The Stimulus Checks Are Coming

By Yuval Rosenberg

Big Banks Say Stimulus Payments Will Start
Arriving Wednesday

The latest round of Covid relief payments will start reaching
many checking and savings accounts at big banks by 9 a.m. on
Wednesday, according to the trade group that governs the ACH
Network payment system.

After the American Rescue Plan Act was signed into law last
week, there was some confusion — and plenty of
grumbling — over when the “economic impact
payments” would be available.

“After Wells Fargo & Co., JPMorgan Chase & Co. and Bank of
America Corp. told their customers they wouldn’t receive their
stimulus money until this week, consumers flooded social media with
complaints,” Bloomberg’s Jennifer Surane
reports. “But banks were quick to note they
haven’t been given the money yet.”

Nine banking and credit union industry groups issued a
statement Tuesday saying that the availability of
the funds was determined by the Internal Revenue Service, not by
them: “While the IRS could have chosen to send the funds via
Same Day ACH or provided for an earlier effective date, it chose
not to do so. It is up to the sender, in this case the IRS, to
decide when it wants the money to be made available and the IRS
chose March 17.”

Banks will receive the money from the government at 8:30 a.m. ET
on Wednesday. “This is literally the moment in time when the money
will be transferred from the government to banks’ and credit
unions’ settlement accounts at the Federal Reserve,” Nacha, the
group governing the ACH Network, said in a
statement. “There is no mystery where the money is
from the time the first payment file was transmitted on Friday,
March 12 to when all recipients will have access to the money on
Wednesday—it is still with the government.”

Some banks and financial technology companies
did begin depositing billions of dollars’ worth of
payments into customer accounts ahead of the official payment date
after they were notified by the IRS that their customers would be
eligible for the payments.

Once they receive the money Wednesday morning, banks must make
it available to account holders by 9 a.m. ET.

More than
100 million payments are reportedly expected to go
out Wednesday via direct deposit, but not all direct deposits will
go out at the same time — and some payments will go out in the form
of checks or debit cards that will be sent by mail.

Biden Plan: Higher Taxes on the Wealthy, Relief for the Middle
Class

President Joe Biden thinks middle-class families need tax relief
while the wealthy and corporations need to start paying a bit more,
a White House economic adviser said Tuesday.

Bharat Ramamurti, who served as a top economic policy adviser to
Sen. Elizabeth Warren in her 2020 presidential campaign and now
serves as deputy director of the National Economic Council in the
Biden administration,
told Bloomberg TV that Biden’s tax proposals will
focus on increasing taxes on corporations and the wealthy.

“The president’s tax plan is intended to make sure that
middle-class families are not paying more than their fair share and
that the wealthiest folks, who by and large have done quite well
over the last several years, including during the last year, are
paying a little bit more,” Ramamurti said. “We hope to work with
Congress to accomplish those goals.”

Ramamurti said that many middle-class families are hurting in
the current environment and need the kind of assistance provided in
Biden’s $1.9 trillion Covid relief bill. “A teacher and a nurse who
collectively make, you know, $110,000, deserve relief,” he said.
“And what we’ve seen in the data is that families with that kind of
profile have suffered.”

One major question is whether the White House will push to make
permanent benefits in the relief legislation that help middle-class
families, such as the expanded child tax credit. Ramamurti said
that Biden is “interested at looking at that,” but no decisions
have been made.

Familiar battle lines form: Meanwhile, Republicans are
making it clear that although Biden and some centrist Democrats
would like to make the next economic package a bipartisan affair,
they have no interest in tax hikes to help pay for new spending on
things like infrastructure. “I don’t think there’s going to be any
enthusiasm on our side for a tax increase,” Senate Minority Leader
Mitch McConnell (R-KY)
said Tuesday.

McConnell predicted that Democrats would use the budget
reconciliation process to pass their “Trojan horse” of a bill with
a simple majority and no Republican support, sneaking tax hikes
into legislation authorizing new spending on public goods.

Republican Sen. Rick Scott of Florida also took aim at Biden’s
still-developing plan Tuesday, in terms we will likely hear
repeatedly in the coming months. “The Biden-Harris administration
is fulfilling its campaign promise to ram through job-killing tax
hikes,” he said in a statement. “As folks across the nation recover
from this economic crisis, the last thing they need is to send
their hard-earned money to fund the Democrats’ big government
agenda.”

That’s not to say that Republicans don’t have their own
tax proposals, though. In stark contrast to burgeoning Democratic
plans, Republicans are offering tax cuts for the wealthy. Last
week, GOP senators
reintroduced the Death Tax Repeal Act of 2021,
which would permanently repeal the estate tax, a 40% levy currently
applied only to estates worth more than $11.7 million, or twice
that amount for couples.

