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    Biden Administration Faces Legal Fight Over State Aid Restrictions on Tax Cuts

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    The litigation came amid growing pushback from Republican lawmakers and state officials to a provision in the relief package that the Treasury Department said was constitutional.WASHINGTON — State backlash against a restriction in the $1.9 trillion economic relief legislation that prohibits local governments from using aid money to cut taxes emerged as the Biden administration’s first major legal battle on Wednesday, as Ohio sued to block the provision and other states considered similar action.The litigation came amid growing pushback from Republican lawmakers and state officials, who say that the strings attached to the Covid relief money are a violation of state sovereignty and that imposing tax cut restrictions is an infringement on a state’s right to set its own fiscal policies.On Tuesday, 21 Republican attorneys general wrote a letter to Treasury Secretary Janet L. Yellen seeking clarity on the portion of the law that prevents them from using the federal funds “to either directly or indirectly offset a reduction in the net tax revenue” resulting from state tax cuts.The attorneys general called the provision “the greatest attempted invasion of state sovereignty by Congress in the history of our Republic.”But the Biden administration showed no signs of backing down, saying on Wednesday that the restriction on how states can use their federal funds is constitutional and that those governments should not use stimulus money meant to combat the coronavirus crisis to subsidize tax cuts.The fight could slow the rollout of more than $200 billion in relief funds that states are expected to receive to help cover Covid-related costs, including money for schools and infrastructure investments.States, which are expected to share $220 billion worth of stimulus funds, are anxiously awaiting guidance about whether the restrictions apply to the use of federal dollars to offset new tax cuts, or if it blocks them from cutting taxes for any reason, even if the cuts were in the works before the law passed.In a court filing on Wednesday, Dave Yost, Ohio’s attorney general, sought a preliminary injunction that would bar the federal government’s ability to enforce what he described as the “tax mandate.”“The federal government should be encouraging states to innovate and grow business, not holding vital relief funding hostage to its preferred pro-tax policies,” Mr. Yost, a Republican, said in a statement.Ohio is expected to receive $5.5 billion in federal relief funds. Mr. Yost said that states should not have to choose between accepting the money and maintaining their rights to cut taxes.But the Treasury Department said on Wednesday that if a state that took relief money cuts taxes, that state must repay the amount of lost revenue from those cuts to the federal government.“It is well established that Congress may establish reasonable conditions on how states should use federal funding that the states are provided,” said Alexandra LaManna, a Treasury spokeswoman. “Those sorts of reasonable funding conditions are used all the time — and they are constitutional.”She added that the new law “provided funds to help states manage the economic consequences of Covid-19, and gave states flexibility to use that money for pandemic relief and infrastructure investments.”.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.The Treasury Department rejected the idea that the provision, which was added to the relief legislation at the last minute, was prohibiting states from cutting taxes. States are free to decline the federal funds, or they can repay the money if they are in fiscal shape to cut taxes.“The law does not say that states cannot cut taxes at all, and it does not say that if a state cut taxes, it must pay back all of the federal funding it received,” Ms. LaManna said. “It simply instructed them not to use that money to offset net revenues lost if the state chooses to cut taxes. So if a state does cut taxes without replacing that revenue in some other way, then the state must pay back to the federal government pandemic relief funds up to the amount of the lost revenue.”The amount of aid that a state will receive is tied to its jobless rate, and there are strict requirements to ensure that the money is used for purposes related to the coronavirus or to offset revenues that have been lost because of the health crisis. The Treasury Department plans to closely scrutinize how the money is spent.In their letter to Ms. Yellen, the attorneys general said that if they did not receive a formal response by March 23, they would take “appropriate additional action.”More lawsuits could soon follow. Attorney General Patrick Morrisey of West Virginia said such action would include seeking a court ruling “that the unprecedented and micromanaging provision violates the U.S. Constitution.”At a briefing with reporters on Wednesday, Mr. Morrisey said he had been working on a draft of a complaint. He has been talking to other states about the mechanics of the legal challenge and where it should be filed.“There are huge legal and constitutional problems with this provision,” Mr. Morrisey said. “This may be one of the greatest attempted invasions of state sovereignty by Congress in the history of our Republic.” More

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    How Our Unemployment Benefits System Failed

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    #masthead-section-label, #masthead-bar-one { display: none }The Jobs CrisisCurrent Unemployment RateThe First Six MonthsPermanent LayoffsWhen a $600 Lifeline EndedAdvertisementContinue reading the main storySupported byContinue reading the main storyHow the American Unemployment System FailedA decline in funding and changes in the workplace — and how long people are out of work — have left a program unequal to the 21st-century economy. More

