Tag: bailout

The hopeful news for Social Security buried in the $1.9 trillion bailout

Mary Pat Campbell

Link: https://www.msn.com/en-us/money/retirement/the-hopeful-news-for-social-security-buried-in-the-1-9-trillion-bailout/ar-BB1eht7e?ocid=BingNews

Excerpt:

Lawmakers have moved to include in the bill an unrelated $86 billion bailout for bankrupt union pension plans.

And once they’ve done that, it’s going to be even harder for them to argue that they shouldn’t bail out the stricken Social Security trust fund that is actually their responsibility. Social Security’s deficit: $16.8 trillion, or about $50,000 for every person in America.

On the other hand, if Congress tries to weasel out of fully funding Social Security in a few years’ time, this rescue of private sector union pensions is going to look like an outrage.

Author(s): Brett Arends

Publication Date: 6 March 2021

Publication Site: MSN Money

Senate Narrowly Passes $1.9 Trillion COVID Stimulus Bill

Mary Pat Campbell

Link: https://www.nationalreview.com/news/senate-narrowly-passes-1-9-trillion-covid-stimulus-bill/

Excerpt:

The Senate voted 50-49 to pass Democrats’ $1.9 trillion coronavirus relief package on Saturday, after a marathon session of voting on various amendments.

The bill was passed via budget reconciliation rules, which allow a simple majority to approve legislation in place of a filibuster-proof 60-vote threshold. The Biden administration had been pushing to pass the legislation before the week of March 14, when pandemic-related federal unemployment assistance is scheduled to expire.

The vote occurred entirely on partisan lines. Senator Dan Sullivan (R., Alaska) returned to his home state on Friday to attend the funeral of his father-in-law, meaning Vice President Kamala Harris did not need to cast a tie-breaking vote.

Author(s): ZACHARY EVANS

Publication Date: 6 March 2021

Publication Site: National Review

Bad Stimulus: Government Payments to Individuals Are a Terrible Way to Solve America’s Structural Economic Problems

Mary Pat Campbell
Bad Stimulus: Government Payments to Individuals Are a Terrible Way to Solve America’s Structural Economic Problems

Excerpt:

Biden’s stimulus is not the stuff of economic revolution—it’s a mix of common sense and keeping the lights on. And the fundamental thinking behind the stimulus approach reflects a continuation of neoliberal policies of the past 40 years; instead of advancing broader social programs that could uplift the population, the solutions are predicated on improving individual purchasing power and family circumstances. Such a vision of society as a collection of enterprising individuals is a hallmark of the neoliberal policy formula—which, as the stimulus bill is about to make clear, is still prevalent within the Democratic and the Republican parties. This attention to individual purchasing power promises to be the basis for bipartisan agreement over the next four years.

The reality is that social programs on health care and education, and a new era of labor and banking regulation, would put the wider society on sounder feet than a check for $1,400.

Author(s): Albena Azmanova

Publication Date: 4 March 2021

Publication Site: naked capitalism

MoneyPalooza Monstrosity — The Return: Multiemployer Bailout

Mary Pat Campbell

Link: https://marypatcampbell.substack.com/p/moneypalooza-monstrosity-the-return

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Excerpt:

Now, you can say that they are just about to add $2 trillion to the federal debt, so what’s $2 trillion more? (and yes, people will be saying that – we shall see how much that money printer can go BRRRRRR)

In my own opinion, the standard measures for DB pension shortfalls greatly underestimate the cash flows needed, given this time of extremely low interest rates. But still, let’s pretend.

The public pension bailout would be at least 20 times the amount of a MEP bailout. Just because you bailout a set of pensions that would have pulled down a federal guarantee fund (the PBGC) does not mean you’re going to bailout other pensions that are much bigger and that you never guaranteed in the first place.

Author(s): Mary Pat Campbell

Publication Date: 3 March 2021

Publication Site: STUMP on Substack

The ‘COVID Relief Bill’ Is Mostly an Expensive Bundle of Politically Motivated Giveaways

Mary Pat Campbell
The ‘COVID Relief Bill’ Is Mostly an Expensive Bundle of Politically Motivated Giveaways

Excerpt:

A sizable portion, about $500 billion, is a bailout of state and local governments that for the most part do not need one. While state tax revenues took a small hit from the pandemic and associated economic lockdowns, the damage is far smaller than was once feared. States should handle their own finances.

But it’s not just a bailout; it’s a bailout in which the funding is allocated based on the size of each state’s unemployed population. In other words, states that imposed draconian and unnecessary economic lockdowns during the past year are going to get a larger share of the federal cash than states that managed to balance public health needs and the economy—an arrangement that New Hampshire Gov. Chris Sununu rightly calls “outrageous.”

Author(s): Eric Boehm

Publication Date: 3 March 2021

Publication Site: Reason

$350 Billion Covid “Bailout” To States, Cities, And Counties – Here’s What You Need To Know

Mary Pat Campbell

Link: https://www.forbes.com/sites/adamandrzejewski/2021/03/03/350-billion-covid-bailout-to-states-cities-and-counties–here-are-the-details/?sh=626de35e661c

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Excerpt:

This week, the U.S. House passed, along party lines, the $1.9 trillion American Rescue Plan Act of 2021. A vote in the U.S. Senate is expected soon.

Buried within the 591-page bill is a $350 billion bailout for 50 states, tribal governments, U.S. territories, and more than 30,000 cities and counties.

Our auditors at OpenTheBooks.com finally located the $350 billion allocation, line-by-line, in a supplemental database hidden on the back end of the House Oversight Committee’s website.

