- Weekly unemployment claims have spiked to 853,000, their highest numbers since mid-September as job growth falters.
- Economists say that without another stimulus package, the U.S. economy will continue to slow.
- Despite earlier optimism that a $908 billion bipartisan proposal would pass, Congress has reached another impasse, with liability protections for business and funding to states and local governments being the two major sticking points.
- Democrats have accepted Republicans’ demands, agreeing to temporary liability projections. Republicans, meanwhile, have refused to support more funding for states, arguing the money amounts to “blue-state bailouts.”
- However, red states are expected to suffer even more from budget shortfalls plaguing most state and local governments, and unless more is done, there will be major long-term economic damage.
Unemployment Numbers Spike
The U.S. Department of Labor (DOL) reported Thursday that another 853,000 Americans filed new unemployment claims in the first week of December, an increase of 137,000 more claims than the week before and the largest spike since mid-September.
Another 428,000 people filed under the federal joblessness benefits program for freelancers and self-employed workers, a nearly 50% increase from the week before. The increase in claims comes as the U.S. is reporting a sharp decrease in job growth.
Last week, the DOL reported that only 245,000 new jobs were created in November, less than half of the 610,000 jobs that were added to the economy the month before.
As more states and cities continue to impose tightened restrictions on both consumers and businesses in an attempt to curb the staggering increases in COVID-19 cases, economists are worried that layoffs will surge again.
Many experts also say that the economic recovery will just continue to slow if the federal government does not provide more aid for Americans and businesses.
But despite earlier optimism over the $908 billion proposal introduced by a bipartisan group of senators last week, Congress has hit another impasse. While Democratic leadership agreed to compromise and back the framework, top Republicans have refused to do the same.
White House Proposal
In an apparent attempt to bring the two sides together, the White House put forward its own $916 billion proposal Tuesday.
Although the package, which was announced by Treasury Secretary Steven Mnuchin, sought to reach some middle ground on key issues, it also created another set of problems.
While Mnuchin’s plan included another round of one-time stimulus checks worth $600 per person, with another $600 per child, it also proposed huge cuts to unemployment benefits laid out in the bipartisan framework.
Under the initial package, Congress would approve $180 billion in new federal unemployment benefits, which would be enough to both extended existing programs set to expire in about two weeks and add a supplementary $300 a week for jobless Americans.
Despite costing more, the White House plan would slash that number to just $40 billion, and according to people familiar with the proposal, while it would extend the federal benefits, it would not give any federal additional aid to the millions of Americans who are struggling to make ends meet.
Democratic leaders immediately denounced the White House proposal. In a joint statement, House Nancy Pelosi (D-Ca.) and Senate Minority Leader Chuck Schumer (D-Ny.) called the proposed cuts to unemployment “unacceptable.”
On the other side, several key Republicans embraced the framework. House Minority Leader Kevin McCarthy (R-Ca.) said it was “a very good offer,” and even Senate Majority Leader Mitch McConnell, who has refused to reach any kind of compromise with the Democrats on the bipartisan bill, signaled openness to the idea.
However, McConnell also suggested dropping two specific provisions in the White House framework that have been arguably the biggest sticking points for the two parties: the liability protections that prevent businesses from coronavirus-related lawsuits if a customer or employee is infected on-site, and any sort of funding for state and local governments.
Republicans have repeatedly insisted that the next stimulus bill include this liability measure, and McConnells’ remarks represent the only concession he has made in months. The argument Republicans have made for the provision is that it is needed to protect small businesses from the wave of lawsuits related to the pandemic that McConnell has warned about.
Economic data shows that there have been relatively few lawsuits so far, and Democrats, have continuously rejected the idea, which Sen. Bernie Sanders (D-Vt.) called, “a get-out-of-jail-free card to companies that put the lives of their workers and customers at risk.”
Despite those objections, Democratic leadership still agreed to the more limited, temporary version of the liability protections for businesses put forward in the bipartisan proposal. In other words, the only “concession” McConnell has made is on a provision that Democrats have already agreed to compromise on. Meanwhile, he is still demanding that they let go of one of their biggest asks.
