Happy Friday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL—Senate Democrats pump brakes on new stimulus checks: House Democrats looking to deliver another round of $1,200 relief checks to Americans are encountering skepticism from an unexpected source — fellow Democrats in the Senate.
The $3 trillion House-passed measure is not only facing opposition from GOP senators, but also prompting Senate Democrats to raise concerns about what they see as a huge untargeted expenditure.
- Sen. Ben Cardin (D-Md.), a member of the Senate Finance Committee, said he wants the next round of coronavirus relief to be more focused on the households that have been hardest hit by the economic downturn brought on by the pandemic.
- Cardin said the direct payments made more sense in March when Congress wanted to get money out the door as quickly as possible. But now, as states are allowing businesses to reopen around the country, he says lawmakers should look at who will most need relief in the coming months.
- Sen. Ron Wyden (Ore.), the top Finance Committee Democrat, said he would back another round of direct payments but that they’re not his top priority.
The Hill’s Alexander Bolton breaks down the talks over another stimulus bill here.
LEADING THE DAY
Lawsuit accuses Trump officials of illegally seizing tax refunds: A class-action lawsuit filed Friday is accusing the Trump administration of illegally seizing student loan borrowers’ tax refunds even after Congress halted government debt collection amid the coronavirus pandemic.
The lawsuit filed in federal court in Washington by the groups Student Defense and Democracy Forward accuses Treasury Secretary Steven Mnuchin and Education Secretary Betsy DeVos of defying Congress’s mandate and seizing money that student loan defaulters desperately need.
The lawsuit was filed on behalf of Kori Cole, a Colorado woman whose family tax refund of nearly $7,000 was seized in April to go towards her defaulted student loans.
- The Department of Education can request that the Department of Treasury offset tax refunds for those who owe money on their student loans, and the federal government has agreements with most states that allow them to offset state tax refunds as well.
- But under the CARES Act signed into law in March, the Treasury Department was forbidden from conducting any involuntary debt collection until September, including seizing any tax refunds.
The Hill’s Harper Neidig has more here.
Powell: Fed to open small-business lending program within days: Federal Reserve Chairman Jerome Powell said Friday that the central bank is days away from opening its program to finance emergency loans for businesses derailed by the coronavirus pandemic.
In an interview that aired online Friday, the Fed chairman said that the bank would soon begin purchasing loans made to businesses through its Main Street Lending Program (MSLP) after months of building out the new emergency facility.
- Through the MSLP, the Fed will buy nearly all of a loan offered from a bank to a business with no more than 15,000 employees or $5 billion in annual revenue.
- The program is backed up with credit protection from the Treasury Department allocated through the $2.2 trillion coronavirus economic relief bill signed by President Trump in March.
“We’re looking back at companies that were in good, solid financial shape before the pandemic. We’re trying to find those companies, and we’re trying to create credit products that work for them. That’s the nature of the exercise, Powell said, noting the challenges presented by the wide range of companies eligible for the program. Read more here.
GOOD TO KNOW
- The House is pushing back its June target date for passing 12 appropriations bills and is setting up July as a new deadline.
- Consumer spending dropped by a record 13.6 percent in April amid the economic fallout of the coronavirus pandemic, according to data released by the Department of Commerce on Friday.
- A panel of top bank economists said it expects the American economy to shrink more than 5 percent and unemployment to remain above 10 percent through the end of 2020, according to projections released Friday.
- The IRS late Thursday provided guidance for expanding a tax credit that encourages the use of still-developing technology to remove carbon from the atmosphere.
- A group of Democratic senators on Friday sent two letters raising concerns over the tipping system for grocery delivery service Instacart.
- American Airlines on Wednesday said it will need to cut its management and support staff by 30 percent in response to the coronavirus pandemic.