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    Biden's Spending Plans Could Start to Tackle Inequality

    The Biden administration is relying on Congress instead of just the Fed to fix the economy. That mix could lead to a less wealth-unequal future.The coronavirus pandemic has threatened to rapidly expand yawning gaps between the rich and the poor, throwing lower-earning service workers out of jobs, costing them income, and limiting their ability to build wealth. But by betting on big government spending to pull the economy back from the brink, United States policymakers could limit that fallout.The $1.9 trillion economic aid package President Biden signed into law last month includes a wide range of programs with the potential to help poor and middle-class Americans to supplement lost income and save money. That includes monthly payments to parents, relief for renters and help with student loans.Now, the administration is rolling out additional plans that would go even further, including a $2.3 trillion infrastructure package and about $1.5 trillion in spending and tax credits to support the labor force by investing in child care, paid leave, universal prekindergarten and free community college. The measures are explicitly meant to help left-behind workers and communities of color who have faced systemic racism and entrenched disadvantages — and they would be funded, in part, by taxes on the rich.Forecasters predict that the government spending — even just what has been passed so far — will fuel what could be the fastest annual economic growth in a generation this year and next, as the country recovers and the economy reopens from the coronavirus pandemic. By jump-starting the economy from the bottom and middle, the response could make sure the pandemic rebound is more equitable than it would be without a proactive government response, analysts said.That is a big change from the wake of the 2007 to 2009 recession. Then, Congress and the White House passed an $800 billion stimulus bill, which many researchers have concluded did not do enough to fill the hole the recession left in economic activity. Lawmakers instead relied on the Federal Reserve’s cheap-money policies to coax the United States’ economy back from the brink. What ensued was a halting recovery marked by climbing wealth inequality as workers struggled to find jobs while the stock market soared.“Monetary policy is a very aggregated policy tool — it’s a very important economic policy tool, but it’s at a very aggregated level — whereas fiscal policy can be more targeted,” said Cecilia Rouse, who oversees the White House Council of Economic Advisers. In the pandemic crisis, which disproportionately hurt women of all races and men of color, she said, “If we tailor the relief to those who are most affected, we are going to be addressing racial and ethnic gaps.”From its first days, the pandemic set the stage for a K-shaped economy, one in which the rich worked from home without much income disruption as poorer people struggled. Workers in low-paying service jobs were far more likely to lose jobs, and among racial groups, Black people have experienced a much slower labor market rebound than their white counterparts. Globally, the downturn probably put 50 million people who otherwise would have qualified as middle class into lower income levels, based on one recent Pew Research analysis.But data suggest the U.S. policy response — including relief legislation that passed last year under the Trump administration — has helped mitigate the pain.“The CARES Act to the American Rescue Plan have helped to support more households than I would have imagined,” Charles Evans, the president of the Federal Reserve Bank of Chicago, told reporters this month during a call, referring to the pandemic relief packages passed in early 2020 and early 2021.Wealth has recovered nearly across the board after slumping early last year, foreclosures have remained low, and household consumption has been shored up by repeated stimulus checks.While the era has been fraught with uncertainty and people have slipped through the cracks, this downturn looks very different for poorer Americans than the post-financial crisis period. That recession ended in 2009, and America’s wealthiest households recovered precrisis wealth levels by 2012, while it took until 2017 for the poorest to do the same.At a food bank in Phoenix last month. The $1.9 trillion economic aid package signed into law includes a wide range of programs with the potential to help poor and middle-class Americans.Juan Arredondo for The New York TimesThe government’s policy response is driving the difference. In the 2010s, Republicans cited deficit worries and curtailed spending early, at a time when the economy remained far from healed after the worst downturn since the Great Depression. Interest rates were already near zero and not offering much of an economic lift, so the Fed engaged in several rounds of large-scale bond purchases to try to bolster the economy.The Fed policies did help. But low rates and huge bond-buying bolstered the economy slowly, and by first increasing prices on financial assets, which rich households are much more likely to own. As companies gain access to cheap capital to expand and hire, the workers who secure those new jobs have more money to spend, and a happy cycle unfolds.By 2019, that prosperous loop had kicked into gear and unemployment had dropped to half-century lows. Black and Hispanic as well as less-educated workers were working in greater numbers, and wages at the bottom of the income distribution had begun to steadily climb.Poverty fell, and there were reasons to hope that if that had continued, income inequality — the gap between how much the poor and the rich earn each year — might soon decline. Lower income inequality could, in theory, lead to lower wealth inequality over time, as households have the wherewithal to save more evenly.But getting there took nearly a decade and when the pandemic hit in 2020, it almost certainly disrupted the trend. The data are released on a lag.As those divergent trends between labor and capital played out, the rich rebuilt their savings — which are heavily invested in stocks and businesses — much faster. Poorer households eventually reaped benefits as the years wore on and people landed jobs. The bottom half of America’s wealth holders ended up better off than they had been before the crisis, but farther behind the rich.At the start of 2007, the bottom half of the wealth distribution held 2.1 percent of the nation’s riches, compared to 29.7 percent for the top 1 percent. By the start of 2020, the bottom half had 1.8 percent, while the top 1 percent held 31 percent.Researchers debate whether monetary policy actually worsens wealth divides in the long run — especially since there’s the hairy question of what would have happened had the Fed not acted — but monetary policymakers generally agree that their policies can’t stop a pre-existing trend toward ever-worse wealth inequality.By offering a more targeted boost from the very start of the recovery, fiscal policy can. Or, at a minimum, it can prevent wealth gaps from deepening so much.Monetary policy “is naturally trickle-down,” said Joseph Stiglitz, an economist at Columbia and Nobel laureate. “Fiscal policy can work from the bottom and middle up.”That’s what the Biden administration is gambling on. Paired with packages from December and last April, Congress’s recent package will bring the amount of economic relief that Congress has approved during the pandemic to more than $5 trillion. That dwarfs the amount spent in the last recovery.The legislation is a mosaic of tax credits, stimulus checks and small-business support that could leave families at the lower end of the income and savings distribution with more money in the bank and, if its provisions