Unemployment declining faster in states that are cutting off $300 enhanced federal benefits, according to WSJ

Kansas City, Missouri
Kansas City, Missouri.

  • Unemployment is declining faster in states ending weekly $300 federal benefits, per the WSJ.
  • Missouri ended enhanced federal benefits for unemployed state residents as of June 12.
  • The state’s unemployment rate sits below the national average, but many continue to struggle.
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The number of Americans receiving unemployment benefits is declining at a faster rate in Missouri and 21 other US states that opted out of receiving enhanced federal payments this month, according to The Wall Street Journal.

Under the $1.9 trillion COVID-19 relief package that President Joe Biden signed into law in March, weekly federal pandemic compensation of $300 was added to state unemployment checks, with the benefits slated to expire in September.

Republican-led states recently moved to cut off the expanded unemployment aid, decrying its effect on job creators and alleging that the extra money keeps individuals from seeking millions of open jobs. Most Democratic-led states have embraced the aid, calling it a vital resource for the unemployed as the country continues to recover from the coronavirus pandemic.

GOP Gov. Mike Parson of Missouri said that federal benefits were gladly welcomed during the height of the pandemic, but with much the economy reopening, the continuation in payments “worsened the workforce issues” the state faced.

Amid concerns about a labor shortage, most GOP governors nixed what they saw as overly-generous federal aid.

In May, the Missouri’s unemployment rate was 4.2%, below the national average of 5.8%, according to data from the Department of Labor.

Missouri ended enhanced federal benefits for unemployed state residents as of June 12, making it one of the first states to take the action.

Seven additional states followed suit for the week ending June 19, and this weekend, 10 additional states will end aid to unemployed residents.

By July 10, four more states will have cut off enhanced benefits.

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The number of individuals who received unemployment benefits decline by 13.8% by the week ending June 12, compared to mid-May, in states where governors explicitly said that enhanced benefits would end in June, based on an analysis by Jefferies LLC economists.

This figure compares to a 10% decline in states that are ending benefits in July, and a smaller 5.7% decline in states that intend to keep the benefits until the funding ends in September.

Impacted individuals would lose the $300 federal funding, but will continue to receive state unemployment benefits.

Aneta Markowska, Jefferies’ chief financial economist, told the Journal the result of states opting out of enhanced benefits was beginning to show.

“You’re starting to see a response to these programs ending,” she said, adding that “employers were having to compete with the government handing out money, and that makes it very hard to attract workers.”

However, some economists and a wide swath of Democrats point to issues such as a lack of adequate child care, low hourly wages in some industries, and a continued trepidation over COVID-19 in explaining why many have not rejoined the workforce.

In Missouri, the state’s workforce fared relatively well, with its unemployment rate peaking at 12.5% in April 2020, compared to the 14.8% national unemployment rate that month.

However, despite the less-than-dire outlook that comes from looking at the overall numbers, real people continue to struggle.

The Journal spoke with Davina Roberson, a 45-year-old Fenton, Mo., mother of two boys with special needs who was furloughed from her $26-an-hour position as a corporate travel agent last year.

While she continued to receive critical health benefits through her old employer, she would have to forgo the coverage if she took another role.

Roberson told the Journal that she has now sought help from food pantries and charities for clothing.

“It’s not that I don’t want to go back to work,” Ms. Roberson told the Journal. “But if I took a minimum wage job, I’d be working for health insurance and child care and have nothing left to live on.”

Read the original article on Business Insider

Sasse will introduce legislation to redirect expanded unemployment benefits into signing bonuses for new hires

Ben Sasse
Sen. Ben Sasse (R-Nebraska) speaks during a hearing of the Senate Judiciary Subcommittee on Privacy, Technology, and the Law, on Capitol Hill.

  • Sen. Sasse says that expanded unemployment benefits have prevented people from returning to work.
  • He will propose a bill that would redirect expanded benefits into signing bonuses for new hires.
  • “We’ve got to get America and Americans up and running,” he said in a statement.
  • See more stories on Insider’s business page.

GOP Sen. Ben Sasse of Nebraska on Saturday said he would introduce legislation to grant signing bonuses to new hires, as the latest jobs report on Friday fell far short of expectations.

In an email, Sasse said that the proposed National Signing Bonus Act would redirect expanded unemployment benefits, which have been a lifeline for millions of Americans during the COVID-19 pandemic, into signing bonus payments for new hires.

