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    Britons Brace for More Hardship as Prices Soar Amid Inflation

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    Cutting back on meat. Choosing cheaper supermarket brands. Stockpiling soap. Soaring prices force more sacrifices.LONDON — Stacey Smith grabbed some boxes of tea from a low shelf of a London supermarket on Wednesday, and then phoned the neighbor who had asked her to buy them.“They have gone up 20 pence,” she said. “Do you still want them?”Her neighbor agreed to accept the price increase, something that Ms. Smith, a teaching assistant and a single mother of three, has been unable to do with her own shopping. After she bought the tea, she headed to Aldi, a cheaper supermarket, to shop for her family.In the past months, as food prices have soared in Britain, she has cut down on meat and relied on pasta and sauces instead. Her children have stopped attending swimming lessons, she has limited their trips to the fridge for snacks and she has turned down their requests for money to spend at the bowling alley.“We need that money for food,” said Ms. Smith, who makes 1,200 pounds (about $1,400) a month. “Before, we were keeping our head just above the water. Now, we are literally sinking.”In Britain, inflation rose 10.1 percent in July compared to a year earlier, with consumer prices growing at their fastest pace since 1982. Many Britons, especially the most vulnerable, who have borne the brunt of the effects of inflation, braced for more sacrifices: for saying “no” more often to their children, for making more trips to multiple supermarkets to find discounts, for joining lines at the food banks and for making more compromises to their health.Many Britons are concerned that their leaders have left the country rudderless during the growing economic crisis. The government is embroiled in a leadership transition, with Prime Minister Boris Johnson working out his last few weeks in Downing Street before a successor is announced on Sept. 5. Parliament itself is not in session, and vacation season is in full swing, with Mr. Johnson being spotted in Greece over the weekend — his second foreign holiday in recent weeks.In the meantime, residents are scrambling to cope, often forced to make hard choices.At Iceland, a low-cost supermarket with an emphasis on frozen food, Tainara Graciano, 51, a housekeeper in London, carried a basket with two cartons of eggs and discounted chicken nuggets that were expiring on the same day. She had cut back on bottled water since prices began spiraling up.“He drinks a lot,” she said of the water, looking at her 11-year-old son as he strolled by. Then she pointed at her half-empty basket and said, “Five months ago, I carried two of those.”Britons have been making more trips to multiple supermarkets to seek out lower prices.Andy Rain/EPA, via ShutterstockAcross the street, Arwen Joseph, 47, was shopping for house supplies at the low-cost store Poundland.Ms. Joseph, who is on government benefits and sometimes uses a food bank, said it had been harder to buy healthful food that was compatible with her allergies, which give her severe eczema. As a result, she has cut back on other items.“We used to have ice cream or bubble tea maybe once a week,” said her 9-year-old daughter, Georgia Gold. “Now we haven’t had it so much.”Volunteers at food banks say they have been caught off guard and are now struggling to keep up as more people arrive asking for help.Solomon Smith, who runs the Brixton Soup Kitchen in South London, which provides hot meals and other food bank services to those in need, said the number of people using the service had more than doubled in recent months.“People are telling us they haven’t eaten properly for days,” he said. “Some of them have been forced to go into shops to steal. Others don’t know if they should pay their gas bills or eat food.”The food bank itself has not escaped the inflation squeeze. It has had to cut back on hot meals and food purchases, and has seen public donations dry up, according to Mr. Smith.“We just don’t have enough to give to everyone,” he said, his voice wavering. “I don’t know what is going to happen next week.”People across Britain are confronting similar problems.At the Blackburn Food Bank, in the north of England, more people with full-time employment are turning up as wages have not kept up with the inflation.“People are very shocked that they have to be here,” said Gill Fourie, operations manager at Blackburn. “People don’t even have gas and electricity to cook,” she said, referring to mounting household energy prices which are forecast to climb to 3,500 pounds (about $4,240) a year in October, triple what they were a year ago. She added, however, that the facility continued to receive support from the community. Even people who are in less vulnerable situations have had to watch their wallets.“I would love to get some Mutti, but I cannot afford it,” said Melanie McHugh, an actress, as she looked at cans of tomato sauce at her local supermarket in south London. She said she was going to make shakshuka, a vegetable dish that could last for several days. She went for a cheaper brand of sauce.Ms. McHugh, who has stopped buying butter, also grabbed a lower cost brand of chorizo.“I am aware that I am lucky,” she said. “But I am also aware my habits have changed.”The British government has allocated £15 billion (about $18 billion) in benefits for the most vulnerable families. Ms. Smith, the mother of three, said she had received about 300 pounds this month. She has also stockpiled laundry soap, but said that did not ease her worries. She has started thinking of giving up her car and getting another job, as a cleaner, on weekends.“It’s not what I would like to do,” she said. “But you have to do what you need to survive.” More

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    As Broadway Struggles, Governor Hochul Proposes Expanded Tax Credit

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    With Omicron complicating Broadway’s return, Gov. Kathy Hochul proposed more assistance for commercial theater, which her budget director called “critical for the economy.”As Broadway continues to reel from the economic effects of the coronavirus pandemic, Gov. Kathy Hochul is proposing to expand and extend a pandemic tax credit intended to help the commercial theater industry rebound.Ms. Hochul on Tuesday proposed budgeting $200 million for the New York City Musical and Theatrical Production Tax Credit, which provides up to $3 million per show to help defray production costs.“They were starting to recover before Omicron, and then, as you have all seen, a lot of these performance venues had to shut down again, and those venues are critical for the economy,” the state budget director, Robert Mujica, told reporters.The tax credit program, which began last year under Gov. Andrew Cuomo, was initially capped at $100 million. Early indications are that interest is high: Nearly three dozen productions have told the state they expect to apply, said Matthew Gorton, a spokesman for Empire State Development, the state’s economic development agency.The Hochul administration decided to seek to expand the tax credit program — and to extend the initial application deadline, from Dec. 31, 2022 to June 30, 2023 — as it became clear that Broadway’s recovery from its lengthy pandemic shutdown would be bumpier than expected.Shows began resuming performances last summer, and many were drawing good audiences — Ms. Hochul visited “Chicago” and “Six” in October, while Mr. Gorton saw “The Lehman Trilogy” and “To Kill a Mockingbird.”But the industry is now struggling after a spike in coronavirus cases prompted multiple cancellations over the ordinarily lucrative holiday season, and then attendance plunged. Last week, 66 percent of Broadway seats were occupied, according to the Broadway League; that’s up from 62 percent the previous week, but down from 95 percent during the comparable week before the pandemic.“Clearly, we’re not out of the woods yet,” said Jeff Daniel, who is the chairman of the Broadway League’s Government Relations Committee, as well as co-chief executive of Broadway Across America, which presents touring shows in regional markets. Mr. Daniel, still recovering from his own recent bout of Covid, welcomed the governor’s proposal, and said the League would work to urge the Legislature to approve it.“Every show we can open drives jobs and economic impact,” said Mr. Daniel, who noted the close economic relationship between Broadway and other businesses, including hotels and restaurants. “If we can maximize Broadway, we maximize tourism.”Under the program, shows can receive tax credits to cover up to 25 percent of many production expenditures, including labor. As a condition of the credit, shows must have a state-approved diversity and arts job training program, and take steps to make their productions accessible to low-income New Yorkers. More

