Critics say a wealth tax wouldn’t work. Argentina just brought in $2.4 billion with one.

Congress in Buenos Aires, Argentina.
Congress in Buenos Aires, Argentina.

  • A one-off tax on Argentinian’s wealthiest brought in around $2.4 billion for pandemic recovery.
  • The measure was passed in December, as worldwide critics of wealth taxes said they weren’t feasible.
  • Critics say they’re difficult to implement, and the ultrawealthy will dodge them, but Argentina raised more than expected.
  • See more stories on Insider’s business page.

A one-off wealth tax on the wealthiest Argentinians brought in around $2.4 billion to help address pandemic costs, according to the Buenos Aires Times.

In December, Argentina’s Congress voted to pass a levy on those with assets over 200 million pesos, Insider’s Joshua Zitser reported. The measure passed by 42 to 26 votes, although it did see some intense political opposition. According to the BBC, the tax was only set to impact the top 0.8% of the population, and about 10,000 people ended up paying the tax, according to some early data. They saw a levy of up to 5.25% on their total assets.

Argentina’s wealthiest reportedly pushed back on the tax, with some moving to take legal action. Others procrastinated on paying; payments were due April 16, but the Buenos Aires Times reported that only 2% of taxpayers subject to the tax had paid up by early April.

The revenue raised will go toward areas impacted by the pandemic, like housing, scholarships, public health, and relief for small businesses. Overall, the amount that the taxes brought in comes to about 0.5% of the country’s GDP, according to the Buenos Aires Times. The newspaper reported this was a higher amount than expected.

As the subject of wealth taxes has gained steam internationally during the pandemic, critics have emerged, citing issues ranging from feasibility to even legality. Argentina’s example suggests their critiques could be wrong, and wealth taxes have viability.

One-off wealth taxes have emerged as a possible pandemic recovery solution

The International Monetary Fund has said that temporary taxes on the wealthy could help the global economy rebound from the coronavirus recession. That statement from the IMF marked a major shift from its own policies – and perhaps highlights the increased traction of one-off wealth taxes as a way to curb inequality and help economies rebound from pandemic devastation.

Experts in the UK also called for a one-off measure in December, saying it could bring in around 260 billion pounds. The Wealth Tax Commission was proposing a 1% tax on wealth over £500,000 for five years. One-off taxes do have some precedent in the UK, and potential taxes on wealth may still be looming across the pond.

On this side of the Atlantic, Sen. Elizabeth Warren has been an outspoken advocate for a straightforward wealth tax on Americans with a net worth of $50 million or more. Her proposal – which would be permanent – could bring in $1.4 trillion over 10 years. A majority of Americans support a wealth tax as a way to curb inequality.

Read more: Advisors to the wealthy are fielding a frenzy of calls from clients worried about estate planning and taxes. Here’s how they’re navigating the chaos.

One of the most prominent wealth-tax critics has been billionaire Leon Cooperman; he’s said that he doesn’t think a wealth tax is intelligent or legal. He’s also said the ultrawealthy would hide their assets. That’s an assertion that’s been echoed by inequality expert and Nobel Prize-winning economist Angus Deaton: He told Bloomberg that a wealth tax would be difficult to implement, and the wealthy would try to avoid it.

President Joe Biden seems to be opting for taxes that target the wealthy, but don’t necessarily constitute a wealth tax. He’s proposed, among other measures, raising the income tax rate for Americans making over $400,000, upping the tax rates on capital gains, and increasing the corporate tax rate.

“It’s time for corporate America and the wealthiest 1% of Americans to just begin to pay their fair share,” Biden said in his address to the joint session of Congress.

Read the original article on Business Insider

The poorest 20% of Americans will likely see a 20% income boost thanks to Biden’s stimulus plan, per new analysis

Joe Biden
President Joe Biden.

  • New analysis found the COVID-19 relief bill will primarily focus on low- and mid-income households.
  • Direct stimulus checks and an expanded child tax credit will put extra money in Americans’ pockets.
  • The House is set to vote on a final version of the bill this week and Biden will sign it soon after.
  • Visit the Business section of Insider for more stories.