State and Local Funding
For months, Democrats have said that they will not move forward on a bill that does not include funding for state and local governments. Republicans have refused to budge on their objections, and branding the effort as a “blue-state bailout.”
But this issue is not something that just affects Democrats or Republicans: states all over the country are struggling with severe budget crises because of the pandemic.
In fact, according to a recent report from Moody’s Analytics, six of the seven states that are expected to suffer the biggest declines in revenue over the next two years are red states led by Republican governors and won by Trump in the election.
Governors and local leaders all across the country have repeatedly begged Congress to give them additional federal aid, and while Congress did give them some money under the CARES Act passed in March, states are still under enormous financial strain.
From the get-go, much of the coronavirus-related spending has fallen on state and local leaders, and the Trump administration has continued to put the bulk of the responsibility in the hands of governors without giving them the tools to do so.
Meanwhile, there has been an increased demand for unemployment benefits and other state-funded social safety-net programs that are either wholly or partially state-funded. However, according to economists, the biggest reason states are losing money is because the economic shutdowns have also significantly decreased tax revenues.
Sales tax revenue, which is the largest source of revenue for the majority of states, has tanked because businesses are shut down and consumers are staying home. Income tax revenue has also tanked as unemployment rates have risen and people collecting those benefits have stopped paying income taxes.
Local businesses, which are also major sources of tax revenue directly and through their employees, are being forced to either fire those employees or shut down entirely. Notably, all of the stimulus proposals would include another round of Paycheck Protection Program (PPP) loans for small businesses, but experts say it likely would not be enough.
Studies have shown that PPP loans have not been effective in helping these local businesses in the long run.
“P.P.P. never really served these kinds of businesses very well. More and more of them are boarding up and closing down, and it’s a real hit to the community, a real hit to the quality of life in these communities,” Laura Tyson, an economist at the University of California, Berkeley, told The New York Times.
Multiple reports have also found that the funds were largely allocated poorly and even improperly at times.
One recent study from The Counter, an independent, food-focused news organization, found that just 1% of PPP borrowers took in a quarter of the loan money, and many of those were large companies.
In fact, the organization also reported that large fast-food franchises alone took in more than $60 billion in PPP funding through a loophole that allowed large companies to be eligible for the loans as long they employed less than 500 people at one location.
“The Counter also found multiple instances where conglomerates appeared to bypass the $10 million cap on loans through the use of subsidiaries,” the study said.
However, these small local businesses that are being thrown under the bus for the Wendy’s and Taco Bell’s of the world are not only important facets of the local economies they serve, they are also essential to the future of the American economy as a whole,
As The Times reports, “If [local businesses] fail in large numbers, it will slow the economic recovery once the pandemic is over.”
Some states have taken action to help out these small businesses, but at large, they are very limited in what they can do. In addition to being generally cash-strapped, unlike the federal government, the vast majority of states cannot deficit spend if they run out of money.
Absent a federal stimulus, the only way for states to get more money would be to raise taxes or make massive budget cuts. Both options would put significant strain on the millions of struggling Americans and have a broader, negative multiplier effect on the already faltering American economy.
See what others are saying: (The New York Times) (The Washington Post) (Forbes)
House Panel Approves Commission To Study Reparations
- In a 25 to 17 vote along party lines, the House Judiciary Committee approved legislation Wednesday that would establish a commission to study slavery reparations for Black Americans.
- Republicans objected to the plan, arguing that it will cost too much money and that it is unfair to make all American taxpayers responsible for the consequences of slavery.
- Democrats pushed back, claiming the modern oppression of Black people still holds roots in slavery, and noting that the bill just creates a commission to study reparations, not implement them.
- While the proposal faces steep odds in the Senate, Wednesday’s historic vote will move the measure to the House floor for a full vote for the first time since it was introduced over three decades ago.
Reparation Commission Achieves First Approval
The House Judiciary Committee voted for the first time on Wednesday to advance a bill that will create a commission to consider paying slavery reparations for Black Americans.
The legislation was first proposed over 30 years ago, and if signed into law, it would create a 13-member commission that would study the effects of slavery and racial discrimination in the U.S. and then give Congress a recommendation for “appropriate remedies” to best compensate Black Americans.