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    How $2 Trillion in Tax Increases in Biden's Bill Target Companies and the Rich

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    The proposal to fund the president’s sprawling spending plan mostly turns up the dial on more conventional tax policies, while trying to curb maneuvers that allow tax avoidance.WASHINGTON — President Biden’s new plan to pay for his climate change and social policy package includes nearly $2 trillion in tax increases on corporations and the rich. But many of the more contentious and untested proposals that Democrats have been considering in recent weeks were left on the cutting-room floor.The latest proposal reflects the reality that moderate Democrats are unwilling to back certain ideas aimed at raising money, including taxing the unrealized capital gains of billionaires and giving the Internal Revenue Service more insight into the finances of taxpayers. Ultimately, the package of tax increases mostly turns up the dial on more conventional tax policies, while adding some new wrinkles to curb maneuvers that allow tax avoidance.“I think in terms of who they’re targeting, they did decide to target the larger population of very rich people and not just get the money from a very small group of superrich people,” said Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center.Here’s a look at what’s in the new tax plan:Taxing the rich.Instead of a wealth tax or a special tax on billionaires, Mr. Biden rolled out a new “surtax” on income for multimillionaires and billionaires. It would effectively raise the top tax rate on ordinary income to 45 percent for the highest earners.Those with adjusted gross income of more than $10 million would face an additional 5 percent tax on top of the 37 percent marginal tax rate they already pay. Those making more than $25 million would face an extra 3 percent surtax.The Biden administration estimates that these tax increases would hit the top .02 percent of taxpayers and raise $230 billion of tax revenue over a decade.The plan also aims to ensure that people making more than $400,000 are not able to use loopholes to avoid paying a 3.8 percent Medicare tax. The White House estimates that provision alone will generate $250 billion in tax revenue over the next 10 years.Making corporations pay more.Borrowing a page from his campaign playbook, Mr. Biden wants to impose a 15 percent minimum tax on profitable companies that have little to no federal tax liability. Many profitable companies are able to reduce or eliminate their tax liability through the use of tax credits, deductions and previous losses that can carry over. The new tax would apply to companies with more than $1 billion in so-called book income — profits that firms report to their shareholders but not to the I.R.S.The plan is meant to ensure that the approximately 200 companies that pay no corporate income tax will have to pay some money to the federal government.The White House estimates the provision, which was also included in a plan presented by Senate Democrats, will raise an additional $325 billion in tax revenue over a decade.Chye-Ching Huang, the executive director of the Tax Law Center at New York University, said on Thursday that the proposal could mean that financial statements where book income is reported could become the new “locus for tax avoidance.”A separate proposal would also enact a 1 percent surcharge on corporate stock buybacks. Buybacks have surged along with the stock market, with cash-rich firms like Apple, JPMorgan Chase and Exxon spending billions of dollars each year to buy back, then retire, shares in their own companies. That can help drive up the company’s stock price, enriching both shareholders and corporate executives whose compensation is often tied to their firm’s stock performance.The provision is projected to raise $125 billion over 10 years.Ending the tax race to the bottom.Mr. Biden’s framework would raise the tax that companies pay on foreign earnings to 15 percent, putting the United States in line with a global minimum tax that is being completed at the Group of 20 summit in Rome this week.The Biden administration initially wanted to double the current rate to 21 percent from 10.5 percent. In settling on 15 percent, the U.S. rate would match what was agreed to by the 136 countries participating in the global deal and could blunt criticism that American companies will face a competitive disadvantage.The global agreement is meant to end corporate tax havens and stop what Treasury Secretary Janet L. Yellen describes as the “race to the bottom” of declining corporate tax rates around the world.To deter companies from finding ways to avoid the tax, the plan would impose a penalty rate on foreign corporations based in countries that are not part of the agreement.The Biden administration projects the international plans would raise $350 billion over a decade.Narrowing the tax gap.White House and Treasury Department officials have spent months pushing a proposal to narrow the $7 trillion gap in taxes that are owed by individuals and businesses but not collected. The administration initially wanted to invest $80 billion in additional enforcement staffing at the I.R.S. and require banks to hand over more information about the finances of their customers.Under the new proposal, the I.R.S. would get more money to ramp up audits of people making more than $400,000. However, the new bank reporting proposal — which the Treasury has called critical to its ability to hunt down hidden revenue — was conspicuously absent. A lobbying campaign from banks prompted huge blowback from lawmakers, including Senator Joe Manchin III, a West Virginia Democrat whose vote is critical to passing the overall package.Treasury officials and a group of Senate Democrats are continuing to negotiate with Mr. Manchin on narrowing the proposal in a way that he could support.As it stands, the plan to bolster I.R.S. enforcement is projected to raise $400 billion over a decade, down from the $700 billion in the original proposal.Reducing the deficit, maybe.Mr. Biden said on Thursday that his plans were “fiscally responsible” and claimed that the proposals, if enacted, would reduce the country’s budget deficit.The $2 trillion of proposed tax increases would more than offset the $1.85 trillion in spending on housing, child care and climate initiatives. However, nonpartisan scorekeepers such as the Congressional Budget Office have in the past offered less rosy projections of what Biden administration proposals might actually raise in revenue.Additional I.R.S. enforcement personnel will take years to get up to speed, and audits could be less effective without the additional bank information the Treasury Department is seeking.Some Democratic lawmakers are also still fighting for the inclusion of provisions that could actually cost money, including a partial or temporary restoration of SALT, the state and local tax deduction that Republicans capped in 2017. Last-minute additions such as that could add to the cost of the overall package. More

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    Democrats’ Divide: Should Obama-Era Economic Ideas Prevail in 2021?