Under President Joe Biden’s $1.9 trillion pandemic relief bill, the poorest of the poor should expect to receive a significant boost to their incomes, while the richest of the rich should expect, well, not much.

According to a new analysis by the Tax Policy Center, the Senate-passed version of President Joe Biden’s coronavirus spending bill would give the poorest 20% of Americans a 20.1% income boost after taxes, while giving the richest 20% of Americans a 0.7% raise.

Most of that extra money will come from direct stimulus payments and monthly benefits stemming from the child tax credit included in the legislation. The earned income tax credit and the child and dependent care tax credit also play a role in the extra funds.

The White House is hailing The American Rescue Plan Act of 2021 as the most progressive piece of legislation in history and many progressives agree.

Democratic Rep. Pramila Jayapal of Washington, who chairs the Congressional Progressive Caucus, called the stimulus a “truly progressive and bold package that delivers on its promise to put money directly in people’s pockets.”

The Tax Policy Center’s data released Monday appears to confirm that sentiment.

The current version of the stimulus bill would reduce federal taxes by an average of $3,000 and raise after-tax incomes by 3.8 percent, with the majority of relief – nearly 70% – going to low and middle-income households that make $91,000 or less, according to the nonpartisan think-tank.

Families with children would get a tax cut of more than $6,000 on average, with low and middle-income families receiving nearly 75% of the benefit, according to the Tax Policy Center.

The most significant tax cut will likely come from the next installment of economic impact payments. In the current version of the bill, individuals earning below $75,000 annually can receive the entire $1,400 and couples making up to $150,000 also qualify for the full amount.

The checks represent more than two-thirds of the overall tax cut, according to the analysis, cutting household taxes by $2,300 on average.

One of the biggest wins for progressives is the bill’s inclusion of the beefed-up child tax credit, an expansion that Biden has said he supports making permanent. Currently, the credit is a one-year measure in the relief bill, and caretakers of 93% of children will receive the monthly benefits.

Howard Gleckman, a senior fellow at the Tax Policy Center, drew sharp comparisons between the coronavirus spending bill and the Republican-passed Tax Cuts and Jobs Act of 2017 in a Monday blog post for the think-tank.

While the coronavirus spending bill provides the majority of relief to low and middle-income households, “nearly half of the [Tax Cuts and Jobs Act’s] 2018 tax cuts went to households in the top 5 percent of the income distribution (who made about $308,000 that year).” Gleckman wrote.

While the 2017 Tax Cuts and Jobs Act heavily favored upper-middle and upper-class households, the American Rescue Plan Act of 2021 is focused on providing immediate aid to the Americans struggling most.

The richest 1% will receive a 0% income boost from the bill, according to the analysis.

The House is likely to take its final vote on the Senate version of the stimulus bill Wednesday, according to CNN. The chamber is expected to pass the bill and will send the legislation to Biden, who will sign it into law shortly thereafter, mere days before the December stimulus measures are set to expire.

Read the original article on Business Insider

House Democrats dismiss efforts to scale back eligibility for $1,400 stimulus checks

neal pelosi
  • House Democrats released a draft of stimulus legislation on Monday evening.
  • It kept the stimulus check thresholds put forward in the Biden rescue package, a dismissal of a push from some Democrats to restrict who can get a full check.
  • Democrats in the House are racing to put the Biden stimulus plan for a floor vote by the end of the month.
  • Visit the Business section of Insider for more stories.

House Democrats released a stimulus plan to maintain the income limit for stimulus checks at $75,000 for individual taxpayers and $150,000 for couples, dismissing an attempt from some Senate Democrats to sharply limit who can receive a direct payment.

Rep. Richard Neal of Massachusetts, chair of the House Ways and Means Committee, put forward the proposal. It may still undergo more changes as committees start fashioning the Biden rescue plan into legislation over the next two weeks.

“Our nation is struggling, the virus is still not contained, and the American people are counting on Congress to meet this moment with bold, immediate action,” Neal said in a statement.

The proposal would tighten eligibility for individual taxpayers making more than $75,000 with a quicker phase-out. Joint taxpayers earning $150,000 are eligible for direct payments, and it’s capped for those making $200,000.

