Author: BigGuy

The United States House of Representatives passed on Wednesday a $1.9 trillion coronavirus stimulus bill proposed by the Democrats. A total of 220 US representatives voted in favor of the bill without a Republican vote, while 211 lawmakers voted against the legislation, including Democratic representative Jared Golden of Maine. The bill includes $1,400 direct stimulus payments to US citizens, an extension of $300 weekly jobless benefits for unemployed Americans through September 6, tax credit expansions, around $20 billion in vaccine development and distribution funds, as well as $350 billion in state and local aid. White House press secretary Jen Psaki unveiled that US President Joe Biden would sign the bill into law on Friday.

The $1,400 stimulus checks will be accompanied by a host of other relief, according to Garrett Watson, a senior policy analyst for the Tax Foundation. Here are the other benefits you can expect. The legislation provides a rebate that amounts to $1,400 for a single taxpayer, or $2,800 for a married couple that files jointly, plus $1,400 per dependent. Individuals earning up to $75,000 would get the full amount as would married couples with incomes up to $150,000. The size of the check would shrink for those making slightly more with a hard cut-off at $100,000 for individuals and $200,000 for married couples. Some Republicans want to cut the size of the rebate as well as the pool of Americans eligible for it, but Biden has insisted on $1,400 checks, saying “that’s what the American people were promised.” The new round of checks will cost the government an estimated $422 billion. Under current law, most taxpayers can reduce their federal income tax bill by up to $2,000 per child. The package moving through the House would increase the tax break to $3,000 for every child age 6 to 17 and $3,600 for every child under the age of 6. The legislation also calls for the payments to be delivered monthly instead of in one lump sum. If the secretary of the Treasury determines that isn’t feasible, then the payments are to be made as frequently as possible. Also, families would get the full credit regardless of how little they make in a year, even just a few hundred dollars, leading to criticism that the changes would serve as a disincentive to work. Add in the $1,400 per individual checks and other items in the proposal, and the legislation would reduce the number of children living in poverty by more than half, according to an analysis from the Center on Poverty and Social Policy at Columbia University. The legislation would send $350 billion to state and local governments and tribal governments. While Republicans in Congress have largely objected to this initiative, Biden’s push has some GOP support among governors and mayors. Many communities have taken hits to their tax base as millions of people have lost their jobs and as people stay home and avoid restaurants and stores to prevent getting COVID-19. Many areas have also seen expenses rise as they work to treat the sick and ramp up vaccinations. But the impact varies from state to state and from town to town. Critics say the funding is not appropriately targeted and is far more than necessary with billions of dollars allocated last spring to states and communities still unspent. The bill calls for $130 billion in additional help to schools for students in kindergarten through 12th grade. The money would be used to reduce class sizes and modify classrooms to enhance social distancing, install ventilation systems and purchase personal protective equipment. The money could also be used to increase the hiring of nurses, counselors and to provide summer school. Spending for colleges and universities would be boosted by $40 billion, with the money used to defray an institution’s pandemic-related expenses and to provide emergency aid to students to cover expenses such as food and housing and computer equipment. The bill provides another round of relief for airlines and eligible contractors, $15 billion, so long as they refrain from furloughing workers or cutting pay through September. It’s the third round of support for airlines. A new program for restaurants and bars hurt by the pandemic would receive $25 billion. The grants provide up to $10 million per entity with a limit of $5 million per physical location. The grants can be used to cover payroll, rent, utilities and other operational expenses. The bill also provides another $7.25 billion for the Paycheck Protection Program, a tiny fraction of what was allocated in previous legislation. The loans are designed to help borrowers meet their payroll and operating costs and can potentially be forgiven. Expanded unemployment benefits from the federal government would be extended, with an increase from $300 a week to $400 a week. That’s on top of what beneficiaries are getting through their state unemployment insurance program. The bill provides money for key elements of the Biden administration’s COVID-19 response, while also trying to advance longstanding Democratic priorities like increasing coverage under the Obama-era Affordable Care Act. On “Obamacare,” it dangles a fiscal carrot in front of a dozen states, mainly in the South, that have not yet taken up the law’s Medicaid expansion to cover more low-income adults. Whether such a sweetener would be enough to start wearing down longstanding Republican opposition to Medicaid expansion is uncertain. The bill provides $46 billion to expand federal, state and local testing for COVID-19 and to enhance contract tracing capabilities with new investments to expand laboratory capacity and set up mobile testing units. It also contains about $14 billion to speed up the distribution and administration of COVID-19 vaccines across the country. The bill would gradually raise the federal minimum wage to $15 per hour by June 2025 and then adjust it to increase at the same rate as median hourly wages. However, that provision is not expected to survive in the final bill. The Senate parliamentarian ruled that it cannot be included in the COVID-19 economic relief package under the process Democrats chose to undertake to get a bill passed with a simple majority. Biden had predicted such a result. Still, the ruling was a stinging setback for most Democratic lawmakers who had said the higher minimum wage would increase the pay for millions of Americans. The nonpartisan Congressional Budget Office had projected the new federal minimum wage would lift some 900,000 people out of poverty once it was fully in place. But Republicans said the mandatory wage hikes would make it harder for small businesses to survive and they pointed to the CBO’s projection that about 1.4 million jobs would be lost as employers looked for ways to offset their higher personnel costs.