The measure passed the committee 25 to 17 along party lines, as expected, with objections from Republicans, who claimed reparations will cost too much and that they are unfair to Americans who have no history of enslavers in their families.
Democrats pushed back against those assertions, arguing that the federal government does have enough money to take some kind of action. They also noted that the commission will not actually implement any reparations, but rather just look into the options and then make a non-binding recommendation.
There are a lot of different ideas for what reparations could look like. While some support direct cash payments of various sizes, others have argued there are different proposals that might be more realistic to put into law, like no-interest loans for Black homeowners or free college tuition.
“I ask my friends on the other side of the aisle, do not cancel us tonight. Do not ignore the pain, the history and the reasonableness of this commission,” Rep. Sheila Jackson Lee (D-Tx.), the lead sponsor of the bill, said Wednesday.
Others also condemned the argument that some Americans, particularly those whose ancestors did not directly benefit from owning slaves, should not bear responsibility. They said that this line of thinking ignores both generational wealth, which vastly benefits white Americans over all others, as well as how Black Americans are hurt by modern-day discrimination and oppression that has roots in slavery.
“Slavery was indeed ended 150 years ago but racism never took a day off and is alive and well in America,” Rep. Hank Johnson (D-Ga.) said in committee Wednesday.
“You can ask the family members of Daunte Wright, Breonna Taylor, Ahmaud Arbery or George Floyd. Black folks in this country cannot keep living and dying like this. But we’ll be forced to do so if White folks in America continue to refuse to look back at history.”
While many have described the legislation as a flexible first step, any further congressional action will almost certainly be an uphill battle. The committee vote is just the very first step: the proposal still has to go to a vote by the full House, where it is unclear if it will even garner enough support among the House Democrats’ slim majority.
If it were to pass the lower chamber, the bill faces almost insurmountable odds in the 50-50 split Senate, where ten Republicans would have to join all Democrats to break the legislative filibuster.
House Majority Leader Steny Hoyer (D-Md.) has said that he will start considering when to schedule the vote, though it is unlikely to be considered soon. Hoyer also urged President Joe Biden to use his executive power to create the commission if the legislation fails.
The White House has said that Biden supports the commission, but administration officials have not confirmed whether he would act unilaterally on the subject.
See what others are saying: (The Washington Post) (USA Today) (Vox)
Biden To Pull All U.S. Troops From Afghanistan by Sept. 11
- President Biden declared Wednesday that he will pull all U.S. troops out of Afghanistan by Sept. 11, which also marks the 20th anniversary of the 9/11 attacks.
- The Afghanistan war is the longest war the U.S. has ever been in. It has resulted in the deaths of 2,400 American troops, injured and killed almost 100,000 civilians, and cost about $2 trillion.
- Some praised the decision as a key step to address seemingly endless wars and promote diplomacy.
- Many experts and defense officials, however, have warned the withdrawal could undermine American goals in the region and embolden the Taliban, which is currently the strongest it has been since the U.S. invasion removed the group from power in 2001.
Biden Announces Troop Removal Amid Growing Violence
President Joe Biden announced Wednesday that he will withdraw all American troops from Afghanistan by Sept. 11, the 20th anniversary of the 9/11 terror attacks that drew the U.S. into its longest war in history.
“We went to Afghanistan because of a horrific attack that happened 20 years ago. That cannot explain why we should remain there in 2021,” Biden said in an afternoon speech. “It’s time to end America’s longest war. It’s time for America’s troops to come home.’’
The decision comes as Biden nears the May 1 deadline set under a February 2020 peace deal by the administration of former President Donald Trump to bring the troops home from the war, which has killed nearly 2,400 troops, injured and killed nearly 100,000 civilians, and cost about $2 trillion.
Biden had previously said that it would be hard to meet the date after taking office, but even with the extended timeline, many experts and defense officials have warned against the move.
The U.S. first entered the war to oust the Taliban government, which was harboring al-Qaeda militants involved in planning the 9/11 attacks. The Taliban was removed within months, but the group still had support in parts of the country and steadily regained territory and strength.
Now, almost two decades later, the group is the strongest it has been since the 2001 invasion, and according to reports, controls or has influence over half the country. The situation has also escalated in the months after Trump, during his last week in office, reduced the official number of troops in Afghanistan to 2,500, which is the lowest level since 2001.