Under Sasse’s plan, individuals who are hired by July 4 would receive a two-month signing bonus “equal to 101 percent of their current unemployment payment.”

As part of President Joe Biden’s $1.9 trillion COVID-19 relief package, expanded federal unemployment benefits provide $300 a week as a supplemental to state unemployment checks.

Republicans have long argued for less generous unemployment benefits, saying expanded benefits only serve to disincentivize people from returning to work. They quickly seized on the April jobs report, which showed that US employers added 266,000 jobs for the month, well below the 1 million jobs that many economists were expecting to be added to the US economy.

The April unemployment rate also rose slightly – to 6.1% from 6% – according to the Department of Labor.

“The emergency UI program is now penalizing people for going back to work,” Sasse said in the statement. “Now, as millions of Americans are vaccinated each day, we’ve got crummy job numbers – 7,400,000 jobs are available but fewer than 300,000 people returned to work last month. We’ve got to get America and Americans up and running.”

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The US Chamber of Commerce, which last week criticized Biden’s proposed $2 trillion infrastructure bill, called for an end to the $300-a-week federal unemployment benefits after Friday’s report.

“The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market,” the chamber’s chief policy officer, Neal Bradley, said in a statement. “We need a comprehensive approach to dealing with our workforce issues and the very real threat unfilled positions poses to our economic recovery from the pandemic.”

In February, Biden’s first full month in office, the economy added 536,000 jobs. In March, 770,000 jobs were regained.

GOP Govs. Greg Gianforte of Montana and Henry McMaster of South Carolina recently announced that their states will opt-out of receiving the expanded federal unemployment benefits at the end of June.

“I hear from too many employers throughout our state who can’t find workers,” Gianforte said last week. “Nearly every sector in our economy faces a labor shortage … We need to incentivize Montanans to reenter the workforce.”

McMaster recently echoed a similar sentiment.

“What was intended to be a short-term financial assistance for the vulnerable and displaced during the height of the pandemic has turned into a dangerous federal entitlement, incentivizing and paying workers to stay at home rather than encouraging them to return to the workplace,” he said.

Read the original article on Business Insider

As Biden approaches 100th day in office, Republicans admit difficulties in attacking his agenda

Joe Biden
President Joe Biden speaks at the White House.

  • As President Biden nears his 100th day in office, he has positive favorability ratings from voters.
  • Republicans are struggling to counter Biden’s robust policy agenda.
  • Biden’s push to raise corporate taxes to fund his infrastructure bill garners the support of voters.
  • See more stories on Insider’s business page.

President Joe Biden has befuddled Republicans in Washington, DC.

He successfully pushed through his $1.9 trillion COVID-19 relief bill despite the objections of every congressional Republican, arguing that the broadly popular legislation had sizeable support among GOP voters.

As someone who has endeared himself to Amtrak, Biden has long been a proponent of strengthening the country’s infrastructure, which has resulted in a proposed $2 trillion piece of legislation that would invest in everything from roads and bridges to broadband and public school upgrades.

Similar to the relief bill that passed in March, Republicans are arguing that the infrastructure bill is too expensive.

Biden, cognizant of the missteps that plagued the administration of former President Barack Obama from his former perch as the vice president, has been unrelenting in his view that now is the time for bold change in America.

Republicans have attacked that worldview, arguing that unified Democratic control of government has resulted in too much liberalism, with Biden’s governance being painted as a liability.

However, nearly 100 days into Biden’s first term, most voters seem to hold the opposite view and the GOP has been almost powerless to stop him.

Biden is getting good marks from the American public

Over the past few days, several major national polls have shown Biden with positive approval ratings.

The most recent Pew Research Center poll showed Biden with a 59% job approval rating – 39% of respondents disapproved of his performance.

The latest Morning Consult/Politico poll had Biden with a 60% job approval rating, while only 37% viewed his performance unfavorably.

Quinnipiac released a poll on Wednesday that also showed Biden in positive territory with a 48% approval rating, while 42% disapproved.

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The proposed infrastructure bill actually polls better among respondents in the Quinnipiac poll when asked if they’d support raising corporate taxes to fund the legislation, a position that most GOP members of Congress staunchly oppose.

biden amtrak
US Democratic presidential candidate and former Vice President Joe Biden and his wife Jill greet supporters as they prepare to board an Amtrak train to begin a campaign train tour in Cleveland, Ohio, on September 30, 2020.