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    A more traditional view is competing against a newer approach that has become mainstream among economists.Over the last dozen years, there has been a sea change in how economists view many crucial questions related to deficits, public debt and the long-term payoffs of social spending.Most Democratic elected officials have embraced this new thinking, and it permeates the Biden domestic agenda. But a handful of Democrats are unpersuaded, holding to a view that was more widespread in the early Obama years, focusing on the risks of debt and spending.That tension, and how it resolves itself — or doesn’t — will be central to the evolution of the Biden presidency and American economic policy for years to come. On the surface, there is a clash between lawmakers with different political instincts. But there is also a clash over whether a more traditional view will prevail over a newer approach that has become mainstream among economists — especially those who lean left, but with some acceptance among center-right thinkers.“I just don’t want our society to move to an entitlement society,” Senator Joe Manchin of West Virginia has said. T.J. Kirkpatrick for The New York TimesIn the older view, it is irresponsible to increase long-term budget deficits because it will curtail private investment and risk a fiscal crisis. Social policies should be seen as a zero-sum trade-off between alleviating poverty and encouraging work. And any major new spending should be coupled with enough revenue-raising measures that the number-crunchers at the Congressional Budget Office conclude the numbers will balance over the next 10 years.This was the approach that the Obama administration and congressional Democrats took in passing the Affordable Care Act, a process made lengthier and more complex by these self-imposed constraints.But since those days, the intellectual ground has shifted in important ways.For one, long-term interest rates have fallen precipitously, even as very large budget deficits have become the norm. That implies the United States can maintain higher public debt than once seemed possible without excessively constraining private investment or facing excessive interest costs.“The long-term downward move in interest rates is the most important macroeconomic development that has occurred over the last couple of decades,” said Karen Dynan, a former official at the Federal Reserve and at the Obama Treasury Department who now teaches at Harvard. (One of her classes is on the economic crises of the 21st century, including a unit on the evolution in thinking they have prompted.)“Lower rates make deficit-financed spending less costly in budget terms and lowers the economic cost, because you can think of lower rates as a signal that the private sector has less demand for that money,” Professor Dynan sad.During the early Obama years, there was extensive discussion, including from some Democrats, that a loss of confidence in America’s debts could cause a fiscal crisis. The experience of the last decade has offered reassurance that in a nation like the United States, with a credible and competent central bank, such an event is unlikely.Republican legislators like Jeff Sessions and Paul Ryan, back, led the charge against spending in 2011 during the Obama era. Michael Reynolds/European Pressphoto Agency“I would have worried 10 years ago that as debt rose to 100 percent or more of G.D.P., folks lending to the U.S. government would start to feel differently about it, and the answer is that they don’t,” said Wendy Edelberg, a former chief economist of the C.B.O. who is now director of the Hamilton Project at the Brookings Institution. “I personally feel like I’ve learned a lot more in the last decade about how monetary and fiscal policy interact, especially in a crisis.”As evidence: The federal government, with extensive help from the Federal Reserve, launched a multitrillion dollar response to the pandemic despite coming into the crisis with an elevated public debt. Rather than spur a crisis of confidence in U.S. government bonds, their values have surged.The evolution in thinking is hardly universal, with some more conservative economists pointing to the risks that conditions could change.“Any economic policy that begins with the premise, ‘Let’s just assume interest rates stay below 2008 levels forever,’ is extraordinarily hubristic and naïve,” said Brian Riedl, a senior fellow at the Manhattan Institute. “Particularly because there is no backup plan if they are wrong and rates ever do revert to pre-2008 levels. At that point, the policies driving the debt will be nearly impossible to reverse, and we could face a severe fiscal crisis.”That is very much the argument that Senator Joe Manchin has made in holding up the party’s social spending bill, seeking to lower its total cost and seek offsetting revenue increases that would reduce the deficit.“While my fellow Democrats will disagree, I believe that spending trillions more dollars not only ignores present economic reality, but makes it certain that America will be fiscally weakened when it faces a future recession or national emergency,” Senator Manchin wrote in a commentary for The Wall Street Journal last month.The national debt clock in New York in August 2020. Amr Alfiky/The New York TimesA similar shift has taken place in how many economists view the potential long-term economic benefits of certain forms of social welfare spending.Not long ago, research into the trade-offs of welfare spending tended to focus on narrow questions like how much a given benefit might discourage people from working. In the last few decades, researchers have used novel statistical techniques (including those that won a Nobel Prize last week) and rich new sources of data to try to determine what long-term benefits they might offer to the overall economy.Take, for example, spending that keeps children well-fed and out of poverty, such as school lunch programs and assistance payments to low-income parents. These appear to have long-lasting benefits for future employment and earning power — creating supply-side benefits, or increasing the economy’s overall potential.“If we give people more resources when they’re young, they can eat better and do better in school, and this could have lasting impacts,” said Hilary Hoynes, a professor at the University of California, Berkeley, and an author of extensive research along these lines. “It doesn’t seem like such a crazy thing to assert, but we had no evidence on that 15 years ago.”This is part of the thinking beneath major elements of Democratic legislation under consideration, including universal preschool and an extension of a child tax credit. Professor Hoynes said she had received many calls from congressional staff members in the last few years seeking to understand the emerging evidence.Senator Manchin, meanwhile, has said, “I just don’t want our society to move to an entitlement society,” suggesting he is focused on the ways these benefits might create a near-term disincentive to work.Beyond the intraparty divide over the risk of deficits and the benefits of social spending, there is a simmering debate over how the costs of the bill should be offset. Centrist Democrats insist upon provisions that raise money so as to keep the programs from raising the deficit, but it’s less clear what that means in practice.During the passage of the Affordable Care Act, that meant a very specific thing — achieving a “score” from the C.B.O. attesting that by its best estimates, the legislation would have a neutral to positive effect on cumulative deficits.This scoring incentivizes an odd gaming of the system, including programs that phase in or out, and revenue-raising measures that are backloaded to avoid near-term pain while making the numbers balance. It also inserts a false precision into the legislative process — as if anyone knows what economic growth and federal revenue will be a decade down the road.“I very much worry that there’s going to be some absurd emphasis on the C.B.O. score, whether it is slightly on one side of zero or the other side of zero,” Ms. Edelberg said. “This is a really important package that will change people’s lives, and that should be the guiding principle. The 10-year window is arbitrary. Aiming for deficit neutrality is arbitrary — it’s arbitrariness on top of arbitrariness.”The Biden agenda, in other words, could depend on just how much the entire range of Democrats in Congress view the strategies and instincts of the Obama years as a model to follow or a cautionary tale. More