work as advertised, with a better chance of returning to work early in the recovery.There is no guarantee Mr. Biden’s broader economic proposals, totaling about $4 trillion, will clear a narrowly divided Congress. Republicans have balked at his plans and this week offered a counterproposal on infrastructure that is only a fraction the size of what Mr. Biden wants to spend. A bipartisan group of House moderates is pushing the president to finance infrastructure spending through an increased gas tax or something similar, which hits the poor harder than the rich.Still, the president’s new proposals could have long-term effects, working to retool workers’ skills and lift communities of color in hopes of putting the economy on more equal footing. The president is set to outline his so-called American Family Plan, which is focused on the work force, before his first address to a joint session of Congress next week.While details have yet to be finished, programs like universal prekindergarten, expanded subsidies for child care and a national paid leave program would be paid for partly by raising taxes on investors and rich Americans. That could also affect the wealth distribution, shuffling savings from the rich to the poor.The plan, which must win support in a Congress where Democrats have just a narrow margin, would raise the top marginal income tax rate to 39.6 percent from 37 percent, and raise taxes on capital gains — the proceeds of selling an asset, like a stock — for people making more than $1 million to 39.6 percent from 20 percent. Counting in an Obamacare-related tax, the taxes they pay on profits would rise above 43 percent.If the Biden package helps a wide swath of people to get back to earning and saving money faster this time, there’s hope that it might set the economy on a different trajectory.Jim Wilson/The New York TimesThe new policies will not necessarily cut wealth inequality, which has been on an inexorable upward march for decades, but they could keep poorer households from falling behind by as much as they would have otherwise.Betting big on fiscal policy to return the economy to strength is a gamble. If the economy overheats, as some prominent economists have warned it could, the Fed might have to rapidly lift interest rates to cool things down. Rapid adjustments have historically caused recessions, which consistently throw vulnerable groups out of jobs first.But administration officials have repeatedly said the bigger risk is underdoing it, leaving millions on the labor market’s sidelines to struggle through another tepid recovery. And they say the spending provisions in both the rescue package and the infrastructure could help to fix longstanding divides along racial and gender lines.“We think of investment in racial equity, and equity in general, as good policy, period, and integral to all the work we do,” Catherine Lhamon, a deputy director of the Domestic Policy Council, said in an interview. More

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    Progressive Lawmakers to Unveil Legislation on Energy and Public Housing

    The proposal, billed as the Green New Deal for Public Housing Act, offers a clear policy marker for liberals as Democrats seek to influence President Biden’s $2.3 trillion infrastructure plan.WASHINGTON — Top liberal lawmakers are set to unveil legislation on Monday that would modernize the public housing system and start a transition to renewable energy, offering a clear policy marker for progressives as Democrats haggle over the details of President Biden’s infrastructure plan and how to push it through Congress.The introduction of the legislation, led by Senator Bernie Sanders, the Vermont independent, and Representative Alexandria Ocasio-Cortez, Democrat of New York, is the first of multiple proposals from progressive lawmakers as they seek to influence a $2.3 trillion infrastructure overhaul to address climate change and economic inequities.Their proposal comes as Mr. Biden and his allies are navigating congressional crosscurrents that include the larger policy demands of a Democratic caucus that has little room for disagreement and Republicans who say they want to compromise, but have largely panned a plan paid for by tax increases. While the president has outlined the broad contours of his proposal, it is up to lawmakers to reach agreement on the final provisions and details of the legislation.Some lawmakers are floating the prospect of downsizing Mr. Biden’s legislative plan to win the 10 Republican votes needed to overcome the 60-vote filibuster threshold in the Senate, amid a flurry of lobbying from rank-and-file members. Progressive Democrats like Ms. Ocasio-Cortez and Mr. Sanders are instead doubling down on their call for a larger package than the president proposed and pushing to shape what could be one of the largest investments of federal dollars in a generation.The progressives’ legislation, billed as the Green New Deal for Public Housing Act, is a prong of the broader climate platform that Ms. Ocasio-Cortez and others have long championed to help the United States wean itself from fossil fuels. It would repeal limitations on the construction of public housing and create grant programs to ensure improvements that not only address unsafe and aging housing, but reduce carbon emissions.“We’re here to make sure the Democratic Party upholds its values and keeps its promises, and to also push and expand the scope and the ambition of the Democratic Party,” Ms. Ocasio-Cortez said in an interview. She and other liberal lawmakers are expected to reintroduce additional parts of the Green New Deal this week.Filling sand bags to protect public housing before a hurricane in Lumberton, N.C., in 2019. Republicans have seized on the climate and housing provisions in President Biden’s infrastructure plan as overreach.Alyssa Schukar for The New York TimesTo qualify for the grants, recipients would have to adhere to strong labor standards, such as protection of collective bargaining and use of American manufacturing and products. The legislation would also fund tenant protection vouchers for displaced residents and create apprenticeship programs for residents.When Mr. Biden outlined his proposal last month, he called for more than $40 billion to improve public housing infrastructure. At an event in New York on Sunday, a group of lawmakers from the state, including Senator Chuck Schumer, the majority leader, pushed for at least double that figure.“Public housing has been neglected, left to get worse, and we’re not going to stand for it anymore,” Mr. Schumer said. The president’s plan, he added, was “a good start, but it ain’t enough.”Mr. Sanders, Ms. Ocasio-Cortez and allies envision the proposal costing between $119 billion and $172 billion over 10 years to meet the needs of their constituents, according to an estimate provided to The New York Times. It aims to create thousands of maintenance and construction jobs.“Probably our best bet would be one bill — and it should be a large bill,” Mr. Sanders said in an interview. “I think it’s just easier and more efficient for us to work as hard as we can in a comprehensive broad infrastructure plan, which includes human infrastructure as well as physical infrastruture.”Republicans, who have sought to weaponize the Green New Deal in recent years as egregious federal overreach that would harm the economy, have already seized on the climate and housing provisions in Mr. Biden’s plan as far beyond the traditional definition of infrastructure. Mr. Biden is also preparing a second proposal that would focus even more on projects outside what Republicans call “real” infrastructure and could bring the total cost to $4 trillion.