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    Unemployment Claims Rise Sharply, Showing New Economic Pain

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesA Future With CoronavirusVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyUnemployment Claims Rise Sharply, Showing New Economic PainWeekly filings for jobless benefits hit the highest level since July as the pandemic’s resurgence batters the service industry.A closed restaurant in Santa Barbara, Calif. The winter coronavirus wave has pummeled the leisure and hospitality industries.Credit…Bryan Denton for The New York TimesJan. 14, 2021Updated 7:08 p.m. ETTen months after the coronavirus crisis decimated the labor market, the resurgent pandemic keeps sending shock waves through the American economy.Though more than half of the 22 million jobs lost last spring have been regained, a new surge of infections has prompted shutdowns and layoffs that have hit the leisure and hospitality industries especially hard, dealing a setback to the recovery.The latest evidence came on Thursday when the Labor Department reported that initial claims for state unemployment benefits rose sharply last week, exceeding one million for the first time since July.Just days earlier, the government announced that employers had shed 140,000 jobs in December, the first net decline in employment since last spring, with restaurants, bars and hotels recording steep losses.“We’re in a deep economic hole, and we’re digging in the wrong direction,” said Daniel Zhao, senior economist with the career site Glassdoor. “The report obviously shows that the rise in claims is worse than expected, and there is reason to think that things are going to get worse before they are going to get better.”That prospect is all the more troubling because a major element of the relief package signed by President Trump last month — a $300 weekly federal supplement to other unemployment benefits — is set to run out in mid-March.President-elect Joseph R. Biden Jr. has said he will push a new stimulus package through Congress to provide a lifeline for workers and employers until the pandemic can be brought under control. His plan will include direct payments to most households along with aid to small businesses and local and state governments.The recent economic data has brought a new sense of urgency to such efforts, with millions struggling to make ends meet even as more job losses could be in the offing.The Labor Department said on Thursday that 1.15 million workers filed initial claims for state unemployment benefits during the first full week of the new year. A further 284,000 claims were filed for Pandemic Unemployment Assistance, an emergency federal program for freelancers, part-time workers and others normally ineligible for state jobless benefits. Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 965,000.Before the pandemic, weekly filings typically totaled around 200,000.The holidays may have held down unemployment claims in previous weeks, with people waiting until the new year to submit claims. But several economists expressed skepticism that filing delays were a major driver of the uptick in claims last week.“I don’t think there’s any question that on the margin, there could be some unusual things going on,” said Mark Hamrick, senior economic analyst at Bankrate.com. “But we have to think also about the fact that these are not our grandfather’s unemployment lines — meaning much of this is done digitally. I think if one just tries to understand human nature, it doesn’t make a lot of sense that someone would be delaying a request for financial assistance when they’re out of work.”More likely, economists say, is that the $300 federal supplement prompted an increase in demand for benefits.Confusion over the new federal aid — which Mr. Trump spent several days threatening not to sign — may also have temporarily slowed down claims for Pandemic Unemployment Assistance, which fell during the week ending Jan. 2. The increase last week brought the numbers more in line with the previous elevated levels.Volunteers processing donations at a food pantry in Wichita, Kan. More than one million people filed new claims for unemployment benefits last week.Credit…Stephen Speranza for The New York TimesThose seeking new work have found diminishing prospects. Hiring slowed for five straight months before December’s outright reversal. In November, even before the recent surge in virus cases, the number of workers officially counted as unemployed outnumbered job openings by more than four million, according to the Labor Department.The Coronavirus Outbreak More

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    A Long, Lonesome Look at America

