The White House is giving bipartisan infrastructure negotiations until the end of June even as progressive opposition swells

US Senator Bernie Sanders, of Vermont, speaks with reporters about potential efforts to raise the minimum wage at the US Capitol in Washington.
Sen. Bernie Sanders (I-VT).

  • The White House is giving bipartisan economic talks until the end of June for a deal to pan out.
  • Biden could potentially shift course and embrace a Democratic-only plan after that.
  • An emerging bipartisan framework is struggling to draw substantial Democratic support.
  • See more stories on Insider’s business page.

White House officials are indicating to congressional Democrats that they’re giving bipartisan infrastructure negotiations until the end of June before potentially shoving Republicans aside and moving ahead with a Democratic-only plan.

It’s a fresh sign that the Biden administration’s patience is starting to wear thin at the slow pace of economic talks with the GOP. More than two months of back-and-forth discussions haven’t yielded a major breakthrough.

“They’re giving it a week or 10 days more and that’s about it,” House Budget chair John Yarmuth told reporters on Tuesday. “Then we move along with with reconciliation – for everything.”

The White House did not immediately respond to a request for comment.

Reconciliation, the legislative tactic that only requires a simple majority to pass certain bills, is increasingly favored by progressive Democrats, who want to combine President Joe Biden’s two-part plan into a massive $4 trillion bill and muscle it through both the House and Senate with only Democratic votes.

Many on the left fear Biden’s social spending proposals – such as paid family leave and universal pre-K – would not draw strong support from Democratic centrists in the Senate, and derail that part of the plan. But Biden is pursuing a deal and the White House is giving additional time for an agreement to be struck.

A bipartisan group encompassing 10 lawmakers from both parties is still drafting a nearly $1 trillion infrastructure plan, though key details remain unclear. It includes Republican Sens. Mitt Romney of Utah, Rob Portman of Ohio, Bill Cassidy of Louisiana, Lisa Murkowski of Alaska, and Susan Collins of Maine.

The Democratic side comprises Sens. Joe Manchin of West Virginia, Kyrsten Sinema of Arizona, Jeanne Shaheen of New Hampshire, Mark Warner of Virginia, and Jon Tester of Montana.

Sen. Bernie Sanders has come out in opposition to the emerging framework, saying its sources of revenue were not progressive enough. The group is eyeing indexing the gas tax to inflation, which may increase gas prices for average people, and repurposing stimulus funds from states.

“I wouldn’t vote for it,” Sanders told reporters on Monday. “The bottom line is there are a lot of needs facing this country. Now is the time to address those needs, and it has to be paid for in a progressive way, given the fact that we have massive income and wealth inequality in America.”

Other Democrats such as Sens. Ron Wyden of Oregon, Ed Markey of Massachusetts, and Jeff Merkley of Oregon are coming out against a plan that doesn’t contain aggressive measures to combat climate change.

“Put me down as skeptical of these theories that somehow you get everything you want, and somehow the priorities I have might be addressed down the road,” Wyden said Wednesday. Every lost Democratic vote means an additional Republican would be needed for the plan to clear the chamber – with a bare minimum of 10 GOP votes

Others are reserving judgment until more details emerge. “I got to look at it first,” Sen. Tim Kaine of Virginia told Insider.

“I want to see it, how are the Republicans gonna pay for it?” Sen. Sherrod Brown of Ohio, chair of the Banking Committee, told Insider. “I’ll see it, I don’t know yet.”

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US retail sales slid from record highs in May amid waning reopening boost

Shopping Target
  • US retail sales fell more than expected in May as Americans settled into a new normal.
  • Spending dropped 1.3% through the month. Economists expected a decline of 0.7%.
  • The reading marks the largest decline since February, but sales still sit 28% higher from May 2020.
  • See more stories on Insider’s business page.

Spending at US retailers slumped for the first time since February last month as more economic restrictions were reversed and Americans settled into a new sense of normal.

US retail sales fell 1.3% in May, the Census Bureau said Tuesday. Economists surveyed by Bloomberg held a median estimate for a 0.7% decline. The decline places monthly sales at $620 billion and just below the record-high seen in April.

The April sales data was revised higher to a 0.9% jump from an initially unchanged reading.

While sales sit lower than the previous total, they’re still up 28% year-over-year and 18% from pre-pandemic highs. The May 2020 sales report showed spending surge as stimulus included in the $2.2 trillion CARES Act revived economic activity. It also marked the largest one-month sales jump in data going back to 1992.