But it’s a sign that momentum is gathering behind Democrats pressing to keep the existing income thresholds that President Joe Biden laid out in his $1.9 trillion relief package. Sen. Raphael Warnock of Georgia, became the latest Democratic senator to express support for the move in an interview with Insider.

“I think people making $75,000 in Georgia are struggling in many instances,” he said, and added he was committed to pushing for “a robust package.”

The plan includes the $1,400 checks – a key component of President Joe Biden’s $1.9 trillion stimulus plan – to bolster the initial $600 direct payments previously approved by Congress in December.

The news comes after GOP lawmakers and some moderate Democrats pushed for a plan setting the eligibility threshold at $50,000, which could exclude at least 29 million families. For couples, the payments would begin to phase out for couples earning more than $100,000.

Read more: European spies can stop holding back secrets from the US after Biden called for end to Trump’s briefings, sources say

Read the original article on Business Insider

McConnell and the GOP are preparing a barrage of budget amendments to water down Biden’s COVID-19 stimulus package

mitch mcconnell
Senate Minority Leader Mitch McConnell.

  • Mitch McConnell is bombarding Democrats with amendments to Thursday’s budget resolution.
  • Republicans have filed at least 400 amendments at the measure, which is key to passing Biden’s stimulus plan.
  • The process is a traditional response to the use of budget reconciliation, and is usually painful.
  • Visit the Business section of Insider for more stories.

Senate Minority Leader Mitch McConnell is preparing a welter of amendments to a budget resolution essential to passing President Joe Biden’s COVID-19 stimulus package in a grueling “vote-a-rama” on Thursday.

Democrats have signaled that they will press ahead to pass the $1.9 trillion stimulus without GOP support using budget reconciliation, a process that prevents filibustering and would allow the bill to pass with a simple majority of 51 votes.

However, the price for using this measure is having to receive a barrage of amendments from the GOP to the budget resolution needed to pass the stimulus, which is likely to keep the Senate debating for hours. 

Republicans had filed at least 400 amendments by Wednesday night, Roll Call reported

“Senate Republicans will be ready and waiting with a host of amendments to improve the rushed procedural step that’s being jammed through,” McConnell told the Senate floor Tuesday.

“We’ll be getting senators on the record about whether taxpayers should fund checks for illegal immigrants, whether Democrats should raise taxes on small businesses in the midst of this historic crisis, and whether generous federal funding should pour into school districts where the unions refuse to let schools open,” he continued.

“And this is just a small taste.”

Other proposed amendments include measures to preserve former President Donald Trump’s southern border wall and a plan to reverse Biden’s decision to halt the Keystone XL pipelineaccording to Politico

Faced with accusations of a lack of bipartisanship, the White House has signaled that Biden is open to some adjustments to the stimulus from the GOP, but that flexibility may be limited. 

The president has rejected outright a slimmed-down proposal from Republicans on Monday, which was priced at around a third of the cost.

But there is room for adjustment on the threshold for receiving $1,400 stimulus checks, currently aimed at those earning $75,000 or less. 

A “vote-a-rama” followed the last use of budget reconciliation in 2017, when the Trump administration passed a sweeping series of tax breaks without Democratic support. 

This process is viewed by lawmakers as not only a way to shape legislation, but a prime site for point-scoring and mining footage for future attack ads.

McConnell hinted at this by painting a picture of what he believes voters will see this time around.

“The American people will see Republicans are focused on smart and responsible policies to reopen the country,” he said, adding that Democrats will be seen as “desperate” to force through a “poorly-targeted borrowing spree.”

Read the original article on Business Insider

Bank of America lifts its forecast for US economic growth on hopes for sweeping Biden-backed stimulus

Joe Biden
President-elect Joe Biden speaks about the US economy following a briefing with economic advisors in Wilmington, Delaware, on November 16, 2020.

  • Bank of America lifted its forecasts for US full-year and first-quarter economic growth, citing hopes for new stimulus under the Biden administration and strong consumer spending trends.
  • The bank’s economists lifted their first-quarter GDP forecast to 4% growth from 1% and boosted their 2021 estimate to 5% from 4.6% expansion.
  • Early indicators suggest the $900 billion relief package signed by President Trump last month is already lifting spending activity, the team said in a note to clients.
  • The $1.9 trillion relief plan revealed by Biden on Thursday can further accelerate a return to pre-pandemic economic strength, they added.
  • Visit Business Insider’s homepage for more stories.

