Happy Wednesday and welcome back to On The Money, where we can strongly recommend against moving apartments in the middle of a sweltering summer. 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—Meadows says benefits to expire as negotiators struggle to get deal: White House chief of staff Mark Meadows said Wednesday that added unemployment benefits will formally expire on Friday as negotiators appear to be struggling to make any progress toward a bipartisan deal.
“Enhanced unemployment insurance provisions will expire,” Meadows told reporters after a meeting with Treasury Secretary Steven Mnuchin, House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y.).
- Under the coronavirus relief package passed in March, Congress agreed to an additional $600-per-week federal benefit for those without a job during the pandemic.
- As drafted, the benefit is set to officially expire Friday, but because of the calendar and how most states disperse unemployment benefits they actually began to expire last Saturday.
The Hill’s Jordain Carney tells us why here.
The background: What to do about unemployment benefits has been a major sticking point for months as Republicans and Democrats seek a bipartisan deal.
- Democrats want to extend the $600 added benefit through the end of the year.
- Republicans, meanwhile, proposed switching to a 70 percent wage replacement match. During the two-month transition to the new system, the federal government would provide a $200 per month federal unemployment benefit.
The dispute over unemployment benefits is among several obstacles impeding the path to deal.
Treasury Secretary Steven Mnuchin on Wednesday said both the White House and Republicans were “very far apart” from Democrats on negotiations over the next coronavirus relief package, citing differences over unemployment benefits and a now-expired federal eviction and foreclosure ban.
Short term deal? Some Republicans, including President Trump, have expressed support for a narrower deal focused on unemployment, evictions, and another round of direct payments, leaving the rest to future talks.
“You got to work on the evictions so people don’t get evicted. You work on the payments to the people. The rest of it, we’re so far apart we don’t care,” Trump told reporters after Mnuchin spoke. “We really don’t care. We want to take care of the people.”
LEADING THE DAY
Fed keeps rates near zero as economy faces blow from coronavirus case spikes: The Federal Reserve on Wednesday kept interest rates near zero percent as the U.S. economy continues to reel from the devastation of the coronavirus pandemic.
- In a Wednesday statement, the central bank’s policymaking Federal Open Market Committee (FOMC) announced it would maintain the zero to 0.25 percent baseline interest rate range.
- The Fed slashed rates to near-zero levels on March 15 amid chaos in financial markets triggered by the onset of the pandemic in the U.S.
“The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world. Following sharp declines, economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year,” the FOMC said.
Slowing growth:
- While the U.S. has recovered roughly 8 million of the more than 20 million jobs lost early to the pandemic, those gains appear to be slipping amid the surging number of cases across much of the country.
- Economists also fear that recent lapses of enhanced unemployment benefits and a federal eviction and foreclosure moratorium could cause a deeper downturn with staggering long-term damage.
Powell backs social distancing: At a press conference following the Fed’s decision, Fed Chair Jerome Powell said that social distancing and other measures meant to slow the spread of the novel coronavirus are crucial to the U.S. economy’s recovery from the pandemic.
Powell argued that coronavirus-related restrictions that may seem damaging to the economy are essential to repairing the damage wrought by the pandemic.
“The path of the economy is going to depend to a very high extent on the course of the virus and the measures we take to keep it in check,” Powell said. “Social distancing measures and a fast reopening of the economy — they actually go together. They’re not in competition with each other.”
Trump claims decision to repeal fair housing rule will boost home prices, lower crime:
President Trump claimed Wednesday that his recent decision to replace an Obama administration rule targeting racial housing discrimination would boost suburban housing prices and reduce crime.
In a pair of Wednesday tweets, Trump asserted that his efforts to prevent low-income housing from being built in affluent areas would prevent suburbanites from being “bothered or financially hurt” by a rule intended to expand access to housing for minorities.
“I am happy to inform all of the people living their Suburban Lifestyle Dream that you will no longer be bothered or financially hurt by having low income housing built in your neighborhood,” Trump tweeted.
“Your housing prices will go up based on the market, and crime will go down. I have rescinded the Obama-Biden AFFH Rule. Enjoy!”
The context: Trump was referring to his decision last week to repeal the Obama administration’s 2015 Affirmatively Furthering Fair Housing (AFFH) rule.
- That rule, written under the Fair Housing Act, required local governments to prove that federal subsidies for housing projects would not go to developments with zoning laws or other regulations that are effectively discriminatory to minorities, particularly Black and Hispanic Americans.
- The Department of Housing and Urban Development (HUD) on Thursday repealed the AFFH with a measure that gave local governments significantly more flexibility and benefit of the doubt to establish their own fair housing guidelines.
- While the Obama rule previously required localities to draw up plans to address housing discrimination, the Trump administration gutted it more than two years ago.
Why Trump said it: Trump has pitched the repeal as a way to “preserve” suburbs, drawing on the long history of resistance to fair housing and low-income housing projects in affluent areas, typically along racist and classist lines.
- Opponents of efforts to expand access to housing beyond the well-off and white have long claimed that such projects would harm property values and increase crime.
- Studies have found that investments in low-income housing typically reduce or do not increase crime while reducing segregation, but may cause homeowners to sell for a cheaper price when such projects are built in affluent areas.
CHECK OUT THE HILL’S UPCOMING EVENT:
American Resilience: The Future of Small Business – Thursday, July 30
Small businesses are fundamental to the idea of America. What steps should be taken to ensure that businesses that really need the help are receiving aid, particularly minority-owned businesses that are often overlooked? On Thursday, July 30, The Hill Virtually Live hosts a discussion on public and private efforts to support America’s entrepreneurs featuring Sen. Jeanne Shaheen and Rep. Steve Chabot. RSVP today: smallbusinessresilience.
GOOD TO KNOW
- The U.S. Postal Service (USPS) says it has reached an agreement on the terms of a $10 billion loan from the Treasury Department “should the need arise.”
- The AFL-CIO is accusing some of the nation’s largest companies of juicing executive pay with cheap stocks as the COVID-19 pandemic erupted, even as they proclaimed they were cutting salaries.
- Shares of Eastman Kodak soared early Wednesday after the federal government announced that the iconic camera maker would receive a loan to open pharmaceutical factories in the U.S.
- Five takeaways from the long anticipated confrontation between the chief executives of America’s largest tech firms and Congress