Spending in the clothing and accessories industry was up 200% year-over-year, while sales at food services and bars sat 71% higher from the year-ago period.

Sliding sales and rising inflation

The May dip in retail spending suggests that, after reopening unleashed pent-up demand, consumers are pulling back. Retail sales were among the few indicators to stage a V-shaped rebound early in the pandemic and quickly exceed pre-crisis levels. Now, as stimulus dries up and the final lockdown measures are unwound, spending is set to moderate.

Such a trend would be good news for those fearing runaway inflation. The wave of consumer demand and various bottlenecks throughout the economy led price growth to accelerate sharply through the spring. The Consumer Price Index rose 0.6% in May, beating the median estimate for a 0.4% jump.

The gauge also rose 5% year-over-year, marking the fastest one-year inflation rate since 2008. Though the reading is somewhat skewed by falling prices in May 2020, it still signals inflation firmed up as massive demand ran up against widespread supply shortages. A steady dip in retail sales could hint at softer demand through the summer.

But whereas fiscal stimulus like direct payments and enhanced unemployment insurance will soon lapse, monetary policy remains highly accommodative. The Federal Reserve has indicated it is willing to run the economy hot to foster a faster and more inclusive recovery for the labor market. The central bank continues to hold interest rates near zero and buy at least $120 billion in assets each month to maintain its policy stance.

The Federal Open Market Committee will give the next hint at when the Fed will retract its support on Wednesday, following its two-day meeting. Policymakers are expected to hold interest rates and purchase pace steady but note the committee has begun talks on when to taper its asset-buying. Fed Chair Jerome Powell will likely acknowledge that, while inflation has exceeded estimates, the elevated rate will prove temporary as supply-chain strains are solved.

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Mitch McConnell gives ‘maybe 50-50’ odds of bipartisan infrastructure deal as Democrats say they won’t drop climate initiatives

GettyImages mitch mcconnell
Senate Minority Leader Mitch McConnell.

  • McConnell took a dour view on the likelihood of a bipartisan Senate group succeeding with an infrastructure bill.
  • He told a conservative radio host that its odds were “maybe 50-50.”
  • Pelosi signaled she’s unwilling to strike a deal with Republicans if it meant substantially cutting the package.
  • See more stories on Insider’s business page.

Senate Minority Leader Mitch McConnell provided a downbeat view on the latest roughly $1 trillion infrastructure framework negotiated by a faction of centrist senators from both parties.

The plan would provide just over $1 trillion in new infrastructure spending focused on roads, bridges, ports, and highways.

“Maybe 50-50,” the Kentucky Republican said in a Monday interview with conservative radio host Hugh Hewitt. “Look, both sides would like to get an infrastructure bill.”

McConnell reiterated the by now familiar “red lines” for Senate Republicans: no modifications to the 2017 Republican tax law that would result in tax increases, and that any package should be paid for.

He suggested repurposing stimulus aid to states provided under President Joe Biden’s $1.9 trillion coronavirus relief law to cover the cost. That’s already been shot down by the White House in previous negotiations with Senate Republicans.

“States and localities are literally awash in extra money. A lot of that is still in the pipeline,” McConnell said. “Why don’t we repurpose that, earmark it for infrastructure, which both localities would prefer to spend it on anyway?”

The bipartisan group encompasses 10 lawmakers from both parties and includes Republican Sens. Mitt Romney of Utah, Rob Portman of Ohio, Bill Cassidy of Louisiana, Lisa Murkowski of Alaska, and Susan Collins of Maine.

On the Democratic side, it includes Sens. Joe Manchin of West Virginia, Kyrsten Sinema of Arizona, Jeanne Shaheen of New Hampshire, Mark Warner of Virginia, and Jon Tester of Montana.

The framework is unlikely to contain the aggressive climate measures that many Democrats favor, which is a nonstarter among a growing group of Democratic senators. House Speaker Nancy Pelosi also appears to be against dropping climate initiatives if it means passing a watered-down bill with the GOP.

“I have no intention of abandoning the rest of my vision,” Pelosi told CNN’s “State of the Union” on Sunday, adding the proposed measures “could have been talked about 50 years ago.”