Robust consumer spending and the likelihood of additional stimulus led Bank of America to boost its outlook for US economic growth on Friday.

Economists led by Michelle Meyer expect US gross domestic product to grow 5% through 2021, up from the previous estimate of 4.6%. The bank’s first-quarter GDP forecast was also revised higher, to 4% from 1%.

Early indicators suggest the $900 billion relief package passed by President Trump late last month is already lifting economic activity from its nearly frozen state, the economists said. Debit- and credit-card spending is up nearly 10% from the year-ago period as of January 9, compared to being up just 2% before new stimulus was rolled out.

Additional stimulus from a Biden administration adds to the bank’s bullish forecast. The President-elect revealed a $1.9 trillion relief plan on Thursday, pitching $1,400 direct payments, state and local government aid, and a $15 minimum wage as critical to reviving the virus-slammed economy.

Democrats’ new, albeit slim, majority in the Senate signals a version of the plan will reach Biden’s desk. That extra support stands to provide a major backstop for the economy through the new year, Bank of America said.

Read more: ‘I don’t believe that we’ve really left the recession yet’: Bond king Jeff Gundlach lays out the 2 risks that investors should watch nearly a year into the pandemic – and shares the 4 components of a balanced, winning portfolio

“There are risks in both directions, but we see them skewed to the upside,” the team said in a note to clients. “There is now a ‘fiscal put’ akin to the ‘Fed put.'”

Fresh fiscal relief also takes some pressure off of the Federal Reserve in the near-term, the economists added. Should new stimulus fuel stronger growth and inflation, the Fed could rein in its easy monetary policy stance sooner than initially expected. 

The Biden-backed stimulus also provides the fiscal support Fed policymakers clamored for throughout 2020. If the economy weakens further, the government can coordinate a fiscal- and monetary-policy response akin to that seen at the start of the pandemic, the team said.

Still, elevated COVID-19 cases and strict economic restrictions will delay a full recovery, they added. Bank of America expects GDP will return to pre-pandemic levels in the third quarter.

While front-loaded stimulus boosted the firm’s first-quarter forecast, the early passage of a relief deal cut its second-quarter growth estimate to 5% from 7%.

Read more: Global X’s lithium and battery ETF returned 126% in 2020 as electric vehicle-driven demand surged. One of the firm’s analysts shared 4 stocks he sees ‘leading the rise’ in the industry going forward.

Read the original article on Business Insider

Democrats are lining up behind Biden’s COVID-19 stimulus plan, a stark contrast to the deep GOP divides over the last deal

Bernie Sanders Joe Biden at a Democratic presidential primary debate in February 2020.

  • Democratic Party members are largely unified in their support for President-elect Biden’s COVID-19 stimulus
  • A coordinated position — which also includes endorsement from the Chamber of Commerce — is a far cry from the chaos that dominated GOP negotiations last year. 
  • In negotiating the second bill, Republicans were split between hardliners like Mitch McConnell, and a breakaway group who led bipartisan negotiations — and were ultimately undermined by Trump.
  • The issue of $2,000 checks – now reduced to $1,400 — has caused some complaints, but the party appears to be largely backing Biden’s plan. 
  • Visit Business Insider’s homepage for more stories.

Congressional Democrats are largely unified in their support for President-elect Joe Biden’s COVID-19 stimulus plan, contrasting sharply with the GOP divisions on the previous package.

Negotiations for the package passed over the holidays were characterized by GOP breakaway groups and an 11th-hour intervention from President Donald Trump.

But Biden’s transition team appears to have kept a strict handle on messaging at the announcement of his $1.9 trillion relief plan.

The plan was announced Thursday with endorsement from figures such as Sen. Bernie Sanders, House Speaker Nancy Pelosi, and the US Chamber of Commerce. 

Other positive comments came from Pennsylvania Sen. Bob Casey and New York Gov. Andrew Cuomo.

“President-Elect Biden has put forth a very strong first installment of an emergency relief plan,” said Sanders in a statement.

