Biden Slams Trump’s Coronavirus Response

Biden Slams Trump’s Coronavirus Response

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Plus: $429 billion saved, but plenty more to go
Friday, May 22, 2020

Biden Slams Trump’s Coronavirus Response

Former Vice President Joe Biden on Friday slammed President Trump’s efforts to prop up the economy in the midst of the coronavirus pandemic, charging that the focus so far has been on helping large corporations and the very wealthy instead of smaller Main Street businesses.

“Almost 40 million Americans have filed for unemployment, and you know what the White House is proposing? More tax cuts for corporate America. I’ve got a novel idea – how about some relief for Main Street?” Biden, the presumptive Democratic presidential nominee, said in an interview with CNBC.

He added: “The president’s response to all this has cost lives and has cost jobs. The way to fix the economy is to get the public health response correct. What we’re doing now is upside-down – the bigger you are the faster you get the money, the smaller you are, you don’t get the money.”

Biden also criticized the administration for failing to disburse any money so far via the $600 billion Main Street lending facility for companies with less than $5 billion in annual revenue. That program, set up by the Federal Reserve and Treasury, is set to start up in June.

In a statement to CNBC responding to Biden’s remarks, a White House spokesman said the president “has provided state and local leaders with data-driven guidelines to reopen their communities in safe, responsible ways, helped states ramp up their testing capabilities, and surged critical [personal protective equipment] and other supplies where they are needed.” He added that the president has taken steps to “ensure we emerge stronger than ever before.”

The facts: Coronavirus response efforts passed by Congress and signed into law by Trump have expanded unemployment benefits for laid-off workers and provided nearly $300 billion for direct payments to Americans making up to $99,000 ($198,000 for couples). They have also boosted food and housing assistance, among a host of other provisions.

Congress and the administration have also provided $46 billion for emergency bailout funds to airlines and $670 billion for forgivable loans to small businesses under the Paycheck Protection Program (PPP). The Small Business Administration said that, as of May 16, it had approved more than 4.3 million forgivable PPP loans totaling more than $513 billion. But the program has come under widespread criticism, especially after larger companies with stronger banking relationships were reported to have gotten loans (see more below on changes likely coming to PPP).

Drawing a line at $400,000: Asked how quickly he might enact his proposals to raise taxes on corporations and high-earning individuals given the economic devastation of the pandemic, Biden dodged. He said he would reverse the 2017 Trump tax cuts and raise taxes on capital gains for people making over $1 million a year. His plans call for raising the corporate rate to 28% and hiking taxes on those making more than $400,000. “My tax policy is based on a simple proposition,” Biden explained, “which is, stop rewarding wealth and start rewarding work a little bit.”

Biden pledged that he would not raise taxes on anyone making under $400,000 a year. “Nobody making under 400,000 bucks would have their taxes raised. Period. Bingo!” he said.

A March analysis of Biden’s tax proposals by the Urban-Brookings Tax Policy Center found that all incomes group would see their taxes go up at least lightly, on average, but that nearly 93% of the tax increases would be borne by the top 20% of earners, with 74% of the increased burden falling on the top 1%.

Criticizing corporate tax cuts: Biden also criticized the 2017 tax cuts and said reducing corporate taxes again would be a mistake. “The president is talking about a greater tax cut for corporations. You tell me what you think, how many jobs that will create in the next six months?” he said.

The former vice president also criticized Amazon, saying that the online retail giant “should start paying their taxes.”

“The biggest corporate bailout in American history is asking next to nothing of corporate America,” he said. “I don’t think any company, I don’t give a damn how big they are, the Lord almighty, should absolutely be in a position where they pay no tax and make billions and billions and billions of dollars." Amazon has said it pays “every penny” it owes.

Small Business Program Is Popular, but Congress Eyes Changes

Although critics say the $670 billion Paycheck Protection Program, which provides small businesses with loans and grants during the coronavirus crisis, is seriously flawed, there’s no doubt that it has been wildly popular.

Ernie Tedeschi of the research firm Evercore ISI says that, according to U.S. Census survey data, about 75% of all non-farm small businesses with single locations have applied for assistance through the program, and nearly 90% of those have received a check.

But some small business owners say that the PPP’s rules — which require participants to spend 75% of the funds on labor and use all of the money within eight weeks in order to transform the loans into grants — aren’t realistic and may leave some aid recipients with big loans on their books. The House passed a bill last week that would extend the time to use the money to 24 weeks while eliminating the requirement to use most of the money for labor costs, though the bill is not expected to move forward.

The Senate was working on its own version of a revamp this week but was unable to reach a deal before leaving town Thursday. Senators were discussing an increase in the time period to use PPP funds to 16 weeks and an extension of the program, which is scheduled to expire on June 30, to the end of the year. Participants may also be allowed to use the funds for a wider range of expenses, including investments needed to reopen safely.