Map Link: https://www.openthebooks.com/maps/?Map=90043&MapType=Pin

CBO data: https://www.openthebooks.com/assets/1/6/CD13263501.pdf

Author(s): Adam Andrzejewski

Publication Date: 3 March 2021

Publication Site: Forbes

Multiemployer pension measures cleared for relief bill vote

Mary Pat Campbell

Link: https://www.pionline.com/legislation/multiemployer-pension-measures-cleared-relief-bill-vote

Excerpt:

Legislation to help struggling multiemployer pension funds is to remain in the COVID-19 relief measure headed for a Senate vote this week.

The package also calls for some funding relief for single-employer plans, through extended amortization periods and pension interest rate smoothing changes.

The pandemic relief package was approved by the House along party lines Feb. 27. Its pension provisions were at risk of being stripped until the Senate parliamentarian ruled late Monday that they fit the rules for a budget reconciliation process that allows Democrats to prevail under a simple majority.

Author(s): Hazel Bradford

Publication Date: 2 March 2021

Publication Site: Pensions & Investments

Teamsters Laud House Committee For Including Pension Reform In Stimulus Bill

Mary Pat Campbell

Link: https://www.prnewswire.com/news-releases/teamsters-laud-house-committee-for-including-pension-reform-in-stimulus-bill-301225317.html

Excerpt:

 The Teamsters are applauding the House Ways & Means Committee’s inclusion of a multiemployer pension reform measure in a broader stimulus package introduced by the panel yesterday.

In unveiling language included in the Butch Lewis Emergency Pension Plan Relief Act of 2021, the House panel took the first step towards ensuring that millions of retirees and active workers who have played by the rules will receive the pension benefits they earned through years of hard work.

“The financial distress many of these plans are facing is beyond the control of retirees and workers,” Teamsters General President Jim Hoffa said. “While multiemployer pension plans have been buffeted by economic turbulence over the decades, the situation has been seriously exacerbated by the current pandemic.”

Author(s): International Brotherhood of Teamsters

Publication Date: 9 February 2021

Publication Site: PR Newswire

Editorial: The dangers of an oversized stimulus package and a lesson from Illinois — yes, Illinois!

Mary Pat Campbell

Link: https://www.chicagotribune.com/opinion/editorials/ct-editorial-stimulus-payments-1400-economy-20210210-3jtgubimtjgi5deaigdplzilpe-story.html#new_tab

Excerpt:

Look at Illinois, of all places. Next week, Gov. J.B. Pritzker plans to introduce his budget for the next fiscal year. While the details are sketchy, his office estimates the state will need to close a $3 billion deficit, less than the $5.5 billion his office originally estimated. A stronger than expected economy is partly due the credit. While closing a $3 billion hole is not great news, we’ll take what we can get around here.

Yet, rather than take into account rosier economic pictures states like Illinois are projecting, Democrats in Washington are pressing for another big spending bill, even as they juggle the other big news of the week, the start of former President Donald Trump’s impeachment trial in the Senate. They insist an undersized response during the Great Recession slowed that recovery. But keep in mind during that far worse slump, President Barack Obama’s stimulus program had a price tag around $800 billion. Since the pandemic hit, by contrast, Congress has responded with $4 trillion in new outlays.

Does that sound like “too little?” More than $1 trillion of that sum has not even been spent yet, according to the Committee For a Responsible Federal Budget.

Author(s): Editorial board

Publication Date: 10 February 2021

Publication Site: Chicago Tribune

Kansas Lawmakers Already Have Plans for COVID Relief Funds

Mary Pat Campbell

Link: https://www.governing.com/finance/Kansas-Lawmakers-Already-Have-Plans-for-COVID-Relief-Funds.html

Excerpt:

Republican lawmakers are eyeing the relief dollars to fund $500 million in tax cuts, heavily targeted to multinational corporations and wealthy and retired Kansans. They also want the money for refunds to students relegated to online learning and replenishment of the state’s unemployment insurance fund, which has been depleted by a record volume of legitimate and fraudulent claims. A House committee on Thursday recommended using the federal aid to fund $500 bonuses for teachers and grants for school security.

The state Senate approved the tax cut earlier this month after growing its size from a proposed $175 million to an estimated $500 million. Though the House has not yet picked up the measure, Senate Republicans have pitched federal dollars as a way to keep it alive.

Senate Majority Leader, Gene Sullentrop, a Wichita Republican, said immediately after the vote that the final size of the cut would be dependent on federal funding.

Author(s): KATIE BERNARD, THE KANSAS CITY STAR

Publication Date: 1 March 2021

Publication Site: Governing

Virus Did Not Bring Financial Rout That Many States Feared

Mary Pat Campbell

Link: https://www.nytimes.com/2021/03/01/business/covid-state-tax-revenue.html

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Excerpt:

Throughout the debate over stimulus measures, one question has repeatedly brought gridlock in Washington: Should the states get no-strings federal aid?

Republicans have mostly said no, casting it as a bailout for spendthrift blue states. Democrats have argued the opposite, saying that states face dire fiscal consequences without aid, and included $350 billion in relief for state and local governments in President Biden’s $1.9 trillion federal stimulus bill, which narrowly passed the House this past weekend. It faces a much tougher fight in the Senate.

As it turns out, new data shows that a year after the pandemic wrought economic devastation around the country, forcing states to revise their revenue forecasts and prepare for the worst, for many the worst didn’t come. One big reason: $600-a-week federal supplements that allowed people to keep spending — and states to keep collecting sales tax revenue — even when they were jobless, along with the usual state unemployment benefits.

Author(s): Mary Williams Walsh, Karl Russell

Publication Date: 1 March 2021

Publication Site: New York Times