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    Most Americans Are Expected to Save, Not Spend, Their $600 Check

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesThe Stimulus PlanVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyMost Americans Are Expected to Save, Not Spend, Their $600 CheckWhile lawmakers debate increasing the stimulus payments to $2,000, experts say it would make far more sense to give more money to the unemployed.Galen Gilbert, a 71-year old lawyer who lives in a Boston suburb, plans to deposit his stimulus check into savings. “I’m not really suffering financially,” he said.Credit…Katherine Taylor for The New York TimesNelson D. Schwartz and Dec. 30, 2020Updated 4:49 p.m. ETGalen Gilbert knows just what he will do with the check he gets from Washington as part of the pandemic relief package, whatever the amount: put it in the bank.“I’ve got more clients than I can handle right now and I’ve made more money than I usually do,” said Mr. Gilbert, a 71-year-old lawyer who lives in a Boston suburb. “So I’m not really suffering financially.”Cheryl K. Smith, an author and editor who lives in Low Pass, Ore., isn’t in a rush to spend the money, either. She plans to save a portion, too, while donating the rest to a local food bank. “I’m actually saving money right now,” Ms. Smith said.President Trump’s demand to increase the already-approved $600 individual payment to $2,000, with backing from congressional Democrats, has dominated events in Washington this week and redefined the debate for more stimulus during the pandemic. Mitch McConnell, the Senate majority leader, said on Wednesday he would not allow a vote on a standalone bill increasing the checks to $2,000, dooming the effort, at least for now.Whatever the amount, the reality is that most Americans right now are much more likely to save the money they receive.Of course, the money will be a lifesaver for the roughly 20 million people collecting unemployment benefits and others who are working reduced hours or earning less than they used to. Yet, for the majority of the estimated 160 million individuals and families who will receive it, spending the money is expected not to be a high priority.After an earlier round of $1,200 stimulus checks went out in the spring, the saving rate skyrocketed and remains at a nearly 40-year high. That largely reflects the lopsided nature of the pandemic recession that has put some Americans in dire straits while leaving many others untouched.Economists on the right and left of the political spectrum said that when otherwise financially secure people receive an unexpected windfall, they almost invariably save it. The free-market economist Milton Friedman highlighted this phenomenon decades ago.Many experts said a truly stimulative package would have earmarked the payments for those who need it most — the unemployed.“We know where the pockets of need are,” said Greg Daco, chief economist at Oxford Economics. “Putting it there would be a much more efficient use of the stimulus.”And because the money will immediately be put to work — the jobless don’t have the luxury of saving it — it would also have a much bigger impact on the overall economy, through what experts refer to as the multiplier effect. In essence, each dollar given to a person in need is likely to benefit the economy more because it would be used to pay for, say, groceries or rent.“Providing $2,400 to a family of four in the same financial situation as they were at the end of 2019 doesn’t do much to boost the overall economy right now,” Mr. Daco said. “It’s not whether it’s a positive or not. It’s their potency that’s in question.”Individuals with an adjusted gross income in 2019 of up to $75,000 will receive the $600 payment, and couples earning up to $150,000 a year will get twice that amount. There is also a $600 payment for each child in families that meet those income requirements. People making more than those limits will receive partial payments up to certain income thresholds.A more effective approach, experts say, would have raised unemployment insurance benefits to the jobless by $600 a week, matching the supplement under the stimulus package Congress passed last spring, rather than the $300 weekly subsidy the new legislation provides. Democrats had pushed for larger payments to the jobless and included it in legislation that passed the House, which they control. But the measure met stiff resistance from Republicans, who control the Senate, and was not included in the final compromise bill.The Coronavirus Outbreak More

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    A Look at What’s in the Stimulus Package Trump Signed