“Republicans are not going to partner with Democrats on the Green New Deal or on raising taxes to pay for it,” Senator John Barrasso, Republican of Wyoming, said at a news conference last month. Senator Mitch McConnell of Kentucky, the minority leader, has repeatedly warned that the infrastructure plan is “a Trojan horse” for liberal priorities, while Representative Steve Scalise of Louisiana, the No. 2 House Republican, declared last week that “it’s a lot of Green New Deal” that would lead voters to turn away from Democrats.“I think the expansive definition of infrastructure that we see in this sort of ‘Green New Deal wish list’ is called into question,” Senator Shelley Moore Capito, Republican of West Virginia, said on “Fox News” last week. “I don’t think that the American people, when they think of infrastructure, are thinking of home health aides and other things that are included in this bill.”In acknowledgment of both Republican resistance to Mr. Biden’s plan and the lure of bipartisan legislation, some lawmakers have raised the possibility of first passing a smaller bill that addresses roads, bridges and broadband with Republican votes before Democrats use the fast-track budget reconciliation process to bypass the filibuster and unilaterally push the remainder of the legislative proposals through both chambers.“I think that if we come together in a bipartisan way to pass that $800 billion hard infrastructure bill that you were talking about, that I’ve been urging, then we show our people that we can solve their problems,” Senator Chris Coons, Democrat of Delaware, said on “Fox News Sunday.” While the progressives’ proposal is largely unchanged from its original iteration in 2019, the political landscape is vastly different, with Democrats in control of Washington. Mr. Sanders now oversees the Senate Budget Committee, and a historic investment of federal funds to counter the economic and health effects of the coronavirus pandemic has some lawmakers and voters more open to substantial spending.“The time has now caught up to the legislation, and I’m really thrilled about that,” Ms. Ocasio-Cortez said. “You have a respiratory pandemic that’s layered on communities that are suffering from childhood asthma, that are already dealing with lung issues, that have pre-existing hypertension, which are all indicated by factors of environmental injustice.”Ms. Ocasio-Cortez and other progressives have championed a broader climate platform.Anna Moneymaker for The New York TimesThe Congressional Progressive Caucus, in an outline of five priorities for the final infrastructure product, singled out key elements of the housing legislation, including the energy efficiency standards. But with slim margins in both chambers and a huge lobbying campaign underway to ensure pet policies and provisions are included, it is unclear how Democrats would work this proposal in and whether every member of the caucus would sign on.Mr. Sanders acknowledged that the path forward for his proposal — and a number of other liberal priorities — could be difficult even with Democrats in control. He and other members of his party are exploring using budget reconciliation to pass elements of Mr. Biden’s legislative agenda, including his infrastructure plan. But without Republican votes, every Senate Democrat would need to remain united behind the entire package.“That is not easy stuff,” Mr. Sanders said. “People have different perspectives, people come from very different types of states, different politics, and that’s going to be a very difficult job for both the House and the Senate.” More

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    Covid-19 Pushes India’s Middle Class Toward Poverty

    The pandemic sent 32 million people in India from the middle class last year. Now a second wave is threatening the dreams of millions more looking for a better life.NOIDA, India — Ashish Anand had dreams of becoming a fashion designer. A former flight attendant, he borrowed from relatives and poured his $5,000 life savings into opening a clothing shop on the outskirts of Delhi selling custom-designed suits, shirts and pants.The shop, called the Right Fit, opened in February 2020, just weeks before the coronavirus struck India. Prime Minister Narendra Modi abruptly enacted one of the world’s toughest nationwide lockdowns to stop it. Unable to pay the rent, Mr. Anand closed the Right Fit two months later.Now Mr. Anand, his wife and his two children are among millions of people in India in danger of sliding out of the middle class and into poverty. They depend on handouts from his aging in-laws. Khichdi, or watery lentils cooked with rice, has replaced eggs and chicken at the dinner table. Sometimes, he said, the children go to bed hungry.“I have nothing left in my pocket,” said Mr. Anand, 38. “How can I not give food to my children?”Now a second wave of Covid-19 has struck India, and the middle class dreams of tens of millions of people face even greater peril. Already, about 32 million people in India were driven into poverty by the pandemic last year, according to the Pew Research Center, accounting for a majority of the 54 million who slipped out of the middle class worldwide.The pandemic is undoing decades of progress for a country that in fits and starts has brought hundreds of millions of people out of poverty. Already, deep structural problems and the sometimes impetuous nature of many of Mr. Modi’s policies had been hindering growth. A shrinking middle class would deal lasting damage.“It’s very bad news in every possible way,” said Jayati Ghosh, a development economist and professor at the University of Massachusetts Amherst. “It has set back our growth trajectory hugely and created much greater inequality.”The second wave presents difficult choices for India and Mr. Modi. India on Friday reported more than 216,000 new infections, another record. Lockdowns are back in some states. With work scarce, migrant workers are packing into trains and buses home as they did last year. The country’s vaccination campaign has been slow, though the government has picked up the pace.Yet Mr. Modi appears unwilling to repeat last year’s draconian lockdown, which left more than 100 million Indians jobless and which many economists blame for worsening the pandemic’s problems. His government has also been reluctant to increase spending substantially like the United States and some other places, instead releasing a budget that would raise spending on infrastructure and in other areas but that also emphasizes cutting debt.Anil G. Kumar lives in Palam, one of the many neighborhoods in Delhi that have been hurt by the pandemic.Smita Sharma for The New York TimesThe Modi government has defended its handling of the pandemic, saying vaccinations are making progress and that signs point to an economic resurgence. Economists are forecasting a rebound in the coming year, though the sudden rise in infections and India’s slow vaccination rate — less than 9 percent of the population has been inoculated — could undermine those predictions.The heady growth forecasts feel far away for Nikita Jagad, who was out of work for over eight months. Ms. Jagad, a 49-year-old resident of Mumbai, stopped going out with her friends, eating at restaurants and even taking bus rides, unless the trip was for a job interview. Sometimes, she said, she shut herself inside her bathroom so her 71-year-old mother wouldn’t hear her crying.Last week, Ms. Jagad got a new job as a manager at a company that provides housekeeping services for airlines. It pays less than $400 a month, roughly half her previous salary. It could also be short-lived: the state of Maharashtra, home to Mumbai, announced lockdown-like measures this week to stop the spreading second wave.If she loses her new job, Ms. Jagad is still the only support for her mother. “If something happens to her,” she said, “I don’t have the money to even admit her in the hospital.”India’s middle class may not be as wealthy as its peers in the United States and elsewhere, but it makes up an increasingly potent economic force. While definitions vary, Pew Research defines middle-class and upper-middle-class households as living on about $10 to $50 a day. The kind of income could give an Indian family an apartment in a nice neighborhood, a car or a scooter, and the opportunities to send their children to a private school.Roughly 66 million people in India meet that definition, compared with about 99 million just before the pandemic last year, according to Pew research estimates. These increasingly affluent Indian families have drawn foreign companies like Walmart, Amazon, Facebook, Nissan and others to invest heavily in a country of aspirational consumers.A collage of vacation photographs in Ashish Anand’s apartment in Noida, a reminder of the good times the family once had.Smita Sharma for The New York TimesAnil G. Kumar, a civil engineer, was one of them. Around this time last year, he and his family were about to buy a two-bedroom apartment. But when last year’s lockdown hit, Mr. Kumar’s employer, a construction chemicals manufacturer, slashed his salary by half.