It’s difficult to run against a president who’s popular and has just funneled a massive amount of stimulus into the economy to help the country recover from the effects of the COVID-19 pandemic.

Republicans are increasingly becoming vocal about their predicament.

Biden’s longtime moderate sensibilities lend him credibility

Senate Minority Whip John Thune of South Dakota acknowledged the party’s struggles in countering Biden’s messaging.

“We need to get better at it,” he told The Hill. “I don’t think sometimes our messaging is as sharp as it should be because a lot of the things they’re doing are things that are popular – when you’re spending money, you’re popular.”

Sen. Mike Braun of Indiana told The Hill that the GOP was doing “poorly” in countering Biden’s agenda.

“I don’t think we’ve done a very good job because he’s getting away with defining himself and rolling out this stuff that we’re borrowing every penny for it, and the public is buying it,” Braun said. “We’ve got to find ways to articulate and scuffle in a better way, and I don’t know that we’ve found that.”

Biden, who served in the US Senate from 1973 to 2009 before holding the vice presidency from 2009 to 2017, has long had a reputation as dealmaking, old-school moderate Democrat.

As president, he has managed to deftly craft policy in a way that has drawn support from moderates and progressives, along with many independent voters.

Progressives, who mostly lined up behind Independent Sen. Bernie Sanders during the 2016 and 2020 Democratic presidential primaries, have overwhelmingly lined up behind Biden’s policy agenda so far, helping give the president almost unanimous support among Democratic voters in the most recent polling numbers.

However, Republicans in Congress are beginning to complain that Biden’s bipartisanship outreach hasn’t yielded them much input.

Republicans think Biden is overreaching with his policies

“He’s been out with a dialogue of unity and bipartisanship and almost pulled off a masterpiece in that there’s not been any of that,” Braun expressed to The Hill. “And that we need to be clarifying that. I think the invitations to the White House … I was on one of those … What did we end up with? Zero.”

GOP members have forecasted that over time, voters will lose an appetite for Biden’s larger spending proposals.

Sen. John Thune
Senate Minority Whip John Thune of South Dakota speaks at a GOP news conference alongside Senate Minority Leader Mitch McConnell of Kentucky.

“His tone is moderate and he’s an affable person, he’s a likeable individual and a lot of us know him, have relationships with him and it’s probably harder to attack somebody who is relatable and likeable,” Thune told The Hill, adding that “if he continues down the left, the far-left lane, with respect to policy, that eventually that will start to catch up with him.”

Senate Minority Leader Mitch McConnell of Kentucky, who served with Biden in the Senate for over 20 years, said recently that Biden was presiding over a “left-wing administration” while praising him as a “first-rate person.”

“I like him personally, I mean, we’ve been friends for a long time,” McConnell said.

Biden’s focus on vaccinations and “straight talk” when it comes to COVID-19 have earned him high marks in his handling of the issue.

Over the past few weeks, Republicans have sought to shift the focus of Biden’s presidency to the US-Mexico border, which has seen a surge in unaccompanied migrant children hoping to cross the border.

However, while Biden’s approval on immigration issues remain his weak spot in polling, it has not significantly impacted his overall standing, much to the consternation of some Republicans.

GOP Sen. Ron Johnson of Wisconsin lodged such a complaint, accusing the press of enabling Biden.

“I think he’s defined himself … I think all we have to do is point out what he’s doing, the disaster at the border,” he told The Hill. “When you have the mainstream media in your back pocket, you’re going to stay popular.”

Read the original article on Business Insider

Republicans are touting benefits of $1.9 trillion COVID-19 relief bill despite voting against it

Madison Cawthorn
Rep. Madison Cawthorn (R-North Carolina) speaks on the House floor.

  • Republicans are touting benefits of the COVID-19 relief legislation they opposed in Congress.
  • Mitch McConnell said Republicans would have a “talk” with Americans about the bill’s issues.
  • Meanwhile, funding for healthcare and restaurants is being praised by some GOP members.
  • See more stories on Insider’s business page.

For months, Congressional Republicans have been unanimously opposed to the American Rescue Plan Act of 2021, the $1.9 trillion COVID-19 relief package that was backed by President Joe Biden and signed into law in March.

The stimulus package, which included $1,400 direct stimulus payments for individuals, funding for state and local governments, $300 in federal unemployment aid through September, and an expansion of the child tax credit, among other measures, did not receive a single GOP vote of support in the House or Senate.

