Millionaires Say: Tax Us More to Pay for Pandemic

By Yuval Rosenberg

Trump Open to Providing Money to Help Schools Reopen, Kudlow
Says

President Trump
threatened last week to cut off funding to schools
that don’t reopen in the fall and Education Secretary Betsy DeVos

told Fox News yesterday that public schools that
don't reopen should not get federal money. But top White House
economic adviser Larry Kudlow said Monday that the president is
willing to consider providing more money to help return students to
classrooms.

"The president has said that he’s open to suggestions about
additional funding if it appears that would be necessary in certain
states and localities, so he will look at that," Kudlow told
reporters outside the White House, according to
Reuters. Kudlow made similar comments to
Fox Business.

Trump and his administration have been pushing to have students
and teachers return to classrooms, even as the coronavirus surges
across many states and new national case counts reach record highs.
"We have to open the schools. We have to get ‘em open," the
president said Monday.

Pelosi, school officials and education advocates push
back: State and local officials along with teachers unions and
school administrators have responded to the administration’s
pressure by emphasizing that schools will need more money and
resources if they are to reopen safely.

"Let's show that we put children first, and their education, by
putting the resources there. Because without the resources, we
shouldn't even be thinking about sending them back to school,"
House Speaker Nancy Pelosi
said Monday an interview with MSNBC's Craig
Melvin.

How much would it cost? The cost of safely
reopening schools has been the subject of some debate, but the
Council of Chief State School Officers, a
nonprofit representing public education officials,
last month
estimated it to be between $158.1 billion
and $244.6 billion.

"[A]dministrators say they are already struggling to cover the
head-spinning logistical and financial challenges of retrofitting
buildings, adding staff members and protective gear, and providing
students with the academic and emotional support that many will
need after a traumatic disruption to their lives," Dana Goldstein
reported in
The New York Times last week. "The federal relief
package passed in March dedicated $13.5 billion to K-12 education —
less than 1 percent of the total stimulus. But education groups
estimate that schools will need many times that, and with many
local and state budgets already depleted by the economic impact of
the coronavirus, it is unclear where it will come from."

House Democrats passed a bill in May that would provide

$58 billion in aid local school districts. Another
Democratic
proposal would provide $175 billion to state
educational agencies and school districts. But those plans haven’t
gotten Republican support.

Millionaires: Tax Us More to Pay for Pandemic

Dozens of wealthy individuals calling themselves Millionaires
for Humanity are asking the Trump administration and other Western
governments to raise taxes on the rich in order to fund recovery
efforts during the coronavirus crisis.

"As Covid-19 strikes the world, millionaires like us have a
critical role to play in healing our world," the group said in an
open
letter Monday. "We are not driving the ambulances that
will bring the ill to hospitals. We are not restocking grocery
store shelves or delivering food door to door. But we do have
money, lots of it. Money that is desperately needed now and will
continue to be needed in the years ahead, as our world recovers
from this crisis."

The group, which is dominated by Americans but includes citizens
of the U.K., Germany, New Zealand, Canada and the Netherlands, said
it was asking "our governments to raise taxes on people like us.
Immediately. Substantially. Permanently."

The letter’s signatories include Walt Disney Co. heir Abigail
Disney, Ben & Jerry’s co-founder Jerry Greenfield and former
BlackRock managing director Morris Pearl. According to
The Guardian, the letter was organized by several
liberal groups including the Patriotic Millionaires, Oxfam and the
Club of Rome.

Some additional quotes from the letter:

  • "The problems caused by, and revealed by, Covid-19 can’t be
    solved with charity, no matter how generous. Government leaders
    must take the responsibility for raising the funds we need and
    spending them fairly. We can ensure we adequately fund our health
    systems, schools, and security through a permanent tax increase on
    the wealthiest people on the planet, people like us."
  • "Unlike tens of millions of people around the world, we do not
    have to worry about losing our jobs, our homes, or our ability to
    support our families. We are not fighting on the frontlines of this
    emergency and we are much less likely to be its victims. So please.
    Tax us. Tax us. Tax us. It is the right choice. It is the only
    choice. Humanity is more important than our money."