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesThe Stimulus PlanVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyA Look at What’s in the Stimulus Package Trump SignedThe $900 billion package provides more relief beyond the $600 checks that have become the focus in Washington.President Trump finally signed a $900 billion stimulus bill that includes much more than just direct payments to households.Credit…Al Drago for The New York TimesDec. 28, 2020Updated 6:31 p.m. ETWASHINGTON — The $900 billion stimulus bill that President Trump finally signed into law on Sunday evening goes well beyond providing the $600 checks that became a huge sticking point in getting the legislation across the finish line.The relief package casts a wide net with a variety of measures aimed at addressing the needs of millions of Americans, including those who have lost their jobs, as well as small businesses, nursing homes, colleges, universities and K-12 schools.The package extends some provisions of the original stimulus package that was passed in the spring, while adding new measures to help working families who have continued to suffer amid the pandemic.The full text of the bill ran almost 5,600 pages. Here’s a look at what’s included.Individual paymentsAmong the most anticipated components of the legislation is the direct payment, with $600 going to individual adults with an adjusted gross income of up to $75,000 a year based on 2019 earnings. Heads of households who earn up to $112,500 and a couple (or someone whose spouse died in 2020) who make up to $150,000 a year would get twice that amount.Eligible families with dependent children would receive an additional $600 per child.In a change from the last round, payments will not be denied to citizens married to someone without a social security number, allowing some spouses of undocumented immigrants to claim the benefit this time around.On Tuesday night, President Trump threatened to veto the bill because he said the payments were too low. He is advocating payments of $2,000. House Democrats planned to bring up an amendment to the bill on Thursday, an aide who was familiar with the proposal said. It is not clear how the House and Senate will act.Unemployment benefitsWith millions of Americans still unemployed, Congress acted to extend multiple programs to help those out of work, albeit at less generous levels than in the spring.The agreement would revive enhanced federal jobless benefits for 11 weeks, providing a lifeline for hard-hit workers until March 14. The new benefit, up to $300 per week, is half the amount provided by the original stimulus bill in the spring.The legislation also extends Pandemic Unemployment Assistance — a program aimed at a broad set of freelancers and independent contractors — for the same period, providing an additional $100 per week.Education resourcesSchool budgets have been severely crippled by the pandemic and left some of the most vulnerable students in dire academic and financial straits. The bill provides $82 billion for education, including about $54 billion for K-12 schools and $23 billion for colleges and universities.The Coronavirus Outbreak More

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    New Signs of Economic Distress Emerge as Trump Imperils Aid Deal

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesThe Stimulus DealThe Latest Vaccine InformationF.A.Q.AdvertisementContinue reading the main storySupported byContinue reading the main storyNew Signs of Economic Distress Emerge as Trump Imperils Aid DealA decline in consumer income and spending poses a further challenge to the recovery as jobless claims remain high and benefits approach a cutoff.Food donations were distributed on Saturday in Bloomington, Calif. Economic data released on Wednesday pointed to challenges ahead as the pandemic grinds on.Credit…Alex Welsh for The New York TimesDec. 23, 2020, 5:30 p.m. ETWith the fate of a federal aid package suddenly thrown into doubt by President Trump, economic data on Wednesday showed why the help is so desperately needed.Personal income fell in November for the second straight month, the Commerce Department said Wednesday, and consumer spending declined for the first time since April, as waning government aid and a worsening pandemic continued to take a toll on the U.S. economy.Separate data from the Labor Department showed that applications for unemployment benefits remained high last week and have risen since early November.Taken together, the reports are the latest evidence that the once-promising economic recovery is sputtering.“We know that things are going to get worse,” said Daniel Zhao, senior economist with the career site Glassdoor. “The question is how much worse.”The answer depends heavily on two factors: the path of the pandemic, and the willingness of the federal government to provide help.Congress, after months of delays, acted on Monday, passing a $900 billion economic relief package that would provide aid to the unemployed, small businesses and most households. Most urgently, it would prevent millions from losing jobless benefits at the end of this week.But on Tuesday evening, Mr. Trump demanded sweeping changes in the bill, throwing into doubt whether he would sign it.Mr. Trump’s criticism of the relief effort, which he called a “disgrace,” was that it was not generous enough: He called on Congress to provide $2,000 a person in direct payments to households, rather than the $600 included in the bill.Many economists view direct payments as among the least effective measures in the package, because much of the money would go to households that don’t need it. But beyond the merits of any specific measure, the real risk is that Mr. Trump’s comments could delay the aid, or derail it entirely.The data released Wednesday underscored the economy’s fragility. Personal income fell 1.1 percent in November and is down 3.6 percent since July, as the loss of federal assistance more than offset rising income from wages and salaries.Consumer spending, which proved resilient in the summer and fall, declined 0.4 percent, an ominous sign for small businesses trying to survive the winter. Some of the biggest drops came in categories most exposed to the pandemic’s impact: Spending on restaurants and hotels fell 3.8 percent in November, and spending on transportation, clothing and gasoline also declined.The pullback in spending is spilling over into the labor market. About 869,000 people filed new claims for state jobless benefits last week. That was down from a week earlier but is significantly above the level in early November, before a surge in coronavirus cases prompted a new round of layoffs in much of the country.A further 398,000 people filed for Pandemic Unemployment Assistance, one of two federal programs to expand jobless benefits that were set to expire this month without congressional action. Some forecasters expect the December employment report to show a net loss of jobs.“The data just underscores the importance of fiscal support,” said Aneta Markowska, chief financial economist for Jefferies, an investment bank. Without it, she said, “there would be permanent damage, and it would probably be pretty significant.”The relief bill was smaller than many economists said was needed to carry the economy through the pandemic and ensure a robust recovery. It won’t revive the hardest hit industries or undo the damage left by months of lost income for many households.A deserted hotel lobby in Beverly Hills, Calif. Consumer spending fell last month for the first time since April, with Americans cutting back in particular on restaurant meals and hotel stays.Credit…Philip Cheung for The New York TimesBut the package may be enough to forestall the wave of evictions and small-business failures that many economists warn is inevitable without it. And it should be enough to avoid a fall back into recession, which an increasing number of forecasters have said is likely without a quick injection of federal money.The Coronavirus Outbreak More