After the bill’s passage, GOP Senate Minority Leader Mitch McConnell of Kentucky slammed the legislation as “a classic example of big-government Democratic overreach in the name of Covid relief” and “one of the worst pieces of legislation” he’s seen in his 36 years in the Senate.

He also said the GOP would “talk repeatedly” to the American public about the true contents of the bill in the coming months.

However, some Republicans are now touting popular elements of the bill they railed against on Capitol Hill.

Conservative freshman GOP Rep. Madison Cawthorn of North Carolina pointed to health funding in his district in a tweet last week, including nearly $2.5 million for the Appalachian Mountain Community Health Centers and $4.6 million for Western North Carolina Community Health Services that was part of the legislation.

“Happy to announce that NC-11 was awarded grants from the U.S. Department of Health & Human Services,” he wrote. “Proud to see tax-payer dollars returned to NC-11.”

Democratic National Committee Chairman Jaime Harrison took note of Hawthorn’s tweet and blasted the congressman and the GOP.

“Come’on man,” he wrote. “@RepCawthorn is trying to take credit for the grants HE VOTED AGAINST. Republicans have no shame.”

Read more: Here are 9 hurdles Biden’s infrastructure plan would have to overcome in Congress before it can become law

Cawthorn spokesman Micah Bock told NBC News in a statement last week that the congressman uses his social media account “to post information relevant to his constituents in NC-11.”

“Oftentimes this means providing relevant federal information on proposals that the congressman does not support,” he said. “There are portions of the American Rescue Plan that benefit NC-11, however, bills are not passed in portions, they are passed entirely or not at all, and this bill does significantly more harm than good.”

GOP Sen. Roger Wicker of Mississippi praised the billions in targeted funding for the restaurant industry that he championed – it was part the final package that he voted against.

“Independent restaurant operators have won $28.6 billion worth of targeted relief,” he tweeted after the bill passed. “This funding will ensure small businesses can survive the pandemic by helping to adapt their operations and keep their employees on the payroll.”

When asked by CNN’s Manu Raju why he didn’t support the full measure, Wicker said he didn’t have to accept the full measure and was critical of the questioning.

“Just because there’s one good provision in a $1.9 trillion bill, doesn’t mean I have to vote for it … I think it’s a stupid question. I’m not going to vote for $1.9 trillion just because it has a couple of good provisions in it.”

Congressional Republicans have currently found themselves boxed into a corner on the issue.

A Pew Research poll released shortly before the bill’s signing showed 70% of US adults backing the legislation, with only 28% of respondents opposed to the measure.

Even 41% of Republican or Republican-leaning respondents, a significant minority, backed the COVID-19 relief bill.

National GOP leaders have pledged to use the bill as a campaign attack against Democrats in the 2022 midterm elections, but nearly three dozen Republican mayors across the county, from David Holt of Oklahoma City to John Giles of Mesa, backed the legislation.

Read the original article on Business Insider

Larry Summers, who called out inflation fears with Biden’s $1.9 trillion COVID-19 relief package, says the US is seeing ‘least responsible’ macroeconomic policy in 40 years

Larry Summers
Former US Treasury secretary Larry Summers.

  • Larry Summers said that the US is seeing the “least responsible” macroeconomic policy in decades.
  • The former Treasury secretary been critical of Biden’s $1.9 trillion COVID-19 relief package.
  • Summers said there’s “a one-third chance” of significant inflation over the next few years.
  • See more stories on Insider’s business page.

Former US Treasury Secretary Larry Summers said that the country is seeing the “least responsible” macroeconomic policy of the past 40 years, resting the blame on lawmakers on both sides of the aisle.

Summers offered the negative economic forecast during an appearance on Bloomberg Television’s “Wall Street Week” on Friday. Summers has vocally criticized President Joe Biden’s recently signed $1.9 trillion COVID-19 relief package, saying it could overheat the economy.

“The [Federal Reserve] has stuck to its guns on no rate hikes for years and years and continuing to grow its balance sheet,” he told Bloomberg. “What is kindling is now igniting. I’m much more worried that we’ll have either inflation or a pretty dramatic fiscal-monetary collision.”

He added: “I think this is the least responsible macroeconomic policy we’ve had in the last 40 years. I think fundamentally, it’s driven by intransigence on the Democratic left and intransigence and completely unreasonable behavior on the whole of the Republican party.”