The endorsement was taken by some observers as a sign that opposition from the left wing of the Democratic party would be limited.

A statement from the Chamber of Commerce – a generally right-leaning lobby group – said it “applauds” the focus on vaccine rollout and economic recovery, although said that further economic measures should be “temporary.” 

This third stimulus plan includes $1,400 relief checks for Americans, which would make a total of $2,000 when combined with the $600 in the most recent package.

Other measures include increasing the federal minimum wage to $15 an hour and hiking federal unemployment benefits, along with other measures designed to support the rollout of a COVID-19 vaccine. 

There has nonetheless been dissent over the $1,400 checks from progressives, who argue that the new stimulus checks should be $2,000 by themselves. 

The package Trump eventually signed into law included $600 payments – which appears to have been subtracted from the anticipated figure of $2,000 in the latest bill. 

“$2,000 means $2,000. $2,000 does not mean $1,400,” Rep. Alexandria Ocasio-Cortez told The Washington Post

Missouri Rep. Cori Bush, who has been touted as the latest member of progressive group “the Squad”, tweeted  “$1,400 ≠ $2,000”

But these complaints are relatively limited compared to the GOP factional chaos that characterized negotiations in the late 2020 package.

Read moreJoe Biden is hiring about 4,000 political staffers to work in his administration. Here’s how 3 experts say you can boost your chances of getting one of those jobs.

Senate Majority Leader Mitch McConnell – whose majority was the main barrier for any legislation – held to a fiscally-conservative line for much of the negotiations. 

A breakaway group of Republican Senators chipped away at that power by banding together with Democrats to propose an influential bipartisan bill that set a middle ground between the two parties. 

As public calls grew for stimulus aid to arrive before Christmas, and with Democrats believing they had compromised enough, a $900 billion bill hammered out between the parties passed both houses.

But then Trump threw a bombshell into the discussions by refusing to sign it. 

Though Republicans may still oppose the Biden package, McConnell’s majority leadership in the Senate was undone with the Georgia runoffs.

It means that the 48 Democratic Senators, plus two independents, will be able get to a majority with the tie-breaker vote of Kamala Harris, soon to be Vice President..

It points to a useful honeymoon for Biden, whose transition has led on a message of unification.

The contrast between this and the highly coordinated rollout of Biden’s new proposal has been remarked on by commentators such as NBC’s Garrett Haake:


Read the original article on Business Insider

WATCH: How business owners can make the most of PPP

The Paycheck Protection Program is back.

For millions of small business owners still struggling to pay rent and employ workers, the federal government’s forgivable loan program is a lifeline. This round looks a little different than the original that launched in the spring. It’s aimed at even smaller businesses, and provides special funding for the service sector, nonprofits, and under-represented entrepreneurs.

On Tuesday, January 5, Insider hosted a webinar detailing what the $325 billion in funding means for business owners and answered questions live from more than 200 attendees. 

Insider’s entrepreneurship editor Bartie Scott and small business reporter Jennifer Ortakales Dawkins discussed:

  • What’s different between this round of PPP and the first one in the spring
  • Special provisions for service industry companies and under-represented entrepreneurs
  • How to know if you’re eligible
  • What materials you’ll need to apply
  • What we know about the timeline so far
  • The how and why of loan forgiveness 

Watch the full webinar above.

Read the original article on Business Insider

Trump just cost jobless workers one week of federal unemployment assistance after he failed to sign the relief bill by midnight on Saturday

trump pentagon
President Donald Trump has said he wants the relief bill to include $2,000 stimulus checks for Americans.

  • President Donald Trump did not sign the latest coronavirus relief legislation before midnight on Saturday, costing jobless workers one week of $300 federal unemployment benefits.
  • State agencies can only distribute benefits for weeks the bill is enacted, meaning the delay could cause the unemployment benefits to be distributed for 10 weeks instead of the intended 11.
  • About 14 million Americans have also lost unemployment benefits, as two federal programs expired on Saturday.
  • Visit Business Insider’s homepage for more stories.

President Donald Trump did not sign the latest coronavirus relief legislation by midnight on Saturday, a move expected to cost jobless workers at least one week of $300 federal unemployment benefits.