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Some Senate Democrats say they will oppose infrastructure deal with GOP if climate measures are dropped, potentially derailing package

Ron Wyden
Sen. Ron Wyden (D-OR) asks questions to a panel of pharmaceutical company CEOs during a hearing held by the Senate Finance Committee on “Drug Pricing in America: A Prescription for Change, Part II” February 26, 2019 in Washington, DC. The committee heard testimony from a panel of pharmaceutical company CEOs on the reasons for rising costs of prescription drugs.

  • Some Democratic senators say they will oppose a bipartisan infrastructure deal that doesn’t address climate crisis.
  • “On a big infrastructure bill, to pass on climate altogether? No way,” Sen. Ron Wyden told Insider on Thursday.
  • Biden’s willingness to pursue a deal may produce a watered-down plan with Republicans that may cost him Democratic support.
  • See more stories on Insider’s business page.

A group of Senate Democrats are ratcheting up their criticism of ongoing infrastructure negotiations with Republicans – and a few are warning they would derail a deal that omits climate change measures.

At least six Democratic senators have publicly raised concern that a bill negotiated with Republicans would produce a watered-down package inadequate to meet the scale of the climate crisis over the past week. They include Sens. Sheldon Whitehouse of Rhode Island; Martin Heinrich of New Mexico; and Brian Schatz of Hawaii.

But a pair of Democrats are going further. Sens. Ron Wyden of Oregon and Ed Markey of Massachusetts have both said in recent days that they would oppose a package that didn’t include provisions to aggressively combat climate change. That’s been a top priority for the Biden administration

“On a big infrastructure bill, to pass on climate altogether? No way,” Wyden told Insider on Thursday. “Think I’m blunt enough? No way.”

Markey was similarly stark.

“We can’t have an infrastructure bill in 2021 that doesn’t have climate at its center,” Markey said in an MSNBC interview on the same day. “No climate, no deal.”

The increasing tempo of criticism represents a major challenge for President Joe Biden as he continues pursuing a bipartisan infrastructure deal. He laid out a sprawling proposal to accelerate the nation’s transition from fossil fuels to clean energy with measures like federal support to build a network of electric-vehicle charging stations.

Other provisions include green-energy tax incentives and money to retrofit homes into energy-efficient ones. But Republicans have dismissed the climate plans as measures going far beyond their infrastructure definition, which is confined to roads, bridges, and broadband.

Biden has expressed a willingness to cut his initial proposal, a move that could cost him Democratic support in both the Senate and House and derail the plan. Still, some GOP senators argue that Democrats should be satisfied with a focus on shoring up the country’s ability to endure the worsening catastrophes.

“If they’re looking for a line item that says ‘climate,’ they’re not going to see that. As we know, climate initiatives can be incorporated in so much,” Sen. Lisa Murkowski told reporters on Thursday. “If you have support for dealing with the threats of erosion and flooding and the superstorms – that is climate-related.”

Murkowski added: “We kind of capture so much of it in the resiliency area. If people look to the specifics, they’ll see that there is plenty there.”

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Four states cut off federal unemployment benefits Saturday – and the White House is very unlikely to step in to prevent the loss of stimulus aid

unemployment insurance weekly benefits stimulus checks recession job losses coronavirus pandemic
  • Four states are cutting off stimulus jobless aid on Saturday.
  • The cuts in Mississippi, Missouri, Alaska, and Iowa yanks aid from 340,000 workers.
  • The Biden administration is very unlikely to step in and prevent the unemployment aid losses.
  • See more stories on Insider’s business page.

For nearly 340,000 workers on Saturday, a steady flow of federal assistance will abruptly end.

Mississippi, Missouri, Alaska, and Iowa are the first four Republican-led states to scrap their federal unemployment insurance programs. They include the $300 federal supplement to unemployment checks, along with a pair of federal programs that expanded government assistance to gig-workers, freelancers, and the long-term unemployed during the COVID-19 pandemic.

No extra federal assistance will be going out the door in those states after this weekend. That means the level of wage replacement with regular unemployment aid will not amount to half of workers’ past income, per data from Andrew Stettner, a senior fellow and jobless policy expert at the left-leaning Century Foundation.

Some 22 million US jobs were lost last year because of the pandemic, many of them low-wage positions.

Twenty-five GOP-led states are pulling the plug on unemployment insurance programs over the summer, imperiling aid for nearly four million people, according to Stettner. Republican governors argue that the federal aid is keeping people from re-entering the workforce, slowing the economic recovery.