More Lawmakers Call for Tax Day Delay

More than 100 House members signed a letter to IRS
Commissioner Charles Rettig Tuesday calling for a delay in this
year’s tax filing deadline.

The
letter from Democratic Reps. Jamie Raskin (MD) and
Bill Pascrell (NJ) requested the delay on behalf of “millions of
stressed-out taxpayers, businesses and preparers” who are “still
grappling with the massive economic, logistical and health
challenges wrought by this devastating pandemic.”

The letter says that the IRS will need to take action to address
changes to the tax law in the Covid relief package and that
taxpayers will need time, and agency guidance, to understand the
changes.

As Biden Sells Relief Plan, Dems Move Beyond Obama Legacy

President Joe Biden visited a suburban Philadelphia flooring
business on Tuesday, his first stop on a “Help Is Here” tour to
promote the $1.9 trillion American Rescue Plan Act he signed into
law last week.

Much like Biden’s push to “go big” with the relief legislation,
the tour is part of a concerted administration effort to avoid
repeating what many Democrats now see as mistakes made in 2009,
when President Obama oversaw a $787 billion stimulus plan in
response to the Great Recession.

“It has become an article of faith in the party that Mr. Obama’s
presidency was diminished because his two signature
accomplishments, the stimulus bill and the Affordable Care Act,
were not expansive enough and their pitch to the public on the
benefits of both measures was lacking,” Jonathan Martin of The New
York Times
says. “By this logic, Democrats began losing
elections and the full control of the government, until now,
because of their initial compromises with Republicans and
insufficient salesmanship.”

Obama allies have noticed the shade, The New York Times’s Astead
W. Herndon
reports:

“The re-examination has irked some of the former president’s
allies but thrilled the party’s progressive wing, which sees Mr.
Biden’s more expansive plan as a down payment on his ambitious
agenda. And it has sent an early signal that Mr. Biden’s
administration does not intend to be a carbon copy of his
Democratic predecessor’s. Times, all concede, have changed. …
“Both Mr. Obama and Mr. Biden came into office on promises of
unity and bipartisanship in the face of an economic crisis, but Mr.
Biden is the beneficiary of a changed landscape in the party.
Democrats are now more cognizant of Republican obstruction, less
deferential to the deficit hawks and energized by a growing
progressive wing that has pulled the party’s ideological midpoint
to the left.”

Casting a cloud over Obama’s legacy: Asked earlier this
month about the prospect of getting GOP cooperation on legislation,
Senate Majority Leader Chuck Schumer said that after Democrats
succeeded in passing the massive package on their own, he hoped
that Republicans might try to work together. “But,” he told CNN,
“we're not going to make the mistake of 2008 and 2009 and do such a
small measly proposal that it won't get us out of the mess that we
are in right now.”

Schumer added that Obama and Democrats had tried a bipartisan
approach back in 2009 and 2010. “We cut back on the stimulus
dramatically and we stayed in recession for five years,” he
said.

Other Democrats — including Biden —have said Obama made a
mistake in not selling his rescue plan or explaining it to the
American public. “I kept saying, ‘Tell people what we did,’” Biden
recalled at an event earlier this month. “He said, ‘We don’t have
time. I’m not going to take a victory lap,’ and we paid a price for
it, ironically, for that humility.”

Progressives are overjoyed: Those on the left who
criticized Obama’s approach are delighted that their critiques have
become orthodoxy, at least among Democrats and many mainstream
economists — and that Biden has embraced
the right lessons, as they see them.

“I am less surprised by the ways in which the [Covid
relief] bill was trimmed back, than by the extent that it breaks
with the Clinton-Obama model,” economist J. W. Mason
wrote Monday. “The fact that people like Lawrence
Summers have been ignored in favor of progressives like Heather
Boushey and Jared Bernstein, and deficit hawks like the Committee
for a Responsible Federal Budget have been left screeching
irrelevantly from the sidelines, isn’t just satisfying to see. It
suggests a big move in the center of gravity of economic policy
debates.”

Charts of the Day

On Wednesday’s edition of MSNBC’s
Morning Joe, Steven Rattner, an investment manager
who was the Obama administration’s “car czar” in charge of the 2009
auto industry rescue, sought to put the U.S. budget deficit into
some historical and global perspective.

“In just two years, we will have amassed deficits of
$6.5 trillion, 50% more than the combined budgetary
deficits from 1965 to 2005, after we first lost our fiscal
discipline around the time of the Vietnam War,” Rattner
writes. “How have we amassed such a large debt
burden compared to other countries? In part because we can. As the
world’s reserve
currency, investors have been willing to buy our debt; a
third of it is held by foreigners, led by Japan
and China.”

News

Views and Analysis