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    Twilight falls over a county road in Crook, Colorado.Flags billow along an empty sidewalk in Martin, Tennessee.In Detroit, Oregon, the wreckage from a wildfire sits beneath burned-out hills.These photographs were taken on a 10,000-mile road trip across the United States.They reflect our country’s beauty, loss, confusion, hope, division, grace and grandeur.They’re scenes of an America cloaked in solitude — and of a country on edge.Supported byContinue reading the main storyThe World Through a LensA Long, Lonesome Look at AmericaJan. 11, 2021, 5:00 a.m. ETI was only a few days into a meandering trip across America, and already I was easing into something of a nighttime routine. Earlier in the day I’d pinpointed a promising campsite in Ozark National Forest. Now, I found myself ascending an isolated forestry road to get to it, my tires crackling over its rough, potholed surface.When I could no longer hear the road noise from the scenic highway that carried me into the mountains, I found a small clearing in the woods, shimmied my car into a level position and climbed into the back. Gathering my camping stove, I stepped outside into a light rainfall and, under a tall canopy of trees, lit the burner.All night I’d been enveloped in a thick foggy haze: not much to see, wipers running full tilt. I hadn’t interacted with anyone in days, and now even the landscape was hidden from view. But the rain seemed to be letting up — enough in this small glade, at least, for me to heat a pot of water for a solitary cup of tea. In the morning, I thought, if things cleared, there’d even be hope of seeing the surrounding mountains in their autumnal glory.Lichens on the rock reflect the turning of the leaves at Sam’s Throne, in Ozark National Forest.So it went, it seems, with much of 2020: our lives — and our country — enveloped in a haze of uncertainty, without our knowing whether the next day would bring a modicum of relief or a deepening of our solitude.Cattle in a field near Encino, N.M.Flocks of geese head west over Nebraska.In October I set off on a trip to witness and document this singular moment in American history — to look quietly and intently at our country, to parse its scenery.A polka-dotted awning on a vacant street in Glenwood, Ark.A boarded-up building in Carter, Wyo.The Rio Grande near Taos, N.M.To limit interaction and prevent exposure, I outfitted my car as a makeshift camper van, removing the rear seats and installing a sleeping (and living and working) platform in their place.After stocking up on food and water, I headed southwest from my hometown, Hudson, Ohio, largely avoiding highways and preferring instead to pass more slowly through less populated areas. Most nights I spent at remote, unimproved campsites — away from any developed campgrounds — in our sprawling network of national forests.The fringes of Kootenai National Forest, in northwest Montana.A barn near Libby, Mont.On many of my previous trips across the country, my spirits have been buoyed by the fleeting social interactions that occur sporadically throughout the day — at diners, motels, knickknack shops, campgrounds.Traveling in isolation, though, was a categorically different experience.Even in the casual places where travelers still gathered — gas stations, coffee shops, rest areas — there were generally no offhand conversations, no sharing of experiences, no sense of spontaneous connection. Strangers transacted and, still strangers, went their separate ways.A service station in Dale, Ore.Without the promise of social interaction, the landscape itself — both natural and built — became my focus.Often it felt like a companion. Often it felt like a manuscript, open to interpretation.Early morning light illuminates the Guadalupe Mountains, east of El Paso.A pair of deer in McKittrick Canyon.Wintry colors in Prineville, Ore.Reviewing the photographs from my trip, I found that my eyes were drawn to projections of my own isolation: lone structures, unpeopled scenes, solitary sets of tire tracks.The Fox Community Church in Grant County, Ore.A Forest Service road near Sisters, Ore.A vacant strip mall in northwest Tennessee.Looking outward, I saw within.An aptly named business in