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    Treasury's Janet Yellen Is Being Tested by Debt Limit Fight

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    The Treasury secretary must wade into a standoff between Democrats and Republicans over raising the debt limit.WASHINGTON — When Janet L. Yellen was Federal Reserve chair in 2014, she faced a grilling from Republicans about whether the federal government had a plan if the nation’s borrowing limit was breached and measures to keep paying the country’s bills were exhausted.Ms. Yellen, appearing at a congressional hearing, outlined a dire scenario in which financial institutions might try to make payments that they could not cover, because the Treasury Department was out of money, leading to a cascade of bounced checks. She pushed back against the notion held by some Republicans that an economic meltdown could be averted, warning that there was no secret contingency plan.“To the best of my knowledge, there is no written-down plan,” Ms. Yellen said at the time, adding that it was beyond her remit at the Fed. “That’s a matter that is entirely up to the Treasury.”Fending off such a calamity is now squarely the responsibility of Ms. Yellen, who is confronting the biggest test she has faced in her eight months as President Biden’s Treasury secretary. Mr. Biden chose Ms. Yellen to help steer the economy out of the pandemic downturn. But in the face of congressional dysfunction, she has been thrust into a political role, trying to convince reticent Republican lawmakers that their refusal to lift the debt cap — which limits the government’s ability to borrow money — could lead to a financial collapse.It is not a comfortable spot for Ms. Yellen, an economist by training who is now trying to navigate the rough political waters that she tends to avoid by countering legislative gamesmanship with economic logic.Over the past month, Ms. Yellen has reached out to Democrats and top Republican leaders, including Senator Mitch McConnell of Kentucky, the minority leader, and Representative Kevin Brady of Texas, the top Republican on the Ways and Means Committee. She has used those calls to convey the economic risks, warning that the Treasury’s ability to stave off default is limited and that failure to lift or suspend the debt cap by sometime next month would be “catastrophic.”Ms. Yellen has reminded Republicans in the calls that they have been willing to join Democrats in lifting the debt ceiling in the past, and that raising the cap allows the U.S. to pay its existing bills and does not authorize new spending.Thus far, Republicans seem unmoved by Ms. Yellen’s overtures.In a call with Ms. Yellen last week, Mr. Brady said he told the secretary that he would be happy to work with her on a bipartisan framework focused on financial stability and curbing government spending but, barring that, Democrats should not expect Republicans to help them address the debt limit.“They are playing a dangerous political game with our economy and it’s absolutely unnecessary,” Mr. Brady said on Wednesday.Mr. McConnell conveyed a similar message during a telephone conversation with Ms. Yellen last week, his spokesman said. Mr. McConnell’s former chief of staff, Brian McGuire, said the Kentucky Republican would not be persuaded by pressure tactics and suggested that the Treasury secretary should direct her economic warnings at Democrats.“If I were advising Secretary Yellen, I’d suggest she be highly skeptical of the Democratic strategy on the debt limit,” said Mr. McGuire, who was Treasury’s assistant secretary for legislative affairs from 2019 to 2020.On Thursday, Ms. Yellen appeared at a news conference with Speaker Nancy Pelosi of California and Senator Chuck Schumer of New York, the majority leader. Ms. Pelosi assailed Republicans for refusing to join Democrats in covering costs that both parties have incurred, including the $1.5 trillion tax cuts that Republicans passed during the Trump administration.“This is a credit-card bill that we owe,” Ms. Pelosi said.Democrats wanted to pair the federal debt limit increase with legislation to keep the government funded through early December, which would require Republican support in the Senate. With no such agreement in sight, the White House’s Office of Management and Budget on Thursday alerted federal agencies to review their shutdown plans, given funding is scheduled to lapse next week.Democrats do have another legislative option for raising the borrowing cap — they could pair it with the $3.5 trillion spending bill that they are aiming to pass along party lines using a fast-track process known as budget reconciliation. However, that would impose procedural hurdles they are trying to avoid, and Democrats have yet to agree on what the spending bill should include or how to pay for it. Party leaders claimed progress toward a deal on Thursday, saying they had agreed upon an array of possible ways to pay for it. But they offered no details about what programs would be included or what the total cost would eventually be, and what they called a “framework agreement” appeared to be modest.With the debt limit increase becoming so contentious, Ms. Pelosi signaled for the first time on Thursday that Democrats could ultimately strip it from the government funding bill because of Republican opposition.“We will keep our government open by Sept. 30, which is our date, and continue the conversation about the debt ceiling, but not for long,” she said.Ms. Yellen, who has kept a low public profile in the last month, did not make a statement at the news conference and took no questions.In private, she has tried to amp up the pressure. Ms. Yellen has personally warned the chief executives of the nation’s largest banks and financial institutions about the very real risk of default. Over the past several days she has spoken to Jamie Dimon of JPMorgan Chase, David M. Solomon of Goldman Sachs, Brian T. Moynihan of Bank of America and Laurence D. Fink of BlackRock, telling them about the disastrous impact a default would have, according to people familiar with the calls.The banking industry traditionally wields significant influence with Republicans; the biggest financial services lobbying groups wrote a letter to top lawmakers earlier this month urging them to take action.“Any default would negatively impact the general economy, disrupt the operations of our financial markets, undermine confidence, and raise funding costs in the future,” they wrote.Ms. Yellen has also sought the counsel of her predecessors, including Steven T. Mnuchin, Jacob J. Lew, Timothy F. Geithner and Henry M. Paulson. Mr. Paulson, who served under President George W. Bush and maintains strong ties with Republican lawmakers, has echoed Ms. Yellen’s concerns about the impact of a default in conversations with Mr. McConnell, according to a person familiar with the matter.Earlier this week, six former Treasury secretaries sent a letter to top lawmakers, warning that a default would blunt economic growth, roil financial markets and sap confidence in the United States.“Failing to address the debt limit, and allowing an unprecedented default, could cause serious economic and national security harm,” they wrote in the letter that was published by Ms. Yellen’s Treasury Department.Ms. Yellen’s task has been complicated by the fact that while she can readily convey the economic risks of default, the debt limit has become wrapped up in a larger partisan battle over Mr. Biden’s entire agenda, including the $3.5 trillion spending bill.Republicans, including Mr. McConnell, have insisted that if Democrats want to pass a big spending bill, then they should bear responsibility for raising the borrowing limit. Democrats call that position nonsense, noting that the debt limit needs to be raised because of spending that lawmakers, including Republicans, have already approved.“This seems to be some sort of high-stakes partisan poker on Capitol Hill, and that’s not what her background is,” said David Wessel, a senior economic fellow at the Brookings Institution who worked with Ms. Yellen at Brookings.While lawmakers squabble on Capitol Hill, Ms. Yellen’s team at Treasury has been trying to buy as much time as possible. After a two-year suspension of the statutory debt limit expired at the end of July, Ms. Yellen has been employing an array of fiscal accounting tools known as “extraordinary measures” to stave off a default.Uncertainty over the debt limit has yet to spook markets, but Ms. Yellen is receiving briefings multiple times a week by career staff on the state of the nation’s finances. They are keeping her informed about the use of extraordinary measures, such as suspending investments of the Exchange Stabilization Fund and suspending the issuing of new securities for the Civil Service Retirement and Disability Fund, and carefully reviewing Treasury’s cash balance. Because corporate tax receipts are coming in stronger than expected, the debt limit might not be breached until mid- to late October, Ms. Yellen has told lawmakers.A Treasury spokeswoman said that Ms. Yellen is not considering fallback plans such as prioritizing debt payments if Congress fails to act, explaining that the only way for the government to address the debt ceiling is for lawmakers to raise or suspend the limit. However, she has reviewed some of the ideas that were developed by Treasury during the debt limit standoff of 2011, when partisan brinkmanship brought the nation to the cusp of default.A new report from the Bipartisan Policy Center underscored the fact that if Congress fails to address the debt limit, Ms. Yellen will be left with no good options. If the true deadline is Oct. 15, for example, the Treasury Department would be approximately $265 billion short of paying all of its bills through mid-November. About 40 percent of the funds that are owed would go unpaid.“Realistically, on a day-to-day basis, fulfilling all payments for important and popular programs would quickly become impossible,” the report said, pointing to Social Security, Medicare, Medicaid, defense, and military active duty pay.Tony Fratto, a Treasury official during the Bush administration, lamented that Ms. Yellen is operating without any leverage. Democrats, he said, appeared to have miscalculated when they thought that Republicans would be too ashamed to block a debt limit vote after supporting a suspension of the borrowing cap when President Donald J. Trump was in office.“I think that was in the ‘hope’ category,” Mr. Fratto said. “This is Washington in 2021 — your hopes will be dashed.”Lananh Nguyen More