As the U.S. has scaled down its operations, the Taliban has taken control of major highways and tried to cut off cities and towns in surges that have exhausted Afghan security forces. Violence has also ramped up in recent months.
According to a U.N. report released Wednesday, nearly 1,800 civilians were killed or wounded in the first three months of the year, a nearly 30% increase from the same period last year.
Notably, U.S. intelligence agencies have said that they do not believe Al Qaeda or other terrorist organizations present an immediate threat to strike the U.S. from Afghanistan, an assessment that reportedly played a big role in Biden’s decision to withdraw U.S. forces.
However, many experts are more concerned about how the move will impact Afghanistan and its citizens.
Concerns Over Withdrawal
The Pentagon has warned against removing American troops from the region until Afghan security forces can effectively fight back against the Taliban.
As a result, critics of the plan have argued that withdrawal will leave the forces — which have limited capacities and until now have been funded and trained by the U.S. — entirely in the dust
Beyond that, many also worry that the move could undermine the entire goal of the 2001 invasion by empowering al-Qaeda operates that remains in the country and who could become emboldened once the U.S. troops left.
Some experts and Afghan politicians have said that withdrawing from the country without a solid peace deal in place could end in concentrating more power in the hands of the Taliban. After a long delay following the U.S. agreement in February of last year, peace talks between the Afghan government and the Taliban finally started up in September.
But those talks have since stalled, partly due to Biden’s win and the anticipation of a possible change in policy under the new administration.
While other countries have recently made moves to restart the talks, and there are a number of possible options on the table, nothing is set in stone. American commanders, who have long said a peace deal with the Taliban is the best security measure for the U.S., have argued that the U.S. will need to use the promise of withdrawing their forces as a condition for a good deal.
Now, the U.S. has taken a major bargaining chip off the table, causing concerns that if a deal is struck, the already weakened Afghan government will make key concessions to the Taliban. Many Afghan citizens who oppose the Taliban worry that if the group secures a role in a power-sharing agreement, it could eventually take over the government and re-impose the harsh rule it imposed before the U.S. removed it in 2001. The leadership was particularly tough on women, who were largely barred from public life.
Biden’s decision has sparked a divided front from both political parities, though Republicans have largely remained united against the move.
“It is insane to withdraw at this time given the conditions that exist on the ground in Afghanistan,” Sen. Lindsey Graham (R-S.C.) said Tuesday. “A full withdrawal from Afghanistan is dumber than dirt and devilishly dangerous. President Biden will have, in essence, canceled an insurance policy against another 9/11.”
Many Democrats, however, have argued that U.S. presence in the region is not helping the U.S. achieve its foreign policy goals, and that if withdrawal is based on conditional approaches, the troops will never be able to leave.
Others have also applauded the plan as a careful solution and will still emphasize diplomatic efforts in the region while simultaneously removing the U.S. from a highly unpopular and expensive war.
“The President doesn’t want endless wars. I don’t want endless wars. And neither do the American people. ” Sen. Chuck Schumer (D-N.Y.) said Wednesday. “It’s refreshing to have a thought-out plan with a set timetable instead of the President waking up one morning getting out of bed, saying what just pops into his head and then having the generals having walked it back.”
In a series of tweets Wednesday, Afghanistan’s president, Ashraf Ghani, said had spoken to Biden, and emphasized that the two nations would continue to work together.
“’Afghanistan’s proud security and defense forces are fully capable of defending its people and country, which they have been doing all along,” he wrote.
The Taliban, for its part, has focused more on the fact that the initial timeline had been delayed.
“We are not agreeing with delay after May 1,” a spokesperson said on television Tuesday. “Any delay after May 1 is not acceptable for us.”
It is currently unclear how that stance might affect the situation, especially when it comes to peace deal negotiations.
See what others are saying: (The New York Times) (The Washington Post) (TIME)
Matt Gaetz Reportedly Venmo’d Accused Sex Trafficker, Who Then Sent Money To Teen
- A report published by The Daily Beast Thursday alleges that Rep. Matt Gaetz (R-Fl.) sent $900 through Venmo to accused sex trafficker Joel Greenberg, who then used the funds to pay three young women, including one teenager.