Trump had suggested he might reject the $900 billion stimulus package, which passed in both chambers of Congress earlier this week, unless it includes $2,000 stimulus checks for Americans.

The bill currently includes $600 checks, along with the $300 weekly federal unemployment insurance.

“I simply want to get our great people $2,000, rather than the measly $600 that is now in the bill. Also, stop the billions of dollars in ‘pork,'” Trump tweeted Saturday morning.

The president has not made clear whether he will sign the legislation, but the delay puts other federal assistance programs in danger and could prove costly for Americans whose unemployment benefits were supposed to restart December 26.

By not signing the bill before the end of day Saturday, Trump has effectively cut a week of $300 federal unemployment benefits for jobless people, according to Michele Evermore, a policy expert at the National Employment Law Project.

But she cautioned it’s hard to project without federal guidance how the holdup would affect other unemployment programs.

“I’m not entirely sure how this will be interpreted – at the very least, we lose a week of the $300,” Evermore told Insider. “No matter what, if he doesn’t sign, next week it goes down to 10 weeks of an extra $300.”

The $300 federal unemployment supplement included in the bill is scheduled to end on March 14, a date that will not change based on when the bill actually becomes law.

Depending on when the bill is signed, labor agencies could restart the payments during the first week of January. Because states cannot provide benefits for weeks that precede the approval of the bill, the $300 supplement may only be in place for 10 weeks, rather than the intended 11.

About 14 million people are at risk of losing unemployment benefits, as Saturday was the last day that two federal unemployment programs distribute their payments. They are the Pandemic Unemployment Assistance for gig workers and freelancers and Pandemic Emergency Unemployment Compensation for people who exhausted state benefits.

In tweets on Saturday, including one sent hours before midnight, Trump again called for the relief bill to include higher stimulus checks.

Trump could still sign the package in the following days, though he has not indicated whether he will do so.

Read the original article on Business Insider

INSIDER Poll: A $600 COVID-19 stimulus check is way too small, and most Americans think it should be over $1,500

protest stimulus
Protesters rally demanding economic relief during the coronavirus pandemic in New York City on August 5, 2020.

  • Republicans and Democrats in Congress agreed upon a new $900 billion coronavirus relief bill on Sunday which includes sending out the second round of stimulus checks for adults, just half the amount of the first round of stimulus checks in April.
  • According to Insider polling, 62% of respondents believe that the $600 checks are too little.
  • Additionally, 76% of respondents said the payments should be greater than $1,000 and 43% said the checks should be $2,000 or more.
  • Visit Business Insider’s homepage for more stories.

The second round of stimulus checks was agreed upon on Sunday by Democrats and Republicans in Congress as part of a $900 billion stimulus deal. The new checks will amount to $600 per adult under certain income limits -half the amount of the first round of stimulus checks of $1,200 which were sent out in April. 

According to recent polling from Insider and SurveyMonkey, the new checks are not enough. The majority of survey respondents, 62%, said the $600 stimulus checks are too small.

When asked what the “right amount of money would be for a one-time federal economic stimulus payment at this time,” survey responses varied far and wide, but the median requested amount was $1,500 – just $300 more than the first stimulus check. A further breakdown of responses are as follows:

  • 76% of respondents said the payment should be $1,000 or more.
  • 43% of respondents said the payment should be $2,000 or more.
  • 20% of respondents said that the payment should be less than the congressionally agreed-upon $600.

This analysis comes from a SurveyMonkey Audience poll taken on December 21. The poll collected 1,123 respondents who were asked about coronavirus, the congressional stimulus package, as well as a number of other questions.

In a video tweeted Tuesday night, President Donald Trump said that the $600 payments were insufficient, though the amount was introduced by the president’s appointed Treasury Secretary, Steven Mnuchin, as reported by The Washington Post.

“It really is a disgrace,” Trump said, later establishing his intention to ask Congress “to amend this bill and increase the ridiculously low $600 to $2,000 dollars.

In response, Democrats in Congress quickly jumped at the chance to increase the size of the stimulus checks. Michigan Rep. Rashida Tlaib announced late Tuesday night that she and Rep. Alexandria Ocasio-Cortez had already drafted an amendment to the coronavirus relief bill to increase the checks to $2,000.