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    A Last-Minute Add to Stimulus Bill Could Restrict State Tax Cuts

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    #masthead-section-label, #masthead-bar-one { display: none }Personal TaxesNew Pandemic ChangesHelp for Working FamiliesEstate Tax PlanningSmall-Business TipsWorking RemotelyAdvertisementContinue reading the main storySupported byContinue reading the main storyA Last-Minute Add to Stimulus Bill Could Restrict State Tax CutsRepublicans say Congress is infringing on state sovereignty by trying to limit the ability of local governments to control their finances.President Biden signing the $1.9 trillion economic relief plan into law on Thursday at the White House. The restriction is intended to ensure that states use federal funds to keep their local economies humming.Credit…Doug Mills/The New York TimesMarch 12, 2021Updated 7:02 p.m. ETWASHINGTON — A last-minute change in the $1.9 trillion economic relief package that President Biden signed into law this week includes a provision that could temporarily prevent states that receive government aid from turning around and cutting taxes.The restriction, which was added by Senate Democrats, is intended to ensure that states use federal funds to keep their local economies humming and avoid drastic budget cuts and not simply use the money to subsidize tax cuts. But the provision is causing alarm among some local officials, primarily Republicans, who see the move as federal overreach and fear conditions attached to the money will impede upon their ability to manage their budgets as they see fit.Officials are scrambling to understand what strings are attached to the $220 billion that is expected to be parceled out among states, territories and tribes and are already pressing the Treasury Department for guidance about the restrictions they will face if they take federal money.Under the new law, $25 billion will be divided equally among states, while $169 billion will be allocated based on a state’s unemployment rate. States can use the money for pandemic-related costs, offsetting lost revenues to provide essential government services, and for water, sewer and broadband infrastructure projects.But they are prohibited from depositing the money into pension funds — a key worry of Republicans in Congress — and cannot use funds to cut taxes by “legislation, regulation or administration” through 2024.Democrats slipped the new language into the legislation last week after several senators from the party’s moderate wing expressed concern that some states would seize on the opportunity to use emergency relief money to subsidize tax cuts. They worked with Senator Chuck Schumer, the majority leader, on language for the amendment, according to a Democratic Senate aide.Senator Joe Manchin III, Democrat of West Virginia, explained why he pushed for the language in a briefing this week, arguing that states should not be cutting taxes at a time when they need more money to combat the virus. He urged states to postpone their plans to cut taxes.“How in the world would you cut your revenue during a pandemic and still need dollars?” Mr. Manchin said.Senator Ron Wyden, Democrat of Oregon, said the funds were meant “to keep teachers and firefighters on the job and prevent the gutting of state and local services that we saw during the Great Recession.”“It’s important that there are guardrails to prevent these funds from being used to cut taxes for those at the top,” he added.But some Republican-led states are pointing to the apparent prohibition as a violation of their sovereignty and calling for that part of the law to be repealed. They see the requirement that states refrain from cutting taxes as an unusual intervention by the federal government in state tax policy.“It is an intrusion into what would traditionally be a state prerogative of how we balance our budget,” said Ben Watkins, the director of the Florida Division of Bond Finance. “If they want to give us this money to deal with Covid, then they should just give it to us with no strings attached.”Funding for state and local governments was one of the most contentious issues during stimulus talks, with Republicans saying Democrat-led states were being rewarded for mismanaging their finances and labeling the aid as a “blue-state bailout.”Those concerns were amplified in the latest legislation, which allocates money to a state based on a formula that considers its unemployment rate rather than its population. Conservative-leaning states, many of which had less onerous coronavirus restrictions and did not shut down as much business activity, claim they are essentially being penalized for prioritizing their economies during the pandemic.But early analyses of the bill show that both conservative-leaning and liberal-leaning states will receive big chunks of cash. California, Florida, New York and Texas will each get more than $10 billion in aid, according to a Tax Foundation tally.Still, the tax language has angered Republicans — none of whom voted for the rescue package — and on Thursday, Senator Mike Braun, Republican of Indiana, introduced legislation to reverse it.“Democrats are trying to ban states from cutting taxes with a sneaky amendment to the $1.9 trillion so-called Covid relief package,” Mr. Braun said. “Not only did this blue-state bailout bill penalize states for reopening by calculating state funds based on unemployment, now they are trying to use it as a back door to ban states from cutting taxes.”The restrictions have created a conundrum for states because, while many cities are facing budget crunches, state finances have turned out to be relatively healthy.A New York Times analysis this month found that, on balance, state revenues were generally flat or down slightly last year compared with 2019 as expanded unemployment benefits allowed consumer spending and tax revenues to keep flowing.“Idaho would potentially subsidize poorly managed states simply because we are using our record budget surplus to pursue historic tax relief for our citizens,” Gov. Brad Little of Idaho said this week. “We achieved our record budget surplus after years of responsible, conservative governing and quick action during the pandemic, and our surplus should be returned to Idahoans as I proposed.”Gov. Jim Justice, a Republican of West Virginia, criticized Mr. Manchin in an interview this week with CNN..css-yoay6m{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}@media (min-width:740px){.css-yoay6m{font-size:1.25rem;line-height:1.4375rem;}}.css-1dg6kl4{margin-top:5px;margin-bottom:15px;}.css-k59gj9{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;width:100%;}.css-1e2usoh{font-family:inherit;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;border-top:1px solid #ccc;padding:10px 0px 10px 0px;background-color:#fff;}.css-1jz6h6z{font-family:inherit;font-weight:bold;font-size:1rem;line-height:1.5rem;text-align:left;}.css-1t412wb{box-sizing:border-box;margin:8px 15px 0px 15px;cursor:pointer;}.css-hhzar2{-webkit-transition:-webkit-transform ease 0.5s;-webkit-transition:transform ease 0.5s;transition:transform ease 