumpDonald John TrumpFederal prosecutor speaks out, says Barr 'has brought shame' on Justice Dept. Former Pence aide: White House staffers discussed Trump refusing to leave office Progressive group buys domain name of Trump's No. 1 Supreme Court pick MORE attempts to circumvent Congress's COVID-19 relief talks with executive action. But a disappointing downturn could spur Trump to strike a quick deal with Democrats to avert deeper economic pain ahead of the November election. I explain why here.

LEADING THE DAY

Tax preparers warn unemployment recipients could owe IRS: Tax preparers are concerned that many of the millions of Americans receiving unemployment benefits due to the pandemic are unaware that they might owe money to the IRS next year.

  • Jobless benefits are subject to federal income taxes, as well as state income taxes in most parts of the country.
  • But workers who are collecting benefits for the first time may not be aware of those tax implications, or they might opt against having taxes withheld from their benefit payments.
  • People who do not have enough money withheld during the year could end up with smaller refunds or balances due to the IRS when they file their 2020 tax returns.

“It’s a bigger issue now because the volume of people who are unemployed is higher than usual,” said Cari Weston, director for tax practice and ethics at the American Institute of CPAs.

The Hill’s Naomi Jagoda explains here.

A record rush for jobless benefits: The coronavirus pandemic has led to the highest unemployment rate since the Great Depression and record numbers of workers applying for unemployment benefits. Tens of millions of Americans have filed claims for unemployment benefits since March, and many may have to pay taxes on those benefits.

The often unknown implications: 

  • Recipients of unemployment benefits have to pay federal income taxes on the money they receive from the federal government, but not payroll taxes. Additionally, most states require people to pay state taxes on their unemployment benefits.
  • When people apply for unemployment benefits with their state, they have the option to have 10 percent of each payment withheld for federal income taxes. But tax professionals said some people may not know how to sign up for withholding.
  • Additionally, tax professionals said some recipients may choose not to have taxes withheld from their unemployment benefits because they need as much money as possible immediately.

 

Trump touts economic agenda in battleground state of Ohio: President Trump visited Ohio on Thursday for official and campaign business, targeting a battleground state where he finds himself in a tight race with presumptive Democratic nominee Joe BidenJoe BidenFormer Pence aide: White House staffers discussed Trump refusing to leave office Progressive group buys domain name of Trump's No. 1 Supreme Court pick Bloomberg rolls out M ad buy to boost Biden in Florida MORE.

  • Trump delivered brief campaign-style remarks at the airport in Cleveland and then traveled to Clyde to deliver a speech on his economic agenda at a Whirlpool plant. 
  • There, he highlighted a new executive order intended to boost domestic drug manufacturing and revealed that he had signed a proclamation reimposing 10 percent aluminum tariffs on Canada.

The president’s remarks on Thursday were mainly focused on the economy, once considered his greatest asset heading into the 2020 election. Instead, he attempted to contrast his ability to steward the nation through its recovery from the coronavirus pandemic with that of Biden. The Hill’s Brett Samuels takes us there.

GOOD TO KNOW

ODDS AND ENDS

  • The rush of armchair traders investing through Robinhood, an easy-to-use app for trading stocks, may be helping inflate a stock bubble and setting up investors for a potential bust.
  • Gaming giant Nintendo has seen its operating profits soar during the coronavirus pandemic, reporting an increase of more than 400 percent on Thursday.
  • President Trump is struggling to win over Maine voters with his recent pledge to lift restrictions for the state’s lobster industry.