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Unemployment Claims Rise Again as Lawmakers Debate Extending Benefits

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  • At least 1.4 million people filed for unemployment last week, marking the first time claims have increased since March. The move comes as the extra $600 in unemployment benefits are set to expire next week.
  • On Wednesday, Senate Republicans announced they had agreed to a tentative $1 trillion coronavirus stimulus deal with the White House, which, among other things, included an expansion of loans to small businesses, funding for COVID testing and vaccines, aid to schools, and more.
  • The bill was supposed to be rolled out Thursday morning, but again got held up by the ongoing negotiations that have been stalled for weeks because of divisions within the Republican party.

Unemployment Numbers Spike

The government reported Thursday that 1.4 million people filed for unemployment last week, marking the first time unemployment claims have increased since March.

Separately, another 980,000 new claims were filed by freelancers, part-time workers, and others who do not qualify for state unemployment benefits but can receive aid under the emergency federal program.

Notably, the government did report that the number of continuing claims— claims filed by people who are already receiving unemployment and filed again— did drop from 17.4 million for the week ending July 4 to 16.1 million for the week ending July 11.

However, that data is reported on a week lag, and thus does not account for any of the closures or restrictions that have been put in place over the last two weeks. It also does not represent the fact that the U.S. has now reported more coronavirus cases in the last two weeks alone than in all of June.

While this week’s numbers are still much lower than the numbers reported in March before they started steadily declining, the fact that this is the first uptick since then is significant because it shows a broader trend.

“What you’re seeing is that, as the economy slows, the pace of claims picks back up — which really puts at risk the monthly jobs report over the next few months,” Joseph Brusuelas the chief economist at RSM, a multi-national network of accounting firms told the Washington Post. “The July numbers are going to be tenuous, but it’s August that I’m worried about.”

The timing of the spike is also highly relevant because it comes as the additional $600 in federal unemployment benefits are set to expire in just over a week.

In addition to the 20 to 30 million people who will lose those benefits if and when they expire, many economists have also warned that it would have a very serious effect on the already faltering economy.

“There is one clear takeaway from this morning’s unemployment insurance report –not extending the weekly $600 benefit supplement would be unconscionable,” Andrew Stettner, a senior fellow at The Century Foundation told USA Today. “Families will be evicted from their homes, poverty will soar, children will go hungry, businesses will shutter and the economy will tank.”

Meanwhile, Back in Congress

As that deadline looms, Senate Republicans and the White House are still in the middle of hashing out the details of another coronavirus stimulus package.

For weeks now, that process has been stalled by internal divisions within the Republican Party. While some of the Republicans are divided on specific issues, including unemployment, others simply do not want another stimulus bill at all.

With those negotiations getting down to the wire, Senate GOP leaders announced Wednesday that they had reached a tentative $1 trillion deal with White House officials. According to a draft summary, which was obtained by The New York Times, there are several areas the Republicans have agreed.

Among other things, the summary included $26 billion for vaccine development and deployment, $25 billion for coronavirus testing, a total of $105 billion for education— $30 billion of which would be set aside for schools that reopen, and a second round of loans to small businesses with more loan forgiveness.

Notably, the document did say that there would be another round of stimulus checks, but it did not say how much they would be or who they would go to.

Also of note is what was not in the summary. The plan explicitly states Republicans will not give any money to state and local governments to help with budget holes and layoffs, though it does note that aid will likely be added back in during negotiations with the Democrats, who want hundreds of billions to go to states and cities. 

The summary also does not include a payroll tax cut— something that was pushed by President Donald Trump for both this stimulus package and last— and something that was rejected by Democrats and Republicans both times.

Divisions Linger 

It does appear to show there has been at least some compromising between the Senate GOP and the White House. In addition to the tax cuts not being included, the increased testing and the money to schools that are not reopening are also things the Trump administration had opposed.