“It has become clear to me that we cannot have a full economic recovery until we get the thousands of available jobs in our state filled,” Mississippi Gov. Tate Reeves said last month.

The unemployment aid was extended until early September under President Joe Biden’s coronavirus relief law enacted three months ago. But many employers and Republicans stepped up their complaints about worker shortages, particularly in the leisure and hospitality sector, though those sectors added jobs in the past two months.

Biden appears to have demonstrated some sensitivity to the criticisms. The president said last week that it “makes sense” for federal unemployment aid to expire on Labor Day. Then White House press secretary Jen Psaki said Republican governors have “every right” to cancel the administration’s jobless aid programs.

Sen. Bernie Sanders, along with some economic experts, argue that the government has a legal obligation to step in and distribute aid to at least gig workers through the Pandemic Unemployment Assistance program. But the Labor Department – which administers the program – has concluded it is unable to do much about it.

Some Democrats in Congress have been fiercely critical of the GOP moves.

“No one should face financial ruin for living in states run by Republicans,” Sen. Ron Wyden of Oregon said in a statement last month. He told Politico recently he was eyeing a new bill to address the situation, though such a plan faces an uphill climb in the evenly-divided Senate.

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Infrastructure talks enter last-ditch stage as both Republicans and Democrats eye gas tax increase

Mitt Romney congress
Republican Sen. Mitt Romney of Utah.

  • Sen. Mitt Romney told Insider a bipartisan group is weighing indexing the gas tax to inflation.
  • The gas tax hasn’t been raised since 1993.
  • Other Democrats appeared noncommittal, reflecting the delicate state of the talks.
  • See more stories on Insider’s business page.

Republicans and Democrats are eyeing a potential increase to the gas tax as both parties entered a chaotic last-ditch effort to strike a bipartisan infrastructure deal after a month of failed discussions between President Joe Biden and Senate GOP

The bipartisan group is in the early stages of assembling a plan they hope will draw at least 60 votes in the evenly-divided Senate. The cohort is equally split between Republicans and Democrats.

It includes Republican Sens. Mitt Romney of Utah and Rob Portman of Ohio, as well as Democratic Sens. Joe Manchin of West Virginia, Kyrsten Sinema of Arizona; and Jon Tester of Montana. The group emerged after Biden pulled the plug on negotiations with Sen. Shelley Moore Capito of West Virginia, who had been Republicans’ chief negotiator since April.

Romney told Insider on Thursday that the new working group was weighing indexing the gas tax to inflation. The 18-cent levy hasn’t been raised since 1993. “It keeps it at the same value that it has today,” the Utah Republican said.

The White House has previously said bumping the gas tax was off limits given Biden’s pledge to not hike taxes for households earning under $400,000. They did not immediately respond to a request for comment.

But the idea gained some momentum among Democrats when Sen. Dick Durbin of Iowa, second-ranked in the chamber, said he believed it “ultimately has to happen.”

“I look at it as a user fee. We pay taxes on gasoline because we want to drive our cars on safe roads,” Durbin told reporters.

Still, other Democrats in the group like Tester appeared noncommittal. “It’s not one of my favorite things, but we’ll see what the entire deal looks like,” he said in an interview. “I gotta see it in the context of everything, see what stays in and drops out.”

Sen. Mark Warner of Virginia, another Democrat in the group, declined to answer whether he supported it, a sign of the delicate state of the negotiations. “I actually think it’s better … until the cake is fully baked, to keep the ingredients quiet,” he told Insider.

Seth Hanlon, a tax expert and senior fellow at the liberal-leaning Center for American Progress, projected that indexing the gas tax to inflation would generate between $30 billion to $35 billion over a decade.

“It would be borne by consumers,” Hanlon told Insider. “We could get roughly the same revenue by rolling back the 2017 corporate tax cut by a fraction of a percentage point.”

He added that indexing the gas tax could have “modestly positive environmental effects,” though not if it’s only paired with spending focused on physical infrastructure and if it omits climate.

Biden’s two-part economic plans amount to $4 trillion in fresh spending on physical infrastructure like roads and bridges, as well as caregiving, cash payments, universal pre-K, community college, and a wide range of measures.

Both parties remain far apart on the scope of an infrastructure bill and how to pay for it. Other Republicans are increasingly signaling that climate provisions wouldn’t be included in their package.