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    Biden, Calling Covid Relief Bill a ‘Down Payment,’ Urges More Relief

    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesThe Stimulus DealThe Latest Vaccine InformationF.A.Q.AdvertisementContinue reading the main storySupported byContinue reading the main storyBiden, Calling Stimulus Bill a ‘Down Payment,’ Urges More ReliefThe president-elect said he would ask Congress soon after his inauguration to pass an additional coronavirus aid package with more money for firefighters, police officers and nurses.President-elect Joseph R. Biden Jr. said Tuesday in Wilmington, Del., that he had “been proven right” about the possibility of bipartisan compromise in Congress.Credit…Amr Alfiky/The New York TimesThomas Kaplan, Annie Karni and Dec. 22, 2020WILMINGTON, Del. — A day after Congress approved a hard-fought $900 billion stimulus package, President-elect Joseph R. Biden Jr. called the measure a “down payment” on Tuesday and vowed to enter office next month asking lawmakers to return to the negotiating table.“Congress did its job this week,” he said, “and I can and I must ask them to do it again next year.”In a year-end news conference in Wilmington, Del., Mr. Biden remained vague about the specifics of his plan. But he appeared to be laying the groundwork for how he will handle the country’s economic recovery, signaling that another major economic relief package would be a priority.Mr. Biden said he planned to ask Congress to pass another bill that would include more funding to help firefighters, police officers and nurses. He said that his bill would include a new round of stimulus checks to Americans, but that the amount of money they contained would be a matter of negotiation.His focus, he said, was to have the money necessary to distribute vaccines to 300 million people, to support Americans who have lost jobs because of the coronavirus pandemic and to help businesses stay open.“People are desperately hurting,” he said.President Trump also responded to the bill on Tuesday, hours after Mr. Biden’s news conference. In a video he posted on Twitter, Mr. Trump read from a prepared statement and complained about the legislation his advisers had said he would sign. “I’m asking Congress to amend this bill and increase the ridiculously low $600 to $2,000, or $4,000 for a couple,” he said, calling the bill “a disgrace.”“It’s called the Covid relief bill, but it has almost nothing to do with Covid,” he said, noting that it included funding for the Egyptian military; money for countries like Honduras and Nicaragua; and support for the Kennedy Center in Washington.If Mr. Trump chooses not to immediately sign the bill, the government will still be funded through Monday, and Republicans have enough votes that they could override a potential veto. But the checks that his Treasury secretary, Steven Mnuchin, said would go out next week could be delayed.This month, when Senators Bernie Sanders, the Vermont independent, and Josh Hawley, Republican of Missouri, tried to unanimously force legislation that would provide larger direct payments of $1,200, a staunch Trump ally, Senator Ron Johnson of Wisconsin, blocked the endeavor.The $900 billion package Congress approved on Monday would provide billions of dollars for the distribution of vaccines and support for small businesses, schools and cultural institutions.It would also allocate a round of $600 direct payments to millions of American adults and children, as well as support a series of expanded and extended unemployment benefits for 11 weeks. Those programs will taper off, potentially prompting some form of congressional action before then.“I think everybody understands that Vice President Biden is going to ask for another bill, so we will have another chance to revisit it probably pretty soon,” Senator John Cornyn, Republican of Texas, told reporters on Monday.Mr. Biden did not negotiate with lawmakers on the stimulus directly, but his incoming chief of staff, Ron Klain, and other officials tapped to be part of the administration were kept abreast of the hour-by-hour developments in the talks, according to Democratic officials familiar with the situation.The Coronavirus Outbreak More

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    How Biden Can Move His Economic Agenda Without Congress