However, despite all that, there are still things the party is struggling to hammer out. According to reports, Senator Majority Leader Mitch McConnell (R-KY) was hoping to roll out that package Thursday morning, but was instead met with yet another round negotiations between Senate GOP leaders and the White House.

As in the earlier negotiations, one of the major sticking points reportedly still up for debate was unemployment benefits. While the Republicans agree that they want to cut the jobless payments from the current $600, they disagree on how much they should cut.

According to reports, Senate Republicans had previously floated the idea of decreasing the benefits to $200 per week. Then CNBC reported Wednesday that they were now considering extending the benefits through the end of the year at just $100 a week.

However, on Thursday morning, Treasury Secretary Steve Mnuchin said the extension will be based on 70% wage replacement, which means that the benefits would amount to about 70% of a typical worker’s income while they were employed.

According to Ernie Tedeschi, an economist in the Treasury Department under the Obama administration who spoke to the Post, a 70% wage replaced would put the extended benefits at about $175 per week.

“If they lowered it to $200 a week, 30 million workers would wake up with a pay cut from a third to a half overnight,” he said. “While $200 is marginally better than full expiration, the U.S. would still take a major economic hit from this summer and this fall as a result from it.”

While that would be on top of state unemployment, those benefits vary drastically and often fall short. According to CNN, state benefits on their own generally replace only 40% of wages.

Upcoming Battle With Democrats

As Republicans continue struggling to come to a consensus, the clock is ticking. 

With several key elements of the plan bound to a tight time table, Trump administration officials have emphasized the need to act by the end of next week.

“Let me just remind people: the time-sensitive issue we’re talking about is next Friday on unemployment and schools,” Mnuchin told reporters Thursday morning. “Some of this stuff, if it takes us a couple of weeks to work with the Democrats and agree on all the pieces we can.” 

However, according to reports, McConnell has said that that timeline as unrealistic because, right now, Republicans have not even agreed on a bill within their own party. Once they do, they still face a battle with the Democrats, who have pushed for extending the $600 through the end of the year— a provision that was included in the $3 trillion stimulus bill passed by the House in May.

Even beyond the unemployment debate, many Republicans are worried that they will not be able to get Democrats on board with their proposals at all. 

While speaking to reporters Wednesday, Sen. Kevin Cramer (R-ND) said that even if Republicans do overcome their internal divisions, they would be unable to bridge the “pretty big gap” with Democrats, who support the $3 trillion bill, which prioritizes multiple things Republicans oppose.

In order to meet some of the pressing deadlines, both Senate Republicans and Trump administration officials have said that they intend to propose a series of bills, rather than just one comprehensive package. Democrats, however, have rejected that plan.

“This is a package. We cannot piecemeal this,” House Speaker Nancy Pelosi (D-CA) said in a press conference Thursday morning. “What we have seen so far falls very short of the challenge that we face in order to defeat the virus and to open our schools and to open our economy.” 

“We’re not going to take care of one portion of suffering people and leave everyone else hanging,” Senate Minority Leader Chuck Schumer (D-NY) added at the same briefing Thursday. “This is a comprehensive proposal that addresses the many problems of COVID, and we have to address it as a totality. ” 

“One of the reasons we’re up against this cliff is because Republicans have dithered,” Schumer added, saying that he and Pelosi had urged Republicans to come to the table three weeks ago, but they never responded.

“Now the Senate Republicans have finally woken up to the calamity in our country, they have been so divided, so disorganized and so unprepared that they have to struggle to draft even a partisan proposal within their own conference, they can’t come together. Even after all this time, it appears the Republican legislative response to COVID is ununified, unserious, and unsatisfactory.” 

See what others are saying: (The New York Times) (Politico) (The Washington Post)

Politics

Jan. 6 Committee Prepares Criminal Charges Against Steve Bannon for Ignoring Subpoena

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The move comes after former President Trump told several of his previous aides not to cooperate with the committee’s investigation into the insurrection.


