A Tax Day Delay Until 2021?

By Yuval Rosenberg

Pelosi and Dems Look to ‘Go Big’ With $1.5 Trillion
Infrastructure Bill

House Democrats on Thursday unveiled a $1.5 trillion infrastructure
bill, arguing that the need to rebuild crumbling roads and bridges,
expand broadband access in rural areas and invest in clean energy
has been made more urgent by the coronavirus pandemic and its
economic fallout.

“It's job-creating in its essence, but it's also
commerce-promoting. So it grows the economy of our country,” House
Speaker Nancy Pelosi said, according to
The Hill.

The bill, called the Moving Forward Act, reportedly would
provide nearly $500 billion in highway and transportation funds
over 10 years as well as $100 billion for low-income schools, $100
billion for affordable housing, $100 billion for broadband, $70
billion for the electric grid, $65 billion for water projects, $30
billion for hospitals and $25 billion for the Postal Service.

Pelosi said she would push to pass the bill before Congress
leaves town for its July 4 recess, and she noted that President
Trump has spoken of the need for new infrastructure investment.

“The president, we understand, really wants an infrastructure
bill,” she said. “He talks about it quite a bit, so now let’s get
down to what that means.”

Pelosi reportedly added that low interest rates mean that
“there's never been a better time for us to go big.”

The White House has reportedly discussed a
$1 trillion infrastructure stimulus package, but
congressional Republicans have expressed concern about federal
spending and the additional cost of any new stimulus package.

Democrats urged Trump to enter into negotiations on how to pay
for an infrastructure bill. House Ways and Means Chairman Richard
Neal reportedly said that Democrats have proposed a combination of
government-subsidized bonds, Private Activity Bonds and "some
borrowing" to cover the cost of the legislation.

“It’s time to have the conversation, it’s time to negotiate,”
Neal said, according to
Bloomberg News. “We think on the revenue side we
are open to some solutions and negotiations.”

Republicans have also objected to the green measures
included in Democrats’ previously released highway bill, which
would represent the largest part of the infrastructure
package.

“Republicans have been a bit critical at points during the
mark up and saying this is Green New Deal 2.0. This is the
application of the principles of the Green New Deal. And this
proves that we can both deal with climate change, fossil fuel
pollution and actually create millions of new high-paying American
jobs. That is the promise of this legislation,” Transportation and
Infrastructure Committee Chairman Peter DeFazio (D-OR.) said,
according to The Hill.

Conservative Groups Call for Tax Day to Be Delayed Until
2021

A coalition of more than 20 conservative and free-market groups
wrote to Treasury Secretary Steven Mnuchin on Thursday asking that
he defer the July 15 tax deadline into next year, saying that the
payments due next month “are a fiscal cliff endangering our
economic recovery.”

The 22 groups include Americans for Tax Reform, FreedomWorks,
the National Taxpayers Union Foundation and Tea Party Nation. They
say that the tax payments due next month could total $1 trillion or
more. “This would represent an enormous financial burden at a time
when many individuals and businesses are struggling to make ends
meet due to the impacts of the COVID-19 crisis and the recent civil
unrest,” the groups say. “The case is clear that delaying payment
deadlines – including estimated taxes and excise taxes – must be an
immediate priority.”

Why it matters: At Politico’s Morning
Tax, Bernie Becker
summed it up smartly. “Let’s not act like
conservative groups angling to let people keep their tax dollars is
wildly out of character,” he wrote. “But it is a presidential
election year, and President Donald Trump has promised the economy
will come roaring back before November — so it’s probably fair to
wonder how much of a political debate this will become in the
coming weeks."

Becker notes that the National Treasury Employees Union has also
called for the July 15 deadline to be pushed back for the safety of
IRS employees. But the American Institute of CPAs, for now at
least, says the deadline should stay, in part because the group
doesn’t expect states to offer another delay.

Bailout Oversight Board Sounds a Warning

The government watchdog responsible for monitoring $2.4 trillion in
coronavirus-related bailout funds warned Wednesday that the size
and speed of the various rescue programs present significant
challenges for proper oversight.

In its first report, the Pandemic Response Accountability
Committee reviewed the main issues facing the Offices of Inspector
General at the 37 federal agencies receiving emergency funds. “Key
areas of concern include both the need for accurate information
concerning pandemic-related spending and the significant amount of
money federal agencies may lose as the result of improper
payments,” the report said.

One specific program cited in the report is the $150 billion
fund intended to help state and local governments. The report said
that some aid had been distributed already “without agreements or
terms and conditions establishing requirements for the use of funds
and reporting on such uses.”

The report also said the $660 billion Paycheck Protection
Program run by the Small Business Administration lacks proper
controls, leading to “increased vulnerability to fraud and
unnecessary losses when SBA and its lending partners expedite loan
transactions to provide quick relief.”

The report comes amid complaints about a lack of
transparency in the stimulus and relief programs. Michael E.
Horowitz, the acting chair of the oversight committee, told
Congress that the Treasury Department was resisting efforts to
disclose information on companies and individuals who have received
federal funds.