Summers, who served in Bill Clinton’s Cabinet and directed the National Economic Council in 2009 and 2010 under former President Barack Obama, argued that the country is “running enormous risks.” He said he believes there’s “a one-third chance that inflation will significantly accelerate over the next several years.”

He offered additional scenarios pertaining to the country’s economic outlook.

“There’s a one-third chance that we won’t see inflation, but that the reason we won’t see it is that the Fed hits the brakes hard, markets get very unstable, and the economy skids closer down to a recession,” he said. “I think there’s about a one third chance that the Fed and the Treasury will get what they’re hoping for and we’ll get rapid growth that will moderate in a non-inflationary way.”

He added: “There’s the real risk that macroeconomic policy will be destabilizing.”

Read more: Meet the presidential confidants, Delaware’s closely-knit and well-positioned congressional delegation, Joe Biden’s entrusted with cementing his legacy

For months, Summers has been sounding the alarm of inflation fears, writing an op-ed in The Washington Post in January where he wrote that Biden’s relief package could cause “inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability.”

While Summers praised the COVID-19 package’s “ambition” and its “rejection of austerity orthodoxy,” he stated that garnering legislative support for tax increases or spending reductions could prove to be difficult and might pose a “risk of inflation expectations rising sharply.”

Treasury Secretary Janet Yellen had a different perspective, encouraging robust stimulus measures.

“It’s a big package, but I think that we need to go big now, and that we can afford to go big,” Yellen told PBS NewsHour anchor Judy Woodruff in an interview shortly before the legislation was approved by the Senate.

Yellen has also repeatedly dismissed concerns of inflation. “I’ve spent many years studying inflation and worrying about inflation. And I can tell you we have the tools to deal with that risk if it materializes,” she told CNN in January.

The Biden administration has been vigilant about not repeating the legislative and political mistakes of the $787 billion American Recovery and Reinvestment Act of 2009, which was signed into law by former President Barack Obama in response to economic impacts of the Great Recession.

The stimulus measure, which was championed by Obama and congressional Democrats, became a political liability for the party in the 2010 midterm elections, which saw the GOP retake the House and make sweeping gains across the country.

White House Council of Economic Advisors chair Cecilia Rouse said on MSNBC’s “The Sunday Show with Jonathan Capehart” last week that not doing enough to help the economy would pose a bigger threat, especially as the country is working to end the COVID-19 pandemic.

“When one makes an economic investment, there are risks,” she said. “There is a risk that this [relief package] will overheat the economy and cause inflation. However, it’s really in our estimation that the risk of doing too little is actually greater the risk of doing too much.”

Read the original article on Business Insider

$40 billion of new stimulus money could go to bitcoin and stocks, Mizuho says

bitcoin

A survey conducted by Mizuho found that $40 billion of COVID-19 relief bill funds sent to Americans could go to bitcoin and stocks.

Mizuho analysts, led by Dan Dolev, spoke with approximately 235 people with a household income of $150,000 or less in a survey released on Monday.

The team found that roughly 40% of respondents said they planned on using at least a portion of their stimulus money to invest in bitcoin or stocks.

Mizuho calculated that this means nearly $40 billion of the $380 billion in stimulus checks could go to the assets.

The survey also found that investors are more likely to put their stimulus money into bitcoin than stocks.

Of the respondents who said they plan on investing, 61% said they would be investing in bitcoin versus just 39% who said they would be putting money into stocks.

“The survey predicts that bitcoin will account for 60% of total incremental investment spend,” Dan Dolev, Senior Equity Analyst for Mizuho wrote. “We calculate it could add as much as 2-3% to bitcoin’s current $1.1 trillion market value.”

Bitcoin hit record highs of over $61,000 per coin over the weekend as stimulus hopes and institutional investor demand boosted the digital asset. However, on Monday the cryptocurrency gave back most of those gains.

Dolev highlighted a number of crypto-related firms that he believes could benefit from investors’ stimulus check moves including, Visa, Mastercard, PayPal, and Square.

In an interview with CNBC on Monday, Dolev said he was “very surprised” by the survey results, so he had his team spend a lot of time “sanity-checking” the data.

The analyst added that although the survey data was surprising, he believes it is an accurate representation of how consumers might spend their stimulus money.

“It is what it is,” Dolev concluded.

Read the original article on Business Insider