“Everything turned turtle within a few hours,” he said. Three months later, his job had been eliminated.Now Mr. Kumar spends his days in his home in a working-class neighborhood in the western part of Delhi, searching for jobs on LinkedIn and taking care of his son.The family’s middle-class life is now under threat. They survive on the $470-a-month salary Mr. Kumar’s wife draws from a private university. Instead of holding a big celebration for their son’s 10th birthday at a restaurant, which would have cost nearly $70, they ordered a cake and a new outfit for about one-fifth the cost. Mr. Kumar also canceled his Amazon Prime subscription, which he hadn’t used in a while.“Every day you can’t sit on the laptop,” he said. “At times, you feel depressed.”India’s middle class is central to more than the economy. It fits into India’s broader ambitions to rival China, which has grown faster and more consistently, as a regional superpower.To get there, the Indian government may need to address the people the coronavirus has left behind. Household incomes and overall consumption have weakened, even though the sales of some goods have increased recently because of pent-up demand. Many of the hardest hit come from India’s merchant class, the shopkeepers, stall operators or other small entrepreneurs who often live off the books of a major company.“India is not even discussing poverty or inequality or lack of employment or fall in incomes and consumption,” said Mahesh Vyas, the chief executive of the Center for Monitoring of the Indian Economy. “This needs to change first and foremost,” he said.Mr. Kumar with his 10-year-old son, Akshay, in the Palam neighborhood in Delhi, India. Mr. Kumar lost his job as a civil engineer during last year’s lockdown.Smita Sharma for The New York TimesMost Indians are “tired” and “discouraged” by the lack of jobs, said Mr. Vyas, especially low-skilled workers.“Unless this problem is addressed,” he said, “this will be a millstone that will hold back India’s sustained growth.”Mr. Anand, the prospective fashion designer, who lives in the industrial hub of Noida in the southeastern Delhi area, found himself at wit’s end during last year’s lockdown. The family fell behind on the rent. Two months into the lockdown, he collapsed in what he described as a panic attack.“We did not want to live,” said his wife, Akanksha Chadda, 33, a former operations manager at a luxury retail store who also hasn’t been able to find a job. She sat facing a photograph taken three years ago of her son and daughter sitting on a giant turtle at an amusement park. “I didn’t know if I would wake up the next morning or not.”The days when they could afford muesli for breakfast and pizza for dinner are gone, said Mr. Anand. On good days, they get some vegetables and banana for the kids.In January, Ms. Chadda sold their 8-year-old son’s bicycle to buy milk, lentils and vegetables. He cried for a solid evening. But she felt she had little choice. She had already sold her jewelry the month before.“When you don’t see a ray of hope,” she said, “you lose it.” More

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    Beyond Pandemic’s Upheaval, a Racial Wealth Gap Endures

    Billions in aid has been dispensed, and the social safety net has been reinforced. Will there be more ambitious steps to address longtime inequities?Not since Lyndon Baines Johnson’s momentous civil rights and anti-poverty legislation has an American president so pointedly put racial and economic equity at the center of his agenda.President Biden’s multitrillion-dollar initiatives to rebuild infrastructure in neglected and segregated neighborhoods, increase wages for health care workers, expand the safety net and make pre-K and college more accessible are all shot through with attention to the particular economic disadvantages that face racial minorities. So were his sweeping pandemic relief bill and Inauguration Day executive orders.Yet as ambitious as such efforts are, academic experts and some policymakers say still more will be needed to repair one of the most stubborn and invidious inequalities: the gap in wealth between Black and white Americans.Wealth — one’s total assets — is the most meaningful measure of financial strength. Yet for every dollar a typical white household has, a Black one has 12 cents, a divide that has grown over the last half-century. Latinos have 21 cents for every dollar in white wealth.Such disparities drag down the American economy as a whole. A study by McKinsey & Company found that consumption and investment lost because of that gap cost the U.S. economy $1 trillion to $1.5 trillion over 10 years, or 4 to 6 percent of the projected gross domestic product in 2028.Mr. Biden started talking about the wealth divide on the campaign trail, calling on the Federal Reserve to take on a new role and “aggressively target persistent racial gaps in jobs, wages and wealth.”Vice President Kamala Harris and several Democratic senators have supported proposals targeted specifically at the gap — from increasing Black homeownership to establishing trust accounts for newborns (“baby bonds”). And senior economic advisers who have joined the Biden team, including Cecilia Rouse and Jared Bernstein, have talked about the need for programs that attack structural inequities, noting that disparities in income over time create more entrenched gaps in wealth.Heather Boushey, a member of the White House Council of Economic Advisers, said the president’s proposals were intended to work together to make sure that unexpected or temporary economic jolts — like the loss of a job — didn’t snowball into a disastrous tumble.“No one thing alone is going to check the box to close the wealth gap, but the combination of all these things together will make real progress,” said Ms. Boushey, who has written frequently about the issue.Government support is crucial, economists say, because there is so little that individuals can do on their own to close the wealth gap. The most surprising finding that researchers at the Federal Reserve Bank of St. Louis established after a decade-long study of inequality and financial vulnerability was that no matter what financial decisions you make or schools you attend, roughly 80 percent of those yawning disparities are determined by your skin color, the year you were born and your gender.Median wealth of Black, Hispanic and white households