Deficit Hits Record $864 Billion in June

What a difference a year makes.

In June 2019, the federal deficit totaled $8 billion. According
to the
Treasury Department Monday, the monthly deficit in
June 2020 came in at $864 billion — the largest monthly shortfall
on record and $1 billion more than the Congressional Budget Office

projected last week.

A surge in spending for coronavirus relief drove much of the
increase, with outlays rising by 223% to $1.1 trillion. At $511
billion, the Paycheck Protection Program, which provides small
businesses with forgivable loans, accounted for nearly half of the
spending increase.

Federal receipts were down 28% to $241 billion on a
year-over-year basis, driven by job losses and the delay in tax
filing deadlines.

The June numbers bring the year-to-date deficit to $2.7
trillion, nearly twice the previous full-year record of $1.4
trillion in 2009. Analysts expect the deficit to total roughly $3.8
trillion for the 2020 fiscal year, which ends on September 30.

"June’s deficit figures highlights just how much havoc the
coronavirus pandemic has wreaked on U.S. budgeting,"
said Jeff Stein of The Washington Post. "In prior
years, the federal deficit was considered large when it approached
or eclipsed $1 trillion for an entire year."

Quote of the Day

"COVID-19 is now inversely related to the markets. The worse
that COVID-19 gets, the better the markets do because the Fed will
bring in stimulus. That is what has been driving markets."

–
Andrew Brenner, head of international fixed income
at NatAlliance, a boutique investment firm

Fiscal Flashes

10.1 Million Will Lose Employer Insurance Due to COVID, 3.5
Million Will Stay Uninsured: More than 10 million Americans
will lose their employer-provided health insurance this year as a
result of pandemic-related job loss, researchers at the Urban
Institute estimate in a new report. Of those, an estimated 3.3
million people are projected to regain coverage through a family
member’s work, 2.8 million are expected to enroll in Medicaid and
600,000 are forecast to sign up for new Obamacare or other
individual market plans. The researchers estimate that 3.5 million
people will wind up uninsured. (Urban
Institute)

IRS canceling checks sent to dead people: Hurrying to get
relief out as quickly as possible and uncertain about the rules
governing eligibility, the IRS sent coronavirus relief checks to
nearly 1.1 million dead people. It was just a small fraction of the
roughly 160 million checks sent out, but the news was an
embarrassment for the agency, which has taken steps to avoid
sending checks to dead people in the future. As part of its review
process, the IRS is now canceling uncashed checks sent to dead
people, the agency said on its website. (Politico)

Small business loan data is a mess: The Paycheck
Protection Program last week released details on loans worth more
than $521 billion, but according to an analysis by Bloomberg News,
the data is loaded with errors. An example: "Although the maximum
PPP loan for a one-person enterprise is $20,833, more than 75,000
loans listing one job retained have higher amounts -- including 154
showing $1 million or more." Taken together, the many errors raise
questions about the effectiveness of the small business aid
program.

"We are spending, as American taxpayers, upwards of half a
trillion dollars to purportedly help small businesses stay afloat,"
Kyle Herrig, president of government-watchdog group Accountable.US
told Bloomberg. "We should know where the money went, how many jobs
were saved, and right now with the data, we don’t have that ability
to say with any certainty." (Bloomberg)

State and local governments fight over coronavirus funds:
As Congress prepares to consider the next round of coronavirus
relief, state and local governments are wrestling over the
dwindling funds remaining from the $150 billion lawmakers provided
in March, leading to accusations that the money is being
misspent.

"The funds were supposed to help local governments purchase
personal protective equipment, pay first responders and cover other
public-health costs related to the pandemic," Tony Romm and Erica
Werner report. "But
restrictions in how the aid can be used, and
confusion around how it is supposed to be doled out, mean that many
have struggled to take full advantage of the so-called Coronavirus
Relief Fund four months after Democrats and Republicans authorized
it."

States have earmarked about $18 billion, or some 16% of
the federal funds provided, for their smallest cities and counties,
the Washington Post found. That’s far less than some lawmakers
expected and the Treasury Department recommended in guidance issued
earlier this year. (Washington
Post)

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