Bannon Refuses to Comply With Subpoena

The House committee investigating the Jan. 6 insurrection announced Thursday that it is seeking to hold former White House advisor Steve Bannon in criminal contempt for refusing to comply with a subpoena.

The decision marks a significant escalation in the panel’s efforts to force officials under former President Donald Trump’s administration to comply with its probe amid Trump’s growing efforts to obstruct the inquiry.

In recent weeks, the former president has launched a number of attempts to block the panel from getting key documents, testimonies, and other evidence requested by the committee that he claims are protected by executive privilege.

Notably, some of those assertions have been shut down. On Friday, President Joe Biden rejected Trump’s effort to withhold documents relating to the insurrection.

Still, Trump has also directed former officials in his administration not to comply with subpoenas or cooperate with the committee. 

That demand came after the panel issued subpoenas ordering depositions from Bannon and three other former officials: Chief of Staff Mark Meadows, Deputy Chief of Staff Dan Scavino, and Pentagon Chief of Staff Kash Patel.

After Trump issued his demand, Bannon’s lawyer announced that he would not obey the subpoena until the panel reached an agreement with Trump or a court ruled on the executive privilege matter.

Many legal experts have questioned whether Bannon, who left the White House in 2017, can claim executive privilege for something that happened when he was not working for the executive.

Panel Intensifies Compliance Efforts

The Thursday decision from the committee is significant because it will likely set up a legal battle and test how much authority the committee can and will exercise in requiring compliance.

It also sets an important precedent for those who have been subpoenaed. While Bannon is the first former official to openly defy the committee, there have been reports that others plan to do the same. 

The panel previously said Patel and Meadows were “engaging” with investigators, but on Thursday, several outlets reported that the two — who were supposed to appear before the body on Thursday and Friday respectively —  are now expected to be given an extension or continuance.

Sources told reporters that Scavino, who was also asked to testify Friday, has had his deposition postponed because service of his subpoena was delayed.

As far as what happens next for Bannon, the committee will vote to adopt the contempt report next week. Once that is complete, the matter will go before the House for a full vote.  

Assuming the Democratic-held House approves the contempt charge, it will then get referred to the U.S. Attorney for the District of Columbia to bring the matter before a grand jury.

See what others are saying: (CNN) (The Washington Post) (Bloomberg)

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Senate Votes To Extend Debt Ceiling Until December

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The move adds another deadline to Dec. 3, which is also when the federal government is set to shut down unless Congress approves new spending.


Debt Ceiling Raised Temporarily

The Senate voted on Thursday to extend the debt ceiling until December, temporarily averting a fiscal catastrophe.

The move, which followed weeks of stalemate due to Republican objections, came after Senate Minority Leader Mitch McConnell (R-Ky.) partially backed down from his blockade and offered a short-term proposal.

After much whipping of votes, 11 Republicans joined Democrats to break the legislative filibuster and move to final approval of the measure. The bill ultimately passed in a vote of 50-48 without any Republican support.

The legislation will now head to the House, where Majority Leader Steny Hoyer (D-Md.) said members would be called back from their current recess for a vote on Tuesday. 

The White House said President Joe Biden would sign the measure, but urged Congress to pass a longer extension.

“We cannot allow partisan politics to hold our economy hostage, and we can’t allow the routine process of paying our bills to turn into a confidence-shaking political showdown every two years or every two months,’’ White House Press Secretary Jen Psaki said in a statement.

Under the current bill, the nation’s borrowing limit will be increased by $480 billion, which the Treasury Department said will cover federal borrowing until around Dec. 3.

The agency had previously warned that it would run out of money by Oct. 18 if Congress failed to act. Such a move would have a chilling impact on the economy, forcing the U.S. to default on its debts and potentially plunging the country into a recession. 

Major Hurdles Remain

While the legislation extending the ceiling will certainly offer temporary relief, it sets up another perilous deadline for the first Friday in December, when government funding is also set to expire if Congress does not approve another spending bill.