    Note: Figures adjusted for inflationSource: Federal Reserve Bank of St. LouisThe New York Times“There’s a lot you don’t control,” said Ray Boshara, who headed the research effort. “These larger forces really have an impact on your ability to accumulate wealth.”Imagine playing a game of Monopoly with a set of rigged rules. Your opponent gets $2,000 in cash, rolls with two dice at every turn, and earns $200 every time he circles the board and passes “Go.” You, by contrast, begin with only $1,000, roll with a single die and earn $100 at “Go.”At the game’s end, you can hand off whatever cash and property you’ve accumulated to a friend or family member, and the next round just continues.The rigged game helps explain the origins of the wealth gap. The heavy hand of a history studded by intimidation and terrifying violence, segregation and unfair housing, zoning and lending policies has prevented generations of Black families from gathering assets.In the 19th century, when the government distributed the country’s most realizable asset — land — during the Homestead Act, African-Americans were left out. In the 20th century, when the focus shifted to building a berth in the middle class through homeownership, African-Americans were again largely excluded from federal mortgage loan support programs and the G.I. Bill of Rights. Tax policies, in turn, favored the wealth-building strategies that were offered to whites.Even New Deal assistance programs like unemployment insurance that were created to help people survive the Depression excluded agricultural and domestic workers, who were overwhelmingly Black.Again and again, African-Americans were shut off from the capital that makes capitalism work.“That’s how we built the racial wealth gap,” said William A. Darity Jr., an economics professor at the Sanford School of Public Policy at Duke University. “Unless you have a comparable program focused on building Black wealth, you’re not going to do much about it.”Unequal outcomes in one generation turn into unequal opportunities in the next. Without assets, Black parents cannot offer as much financial support to help pay for their children’s education, first home or efforts to start a small business.Black graduates, for example, have to take out bigger loans to cover college costs, compelling them to start out in more debt — on average $25,000 more — than their white counterparts.Recognizing an uneven playing field is not as obvious as it might seem. The lopsided Monopoly rules were developed by social scientists at the University of California, Berkeley, nearly a decade ago as part of an experiment on money’s effect on human behavior.They found that winners consistently credited their hard-earned skills and smarts for their success rather than a skewed playing field.Research shows that outside forces prevent Black workers who are just as talented and hardworking from achieving the same success as their white peers.Harold M. Lambert/Getty ImagesThat all-too-human response clouds thinking about inequality, said Paul Piff, who led the research team and is now a psychologist at the University of California, Irvine.Americans, much more than people from other countries, interpret “their advantages in terms of things they themselves have earned or deserved as opposed to thinking it’s the result of an unfair world,” Professor Piff said. “Then the inequalities you’re seeing aren’t unfair, they’re just necessary outcomes of things that people did or didn’t do,” he said, so you are less willing to do anything about them.Mr. Boshara at the St. Louis Fed said the implications were particularly pertinent in thinking about the racial wealth gap.“People feel they’ve earned everything they have, but the evidence just doesn’t support that,” said Mr. Boshara, who is helping to lead a follow-up research initiative at the bank, the Institute for Economic Equity. “It counters the American narrative that everybody who has something made it on their own.”Challenging shibboleths about hard work and personal responsibility can meet resistance. People often take immediate offense, interpreting the argument as detracting from their own demonstrable hard work, skills and talent. What the research highlights, though, are the outside forces that prevent other individuals who are just as talented and hardworking from achieving the same success.The same house in a Black neighborhood will fetch less money than it would in a white one. A Black worker with the same credentials as a white colleague will earn less. Even among college graduates, the Black jobless rate tends to be twice as high as the rate for whites. Such inequities operate like an invisible tax on African-Americans, a tax on being Black.The pandemic has underscored how crushing unpredictable and uncontrollable twists in circumstances can be. When Congress approved the $1.9 trillion relief plan, Mr. Biden pointed out that millions of Americans were jobless and lining up at food banks “through no fault of their own.”“I want to emphasize that,” he added. “Through no fault of their own.”The pandemic has hit African-Americans and Latinos hardest on all fronts, with higher infection and death rates, more job losses, and more business closures.Proposals that confront the wealth gap head on, though, are both expensive and politically charged.Professor Darity of Duke, a co-author of “From Here to Equality: Reparations for Black Americans in the Twenty-First Century,” has argued that compensating the descendants of Black slaves — who helped build the nation’s wealth but were barred from sharing it — would be the most direct and effective way to reduce the racial wealth gap.Vice President Harris and Senators Bernie Sanders of Vermont, Elizabeth Warren of Massachusetts and Cory Booker of New Jersey have tended to push for asset-building policies that have more popular support. They have offered programs to increase Black homeownership, reduce student debt, supplement retirement accounts and establish “baby bonds” with government contributions tied to family income.With these accounts, recipients could build up money over time that could be used to cover college tuition, start a business or help in retirement.Several states have experimented with small-scale programs meant to encourage children to go to college. Though those programs were not created to close the racial wealth gap, researchers have seen positive side effects. In Oklahoma, child development accounts seeded with $1,000 were created in 2007 for a group of newborns.“We have very clear evidence that if we create an account of birth for everyone and provide a little more resources to people at the bottom, then all these babies accumulate assets,” said Michael Sherraden, founding director of the Center for Social Development at Washington University in St. Louis, which is running the Oklahoma experiment. “Kids of color accumulate assets as fast as white kids.”Without dedicated funds — the kind of programs that enabled white families to build assets — it won’t be possible for African-Americans to bridge the wealth gap, said Mehrsa Baradaran, a law professor at the University of California, Irvine, and the author of “The Color of Money: Black Banks and the Racial Wealth Gap.”She paraphrased a 1968 presidential campaign slogan of Hubert Humphrey’s: “You can’t have Black capitalism without capital.” More

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    As U.S. Prospects Brighten, Fed’s Powell Sees Risk in Global Vaccination Pace