Biden, along with congressional Democrats, are pushing clean energy tax incentives, a national system of electric vehicle charging stations, and federal funds to retrofit homes.

“If they’re looking for a line item that says ‘climate,’ they’re not going to see that,” Sen. Lisa Murkowski of Alaska said of Democrats.

A few Senate Democrats have stepped up their criticism of the bipartisan talks in recent days, warning that such talks risk omitting measures to combat climate change in an infrastructure deal. Another top Democrat threatened to withhold his vote if climate wasn’t sufficiently addressed.

“On a big infrastructure bill, to pass on climate altogether? No way!” Sen. Ron Wyden of Oregon, chair of the Senate Finance Committee, told Insider. “Think I’m blunt enough? No way.”

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Senate Democrats signal they’re ready to ditch GOP on infrastructure as White House turns to new bipartisan group

Chuck Schumer
Senate Majority Leader Chuck Schumer (D-New York).

  • Biden’s talks with Senate Republicans broke down on Tuesday after more than a month.
  • Schumer said Democrats are looking to pass infrastructure spending alone down the road.
  • The White House is turning to a new working group that is eyeing stimulus money to pay for infrastructure.
  • See more stories on Insider’s business page.

Senate Democrats are starting to signal they are prepared to ditch Republicans on infrastructure, as the Biden administration’s talks with the GOP collapsed without a deal after more than a month.

Senate Majority Leader Chuck Schumer said Democrats were preparing to use reconciliation, a tactic to approve certain bills with a simple majority of 51 votes in the Senate.

“We all know as a caucus we will not be able to do all the things that the country needs in a totally bipartisan way,” he said at a weekly news conference. “So at the same time, we are pursuing the pursuit of reconciliation.”

Several hours later, Sen. Shelley Moore Capito of West Virginia, the chief negotiator for Republicans, announced her talks with President Joe Biden broke down after they failed to resolve major differences.

“I spoke with the president this afternoon, and he ended our infrastructure negotiations,” Capito said in a statement, adding she was “disappointed” in the decision.

“Throughout our negotiations, we engaged respectfully, fully, and very candidly – delivering several serious counteroffers that each represented the largest infrastructure investment Republicans have put forth,” she said.

The West Virginia Republican met with Biden twice in the Oval Office since last month, and both sides were unable to strike an agreement after six weeks of back-and-forth discussions. They were never close to bridging differences on the size and scope of a plan, or on how to finance it.

Biden was seeking at least $1 trillion in new spending, a significant cut from the initial $2.3 trillion infrastructure plan he unveiled in August. Capito’s latest offer that the White House dismissed Friday included only $338 billion in fresh spending – a $700 billion gap.

Now, the Biden administration’s attention is likely to turn to another bipartisan working group that includes Sens. Joe Manchin of West Virginia, Mitt Romney of Utah, and Bill Cassidy of Louisiana, and Sen. Rob Portman of Ohio.

Biden also called Cassidy on Tuesday in a fresh sign of the White House’s new efforts to cobble together a new coalition to support an infrastructure plan.

Cassidy told Insider earlier on Tuesday that some of the group’s plan could be financed with money from the $1.9 trillion coronavirus relief law.

“Dollars that have not been used that are still out there – and won’t be used for years – seem like a logical place to go,” he told Insider. The Louisiana Republican also ruled out there being any funding for caregiving in the proposal, saying that goes beyond the scope of infrastructure.

Romney also said the group was eyeing the use of emergency stimulus funds provided to states in their package. “We’ll allow them to use some of the money we’ve sent to them,” he told Insider.

The Biden administration rejected that measure during the negotiations with Capito. Other Democrats urged quick action after the crawling pace of negotiations with Republicans, arguing they barely budged.

“I think we have to move this up as quickly as we can,” Sen. Bernie Sanders told reporters. “I have not seen any indication that Republicans are prepared to support the kind of serious legislation this country needs.”

Sanders said any reconciliation bill would include both of Biden’s infrastructure plans – the $2.3 trillion American Jobs Plan as well as the $1.8 trillion American Families Plan. The first is devoted to upgrading roads and bridges, instituting elder care, and revitalize manufacturing among other measures.

The latter plan aims to set up universal pre-K, tuition-free community college, cash payments for families, and a national paid leave program.