Although the Senate won’t be back in session until June, there is some hope that a bill could pass next week through special procedures. “I don’t think we’re going to have a problem getting something done one way or the other on it,” said Sen. Marco Rubio (R-FL), who leads the small-business committee.

Quote of the Day: Depressing Outlook From 'Dr. Doom'

“The market, as currently ordered, is going to make capital stronger and labor weaker. So, to change this, you need to invest in your workers. Give them education, a social safety net — so if they lose their jobs to an economic or technological shock, they get job training, unemployment benefits, social welfare, health care for free. Otherwise, the trends of the market are going to imply more income and wealth inequality. There’s a lot we can do to rebalance it. But I don’t think it’s going to happen anytime soon.”

– Economist Nouriel Roubini, from an interview with New York Magazine, explaining why he thinks the economy is headed for “a decade of depression.”

Trump Administration Will Send Nearly $5 Billion to Nursing Homes

The Department of Health and Human Services said Friday it has begun distributing some $4.9 billion to nursing homes to help them combat the coronavirus pandemic and provide support for home facing higher expenses or revenue loss. Each “skilled nursing facility” with six or more certified beds will receive $50,000, plus $2,500 per bed. The funds can be used to scale up testing, acquire personal protective equipment, hire workers or cover other pandemic-related expenses.

Trade groups representing nursing homes and long-term care facilities said the funding falls short of what they need. They have asked for at least $10 billion, according to The Hill. At least 28,100 residents and workers at nursing homes and other long-term care facilities have died from the coronavirus, according to a New York Times tally earlier this month.

Survey of the Day: How the Pandemic Is Changing Health Care Habits

The coronavirus pandemic has affected the health care habits of 72% of U.S. adults, with many delaying or planning to put off treatment, according to a survey released Thursday by the Alliance of Community Health Plans and the Academy of Managed Care Pharmacy. Among those who reported having a chronic condition, 60% say they have put off getting care.

“The pandemic has put consumers in a health care tailspin: They want to be tested for Covid-19, and for that, they rank their doctor’s office as the place they would feel most comfortable. However, for all other health care services and treatment, consumers want to delay visiting health care facilities altogether,” said Ceci Connolly, president and CEO of ACHP.

But while Americans are somewhat nervous about going to the doctor or hospital, many are open to trying telehealth services, with 28% saying they’ve used such services over the past 90 days, 46% saying they’re comfortable using telehealth today and 32% saying they would be open to trying a smartphone app for their care.

Leede Research, which conducted the survey for the insurer and pharmacy associations, interviewed 1,263 adults from May 1-6. The poll has a margin of error of three percentage points.

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US Has Saved $429 Billion by Cutting Waste — and There’s Plenty More to Go: GAO

The government could save billions of dollars by operating more efficiently in a wide range of areas, according to a new report from the Government Accountability Office.

Wasting taxpayer funds is always an issue, but it may be an even more pressing concern now that the U.S. has embarked on a massive, multi-trillion-dollar effort to keep the economy afloat during the coronavirus crisis. “The federal government has made an unprecedented financial response to the COVID-19 pandemic,” the report says. “At the same time, opportunities exist for achieving billions of dollars in financial savings and improving the efficiency and effectiveness of a wide range of federal programs in other areas.”

The tenth in an annual series, the 148-page report identifies hundreds of issues that, if addressed, could produce substantial savings. In addition to an ongoing list of recommended improvements, some of which have spurred lawmakers to act, the GAO report includes 168 new “actions” Congress could take, most of which involve reducing “fragmentation, overlap, or duplication in government missions and functions.” The GAO says the government has saved about $429 billion so far as a result of its efforts to identify ways Congress can reduce costs and increase revenues.

Some highlights from the latest report:

  • Navy shipbuilding: “The Department of the Navy could achieve billions of dollars in cost savings by improving its acquisition practices and ensuring that ships can be efficiently sustained,” the report says.
  • Military depots: “The Department of Defense could potentially save hundreds of millions of dollars annually by accurately measuring and reducing excess funded, unfinished work at military depots.”
  • Student loans: “The Department of Education should analyze data and use it to verify borrowers’ income and family size information on Income-Driven Repayment plans to safeguard the hundreds of billions of dollars in federal investment in student loans and potentially save more than $2 billion.”
  • Medicaid providers: “The Centers for Medicare & Medicaid Services could ensure that states implement Medicaid provider screening and enrollment requirements, which could potentially save tens of millions of dollars annually.”
  • Medicare payments: “Medicare could have cost savings if Congress were to equalize the rates Medicare pays for certain health care services, which often vary depending on where the service is performed.” Potential savings are in the billions, according to the report.
  • IRA accounts: “The Internal Revenue Service should establish a formal collaborative mechanism with the Department of Labor to better manage fragmented efforts and enhance compliance for certain individual retirement accounts that engaged in prohibited transactions, and thereby potentially increase revenues by millions of dollars.”
  • IRS fraud detection: “The Internal Revenue Service could improve the agency’s efforts to prevent refund fraud associated with identity theft,” with savings potentially in the billions.


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