0.5s;}.css-t54hv4{-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-1r2j9qz{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-e1ipqs{font-size:1rem;line-height:1.5rem;padding:0px 30px 0px 0px;}.css-e1ipqs a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;}.css-e1ipqs a:hover{-webkit-text-decoration:none;text-decoration:none;}.css-1o76pdf{visibility:show;height:100%;padding-bottom:20px;}.css-1sw9s96{visibility:hidden;height:0px;}#masthead-bar-one{display:none;}#masthead-bar-one{display:none;}.css-1cz6wm{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;font-family:’nyt-franklin’,arial,helvetica,sans-serif;text-align:left;}@media (min-width:740px){.css-1cz6wm{padding:20px;width:100%;}}.css-1cz6wm:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1cz6wm{border:none;padding:20px 0 0;border-top:1px solid #121212;}How Has the Pandemic Changed Your Taxes?Nope. The so-called economic impact payments are not treated as income. In fact, they’re technically an advance on a tax credit, known as the Recovery Rebate Credit. The payments could indirectly affect what you pay in state income taxes in a handful of states, where federal tax is deductible against state taxable income, as our colleague Ann Carrns wrote. Read more. Mostly.  Unemployment insurance is generally subject to federal as well as state income tax, though there are exceptions (Nine states don’t impose their own income taxes, and another six exempt unemployment payments from taxation, according to the Tax Foundation). But you won’t owe so-called payroll taxes, which pay for Social Security and Medicare. The new relief bill will make the first $10,200 of benefits tax-free if your income is less than $150,000. This applies to 2020 only. (If you’ve already filed your taxes, watch for I.R.S. guidance.) Unlike paychecks from an employer, taxes for unemployment aren’t automatically withheld. Recipients must opt in — and even when they do, federal taxes are withheld only at a flat rate of 10 percent of benefits. While the new tax break will provide a cushion, some people could still owe the I.R.S. or certain states money. Read more. Probably not, unless you’re self-employed, an independent contractor or a gig worker. The tax law overhaul of late 2019 eliminated the home office deduction for employees from 2018 through 2025. “Employees who receive a paycheck or a W-2 exclusively from an employer are not eligible for the deduction, even if they are currently working from home,” the I.R.S. said. Read more. Self-employed people can take paid caregiving leave if their child’s school is closed or their usual child care provider is unavailable because of the outbreak. This works similarly to the smaller sick leave credit — 67 percent of average daily earnings (for either 2020 or 2019), up to $200 a day. But the caregiving leave can be taken for 50 days. Read more. Yes. This year, you can deduct up to $300 for charitable contributions, even if you use the standard deduction. Previously, only people who itemized could claim these deductions. Donations must be made in cash (for these purposes, this includes check, credit card or debit card), and can’t include securities, household items or other property. For 2021, the deduction limit will double to $600 for joint filers. Rules for itemizers became more generous as well. The limit on charitable donations has been suspended, so individuals can contribute up to 100 percent of their adjusted gross income, up from 60 percent. But these donations must be made to public charities in cash; the old rules apply to contributions made to donor-advised funds, for example. Both provisions are available through 2021. Read more. “He’s hurting his own people in the state of West Virginia,” Mr. Justice said. “I do not condone it.”The provision is also raising questions about what actually constitutes a tax cut and whether the law could prevent states from other types of tax relief. The language of the legislation appears to offer states little wiggle room.Jared Walczak, the vice president for state projects at the Tax Foundation’s Center for State Tax Policy, said that the fine print in the law raised many complicated questions for states that, in some cases, would be awarded money for things that they either do not need or that they already had plans to pay for out of their budgets. It is not clear, for example, if a state could use aid money for an expense related to the coronavirus that it was already planning to pay for and then offer tax credits with the additional surplus.“If the federal government intends to forbid any sort of revenue negative tax policy, no matter what its size, because a state received some funding, that would be a radical federal entanglement in state fiscal policy that may go beyond what was intended,” Mr. Walczak said.Such questions will largely hinge on how Treasury Secretary Janet L. Yellen interprets the legislation and what guidance the Treasury Department gives to states.A department official noted that the law says that states and territories that receive the aid cannot use the funds to offset a reduction in net tax revenue as a result of tax cuts because the money is intended to be used to support the public health response and avoid layoffs and cuts to public services. More guidance on the matter is coming, the official said.The lack of clarity also raises the risk that states use the money for projects or programs that do not actually qualify under the law and then are forced to repay the federal government. States are required to submit regular reports to the Treasury Department accounting for how the funds are being spent and to show any other changes that they have made to their tax codes. The department will also be setting up a system of monitoring how the funds are being used.Emily Swenson Brock, the director of the Federal Liaison Center at the Government Finance Officers Association, said that the eligible uses of the federal aid appeared to be relatively limited for the states and that some might actually find it challenging to deploy the money in a useful way.“It’s complicated here for the states,” Ms. Brock said, adding that her organization had asked the Treasury Department for an explanation. “Congress is reaching in and telling these states how they can and can’t use that money.”Before they receive federal funds, states will have to submit a certification promising to use the money according to the law. They could also decline funding or, if they are set on tax cuts, they could offset them with other sources of revenue that do not include the federal funds.For many states, the federal money is welcome even if they do not necessarily need it for public health purposes.Melissa Hortman, the speaker of the Minnesota House of Representatives, said that she was hopeful that the federal government gives states the flexibility to use the money to make up for lost revenue from the virus. She suggested that the state should look to make new investments in education and transportation. Minnesota is expected to have a budget surplus for the next two years and will receive more than $2 billion in aid.“It’s not too much money,” said Ms. Hortman, a Democrat. “Our country has just lived through a once-in-a-hundred-year pandemic.”AdvertisementContinue reading the main story More

