Congress has started to work on the next stimulus bill, which Treasury Secretary Steve Mnuchin said will “start” at $1 trillion. However, many of the current benefits from the CARES Act will expire at the end of the month.
That could create a significant economic disruption for millions of Americans as unemployment benefits expire. It will also cause payments on student loans to be no longer deferred. Additionally, evictions and mortgage foreclosures will resume.
Impact on Millions of Americans
Half of the American households reporting that they have lost income during the coronavirus pandemic. Also, unemployment rates still above 10%. With this, the sunsetting of the enhanced unemployment benefits at the end of the month will have a significant impact. It will greatly affect nearly 25 million Americans who are receiving the benefits.
“If policymakers don’t act this week to extend the increased benefits, they will expire while unemployed workers and the economy need substantial support,” said Center on Budget and Policy Priorities chief economist Chad Stone.
Without the enhanced Federal unemployment benefits, those 25 million Americans will only have their state unemployment benefits to rely on. In some states, like Oklahoma, that’s only $100 per week.
“These benefits are wholly insufficient,” said Michele Evermore, senior policy analyst for the National Employment Law Project.
“Losing the $600 will mean people will put themselves in physical jeopardy by showing up to unsafe jobs to keep themselves afloat,” she then added. “For the people who can’t find jobs, they’re going to lose their homes. They’re not going to be able to afford food, and they’re going to take on debt that will stay with them for years.”
Many Republicans, including President Trump, don’t want the enhanced benefits extended. They feel it is a deterrent to getting Americans back to work.
Treasury Secretary Steve Mnuchin is in favor of another stimulus check for every American instead. He believes that people can use the money immediately. He also mentions, “we can get that into hard-working Americans’ bank accounts very, very quickly.”
For the nearly 45 million Americans who are paying back student loans, the payment pause ends in September, putting additional financial stress on those who must resume payments.
“If borrowers are forced to resume repaying their student loans on Oct. 1, delinquencies and defaults will skyrocket,” said Mark Kantrowitz, nationally-recognized expert on student financial aid, scholarships and student loans. “This year’s college graduates are entering the worst job market ever,” he also said.
On Eviction Proceedings
In the meantime, 30 states are now allowing eviction proceedings to resume, and the eviction moratorium for properties backed by a federal mortgage or receiving government-assisted housing ends on July 25.
This means up to 40 million Americans could lose their homes in the next few months, said Emily Benfer, a housing law expert.
“This data shows us that all the terms people have been using to describe what’s coming – ‘cliff’, ‘tsunami’, ‘avalanche’ and so on – might actually be an understatement,” said John Pollock, coordinator of the National Coalition for a Civil Right to Counsel.
GOP, White House Reach ‘Fundamental Agreement’ On Next Stimulus Bill
Senate Republicans announced last night that they have “reached a fundamental agreement” with the White House on the best path to move forward for the next stimulus bill.
A small group of GOP Senators met with Treasury Secretary Steve Mnuchin and White House chief of staff Mark Meadows for a third time this week. The GOP and the White House are “completely on the same page,” as a result. They also are “in good shape” to move the relief bill forward.
This positive development stands in contrast to reports that discussions within the GOP had broken down. Some say it’s broken to the point that Sen. Ted Cruz asked, “What the hell are we doing?”
Senate Majority Leader Mitch McConnell has recently indicated that he doesn’t expect the new bill to include a payroll tax cut, and it remains to be seen if that will be removed to gain bipartisan support.
“There are some differences of opinion on the question of the payroll tax cut and whether that’s the best way to go. And so we’re still in discussion with the administration on that,” McConnell added.
The GOP is expected to release their plan today, but it’s now “a handful of bills now instead of just one bill,” according to Roy Blunt, the chair of the Rules Committee.
He added, “So we’ll have one appropriations bill, we’ll have several authorization bills that explain in more detail how that appropriated money will be spent, and obviously there will be a bill that will talk about any money that is distributed in direct payments or any other way.”
Here’s what is expected to be included in the proposals:
The bill will include $16 billion in new funding for testing, to add to $9 billion in previously appropriated funds. The combination of funds is a compromise between the White House and Senate Republicans. The former desires a lower funding amount and the latter wants $25 billion. The funding will be focused on testing in schools, daycare centers, nursing homes, and senior centers.
Republican have agreed to $70 billion in funding for K-12 education for all schools on a per capita basis. Half of the money will go to covering costs for schools that have announced plans to reopen.
$30 billion in funding would go to colleges and universities whether or not they reopen this fall.
Republicans are willing to spend $105 billion so that schools can “safely reopen,” McConnell said earlier this week. Democrats originally asked for $100 billion. However, they are now asking for more than $400 billion in school funding.
“We’ve agreed on the school front on ways to get people back to school and encourage them to go back to … school, as much as possible,” Blunt said.
