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On The Money: IRS to start monthly payments of child tax credit July 15 | One-fourth of Americans took financial hits in 2020: Fed

On The Money: IRS to start monthly payments of child tax credit July 15 | One-fourth of Americans took financial hits in 2020: Fed
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Happy Monday and welcome back to On The Money, where we didn’t realize we still needed to worry about Chernobyl. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL—IRS to start monthly payments of child tax credit July 15: The Biden administration on Monday announced it will start to make monthly payments of the expanded child tax credit on July 15.

The Hill’s Naomi Jagoda has all the details here.

The timing: The administration’s announcement, which coincides with Monday’s deadline for individuals to file their 2020 tax returns, provides more details about how the Treasury Department and the IRS plan to implement a key part of the coronavirus relief law.

The details about the monthly payments also come as Democrats seek to extend the one-year expansion of the child tax credit.

  • Biden has proposed in his American Families Plan to extend most of the expansion through 2025, while making the credit permanently fully refundable. 
  • Congressional Democrats across the ideological spectrum are pushing to make the full expansion of the credit permanent.

“We must make this lifeline permanent, which is why Congressional Democrats will continue to champion an expanded Child Tax Credit — because we can only Build Back Better by putting families first,” Speaker Nancy PelosiNancy PelosiOvernight Energy: Lake Mead's decline points to scary water future in West | White House leads opposition to raising gas tax | Biden taps ex-New Mexico lawmaker for USDA post Trump against boycotting Beijing Olympics in 2022 House Democrats' campaign arm raises almost million in May MORE (D-Calif.) said in a statement, deploying a phrase President Biden often uses to describe his economic-recovery agenda. Naomi has more here.

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LEADING THE DAY

Nearly one-fourth of Americans ended 2020 worse off financially: Fed

Nearly one-quarter of Americans ended 2020 worse off financially than they were 12 months ago, according to results from a Federal Reserve survey released Monday.

A survey conducted by the Fed in November found that 24 percent of Americans said their financial standing took a hit amid the pandemic, 10 percentage points higher than at the end of 2019. 

An uneven toll: While nearly one-in-four Americans reported being worse off financially, that ratio is far higher for Black and Hispanic Americans. 

  • The percentage of white respondents who said they were doing “at least okay financially” ticked up from 79 percent in 2019 to 80 percent in 2020, but declined from 65 percent to 64 percent for Black Americans and from 66 percent to 64 percent for Hispanic Americans.
  • The proportions of Black and Hispanic Americans that ended 2020 worse off financially also rose by 12 and 14 percentage points, respectively, while only rising 9 percent for white respondents.

The survey also found significantly more hardship among respondents with lower levels of educational attainment, which makes them more likely to hold a job that requires physical presence at a business that couldn’t be adapted to teleworking.

I break it down here.

 

Student debt cancellation advocates encouraged by Biden

Student loan cancellation advocates are encouraged by recent moves by the Biden administration that signal he may act on eliminating some college debt for individual borrowers, but others remain skeptical that action will be taken on the matter during his first term.

But the prospects of progress on the matter during Biden’s first term are still slim.

The Hill’s Alex Gangitano explains why here.

 

Inflation fears grow for White House

Rising prices are putting increasing pressure on President Biden and the Federal Reserve to prevent inflation from derailing the recovery from the coronavirus recession.

  • A surge of consumer demand unleashed by government stimulus, improving vaccinations and fewer pandemic restrictions is putting a strain on global supply chains. 
  • Manufacturers and other hard-hit industries are struggling to get back up and running after a year of lockdown measures, causing supply shortages and raising costs.
  • All of those factors combined to push the consumer price index (CPI) up 0.8 percent in April and 4.2 percent over the past 12 months, the fastest annual rate since 2008, the Labor Department reported this past week.

While the ramped-up consumer spending is a sign of increased optimism, the Biden administration faces political risks as Americans find themselves dealing with inflation levels that the country hasn’t seen in more than a decade.

I break it down here.

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ON TAP TOMORROW:

  • The House Financial Services Committee holds a hearing on China’s Belt and Road initiative at 10 a.m.
  • A House Small Business subcommittee holds a hearing on community development financial institutions at 10 a.m.
  • The Senate Banking Committee holds a hearing on reauthorizing the National Flood Insurance Program at 10 a.m.
  • The Senate Health, Education, Labor, and Pensions (HELP) Committee holds a hearing on paid family leave at 10 a.m.
  • A Senate Commerce subcommittee holds a hearing on reviving international travel to the U.S. at 3 p.m.

 

GOOD TO KNOW

 

ODDS AND ENDS