https://youtu.be/9inXKBiM9G0

David Tepper, founder of Appaloosa Management whose comments have been known to move markets, said it’s very difficult to be bearish on stocks right now and thinks the sell-off in Treasuries that has driven rates higher is likely over. The major market risk has been removed, Tepper said, adding that rates should be more stable in the short term. “Basically I think rates have temporarily made the most of the move and should be more stable in the next few months, which makes it safer to be in stocks for now,” Bond yields have jumped sharply over the past few weeks amid higher inflation expectations, which put pressure on risk assets. The 10-year Treasury yield climbed from 1.09% at the end of January to above 1.60% on Monday. The swift advance in yields hit tech stocks particularly hard as these companies have relied on easy borrowing for superior growth. Tepper believes Japan, which had been a net seller of Treasurys for years, could start buying the U.S. government bonds again following the surge in yields. The potential buying could help stabilize the bond market, Tepper said. “That takes a major risk off the table, and it’s very difficult to be bearish,” Another bullish catalyst for stocks in the near term is the coronavirus fiscal stimulus package that was just approved by the Senate, Tepper said. The Democrat-controlled House is projected to pass the $1.9 trillion economic relief and stimulus bill later this week. President Joe Biden is expected to sign it into law before unemployment aid programs expire on March 14. The hedge fund manager also said “bellwether” stocks like Amazon are starting to look attractive after the pullback. Shares of the e-commerce giant have fallen 9.7% over the past month, while Apple has dropped more than 11% during the same period. A year ago before stocks really began to drop because of the pandemic, Tepper warned that the virus could be a game changer for markets.

Coronavirus vaccine rollouts and a huge US stimulus package have boosted economic growth expectations.

The Organisation for Economic Co-operation and Development (OECD) sharply hiked its 2021 global growth forecast on Tuesday to 5.6%. The deployment of coronavirus vaccines and a huge US stimulus program have greatly improved the world’s economic prospects. Tuesday’s figure is an increase of 1.4% from the Paris-based organization’s December forecast. It said faster and more effective vaccination across the world is of critical importance. The outlook for global growth would be better than current projections if the production and distribution of vaccines accelerate as containment measures will be relaxed more rapidly. “World output is expected to reach pre-pandemic levels by mid-2021 but much will depend on the race between vaccines and emerging variants of the virus,” it stressed. The OECD said global gross domestic product (GDP) growth would be 4% in 2022. The US growth is expected to be 6.5% in 2021, partly reflecting the large-scale fiscal stimulus now planned with a sustained pace of vaccination. In the euro area, where the level of fiscal stimulus is lower and vaccine rollout slower, GDP is projected to increase 3.9% next year. The forecast for G20 countries was up 1.5 percentage points to 6.2% this year, the OECD said. Effective containment of the virus and regained dynamism of industrial activity created brighter prospects for the Asian-Pacific region. “In China, GDP growth is projected to be 7.8% this year; in Japan 2.7%; in Korea 3.3%; and in Australia 4.5%,” it said.

WASHINGTON (Reuters) – The U.S. House of Representatives will take up by Wednesday the Senate version of the sweeping $1.9 trillion coronavirus relief package backed by President Joe Biden, Speaker Nancy Pelosi said on Monday. Closing in on final approval of one of the biggest U.S. anti-poverty measures since the 1960s, Democrats aim to enact the massive legislation by Sunday, when enhanced federal unemployment benefits are set to expire. The Senate passed its version of the bill after a marathon overnight vote on Saturday. The Senate version eliminated or pared back some provisions included in the House bill, which had increased the federal minimum wage to $15 an hour and extended expanded jobless assistance through Aug. 29. Now that it has passed the Senate, it must be approved again by the House before it can make its way to Biden’s desk and be signed into law. Pelosi told reporters at the Capitol that the timing of a vote on the House floor “depends on when we get the paper from the Senate.” “We’d take it up Wednesday morning at the latest,” she said. Like the Senate, Democrats hold a very narrow majority in the chamber, meaning they cannot withstand many votes against the bill. The first version of the bill passed in the House without a single Republican vote. Two moderate Democrats joined Republicans in voting against that version. One of them, Representative Kurt Schrader of Oregon, said on Monday he would now vote for the bill with the Senate changes. “My concerns remain on the size and scope of this bill but believe the Senate changes provide meaningful relief for Oregonians in need,” Schrader wrote on Facebook. “Funding for our local governments, small businesses, schools, families, healthcare providers and an extension on unemployment benefits will be a lifeline for many,” he said of the legislation. Republicans, who broadly supported coronavirus relief early in the pandemic, have criticized the price tag of the Biden relief package. On Friday, as the Senate vote was still under way, House Democratic lawmaker Bonnie Watson Coleman said she was “disgusted” by some of the changes in the Senate bill and questioned if she could support it. A spokesman for her office did not immediately respond to a request for comment. But Representative Pramila Jayapal, head of the Congressional Progressive Caucus, told reporters she thought members of the group would back the legislation, which she described as “phenomenal” and in keeping with most of its members’ priorities. White House spokeswoman Jen Psaki praised the legislation at a news conference, saying that while there were some changes on the margins, it represented the “core” of what Biden originally proposed.