Ronan, Mont.Silhouettes against the night sky in Craters of the Moon National Monument and Preserve, in central Idaho.What also struck me were the scars. In town after town I saw sidewalks emptied, shops struggling, restaurants barely clinging to life.It all added up to the same bleak assessment: The pandemic has acted like an accelerant, hastening trends toward online commerce that threaten the future of brick-and-mortar stores and streetside businesses — the economic and communal mainstays of small towns throughout America.A café in Ojo Caliente, N.M.A service station in Vaughn, N.M.The economic fallout wasn’t the only visible trauma. In Colorado, Oregon and California, the widespread effects of the worst fire season on record were ubiquitous.Heading west from Fort Collins, Colo., along State Highway 14, I watched as crews scrambled to battle the Cameron Peak fire, the largest in Colorado history. The devastation along Highway 22 in Oregon was astonishing.Handmade signs along State Highway 14 in northern Colorado.A scorched tree trunk in Willamette National Forest.The charred remains of a home in Detroit, Ore.Our country’s political divisions were also omnipresent — in the form of yard signs, flags, billboards.In some places, the public posturing read like communal declarations. More than at other points in recent memory, businesses (as opposed solely to individuals or residences) seemed to trumpet their political affiliations.A politicized marquee on a theater on North Main Street in Springhill, La.A billboard in Carlsbad, N.M.A sign outside a farm in Bossier Parish, La.A roadside stand offering political merchandise in Medina, Tenn.There was, of course, an endless array of beauty. Gazing at the sandstone arches in eastern Utah, standing silently over the pristine waters of the McDonald Creek in northern Montana, looking out at a herd of bison in Southern Colorado, I saw the sublimity and the precariousness of our natural treasures reflected in their own forms.The Corona Arch, near Moab, Utah.McDonald Creek in Glacier National Park.A bison at the Medano-Zapata Ranch, on the eastern edge of Colorado’s San Luis Valley. In the 19th century, American bison were hunted nearly to extinction; fewer than a thousand remained from an estimated population of 30 to 60 million.If much of the American landscape can be read, then much is also continuously rewritten — particularly in our forests, grasslands and wildlife refuges, the arenas for our never-ending attempts to strike a balance between conservation and extraction, between profit and preservation.A U.S. Forest Service sign in Ouachita National Forest.A nearby logging operation.In many ways the trip felt like an extended ode to such places — our national forests in particular.Twelve days and some 4,500 miles in, I woke before dawn in the southern stretches of Bitterroot National Forest, near the border between Idaho and Montana. Temperatures outside had fallen into the low 20s; cocooned in my car, I hadn’t noticed. But, cracking the door open, I felt a rush of cold air.I peered out into the darkness.Clear skies above Bitterroot National Forest.Startled by the cold and beckoned by the Montanan scenery, I opted for an early start, descending the mountains north toward Missoula. I fell into an early-morning trance — until, 20 minutes later, I saw a fellow traveler who’d pulled his car to the side of the road and exited it. He was staring into the distance.I turned to my left, in the direction of his gaze, and saw Trapper Peak, purple and majestic, dressed in unspeakable beauty. Somehow, inexplicably, I hadn’t noticed its grandeur.I pressed the brakes and slowed to a stop some 100 feet away. I, too, exited my car and stood alongside the road.Together in solitude, we took in the scene.Pastel skies at sunrise over Trapper Peak, in the Bitterroot Mountains.Stephen Hiltner is an editor on The New York Times’s Travel desk, where he edits the weekly World Through a Lens column. You can follow his work on Instagram and Twitter.Follow New York Times Travel on Instagram, Twitter and Facebook. And sign up for our weekly Travel Dispatch newsletter to receive expert tips on traveling smarter and inspiration for your next vacation.AdvertisementContinue reading the main story More