Treasury Secretary Steven Mnuchin said last week that he
would not divulge the names of loan recipients in the Paycheck
Protection Program, though he later said that he would work with
Congress on the issue.

Coronavirus Layoffs Keep Coming as Jobless Claims Top 45
Million

About 1.5 million people filed for state unemployment benefits last
week, the Department of Labor
announced Thursday, bringing the 13-week total for
first-time claims to more than 45 million. Another 760,000 filed
new claims for Pandemic Unemployment Assistance, a temporary
program for workers such as independent contractors who ordinarily
do not qualify for unemployment payments.

While new jobless claims continue to decline, falling for the
11th straight week, the numbers remain startlingly high relative to
previous recessions, and some economists have expressed concerns
that the labor market is not healing as rapidly as they had
hoped.

“It’s not clear why claims are still so high,” said Ian
Shepherdson, chief economist at Pantheon Macroeconomics, in a note
to clients. “[I]s it the initial shock still working its way up
through businesses away from the consumer-facing jobs lost in the
first wave, or is it businesses which thought they could survive
now throwing in the towel, or both? Either way, these
are disappointing numbers and serve to emphasize that a full
recovery is going to take a long time.”

Digging Into the Unemployment Numbers

With the labor market in a state of unprecedented turmoil, the data
is coming in so quickly that it can be difficult to see the clear
trendlines. Heidi Shierholz of the Economic Policy Institute
attempted to straighten out some of the crooked lines in a
blog post Thursday.

In particular, Shierholz argued that delays in filing,
processing and reporting jobless claims — along with the two-tiered
system of state and federal benefit payments — make it hard to get
a handle on how many people are currently receiving unemployment
benefits. While the Labor Department reported Thursday that the
number of people receiving benefits has plateaued at 20.5 million,
there are millions more in limbo as they wait for their
applications to be processed.

By Shierholz’s calculations (see the chart below for a
summary), about 34.5 million people are either receiving benefits —
including 9.3 million in the Pandemic Unemployment Assistance
program — or are in process within the system. That means that
“more than one in five workers are either on unemployment benefits
or are waiting to get on,” Shierholz said.

Poll of the Day: Americans Fear Drug Companies Will Use Covid
to Raise Prices

Nearly 90% of Americans are concerned that drug companies will use
the Covid-19 pandemic to raise prices, according to a
new poll by Gallup and West Health, a
non-profit organization focused on health care costs. More than
half (55%) of adults surveyed said they are very concerned that the
pharmaceutical industry will leverage the pandemic to raise prices.
Another 33% said they are somewhat concerned.

Nearly nine in 10 Americans also said they support
allowing the government to negotiate prices directly with the
manufacturer of any approved Covid-19 treatment.

The poll also found that 79% of Americans report being
very or somewhat concerned about their health insurance premiums
going up and 84% are very or somewhat concerned about the general
cost of care rising.

More than half give low marks to U.S. coronavirus
response: Asked to rate the national response to
the pandemic relative to U.S. spending on health care, more than
half of Americans called the response poor (34%) or fair (23%).
About one in 10 (9%) rated the response as excellent and another
14% described it as very good.

The pollsters surveyed 1,016 American adults in interviews
conducted May 11-22.

Why it matters: There has been speculation that the
coronavirus pandemic and the race for a vaccine or treatment may
present an opportunity for the pharmaceutical industry to burnish
its dismal reputation. A Harris poll from mid-May found that

40% of Americans have a more positive view of the
industry than they did before the pandemic hit.

But as Beth Snyder Bulik wrote this week at
Fierce Pharma, pricing remains a potential
landmine for drugmakers looking to reset their reputations. "If a
vaccine or treatment exists, but Americans can’t afford to get it,
especially the most vulnerable or at risk populations—for example,
lower income, minority, or living in more densely populated
areas—it will likely be a major issue," Harris Poll Managing
Director Rob Jekielek told Fierce Pharma.

Opportunity Zones Mostly Help Real Estate Developers:
Report

The 2017 Republican tax package created an Opportunity Zone program
that provides tax breaks for real estate developers in specially
designated, low-income neighborhoods. President Trump has touted
the program as a key part of his effort to combat racial
inequality, but a
new study from the Urban Institute says the
program is falling well short of its goals.

“The incentives were intended to foster equitable development
outcomes — such as by creating quality jobs, affordable housing,
community-oriented amenities like grocery stores, and improved
quality of life for low-income people,” the report says. “Our
evidence suggests they need to be redesigned so government dollars
are allocated effectively and help project sponsors achieve those
outcomes.”

The main problem, the researchers found, is that
low-income neighborhoods provide relatively modest returns on
investment. Wealthy investors prefer the higher returns they can
get on projects in neighborhoods closer to developed areas. “Luxury
housing in appreciating neighborhoods therefore may receive much
larger public support than, say, affordable housing projects,” the
report says.

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