Regardless of the new deadline, many of the same hurdles lawmakers faced the first time around remain. 

Democrats are still struggling to hammer out the final details of Biden’s $3.5 trillion spending agenda, which Republicans have strongly opposed.

Notably, Democratic leaders previously said they could pass the bill through budget reconciliation, which would allow them to approve the measure with 50 votes and no Republican support.

Such a move would require all 50 Senators, but intraparty disputes remain over objections brought by Joe Manchin (D-W.V.) and Kyrsten Sinema (D-Az.), who have been stalling the process for months.

Although disagreements over reconciliation are ongoing among Democrats, McConnell has insisted the party use the obscure procedural process to raise the debt limit. Democrats, however, have balked at the idea, arguing that tying the debt ceiling to reconciliation would set a dangerous precedent.

Despite Republican efforts to connect the limit to Biden’s economic agenda, raising the ceiling is not the same as adopting new spending. Rather, the limit is increased to pay off spending that has already been authorized by previous sessions of Congress and past administrations.

In fact, much of the current debt stems from policies passed by Republicans during the Trump administration, including the 2017 tax overhaul. 

As a result, while Democrats have signaled they may make concessions to Manchin and Sinema, they strongly believe that Republicans must join them to increase the debt ceiling to fund projects their party supported. 

It is currently unclear when or how the ongoing stalemate will be resolved, or how either party will overcome their fervent objections.

See what others are saying: (The New York Times) (NPR) (The Washington Post)

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California Makes Universal Voting by Mail Permanent

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California is now the eighth state to make universal mail-in ballots permanent after it temporarily adopted the policy for elections held amid the COVID-19 pandemic. 


CA Approves Universal Voting by Mail

California Gov. Gavin Newsom (D) signed a bill Monday requiring every registered voter in the state to be mailed a ballot at least 29 days before an election, whether they request it or not.

Assembly Bill 37 makes permanent a practice that was temporarily adopted for elections during the COVID-19 pandemic. The law, which officially takes effect in January, also extends the time mail ballots have to arrive at elections offices from three days to seven days after an election. Voters can still choose to cast their vote in person if they prefer.

Supporters of the policy have cheered the move, arguing that proactively sending ballots to registered voters increases turnout.

“Data shows that sending everyone a ballot in the mail provides voters access. And when voters get ballots in the mail, they vote,” the bill’s author, Assemblyman Marc Berman (D-Palo Alto), said during a Senate committee hearing in July.

Meanwhile opponents — mostly Republicans — have long cast doubts about the safety of mail-in voting, despite a lack of evidence to support their claims that it leads to widespread voter fraud. That strategy, however, has also faced notable pushback from some that a lot of Republicans who say it can actually hurt GOP turnout.

Others May Follow

The new legislation probably isn’t too surprising for California, where over 50% of votes cast in general elections have been through mail ballots since 2012, according to The Sacramento Bee. Now, many believe California will be followed by similar legislation from Democrats across the country as more Republican leaders move forward with elections bills that significantly limit voting access.

Newsome signed 10 other measures Monday changing election and campaign procedures, including a bill that would require anyone advocating for or against a candidate to stand farther away from a polling place. Another bill increases penalties for candidates who use campaign funds for personal expenses while a third measure increases reporting requirements for limited liability corporations that engage in campaign activity.

“As states across our country continue to enact undemocratic voter suppression laws, California is increasing voter access, expanding voting options and bolstering elections integrity and transparency,” Newsom said in a statement.

“Last year we took unprecedented steps to ensure all voters had the opportunity to cast a ballot during the pandemic and today we are making those measures permanent after record-breaking participation in the 2020 presidential election.”

The news regarding California came just in time for National Voter Registration day today, giving Americans another reminder to make sure they’re registered in their states. For more information on how to register, visit Vote.gov or any of the other resources linked below.

See what others are saying: (The Hill) (Los Angeles Times) (The Sacramento Bee)

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