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    Use It or Lose It: Tenant Aid Effort Nears a Federal Cutoff

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    AdvertisementContinue reading the main storySupported byContinue reading the main storyUse It or Lose It: Tenant Aid Effort Nears a Federal CutoffEmergency pandemic funding to help renters must be distributed by Dec. 30. But getting the money to those who need it is no small task.Gregory Heller of the Philadelphia Housing Development Corporation is scrambling to get emergency aid into tenants’ hands before a federal deadline.Credit…Hannah Yoon for The New York TimesDec. 15, 2020Updated 7:15 p.m. ETFor several months, Gregory Heller, an official with a Philadelphia nonprofit group, has grappled with an unusual problem. He had $60 million in rental aid to help low-income tenants weather the pandemic — and a whole lot of trouble spending it.Designing questionnaires, verifying bank statements, processing stacks of paperwork: There is a wide administrative gap between the goal of getting money to renters who need it and the reality of cutting a check to their landlord. People like Mr. Heller are trying to bridge it.He is among hundreds of public servants and nonprofit employees nationwide who are scrambling to unload hundreds of millions in federal aid for tenants before a Dec. 30 deadline. They don’t have enough money to address a growing rental housing crisis yet are struggling to pay out what they have — an undertaking that has become even more urgent as other federal emergency programs, including unemployment benefits and an eviction moratorium, are also about to expire.Working from a home office in front of a laptop whose spreadsheets represent roofs over families’ heads, Mr. Heller, senior vice president for community investment at the Philadelphia Housing Development Corporation, is so engulfed in his efforts that he now supplements the work of his support staff by taking calls from tenants and landlords on his cellphone. That way he can pitch in on answering questions and review applications on the fly, part of a rush to stave off a wave of evictions, one tenant at a time.“I get calls all day, every day,” he said. “I’ve basically joined the help desk.”Philadelphia is a case study in the simple-but-not-easy task of helping tenants with the rent. Social programs are often a partnership in which cities provide funding and lay out rules but delegate the execution to quasi-governmental nonprofit organizations like Mr. Heller’s. Like most places, Philadelphia isn’t close to satisfying the need for help. But through rounds of rejiggering and three phases of funding — each with its own maze of rules and requirements — Mr. Heller’s group built a team to distribute aid, whittled down the processes that delayed it and ultimately concluded that the best way to help was the most straightforward: Give the money directly to renters.“There’s a societal belief that poor people can’t spend money the right way, and I think it’s important to start questioning that assumption,” Mr. Heller said.Almost from the moment the pandemic spread across the United States, advocacy groups have warned that the economic fallout could cause mass displacement of low-income tenants. In response, more than 400 state and local governments have used money from the federal CARES Act to set up funds to cover at least $4.3 billion in rental assistance — money that has helped tenants pay their bills and landlords stay current on their mortgages, according to a database set up by the National Low Income Housing Coalition, a policy group.But now many jurisdictions are reporting trouble spending it, and with barely two weeks left in the year, they are on pace to have more than $300 million left over, according to the coalition’s database. In a pattern that predated the pandemic, the programs have been complicated by bureaucratic hurdles, competing budget demands and a reluctance among landlords to take part.There was shifting federal guidance on how CARES Act money could be spent. States passed legislation that piled local rules on top of the federal rules. Each layer was ostensibly created to improve programs — preventing fraud, making sure the money went to the neediest tenants — but added numerous hurdles for both tenants and landlords, and in the end cost time.“In trying to build bulletproof programs, you build programs that take a long time to get off the ground or simply don’t work because they are too clunky,” said Brad Gair, a principal with Witt O’Brien’s, an emergency-management consulting firm that has helped about a dozen state and local governments create rental funds.Hoping to distribute the remaining aid before it is forfeited, many states and cities are simplifying applications and moving money from nonprofits that can’t process the aid fast enough to those that can. Others are redirecting the funds to different purposes, lest they go unspent.Philadelphia is a case study in the simple-but-not-easy task of helping tenants with the rent. Like most places, it isn’t close to satisfying the need.Credit…Hannah Yoon for The New York TimesNone of this is for lack of demand. In interviews, more than a dozen officials of nonprofit groups and housing administrators reported a deluge of applications, while reports show tenants are piling up credit card bills, back rent and loans. Moody’s Analytics estimates that by the end of the year some 11 million lower-income renters will be about $70 billion in arrears.Tenant advocates, landlord organizations and local-government associations have called on Congress to extend the Dec. 30 deadline. “The idea of reverting that money back to the Treasury just as the eviction moratoriums expire and renters are on the brink is absurd and cruel,” said Diane Yentel, chief executive of the National Low Income Housing Coalition.Like most U.S. cities, Philadelphia had a housing problem long before the pandemic. Rents are lower than in markets like New York and San Francisco, but the burden on tenants is still high. In 2018, about a third of the city’s tenants spent at least half of their pretax income on rent, according to the Pew Charitable Trusts.Despite this, federal aid for housing has been declining for decades, part of a continued disinvestment in the social safety net. The line for the federal Section 8 program, which gives vouchers to low-income renters, is more than a decade long in Philadelphia. At the same time, the Department of Housing and Urban Development’s Community Development Block Grant Program is giving the city less than half of the funding that it received in 1995, adjusted for inflation.Looking to expand aid, Mayor Jim Kenney announced in early March that the city would budget $50 million for a five-year program to assist low-income households. It would also run an experiment, giving one group of households rental vouchers while another group of families got unrestricted cash assistance.The coronavirus ended that by blowing a hole in the city’s budget. But the