Democratic Sen. Bob Casey of Pennsylvania, said Democrats will still need to pass a second bill through reconciliation, along party lines, even if Democrats can agree with Republicans on a smaller physical infrastructure bill focused on fixing roads, bridges and ports. If they can’t, he said, then Democrats will need to include all they can in a reconciliation package.

Casey is pushing for funding for the infrastructure plan to include Biden’s request for a $400 billion fund that would pay for older adults and people with disabilities to get care at home. He dismissed concerns about high spending.

“Those are big numbers but when you consider what corporations and extraordinarily rich people have taken out of the tax code over 40 years, it’s astronomical,” he said. “Even those numbers we are talking about now are dwarfed by the dollars taken out of the tax code because it was rigged.”

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Biden has reportedly offered to ditch his rollback of Trump-era tax cuts in a major infrastructure concession to GOP

Joe Biden Shelley Moore Capito in Oval Office White House
President Joe Biden meets with Sen. Shelley Moore Capito at the White House.

  • Biden has reportedly made a major concession to drop a corporate tax hike in infrastructure talks with Republicans.
  • Instead, he’d put in place a 15% minimum corporate tax.
  • Republicans have barely budged in the negotiations so far. They’re schedule to speak again Friday.
  • See more stories on Insider’s business page.

President Joe Biden has reportedly floated creating a minimum tax for corporations rather than pursuing his proposed corporate tax rate increase, according to The Washington Post.

The move comes as the president continues a fourth week of negotiations with the GOP, who have ruled out any alterations to the 2017 Republican tax cuts. Biden had proposed raising the corporate rate from to 28% from its current level of 21% enacted under President Donald Trump’s tax law.

Instead, Biden put forward a 15% minimum corporate tax as a possible solution, a source familiar with the discussions told the Post. That tax would take aim at corporations paying little to no taxes. Biden has previously cited a report from the left-leaning Institute on Taxation and Economic Policy indicating 55 major American companies paid nothing in federal income taxes in the past year.

The White House did not immediately respond to a request for comment.

The move represents a sharp break from Biden’s previous fiery rhetoric on the need for increased corporate taxes; Still, some centrist Democrats like Sen. Joe Manchin of West Virginia are pushing for a rate closer to 25%, rather than 28%. Biden wants to offset his proposed infrastructure spending with tax hikes on corporations and the country’s highest-earners.

Republicans last week led by Sen. Shelley Moore Capito of West Virginia pitched an infrastructure plan with only a modest amount of new spending above what Congress has already approved. Both parties are at loggerheads over the size and scale of the package, along with how to pay for it. Republicans are seeking to finance their spending with coronavirus relief money, which Democrats are rejecting.

It also comes amidst a push by the US to enact a global minimum corporate tax rate, which would seek to standardize taxes for multinational companies and prevent them from fleeing to countries with lower levies. The latest figure reported for that rate is also 15%, not the expected 21%.

The White House also reportedly wants to increase tax enforcement on corporations and high-earners.

“It’s just not fair. It’s not fair to the rest of the American taxpayers,” Biden previously said in a speech defending the corporate tax rate increase. “We’re going to try to put an end to this. Not fleece them – 28%. If you’re a mom, a dad, a cop, firefighter, police officer, etc., you’re paying close to that in your income tax.”

Capito and Biden are scheduled to speak again on Friday.

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Stimulus checks spurred nearly 50% declines in pandemic-era food shortages and financial worries, study shows

Woman supermarket groceries
  • A University of Michigan study found stimulus payments were effective at staving off economic pain.
  • Gauges of food insecurity and financial instability plummeted after checks were sent in December and March.
  • The payments’ delivery even coincided with broad improvements in the mental health of recipients.
  • See more stories on Insider’s business page.

New analysis suggests that relief payments included in Congress’s sweeping stimulus were highly effective at supporting Americans and easing various stresses through the pandemic.

The pandemic-era stimulus checks weren’t the first instance of the government issuing relief payments, but the amount of cash sent directly to Americans over the past year is unparalleled. Millions of Americans received $1,200 payments from the March 2020 CARES Act, another $600 check from President Donald Trump’s late-2020 package, and a $1,400 payment from Democrats’ March stimulus.

The payments were among the less-studied elements of the various relief plans, but a study by Patrick Cooney and H. Luke Shaefer at the University of Michigan found the checks were helpful in several ways. The researchers cited data from the Census Bureau’s Household Pulse survey.