    #masthead-section-label, #masthead-bar-one { display: none }The Presidential TransitionliveLatest UpdatesElectoral College ResultsBiden’s CabinetDefense SecretaryAdvertisementContinue reading the main storySupported byContinue reading the main storyHow Biden Can Move His Economic Agenda Without CongressUnion leaders and policy experts say the next administration could do plenty on behalf of workers through regulation and other powers.President-elect Joseph R. Biden Jr. may be able to achieve his goals on labor policy even without a cooperative Congress.Credit…Hilary Swift for The New York TimesDec. 15, 2020, 9:00 a.m. ETPresident-elect Joseph R. Biden Jr.’s ability to reshape the economy through legislation hinges in large part on the outcome of the two Georgia runoffs in January that will decide control of the Senate. But even without a cooperative Congress, his administration will be able to act on its agenda of raising workers’ standard of living and creating good jobs by taking a series of unilateral actions under existing law.“If you pay attention to what Trump did and go about it from a different viewpoint, you can accomplish a lot,” said Thomas M. Conway, the president of the United Steelworkers union. Much of this work will fall to the incoming labor secretary, whose department has the authority to issue regulations and initiate enforcement actions that could affect millions of workers and billions of dollars in income.Mr. Biden’s labor secretary could substantially expand eligibility for time-and-a-half overtime pay. In 2016, the Obama administration extended that eligibility to salaried workers making less than about $47,500 a year, but a federal court suspended the Obama rule, and President Trump’s Labor Department set the cutoff at roughly $35,500 rather than continue to appeal. The Biden administration could make millions more salaried workers eligible for time-and-a-half overtime pay by reviving or expanding the Obama criterion and defending it in court.The Labor Department will also have an opportunity to fill several monitoring and enforcement positions created under the United States-Mexico-Canada Agreement that are likely to go unfilled during the Trump administration. The accord, a revision of the North American Free Trade Agreement, allows the United States to block imports from facilities in Mexico that curtail workers’ rights to unionize and bargain collectively. Pursued aggressively, the enforcement could help mitigate downward pressure on U.S. manufacturing wages stemming from unfair competition with Mexico.Mr. Biden’s Labor Department is likely to be more assertive in a variety of other enforcement efforts than its predecessor, which ended an Obama-era policy of typically trying to collect double the amount of wages that lawbreaking employers failed to pay workers under minimum-wage or overtime requirements.“Just getting back wages in small amounts doesn’t provide any incentives for companies to comply,” said Catherine Ruckelshaus, general counsel of the National Employment Law Project, which has ties to the Biden transition team. The Biden administration is likely to revive the Obama approach.Revisiting Labor RulesUnion membership, which has dropped to 10 percent of U.S. workers from roughly double that figure in the early 1980s, could receive a significant boost during the Biden administration, which has signaled that it intends to work closely with the labor movement.Under Mr. Biden, the National Labor Relations Board is likely to be far more aggressive in punishing employers that appear to break the law while fighting union campaigns. It can issue a regulation making it easier for the employees of contractors and franchises to hold parent companies accountable for violations of their labor rights, such as firing workers who try to unionize.According to Benjamin I. Sachs, a Harvard Law School professor, the board could also seize on a legal provision that allows the federal government to cede jurisdiction to the states for regulating labor in certain industries. That could enable a state like California or Washington to create an arrangement in which gig workers, with the help of a union, negotiate with companies over wages and benefits on an industrywide basis in that state, a process known as sectoral bargaining.Under such a system, a union would have to show support from a fraction of workers in the industry, such as 15 or 20 percent, to be able to negotiate with multiple gig companies on behalf of all workers. By contrast, under federal law, the union would typically have to win majority support among the workers it sought to represent, a daunting challenge in a high-turnover industry like gig work.Other labor experts, like Wilma B. Liebman, who led the labor board in the Obama administration, affirm that the board can cede its authority to states but are more skeptical that it would do so in the case of gig workers.Helping Home-Care WorkersThe federal government, through its control of the Medicaid program, could accomplish something similar for home-care workers, who usually work independently or for small agencies that have little power to raise pay because states set the rates for their services. The agencies sometimes resist union campaigns aggressively for fear that allowing workers to bargain for higher wages will put them at a competitive disadvantage.A handful of Democratic-leaning states, like Washington, have addressed this issue by allowing workers to bargain with the state for rate increases that effectively apply industrywide, eliminating the downside that a single agency would face if it raised wages unilaterally.The Service Employees International Union, which represents home-care workers across the country, believes that the Biden administration could encourage other states to create such industrywide bargaining arrangements — for example, by making additional money available to states that adopt this approach. Hundreds of thousands of additional home-care workers could benefit.The federal government, under a provision in the Medicaid law that requires states to keep payments high enough to ensure an adequate supply of home-care workers, could also intervene directly to raise wages and benefits for these workers.