On Sunday, White House spokesperson Ben Williamson said that Trump planned to sign the agreed-upon $900 billion stimulus deal. But after the lame-duck president’s recent push against the package, it’s unclear if that will happen anytime soon.

SurveyMonkey Audience polls from a national sample balanced by census data of age and gender. Respondents are incentivized to complete surveys through charitable contributions. Generally speaking, digital polling tends to skew toward people with access to the internet. SurveyMonkey Audience doesn’t try to weight its sample based on race or income. Polling data collected 1,123 respondents on December 21. All polls carried approximately a 3 percentage point margin of error individually.

Read the original article on Business Insider

McConnell included $600 checks in COVID-19 stimulus plans after hearing that GOP opposition could cost them the Georgia Senate runoffs, report says

Perdue Loeffler
A composite image of Sens. David Perdue and Kelly Loeffler in Georgia on November 19, 2020.

  • Senate Majority Leader Mitch McConnell came to back $600 COVID-19 stimulus checks after hearing that prior opposition was hurting them in Georgia, according to The New York Times.
  • Citing a private call, the Times said McConnel described said Sens. Kelly Loeffler and David Perdue  “getting hammered” on the issue.
  • The Georgia runoffs on January 5 will decide the balance of power in the Senate.
  • Checks of $1,200 were sent out earlier in the year, but had dropped off the radar in the latest negotiations until coming roaring back this week.
  • McConnell’s intervention helped put them back on the agenda, although Democrats are angered that this came at the apparent cost of one month of unemployment benefits.
  • Visit Business Insider’s homepage for more stories.

Senate Majority Leader Mitch McConnell’s decision to support $600 checks in COVID-19 stimulus negotiations was motivated by fears for the Georgia runoff elections, according to The New York Times.

Two sources told the paper McConnell’s U-turn on supporting the checks came after hearing that Republican opposition to more stimulus checks was hurting ongoing campaigns in Georgia.

Times sources said that McConnell warned fellow GOP lawmakers that Sens. Kelly Loeffler and David Perdue are “getting hammered” over the checks.

In a private phone conversation Wednesday, McConnell said that backing another round of direct payments to Americans could help, the Times reported. 

The Georgia runoffs, to be held on January 5, will decide the balance of power in the Senate, determining how much of a free hand President-elect Joe Biden can expect when he takes office. 

McConnell has been the most stubborn force in the stimulus negotiations, consistently sticking to his slimmed-down proposal of around $500 billion.

Meanwhile, leading Democrats have whittled their initial $2.2 trillion demand down by at least half, accepting a $908 billion bipartisan proposal as a basis for negotiations.

That proposal kicked stimulus checks into the long grass. But on Wednesday, McConnell made a surprise pivot to supporting stimulus checks of around $600-700.

Treasury Secretary Steven Mnuchin had introduced a White House proposal last week that included $600 checks, but it also made a massive cut to unemployment benefits, turning off Democrats.

As negotiations drag on, progressives such as Democratic Rep. Alexandria Ocasio-Cortez and independent Sen. Bernie Sanders have continued to make the case for $1,200 checks.

Democrats are also unhappy that the $600 checks proposal comes at the apparent cost of shrinking unemployment benefits by a month. 

The final shape of what both parties are likely to agree on is starting to emerge, with a price tag of around $900 billion. According to the Associate Press (AP), this could include:

  • $300 billion in support for businesses, in another round of PPP
  • $600 checks to all, and a further $300 to the long-term unemployed
  • Renewal of unemployment benefits
  • $25 billion to help renters struggling to make payments
  • $10 billion for the US Postal Service

Likely to be left by the wayside is around $160 billion to help state and local governments – a Democratic wish – and pandemic liability protections for businesses that the GOP has pushed for. 

Negotiations on the stimulus package are going down to the wire, with a deadline on Friday looming to avert a government shutdown. This could be extended. 

Negotiators had hoped to strike a deal after two in-person meetings on Wednesday, but left that night without a final agreement. 

“We’re still close and we’re going to get there,” said McConnell, as he left negotiations, according to the AP.

Read the original article on Business Insider