For one, food shortages fell sharply after the December stimulus’s passage and again after the American Rescue Plan Act was approved in March. The share of Americans saying they sometimes or often lacked sufficient food fell to 8.7% by early May from a late-December high of 13.7%. For households with children, the share fell to 11.3% from 18.3%.

Food instability UMich analysis
Source: University of Michigan Poverty Solutions

The second and third relief payments also padded against financial concerns. Roughly 10% of Americans said it was “very difficult” to pay for usual household expenses in late May. That’s down from 17.8% in December 2020. The proportion fell to 13.5% from 23.1% for respondents with children.

Households earning less than $25,000 saw the largest drop in financial instability over the period, but those earning less than $49,000 also saw notable declines.

Recipients’ mental health also improved markedly in the weeks after checks were sent out. The share of Americans saying they felt anxious for several or more days in a week fell to 52.8% last month from 68.6% in late December.

Similarly, the proportion of respondents saying they felt symptoms of depression for several or more days of the week fell to 46% from late-2020 highs of 59.4%.

To be sure, sentiments broadly improved through the spring as the country emerged from the worst phase of the pandemic. Vaccination led daily COVID-19 case counts to plummet, and the easing of lockdown measures brought back a sense of normalcy after a dire winter.

Yet when considered alongside data on food shortages and financial insecurity, the checks seemingly made significant positive impacts on Americans’ lives. Similarly, in the period between March 2020 and December 2020, gauges of economic hardship worsened amid soaring COVID-19 case counts and the gradual exhaustion of CARES Act relief.

The stimulus checks’ broad-based, rapid, and cash-based nature made them far more effective forms of economic support during the pandemic, the researchers said. The checks supported needs ranging from food scarcity to housing payments, and widespread eligibility matched the widespread fallout felt throughout the country.

“The success of this approach is worth learning from, and building off of, in the months and years ahead,” the team added.

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A Venezuelan ring is accused of stealing over $800,000 worth of stimulus checks during the pandemic

US dollars
  • The Miami Herald reported a Venezuelan ring is accused of stealing over $800,000 in stimulus checks.
  • The FBI has been investigating the ring since January, which was also charged with identity theft.
  • Biden has not yet said if more stimulus checks are on the way amidst calls from Democrats urging him to do so.
  • See more stories on Insider’s business page.

Since the start of the pandemic, the government has distributed three rounds of stimulus checks to Americans in order to help prompt economic and financial recovery. But a ring of Venezuelans might have prevented hundreds of people from receiving those checks.

The Miami Herald reported on Wednesday that Venezuelans living in South Florida and Mexico have stolen over $800,000 in stimulus checks since the start of the pandemic, according to federal authorities. The feds have so far charged Jesus Felipe Linares Andrade for conspiring to steal government money, along with identity theft, and prosecutors in South Florida said Linares could have as many as four other “co-conspirators.”

Linares was arrested in May and pleaded not guilty after being caught in an undercover FBI operation in which he, and his conspirators, stole checks in South Florida and Mexico and created fake IDs to correspond with the names of actual US taxpayers.

According to the Herald, an FBI informant met with one of the conspirators in January to discuss cashing about 30 stimulus checks totaling to $36,000. Then, in April, Linares met with two FBI informants to make arrangements to pick up a package with 416 more stimulus checks worth about $249,000.

The meetings continued through April and eventually totaled to over $800,000 in stolen stimulus payments.

“During the meeting [in April], Linares placed an envelope in the vehicle containing over $150,000 in stolen U.S. Treasury checks and over 30 identification documents,” the affidavit wrote. “The identification documents consisted of copies of driver’s licenses, including Florida driver’s licenses. Some of the names on the driver’s license matched the names on the checks.”

Linares is being held without bond.

Although President Joe Biden has not yet announced whether more stimulus checks are en route, studies have shown that the benefits of stimulus checks are significant, with two more checks having the ability to lift an additional 12 million Americans out of poverty.

And a growing number of Democrats are pushing for recurring stimulus payments to sustain economic recovery from the pandemic.

“The pandemic has served as a stark reminder that families and workers need certainty in a crisis,” House Democrats wrote in a letter. “They deserve to know they can put food on the table and keep a roof over their heads. They should not be at the mercy of constantly shifting legislative timelines and ad hoc solutions.”

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