- Gaetz is currently under federal investigation as part of a broader inquiry into Greenberg, a former politician who has been charged with 33 counts, including sex trafficking an underage girl.
- Investigators are reportedly looking into the involvement of politicians with women who were recruited online for sex and paid in cash, as well as whether Gaetz had sex with a 17-year-old girl and violated sex trafficking laws by paying for her to travel with him.
- Greenberg’s lawyer did not comment on the new allegations but said Thursday his client would soon enter a plea deal and implied that Greenberg would testify as a witness against Gaetz. Meanwhile, Gaetz has accused The Daily Beast of spreading “rumors, gossip and self-serving misstatements.”
Gaetz’s Alleged Venmo Payments
Rep. Matt Gaetz (R-Fl.) allegedly sent money via Venmo to accused sex trafficker Joel Greenberg, who then used the money to pay three young women, including at least one teenage girl, according to a new report from The Daily Beast.
Greenberg, a former local Flordia politician and an associate of Gaetz, was indicted last summer on 33 counts, including sex trafficking a 17-year-old girl. He initially pleaded not guilty to the charges, but his lawyers said in court Thursday that he would plead guilty as part of a plea deal.
Legal experts say the move almost certainly indicates that Greenberg plans to cooperate as a witness against Gaetz, who is currently under investigation by the Justice Department as part of a broader probe into Greenberg.
According to The New York Times, among other things, the DOJ inquiry is looking into their involvement with multiple women who were recruited online for sex and paid cash, as well as whether Gaetz had a sexual relationship with a 17-year-old girl and paid for her to travel with him in violation of sex trafficking laws.
Investigators reportedly believe that Greenberg met the women through a website for people willing to go on dates in exchange for gifts and money, and then arranged for them to meet with himself and associates including Gaetz, The Times reported.
The new report from The Daily Beast, published Thursday, appears to support this narrative. According to the outlet, which viewed the transactions before they were made private this week, Gaetz sent Greenberg two late-night Venmo payments totaling $900 in May 2018.
In the text field of the first payment, Gaetz wrote “Test.” In the second, he asked Greenberg to “hit up” a teenager who he allegedly referred to by her nickname. The Daily Beast did not publish the name of the girl “because the teenager had only turned 18 less than six months before.”
The next morning, Greenberg transferred a total of $900 to three different young women using the same app.
One of the transfers was titled “Tuition,” and the other two were both listed as “School.” The Daily Beast also said it was able to obtain “partial records” of Greenbergs Venmo, which is not publicly available.
Those records, the outlet reported, show that the two men are connected through Venmo to at least one other woman who Greenberg paid with a government-funded credit card, and at least two other women who received payments from Greenberg.
Gaetz, for his part, has not directly addressed the latest allegations. A representative from the Logan Circle Group, an outside PR firm, provided The Daily Beast with a statement from the congressman.
“The rumors, gossip and self-serving misstatements of others will be addressed in due course by my legal team,” the statement said, with the firm also informing the outlet that their lawyers would be “closely monitoring your coverage.”
Greenberg’s defense attorney, Fritz Scheller, also declined requests to comment, but during a press conference Thursday, he implied that the plea deal his client is expected to accept spelled trouble for Gaetz.
“I’m sure Matt Gaetz is not feeling very comfortable today,” Scheller said.
The Daily Beast story also comes amid reports that that the FBI has widened its probe of Gaetz. According to The Times, sources familiar with the inquiry have said investigators are also looking into a trip he took to the Bahamas with other Florida Republicans and several women.
Sources said the trip took place shortly after Gaetz was elected to Congress in 2016, and that the FBI has already questioned witnesses about whether the women had sex with the men in exchange for money and free travel.
It is illegal to trade sex for something of value if prosecutors can provide the exchange involved force, fraud, or coercion.
The Times also reported that investigators are now additionally looking into Gaetz’s alleged involvement in discussions to run a third-party candidate in a State Senate race to make it easier for an associate of his who was running for the seat to win.
The act of recruiting so-called “ghost candidates” who run for office purely to divert votes from one candidate is not usually illegal. However, paying a ghost candidate is normally considered a violation of campaign finance laws.