“We look forward to working with the Biden administration to make changes to the Medicaid program that can turn home-care jobs into good union jobs,” said Mary Kay Henry, the president of the service employees union.The Presidential TransitionLatest UpdatesUpdated Dec. 15, 2020, 6:45 p.m. ETBiden will name Gina McCarthy as the White House’s climate coordinator.Dominion’s C.E.O. defends his firm’s voting machines to Michigan lawmakers, denouncing a ‘reckless disinformation campaign.’Biden will nominate Jennifer Granholm for energy secretary.Using Federal Contract CloutOutside of specific agencies like the Labor Department, the Biden administration will have considerable leverage over the working conditions of the roughly five million workers employed by federal contractors and subcontractors.President Barack Obama signed executive orders raising the minimum wage for these workers to $10.10 an hour and entitling them to at least seven days a year of paid sick leave. Mr. Biden could raise the minimum wage for contractors much further — some are urging $15 an hour — while also mandating that they receive paid family leave and paid vacation days, as proposed by Heidi Shierholz, a senior Labor Department official under Mr. Obama.Mr. Biden could also use the federal government’s buying power to create more domestic manufacturing jobs, a goal he highlighted during the campaign. One approach would be to sign an executive order laying the groundwork for a Buy Clean program of the sort that California introduced in 2017.Under the program, contractors bidding on state infrastructure projects, like steel makers and glassmakers, must adhere to a certain standard for so-called embodied emissions, essentially the amount of carbon emitted when the material is produced, transported and used in construction. Tighter limits tend to favor domestic manufacturers over competitors in countries, like China, that are farther away and where production is often less environmentally friendly.“The incoming administration has broad power to put forth an idea like Buy Clean,” said Mike Williams, deputy director of the BlueGreen Alliance, a coalition of unions and environmental groups. That includes establishing a way to measure emissions and creating a database in which manufacturers are required to disclose them.Promoting Job CreationWhile existing law requires the federal government to favor domestic suppliers in procurement, a variety of waivers allow agencies to award contracts to overseas companies. Mr. Biden noted during the campaign that the Defense Department spent billions on foreign construction contracts in 2018, and he has pledged to close such loopholes.The most aggressive version of this approach would be to revoke a broad waiver that allows agencies to treat purchases from dozens of countries with which the United States has trade relations — including Japan, Mexico and many in Europe — as though they were made in America. Mr. Biden has indicated that he is more likely to try to negotiate new rules with trading partners to address this issue.The Biden administration could also instruct contracting officers to broaden the criteria they use to assess bids. A set of contracting rules laid out in a 1984 law, along with Washington’s growing preoccupation with spending cuts in recent decades, led administrations of both parties to focus on seeking the lowest upfront price.But the Biden administration could elevate value over price — under the same logic that says a $30,000 Cadillac may be a better deal than a $25,000 Ford Focus. The approach would favor companies whose workers are better paid but also better trained and more productive than competitors’.Mr. Biden could set some of these changes in motion through an executive order stating that federal agencies should focus more on quality and working conditions when assessing value. But because executing many of these shifts would be a question of day-to-day management rather than sweeping changes, some policy experts have proposed that the Biden White House create a dedicated office to oversee procurement across the administration.Anastasia Christman, an expert on government contracting at the National Employment Law Project, compares the idea to the White House Office of Faith-Based and Community Initiatives that George W. Bush created in the early 2000s, whose goal was to scour the federal bureaucracy for ways that religious organizations could compete for government funds. In this case, Ms. Christman said, the objective would be to ensure that contracting officers across agencies are using the right criteria in awarding contracts.“It would help contracting offices think differently about how to do the assessment,” Ms. Christman said. “How do you ask right kind of follow-up questions? Why is this bid lower than all others? What is that resting on?”AdvertisementContinue reading the main story More

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    Chinese Companies to Face More Scrutiny as Bill Clears House

    AdvertisementContinue reading the main storySupported byContinue reading the main storyChinese Companies to Face More Scrutiny as Bill Clears HouseThe House voted to approve legislation that will increase oversight for Chinese companies listed on American exchanges, making the bill almost certain to become law.The United States Capitol in Washington. The House of Representatives on Wednesday passed legislation that would create more oversight of Chinese companies operating in American markets.Credit…Oliver Contreras for The New York TimesBy More