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    Gov. Phil Murphy Unveils N.J. Budget Plan With No New Taxes

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesRisk Near YouVaccine RolloutNew Variants TrackerAdvertisementContinue reading the main storySupported byContinue reading the main storyHow New Jersey Averted a Pandemic Financial CalamityA $44.8 billion spending plan unveiled Tuesday by Gov. Phil Murphy calls for no new taxes and fully funds the state pension program for the first time since 1996.Gov. Philip D. Murphy of New Jersey released a $44.8 billion budget on Tuesday that shows better-than-expected revenue projections.Credit…Pool photo by Anne-Marie CarusoFeb. 23, 2021Updated 3:07 p.m. ETIt has been five months since New Jersey officials issued warnings about a coronavirus-related financial calamity. The dire outlook contributed to lawmakers’ decisions to increase taxes on income over $1 million and to become one of the first states to borrow billions to cover operating costs.But the doomsday forecast has since brightened considerably, officials said, enabling the Democratic governor, Philip D. Murphy, to unveil a $44.8 billion spending plan on Tuesday that calls for no new taxes, few cuts and tackles head-on a chronic problem — the state’s underfunded pension program — for the first time in 25 years.The governor also said there would be no increase in New Jersey Transit fares.“The news is less bad,” the state’s treasurer, Elizabeth Maher Muoio, said. “I wouldn’t say it’s good, but it’s less bad.”The governor’s election-year financial blueprint relies on better-than-expected revenue from retail sales and high-earners, who have lost fewer jobs during the pandemic than low-income workers and are reaping the benefits of a prolonged Wall Street rally.The $38 billion that New Jersey and its residents have received in federal stimulus funding, a short-term extension of a corporate tax and a $504 million windfall from the so-called millionaire’s tax also helped, Ms. Muoio said.The release of New Jersey’s proposed 2022 fiscal year budget comes as Congress continues to debate President Biden’s $1.9 trillion virus relief package. The proposed package includes considerable funds for states and municipalities as well as grant and loan programs for small businesses.Other states have seen similarly strong signs of an economic rebound even as cases of the virus have spiked nationwide over the last several months and the nation’s death toll surpassed 500,000 on Monday.Earlier this month, the nonpartisan Congressional Budget Office concluded that large sectors of the economy were adapting to the pandemic better than originally expected and that December’s economic aid package had helped.Mr. Murphy, who is running for re-election in November, said the spending plan was designed to not only enable the state to scrape through the pandemic, but to help it emerge stronger.“This is the time for us to lean into the policies that can fix our decades-old — or in some cases centuries-old — inequities,” the governor said Tuesday in a budget address, which he delivered virtually.A key pillar of the budget is a proposal to fully fund the state’s public sector pension obligations for the first time since 1996.The state has not set aside the full amount of its pension obligation for 25 years, leading $4 billion in extra debt to accrue over time, Ms. Muoio said. Under a deal brokered with the Legislature, Mr. Murphy had been on track to fully fund the state’s share by the 2023 fiscal year. But the spending plan released on Tuesday sets aside $6.4 billion for the pension system, accelerating full funding by a year.“New Jersey is done kicking problems down the road,” the governor said. “We are solving them.”Under the plan, the state’s surplus, which proved to be a vital resource during the first wave of the pandemic, would not grow, officials said, but would remain at about the same level it was at the end of 2020.The Coronavirus Outbreak More

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    States Try to Rescue Small Businesses as U.S. Aid Is Snarled