Treasury Secretary Mnuchin told reporters that there is an agreement in place regarding stimulus checks. He says it is to provide Americans with another round of direct payments. However, the final amount hasn’t been determined. He added, “I’m not going to get into specifics right now, but there is an agreement.”
Unemployment insurance and payroll tax cut
There appears to be no short-term extension of the enhanced unemployment benefits in the next bill. This comes despite reports earlier this week that some Republicans were open to the idea.
“We’re really looking at trying to make sure that we have a comprehensive bill that deals with the issues,” chief-of-staff Meadows told NBC News in an interview. “Any short-term extensions would defy the history of Congress, which would indicate that it would just be met with another short-term extension.”
There has also been no agreement on a payroll tax cut, a top priority for President Trump.
“We really are not in a position to talk any specifics,” Meadows said, adding “We’re going let Leader McConnell talk about that after he actually has a more thorough conversation with his senators.”
Biden Is Latest Dem to Support Ridiculous Free Housing Proposal
Presidential candidate Joe Biden is the latest Democrat to throw their support behind the ridiculous idea that housing should be free
During an appearance yesterday, Biden said he agrees with “forgiving” both mortgage and rent payments. He says this as the country struggles with the coronavirus pandemic and 38 million Americans are without a job.
“There should be rent forgiveness and there should be mortgage forgiveness now in the middle of this crisis. Not paid later, forgiveness. It’s critically important to people who are in the lower-income strata.” said Biden
Tara Raghuveer, housing campaign director at People’s Action, a political network devoted to grassroots organizing, aired her opinion. She said, “The tenant is the most vulnerable person in the economy right now.”
She added, “The alternative to not canceling the rent is complete bottoming out of the market. And tens of millions of people literally never financially recovering from this moment.”
Calls for Housing Relief
Biden’s call for rent and mortgage relief echoes efforts by Minnesota Rep. Ilhan Omar. Omar introduced legislation that would bar landlords and lenders from collecting monthly payments. It would also impose late fees “through the duration of the pandemic.”
Under Omar’s plan, renters and mortgage borrowers who skip payments wouldn’t need to pay back anything once the rent and mortgage forgiveness policy ended. And any lender or landlord who violated the plan would face penalties.
Correctly, housing industry experts point out that allowing renters to skip payments also needs to consider the consequences of the landlords not being able to pay their own mortgages on the property.
“If multifamily landlords, particularly the small mom and pop landlords who own just maybe one to four units can’t make their mortgage payments and can’t stay in business, those are affordable units that are going to be lost to the private market,” said Flora Arabo, the national senior director of state and local policy at Enterprise Community Partners.
“Rent forgiveness without rental subsidies could be pretty catastrophic for tenants,” Arabo said.
Omar’s plan addresses these concerns, supporters say. It does so because it creates a fund for landlords and lenders so that they could recoup any losses.
Not surprisingly, Raghuveer’s organization, People’s Action, worked with Omar in drafting the bill. The organization threw in more stipulations for landlords to collect those funds. These include providing information on their revenues, refraining from discrimination based on the source of income, and other tenant protections.
Biden’s support for the rent and mortgage forgiveness plans doesn’t really mean much. However, the biggest problem with these free housing proposals is that they demonize landlords. They let the tenants immediately skip payments, but force the landlords to deal with bureaucracy and red tape to receive relief funds.
According to the Census Bureau, individual investors own nearly 75% of our nation’s rental units, not massive corporations. Those mom and pop landlords likely aren’t any more sophisticated than their tenants. They would also find themselves in the same dire financial situation should they lose the ability to collect rent.
Bob Pinnegar, president and CEO of the National Apartment Association, said in a recent interview, “Rent cancellation proposals do not adequately address the problem and fail to recognize that many property owners are in the same dire situation as their residents — substantial loss of income amid ongoing financial obligations.”
Andrew Yang Wants You to Make Money Off Your Data by Making it Your Personal Property
Andrew Yang, 2020 Democratic presidential candidate, plans to regulate the tech industry by prioritizing in giving people the right to own their personal data (“data as a property right”), thus allowing them to make money by sharing it with companies. Currently, companies entirely own users’ data – users do not have much control over it.
Yang said, “our data is now worth more than oil” and gave emphasis to the great amount of data people create and how companies make money over it. “By implementing measures to increase transparency in the data collection and monetization process, individuals can begin to reclaim ownership of what’s theirs,” he said.
He also cited a report saying that the collection and use of Americans’ personal data has become a $198 billion industry. Yang believes that people should have more control over their data, such as being able to see how their data is being used and having the freedom to opt out if they choose.
Yang added that we need politicians “who understand technology and a modern way to regulate it,” as reported by Engadget. “In order to regulate technology effectively, our government needs to understand it. It’s embarrassing to see the ignorance some members of Congress display when talking about technology, and anyone who watched Congress question Mark Zuckerberg is well aware of this,” said Yang.
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