    Some countries are lagging behind in vaccinations, and policymakers warned that no economy is secure until the world is safe from coronavirus variants.Jerome H. Powell, the Federal Reserve chair, and the managing director of the International Monetary Fund, Kristalina Georgieva, emphasized the economic need for worldwide vaccinations on Thursday.Pool photo by Stefani ReynoldsJerome H. Powell, the Federal Reserve chair, stressed on Thursday that even as economic prospects look brighter in the United States, getting the world vaccinated and controlling the coronavirus pandemic remain critical to the global outlook.“Viruses are no respecters of borders,” Mr. Powell said while speaking on an International Monetary Fund panel. “Until the world, really, is vaccinated, we’re all going to be at risk of new mutations and we won’t be able to really resume activity with confidence all around the world.”While some advanced economies, including the United States, are moving quickly toward widespread vaccination, many emerging market countries lag far behind: Some have administered as little as one dose per 1,000 residents.Mr. Powell joined a chorus of global policy officials in emphasizing how important it is that all nations — not just the richest ones — are able to widely protect against the coronavirus. Kristalina Georgieva, the managing director of the International Monetary Fund, said policymakers needed to remain focused on public health as the key policy priority.“This year, next year, vaccine policy is economic policy,” Ms. Georgieva said, speaking on the same panel as Mr. Powell. “It is even higher priority than the traditional tools of fiscal and monetary policy. Why? Without it we cannot turn the fate of the world economy around.”Still, she also warned against pulling back on monetary policy support prematurely, saying that clear communication from the United States is helpful and important. The Fed is arguably the world’s most critical central bank thanks to the widely used dollar, and unexpected policy changes in the United States can roil global markets and make it harder for less developed economies to recover.“Premature withdrawal of support can cut the recovery short,” she cautioned.The Fed has held interest rates near zero since March 2020 and has been buying about $120 billion in government-backed bonds per month, policies meant to stoke spending by keeping borrowing cheap. Officials have been clear that they will continue to support the economy until it is closer to their goals of maximum employment and stable inflation — and that while the situation is improving, it is not there yet.“There are a number of factors that are coming together to support a brighter outlook for the U.S. economy,” Mr. Powell said, noting that tens of millions of Americans are now fully vaccinated, so the economy should be able to fully reopen fairly soon. “The recovery though, here, remains uneven and incomplete.”Employers added more than 900,000 workers to payrolls last month, but the country is still missing millions of jobs compared with February 2020 and fresh data showed that state jobless claims climbed last week. Mr. Powell pointed out that the burden is falling heavily on those least able to bear it: Lower-income service workers, who are heavily minorities and women, have been hit hard by the job losses.When asked what keeps him awake at night, Mr. Powell said that “there’s a pretty substantial tent city” he drives past on his way home from work in Washington. “We just need to keep reminding ourselves that even though some parts of the economy are just doing great, there’s a very large group of people who are not.”Given the pandemic’s role in exacerbating inequality, both Mr. Powell and Ms. Georgieva said it was critical to support workers and make sure they can find their way into new and fitting jobs.The Fed chair said policy tended to focus too much on short-term, palliative measures and not enough on longer-term solutions that help to expand economic possibility.“I think we need to, really as a country — and I’m not talking about any particular bill — invest in things that will increase the inclusiveness of the economy and the longer-term potential of it,” Mr. Powell said. “Particularly invest in people, so that they can take part in, contribute to and benefit from the prosperity of our economy.”Those comments come as the Biden administration is pushing for an ambitious $2 trillion infrastructure package that would include provisions for labor market training, technological research and widespread broadband. The administration has proposed paying for the package by raising corporate taxes.“For quite some time, we have been in favor of more investment in infrastructure. It helps to boost productivity here in the United States,” Ms. Georgieva said, calling climate-focused and “social infrastructure” provisions positive. She said they had not had a chance to fully assess the plan, but “broadly speaking, yes, we do support it.”But the White House’s plan has already run into resistance from Republicans and some moderate Democrats, who are wary of raising taxes or engaging in another big spending package after several large stimulus bills.Some commentators have warned that besides expanding the nation’s debt load, the government’s virus spending — particularly the recent $1.9 trillion stimulus package — could cause the economy to overheat. Fed officials have been less worried. “There’s a difference between essentially a one-time increase in prices and persistent inflation,” Mr. Powell said on Thursday. “The nature of a bottleneck is that it will be resolved.”If price gains and inflation expectations moved up “materially,” he said, the Fed would react.“We don’t think that’s the most likely outcome,” he said. More

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    In Washington, ‘Free Trade’ Is No Longer Gospel

    Like its predecessor, the Biden administration has largely dispensed with the idea of free trade as a goal in and of itself.WASHINGTON — For decades, the principle of “free trade” inspired a kind of religious reverence among most American politicians. Lawmakers, diplomats and presidents justified their policies through the pursuit of freer trade, which, like the spread of democracy and market capitalism, was presumed to be a universal and worthy goal.But as the Biden administration establishes itself in Washington, that longstanding gospel is no longer the prevailing view.Political parties on both the right and left have shifted away from the conventional view that the primary goal of trade policy should be speeding flows of goods and services to lift economic growth. Instead, more politicians have zeroed in on the downsides of past trade deals, which greatly benefited some American workers but stripped others of their jobs.President Donald J. Trump embraced this rethinking on trade by threatening to scrap old deals that he said had sent jobs overseas and renegotiate new ones. His signature pacts, including with Canada, Mexico and China, ended up raising some barriers to trade rather than lowering them, including leaving hefty tariffs in place on Chinese products and more restrictions on auto imports into North America.The Biden administration appears poised to adopt a similar approach, with top officials like Katherine Tai, Mr. Biden’s nominee to run the Office of the United States Trade Representative, promising to focus more on ensuring that trade deals protect the rights and interests of American workers, rather than exporters or consumers.The Senate is expected to vote on Ms. Tai’s nomination on Wednesday, and supporters say she will be easily confirmed.Mr. Biden and his advisers have promised to review the impact that past trade policies have had on economic and racial inequality, and put negotiating new trade deals on the back burner while they focus on improving the domestic economy. And they have not yet made any moves to scale back Mr. Trump’s hefty tariffs on foreign products, saying that they are reviewing them, but that tariffs are a legitimate trade policy tool.In her hearing before the Senate Finance Committee on Feb. 25, Ms. Tai emphasized that she would help usher in a break with past policies that would “pit one of our segments of our workers and our economy against another.”While Ms. Tai reassured senators that she would work with them to promote exports from their districts, she called for a policy that would focus more on how trade affects Americans as workers and wage earners.When asked by Senator Patrick J. Toomey, a Republican of Pennsylvania and a noted free trader, whether the goal of a trade agreement between two modern, developed economies should be the elimination of tariffs and trade barriers, Ms. Tai declined to agree, saying she would want to consider such agreements on a case-by-case basis.