CARES Act added some $60 million in new funds, some through the state and some in direct federal support to cities. The catch was that it had to be spent quickly. And that’s where Mr. Heller’s group came in.Mr. Heller, 39, has spent his career in the nonprofit world and has been a consultant on neighborhood development projects in two dozen cities. In 2016, he was appointed to run the Philadelphia Redevelopment Authority, a role he still holds, and last year he joined the Philadelphia Housing Development Corporation.Business & EconomyLatest UpdatesUpdated Dec. 15, 2020, 4:17 p.m. ETEuropean Central Bank will lift ban on bank dividends, a sign of cautious optimism.Top congressional leaders met to discuss a stimulus deal and a year-end spending bill before the deadline on Friday.European truck makers say they will phase out fossil fuel vehicles by 2040.Money can come in an instant, but running new programs involves a bunch of mundane but important tasks. Mr. Heller’s organization could not take applications or distribute aid until it had built new information technology infrastructure, with a web portal for claims and 18 full-time employees to review applications and field calls.The first phase was rolled out on May 12 and covered up to $2,500 in rent over three months. Within four days the city had 13,000 applicants. About a third were approved, consuming $10 million of the eventual $60 million.At the same time, Pennsylvania used CARES Act money to start a separate rental-aid program. This was confusing to landlords and tenants, because while that money was also distributed through nonprofits like Mr. Heller’s, it had different criteria from Philadelphia’s program. The major distinction was that the state program would cover no more than $750 in rent, and to receive it property owners had to agree to forgive the balance, and to waive late fees and back rent. This caused a number of landlords — especially in Philadelphia, where the median rent is $1,600 — to balk. And without landlords’ consent, tenants couldn’t get the aid.Victor Pinckney, a landlord and former president of HAPCO, a city landlords’ group, said the reason was simple: He and others didn’t want to take less than the market rent, or give up the right to collect back payments. “It was a no-brainer,” he said.The result was that tenants like Christy Lee Nicholas, who spent two days filling out the questionnaire and assembling pay stubs and bank statements, didn’t even have their applications looked at because the city couldn’t process them without landlord forms.Ms. Nicholas, 42, made about $1,400 a month from a part-time teaching job but was laid off during the pandemic. She recently applied to the Supplemental Nutrition Assistance Program, better known as food stamps, and pays $1,100 a month in rent. She is one month behind on rent and applied for the city’s program, but her landlord didn’t send in his own forms.Linda Harkins applied to the city’s rental assistance program, but was denied because her landlord did not send in a form.Credit…Hannah Yoon for The New York Times“I got an email that said, ‘Sorry, but unfortunately participation requires your landlord,’” she said.This problem went far beyond Philadelphia. Vincent Reina, an urban planning professor at the University of Pennsylvania, recently found that in some cities as many as half of tenants could not get landlords to cooperate with rental assistance programs. The reasons included not wanting to deal with bureaucracy and an unwillingness to comply with terms like waiving back rent or losing the right to evict tenants collecting aid.“We’ve consistently created programs where owners have ultimate veto power over whether a tenant can access the housing assistance that they’ve applied for and need,” Mr. Reina said.To coax more landlords into the program, Philadelphia used its own CARES Act money to augment state rental funds, allowing it to cover up to $1,500 a month in rent. That took care of an additional $30 million, but even with a higher rent cap, 37 percent of landlords still refused to take part.With the end of the year approaching, the city gave Mr. Heller’s organization $20 million for a third program for tenants. This time, instead of having separate applications from landlords and tenants, the organizers asked people who weren’t able to get aid from the first two rounds to reapply — for a cash payment.“We don’t want to penalize them just because their landlord won’t play ball,” Mr. Heller said.One of them was Linda Harkins. Ms. Harkins is a 67-year-old retiree who makes about $1,200 a month from a pension and Social Security, and until recently supplemented it with about $600 a month from a part-time job with the Census Bureau. When her position was cut, Ms. Harkins applied to the city’s rental assistance program.Her application, like Ms. Nicholas’s, was denied because her landlord did not send in a form. Last month, she applied for the new direct-aid program. Ms. Harkins is hoping the check will arrive by Christmas, or at least the first of the month.With the new cash program, Mr. Heller said he was confident that all $60 million would be spent by year’s end. But the need for help will continue.“We now have a whole program set up to funnel millions of dollars to tenants and landlords,” he said. “This issue predates the pandemic and it’s going to continue after. The question is whether we’re going to continue to fund it, or not.”AdvertisementContinue reading the main story More

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

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

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    A $900 Billion Plan Would Help the Economy, but Not Fix It

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesC.D.C. Shortens Quarantine PeriodsVaccine TrackerFAQAdvertisementContinue reading the main storySupported byContinue reading the main storynews analysisA $900 Billion Plan Would Help the Economy, but Not Fix ItWhile a compromise package gaining steam in Congress would provide urgent help to the economy, some people and businesses would be left out in the cold.The framework of a $908 billion stimulus plan includes several types of assistance that economists have been calling on Congress to approve for months.Credit…Anna Moneymaker for The New York TimesBy More

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    In Blue States and Red, Pandemic Upends Public Services and Jobs

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesC.D.C. Shortens Quarantine PeriodsVaccine TrackerFAQAdvertisementContinue reading the main storySupported byContinue reading the main storyIn Blue States and Red, Pandemic Upends Public Services and JobsAs a standoff over federal aid persists, state and local governments are making deep budget cuts. “Everything’s going to slow down,” one official said.Republican-led states that largely depend on energy-related taxes, like Wyoming, have been walloped by the sharp decline in oil prices.Credit…Stephen Speranza for The New York TimesBy More