On The Money: Sides tiptoe towards a COVID deal, but breakthrough appears distant | Expiring benefits raise stakes of stimulus talks | Stocks fade with eyes on Capitol
Happy Monday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
THE BIG DEAL—Sides tiptoe towards a COVID deal, but breakthrough appears distant:
Party leaders seeking an elusive deal on a coronavirus stimulus package claimed more progress on Monday, but the slow headway appeared far short of the breakthrough needed to get more emergency relief to President Trump’s desk before Election Day.
- Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin, the principal negotiators, spoke by phone for almost an hour Monday afternoon, when “they continued to narrow their differences” on policy specifics, according to Pelosi spokesman Drew Hammill.
- But Pelosi had warned a day earlier that Republican concessions on a national testing strategy gutted 55 percent of the language demanded by Democrats.
- She also demanded more funding and language concessions surrounding childcare, worker safety, election security and tax breaks for low-income families.
The sheer number of outstanding disagreements has lengthened the odds that the sides can forge an agreement that can pass into law before the Nov. 3 elections. The Hill’s Mike Lillis explains here.
LEADING THE DAY
Expiring benefits raise economic stakes of stalled stimulus talks: Washington’s inability to pass a much-needed stimulus bill ahead of November’s election is expected to inflict further damage on the economy, potentially kneecapping its recovery as the expiration of key benefits looms.
Haggling between House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin has progressed, with Mnuchin saying he is willing to sign on to a $1.8 trillion deal. But the sides say they remain far apart on key issues.
The extended wait for expanded unemployment benefits, aid to small businesses, health efforts to fight the virus, and funding for state and local government is expected to leave lasting scars.
“The consequences could be pretty severe,” said Shai Akabas, director of economic policy for the Bipartisan Policy Center. “It is critical for the economy to get support now, and each day, week, month that passes by is damage that can’t be undone.”
The Hill’s Niv Elis explains here.
Read more: Clock ticks on chance for coronavirus deal
Democrat urges IRS to quickly process Gold Star families’ refund requests: A Democratic lawmaker is urging the IRS to quickly process amended tax returns filed by the families of deceased military members after Congress enacted legislation last year to provide these families with tax relief.
“Gold Star Families are counting on prompt receipt of their refunds to help make ends meet in this time of economic uncertainty,” Rep. Elaine Luria (D-Va.) wrote in a letter late last week to IRS Commissioner Charles Rettig.
- In December, Congress passed an omnibus spending package that reversed changes that the Republicans’ 2017 tax-cut law made to a tax on children’s unearned income, known as the kiddie tax.
- The legislation allowed taxpayers to apply the repeal retroactively.
- The changes to the kiddie tax in the 2017 law were made in an effort to simplify it, but they had the unintended consequence of raising taxes on survivor benefits received by the children of deceased military members.
Luria wrote in her letter that many eligible families filed amended 2018 tax returns in January or February but that most of them have yet to receive their refunds.
“These delays would create hardships for taxpayers in the best of times, but they are especially damaging in this current economic crisis,” Luria wrote.
The Hill’s Naomi Jagoda has more here.
More than 7 million households lacked bank, credit union accounts in 2019: Roughly 7.1 million U.S. households did not have an account with a bank or credit union in 2019, according to a report released Monday by the Federal Deposit Insurance Corp. (FDIC).
- Last year, 5.4 percent of U.S. residents was “unbanked,” the FDIC reported in its biannual survey of how American households interact with the financial system.
- The unbanked rate fell 1.1 percentage points from 2017 and has declined in every survey conducted since 2011.
- The FDIC estimated that of the 124.2 million U.S. households with a bank or credit account in 2019, roughly 1.5 million did not have one in 2017. The survey was conducted with the Census Bureau in June 2019 and received responses from nearly 33,000 households.
“It is encouraging that a record number of households had bank accounts in 2019, though we continue to pursue actions to create a more inclusive banking system,” FDIC Chairman Jelena McWilliams said in a statement.
GOOD TO KNOW
- Stocks closed with losses Monday amid mounting concern that negotiations to reach a bipartisan stimulus deal before Election Day may fail to meet a 48-hour deadline set by Speaker Nancy Pelosi (D-Calif.).
- Five things to know about Biden’s tax proposals
- The Wall Street Journal: “The Federal Reserve is in no hurry to issue a digital currency, Chairman Jerome Powell said Monday, citing unresolved concerns including the potential for theft and fraud.”
ODDS AND ENDS