“Maybe if you’d asked me this question five or 10 years ago, I would have been inclined to say yes,” Ms. Tai responded. But after the events of the past few years — including the pandemic, the Trump administration’s trade wars and a failed effort by the Obama administration to negotiate a Pacific trade deal — “I think that our trade policies need to be nuanced, and need to take into account all the lessons that we have learned, many of them very painful, from our most recent history,” she said.Katherine Tai, the Biden administration’s nominee for trade representative, promised a break with past policies that had “pit one of our segments of our workers and our economy against another.”Pool photo by Bill O’LearyIn his first major foreign policy speech on March 3, Secretary of State Antony J. Blinken also said that the calculus on free trade had changed.“Some of us previously argued for free trade agreements because we believed Americans would broadly share in the economic gains,” he said. “But we didn’t do enough to understand who would be negatively affected and what would be needed to adequately offset their pain.”“Our approach now will be different,” Mr. Blinken said.Clyde Prestowitz, a U.S. negotiator in the Reagan administration, called the administration’s statements on trade “a revolution.” While Robert E. Lighthizer, Mr. Trump’s trade representative, also parted with the conventional wisdom on trade, he was seen as an exception, a former steel industry lawyer steeped in protectionism, said Mr. Prestowitz.“Now here is Ms. Tai, with a mostly government official career behind her, talking without making any of the formerly necessary gestures toward the sanctity and multitudinous bounties of free trade,” Mr. Prestowitz said. “The conventional wisdom on trade no longer has an iron grip on policymakers and thinkers.”Like Ms. Tai and Mr. Lighthizer, many past presidents and trade officials emphasized fair trade and the idea of holding foreign countries accountable for breaking trade rules. But many also paid homage to the conventional wisdom that free trade itself was a worthy goal because it could help lift the economic fortunes of all countries and enhance global stability by linking economies.That idea reached the height of its popularity under the presidencies of George H.W. Bush, Bill Clinton and George W. Bush, where the United States negotiated the North American Free Trade Agreement, led the talks that gave the World Trade Organization its modern format, granted China permanent normal trading relations, and sealed a series of trade agreements with countries in Latin America, Africa and the Middle East.President Barack Obama initially put less emphasis on free trade deals, instead focusing on the financial crisis and the Affordable Care Act. But in his second term, his administration pushed to sign the Trans-Pacific Partnership, which came under criticism from progressive Democrats for exposing American workers to foreign competition. The deal never won sufficient support in Congress.For Democrats, the downfall of that deal was a turning point, propelling them toward their new consensus on trade. Some, like Dani Rodrik, a professor of political economy at Harvard, argue that recent trade deals have largely not been about cutting tariffs or trade barriers at all, and instead were focused on locking in advantages for pharmaceutical companies and international banks.David Autor, an economist at the Massachusetts Institute of Technology, said that economic theory had never claimed that trade makes everybody better off — it had said that trade would raise overall economic output, but lead to gains and losses for different groups.But economists and politicians alike underestimated how jarring some of those losses could be. Mr. Autor’s influential research shows that expanded trade with China led to the loss of 2.4 million American jobs between 1999 and 2011. China’s growing dominance of a variety of global industries, often accomplished through hefty government subsidies, also weakened the argument that the United States could succeed through free markets alone.Today, “people are much more sensitive to the idea that trade can have very, very disruptive effects,” Mr. Autor said. “There’s no amount of everyday low prices at Walmart that is going to make up for unemployment.”But Mr. Autor said that while the old consensus was “simplistic and harmful,” turning away from the ideal of free trade held dangers too. “Once you open this terrain, lots of terrible policies and expensive subsidies can all march in under the banner of the protection of the American worker,” he said.Some have argued that the approach could forgo important economic gains.William Reinsch, the Scholl Chair in International Business at the Center for Strategic and International Studies, wrote that Americans had come to understand that the argument that “a rising tide would lift all boats” is not always correct.“A rising tide does not lift all boats; it only lifts some boats, and for a long time, workers’ boats have been stuck in the muck while the owners’ yachts flow free,” he wrote. However, Mr. Reinsch added, “no tide lifts no boats. In economic terms, if we forgo the expansion of trade, we do not get the benefits trade provides, and there is nothing to distribute.”Workers making iron bars in a steel factory in China last month.Agence France-Presse — Getty ImagesIt remains to be seen how much the Biden administration will adhere to the Trump administration’s more protectionist policies — like keeping the tariffs on foreign metals and products from China.While the Biden administration has tried to distance its trade policy from that of the previous administration, many former Trump administration officials say the direction appears remarkably similar.In an interview in January, Mr. Lighthizer said that the Trump administration had reoriented trade policy away from the interests of multinational businesses and the Chamber of Commerce and toward working-class people and manufacturing, goals that Democrats also support. He said the Biden administration would try to make trade policy look like their own, but ultimately “stay pretty close.”“The goal is creating communities and families of working people, rather than promoting corporate profits,” Mr. Lighthizer said. “I think the outlines of what we’ve done will stay. They will try to Biden-ize it, make it their own, which they should do, but I’d be surprised if they back away from the great outline of what we’ve done and how we’ve changed the policy.”Ms. Tai has acknowledged some similarities between the Biden and Trump administration’s goals, but emphasized the difference in their tactics.In her confirmation hearing, she said that she shared the Trump administration’s goal of bringing supply chains back to America, but that the prior administration’s policies had created “a lot of disruption and consternation.”“I’d want to accomplish similar goals in a more effective, process-driven manner,” she said. More

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    Biden Highlights Small-Business Help, as Problems Persist With Lending Program