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesBritain’s Vaccine RolloutVaccine TrackerFAQ: Vaccines and MoreAdvertisementContinue reading the main storySupported byContinue reading the main storyStates Try to Rescue Small Businesses as U.S. Aid Is SnarledState governments are offering loans, grants and tax rebates, but budget constraints limit their impact.Kirk Meurer’s business installing office furniture in the Cleveland area dried up practically overnight when the pandemic began.Credit…Da’Shaunae Marisa for The New York TimesDec. 10, 2020, 5:00 a.m. ETWith the economic recovery faltering and federal aid stalled in Washington, state governments are stepping in to try to help small businesses survive the pandemic winter.The Colorado legislature held a special session last week to pass an economic aid package. Ohio is offering a new round of grants to restaurants, bars and other businesses affected by the pandemic. And in California, a new fund will use state money to backstop what could ultimately be hundreds of millions of dollars in private loans. Other states, led by both Republicans and Democrats, have announced or are considering similar measures.But there is a limit to what states can do. The pandemic has ravaged budgets, driving up costs and eroding tax revenues. And unlike the federal government, most states cannot run budget deficits.“We have done what we can do to pump money into small businesses so that people can continue to work,” said Gov. Mike DeWine of Ohio, a Republican. “From the jobs point of view and the economy point of view and the workers’ point of view and small businesses, we’ve got to get that help from the federal government. That’s the only place we can get it.”After months of false starts and on-again-off-again negotiations, there are signs of progress in Washington. Top Democrats last week embraced a $908 billion plan proposed by a bipartisan group of moderate senators. That plan would include nearly $300 billion in aid for small businesses, as well as smaller sums for unemployed workers, state and local governments and other groups. On Tuesday, the White House proposed its own $916 billion plan, which would include more than $400 billion for small businesses.But Democrats and Republicans still disagree on important issues, including aid for state and local governments and liability protection for businesses. Even if the two sides do reach a deal, it could be weeks before money starts flowing.Many small businesses say they can’t wait that long. A survey from the National Federation of Independent Business on Tuesday showed optimism falling and uncertainty rising as the nationwide surge in coronavirus cases leads governments to reimpose restrictions and consumers to pare their spending. Separate data from the Census Bureau shows an increasing share of small businesses cutting jobs, and other surveys have shown large numbers of businesses in danger of failing.If that happens, it could be a disaster for both state economies and state budgets. Local businesses are major sources of tax revenue — both directly and through their employees — and major drivers of economic activity. If they fail in large numbers, it will slow the economic recovery once the pandemic is over.“It becomes almost a death spiral if you can’t keep these businesses running,” said Tim Goodrich, executive director of state government relations for the National Federation of Independent Business.Kirk Meurer was on track to have one of his best years ever in his business installing office furniture in the Cleveland area. But when companies began sending their workers home last spring, his business dried up practically overnight.“Even though we didn’t have to shut down like the restaurants and bars and the travel industries, it didn’t matter,” he said. “The business wasn’t there.”After some delays, Mr. Meurer got money through the federal Paycheck Protection Program, which he thought would be enough to sustain him until business rebounded. But as the pandemic dragged on and offices pushed back their reopening dates to the summer, then to the fall, then into next year, it became clear the company would need more help to survive.“It’s amazing how fast you can burn through money when you’ve got nothing coming in and all the overhead to maintain,” Mr. Meurer said.In recent weeks, his company, Modular Systems Technicians, received a $10,000 grant from a new state fund to help small businesses. He also got money under a program that refunded $8 billion from the state workers’ compensation fund.“It helped,” Mr. Meurer he said. “It’s not nearly enough, but they did what they could.”The money for the Ohio grant program, and from some other recent state aid efforts, actually came from the federal government. As part of the $2.2 trillion CARES Act last spring, Congress created a $150 billion fund that states could tap in responding to the virus. They were given wide latitude in using the money — as long as they did so before the end of the year.As the pandemic has flared anew, however, it has become clear that the economic crisis will last well into next year, by which point the federal money will be gone and state budgets will be unable to pick up the slack. So states are racing to use what’s left of the CARES Act money to shore up their economies and build a buffer for the winter.“I think they’re terrified,” said Joseph Parilla, a fellow at the Brookings Institution who has studied state responses to the pandemic. “If they’re paying attention, they should be.”Eden Stein isn’t sure how much longer her San Francisco gallery and boutique can continue.Credit…Christie Hemm Klok for The New York TimesGov. Jared Polis of Colorado, a Democrat, recalled the legislature for a special session late last month to pass several relief measures, including a $57 million grant program for small businesses. In an interview, he cited Colorado’s slow recovery from the last recession a decade ago, when the failure to contain the foreclosure crisis left lasting scars on the state’s economy. Without further assistance — including federal aid — he fears a wave of business failures that would set off an equally damaging chain reaction, he said.“If we don’t help them get through this, will it ever come back?” Mr. Polis asked. “Sure, but it means years of boarded-up stores and restaurants on Main Streets across America if Democrats and Republicans can’t come together now to act.”Some states are trying creative ways to stretch resources. California last month established a “rebuilding fund,” which will use a comparatively small amount of public money to provide loan guarantees to encourage for-profit and nonprofit lenders to make low-interest loans to small businesses.The California program is aimed at the smallest businesses — most with fewer than 10 employees — and those in low-income and minority neighborhoods. Many were left out of the federal aid programs like the Paycheck Protection Program, which primarily helped somewhat larger employers.“P.P.P. never really served these kinds of businesses very well,” said Laura D. Tyson, an economist at the University of California, Berkeley, who helped design California’s program. “More and more of them are boarding up and closing down, and it’s a real hit to the community, a real hit to the quality of life in these communities.”Ms. Tyson said the loans should help businesses make investments to adapt to life during the pandemic — like investing in online ordering technology or outdoor dining — or to position themselves for the post-pandemic world. But the state can’t afford to cover day-to-day expenses the way the federal government did in the spring.Secession Art & Design, a gallery and boutique in San Francisco, has survived the first nine months of the pandemic through a combination of loans, donations from customers and an aggressive shift in strategy toward online sales, which had been only a small part of the business.But Eden Stein, who owns the 13-year-old business, said she wasn’t sure how long that could continue. California is reimposing restrictions on retail businesses, which could hurt sales during what she calls a make-or-break holiday season. Her lease is up in the spring, and she hasn’t decided whether to renew it.Ms. Stein is thinking of applying for a rebuilding loan from the state but is nervous about taking on more debt. She is applying for a grant under a separate state program, but that won’t be enough to sustain the business. She doesn’t know what the local economy will look like after the pandemic, she said, but it is essential for small businesses to have enough confidence to renew leases and plan for the long term.“I’m not concerned about how hard I can work, how I can connect with my customers or my community,” Ms. Stein said. “I am concerned that I will eventually run out of money.”AdvertisementContinue reading the main story More