    President Biden visited a Black-owned flooring company as he continued his weeklong push to highlight the $1.9 trillion economic relief package.President Biden dropped by a flooring company in the Philadelphia suburbs on Tuesday to promote an assortment of measures in his $1.9 trillion aid package that are aimed at helping small employers and their workers endure the pandemic’s economic shocks.But Mr. Biden’s most immediate and sweeping small-business initiative — changes he made last month to the Paycheck Protection Program — has been mired in logistical challenges. With the relief program scheduled to end in just two weeks, the effect of his modifications will be blunted unless Congress extends it.Last month, Mr. Biden abruptly altered the rules of the $687 billion program to make business owners who employ only themselves eligible for more money. The move was intended to address a clear racial and gender disparity in the relief effort: Female and minority owners, who are much more likely to run tiny businesses than larger ones, were disproportionately hobbled by an earlier rule that based the size of sole proprietors’ loans on their annual profit.Many companies were shut out of the program because of that restriction, while others got loans as small as $1. The administration switched to a more forgiving formula that lets those businesses instead use their gross income, a change that significantly increased the money available to millions of business owners. Its implementation, though, has been a mess.The program’s government-backed loans are made by banks. The largest lender, JPMorgan Chase, refused to make the change, saying it lacked the time to update its systems before March 31, the program’s scheduled end date. The second-largest lender, Bank of America, decided to update all of its applications manually, causing anxiety and confusion among its borrowers. Wells Fargo released its revised application on Tuesday and told borrowers with pending applications that they had just three days to reapply using the new form.Compounding the problem is that Mr. Biden’s change was not retroactive, which has prompted backlash from the hundreds of thousands of borrowers who got much smaller loans than they would now qualify for. Many have used social media or written to government officials to vent their anger.JagMohan Dilawri, a self-employed chauffeur in Queens, got a $1,900 loan in February. Under the new rules, he calculates that he would have been eligible for around $15,000. That wide gulf frustrated Mr. Dilawri, who has struggled to keep up on his mortgage, car loan and auto insurance payments since the pandemic took hold.“When the Biden administration came, they said, ‘We will be fair with everyone,’” he said. “But this is unfair.”Officials at the Small Business Administration, which manages the program, said only Congress could fix that disparity. Absent legislative action, loans that were completed before the rule was revised “cannot be changed or canceled,” said Matthew Coleman, an agency spokesman.On Tuesday, the Senate confirmed Mr. Biden’s nominee to run the Small Business Administration, Isabel Guzman, by an 81-to-17 vote.Despite the concerns, Mr. Biden was met with praise in Chester, Pa., when he visited Smith Flooring, a Black-owned business that supplies and installs flooring. White House officials said the shop cut payroll over the last year, from 22 union employees to 12, after revenues declined by 20 percent during the pandemic. It has survived, the officials said, thanks in part to two rounds of loans from the Paycheck Protection Program, which Congress established last year during the Trump administration to help small businesses.“This is a great outfit. This is a union shop,” Mr. Biden said in brief remarks. Its employees, he said, “work like the devil, and they can make a decent wage, a living wage.”The owners of Smith Flooring, Kristin and James Smith, secured their second loan from the program as part of one of the Biden administration’s changes, which created a two-week exclusive period for certain very small businesses to receive loans. They thanked Mr. Biden for his efforts and for visiting Chester.Mr. Biden’s aid bill, signed last week, added $7 billion to the program and funded others to help struggling businesses, including a $28 billion grant fund for restaurants. The law also set aside additional money for other relief efforts run by the Small Business Administration, including a long-delayed grant program for music clubs and other live-event businesses, which the agency said would start accepting applications early next month.Lenders are scrambling to carry out the administration’s changes to the Paycheck Protection Program and finish processing a flood of applications before March 31. The American Institute of Certified Public Accountants called the deadline “unrealistic,” and 10 banking groups sent a letter to lawmakers urging Congress to give them more time.Advocacy groups are also calling, with increasing urgency, for both an extension and a fix to make the rule change for sole proprietors retroactive.Mr. Biden met with the owners of Smith Flooring, Kristin and James Smith, in Chester, Pa., on Tuesday.Doug Mills/The New York Times“We absolutely need those changes,” said Ashley Harrington, the federal advocacy director at the Center for Responsible Lending. In December, Congress made retroactive changes to Paycheck Protection Program loans for farmers that allowed those borrowers to recalculate and increase previously finalized loans..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;}Frequently Asked Questions About the New Stimulus PackageThe stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more. Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read moreThis credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.“To have that change be made for one group and not be made for another — especially for a group that has so many Black and Latino business owners that have struggled so much in this crisis — really raised alarms and red flags for us,” Ms. Harrington said.Some key Democratic lawmakers said they were willing to extend the date. Representative Nydia M. Velázquez, a New York Democrat who leads the House Small Business Committee, said she was working with the Small Business Administration and congressional Republicans “to find a path forward, whether that be through agency action or additional legislation.”“For those sole proprietors who applied before the new rules took effect, we understand their concerns and are eager to work with Congress to resolve them,” said Bharat Ramamurti, the deputy director of the National Economic Council and the White House’s point person on the relief program.Mr. Ramamurti said that “tens of thousands” of loans had been approved by around 4,000 lenders using the new formula, and that some large lenders — including the online lender Biz2Credit and two banks, Cross River Bank and Customers Bank, that make loans for dozens of partner companies — said they had successfully made the needed updates.But many applicants are struggling. Chase’s refusal to make the change provoked outrage on social media from its customers. “What a slap in the face,” one tweeted at the bank. “Please make this right,” another begged.And some Bank of America customers are mired in confusion over the bank’s process, which required loan seekers to apply in writing for an incorrect amount — one that used the older formula — and rely on the bank’s staff to correct their applications by hand.Asim Khan, an environmental consultant in Ann Arbor, Mich., has been trying for two weeks to get his Bank of America application untangled. He has spent hours on the phone and on hold. “I’ve had two reps tell me they’ve seen it work for people, but yet they can’t make it work for me,” he said. “It’s all super clumsy.”Bill Halldin, a Bank of America spokesman, said the bank was “working with each individual client to manually update their loan information, which is the best way for us to help them take advantage of the recently announced rule change.”While the program still has two weeks left, the big banks are already shutting down. Bank of America stopped accepting new applications last week, and Chase plans to close its application system on Friday. More