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By Yuval Rosenberg and Michael Rainey

GOP Still Infighting Over Coronavirus Aid Bill

The White House and Senate Republicans are still trying to resolve
internal differences over their opening offer on the next coronavirus
relief bill. Negotiations with Democrats, likely to be even more
difficult, are still ahead.

Here's a quick recap of where things stand:

* Senate Majority Leader Mitch McConnell was reportedly pushing to
unveil the GOP blueprint as soon as Wednesday, but Senate Republicans
and the White House are still struggling to reach agreement on key
issues. Senate GOP staffers were reportedly briefed Wednesday afternoon
on the proposal, which is expected to include a two-month extension of
an as-yet-unspecified flat unemployment insurance payment.

* With Republicans still internally divided, and their differences with
Democrats even larger, passage of any coronavirus relief bill appears
likely to slip deeper into August.

* That timing, and the looming expiration of the $600 federal boost to
weekly unemployment benefits, has some Republicans exploring a
short-term extension of emergency unemployment payments to millions of
laid-off workers (see more below).

* The payroll tax cut President Trump says he wants may not be included
in the Republican plan. "GOP leadership has

****made no decision yet on whether their proposal will include a
payroll tax cut," Politico reports.

* Democrats appear to be enjoying the GOP's intraparty squabbling.
"It's in the middle of the week, and the Republican Party is so
disorganized, chaotic and unprepared that they can barely cobble
together a partisan bill in their own conference," said Senate
Minority Leader Chuck Schumer (D-NY).

GOP Considers Short-Term Extension of Unemployment Benefit at Much Lower
Level

As Senate Republicans and the White House try to reach consensus on
their proposal for the next coronavirus relief bill, they are also
discussing a possible extension of enhanced unemployment benefits,
acknowledging that a broader deal isn't likely to be reached before
the $600-a-week payments are set to expire at the end of July.

"I think we should do the whole thing," Sen. Rob Portman (R-OH) said
,
"but if we can't get it all done by next week we cannot allow there to
be a cliff in unemployment insurance given that we're still at about 11%
unemployment. I think we need to do something and [in] the interim
period we can have a compromise."

**A big cut:** The extension under consideration would likely reduce the
benefit dramatically from the current $600 a week. Portman said
Wednesday that GOP lawmakers were discussing a possible two-month
extension of enhanced benefits, but at a lower level, with $200 per week
being cited by some White House advisers. CNBC reports

the extension now under consideration would lower the supplemental
payment to $100 a week and last through the end of the year.

The $600 per week payments have played a major role in maintaining
household incomes and economic demand in the face of the worst
employment crisis in decades. A potential extension would allow more
than 20 million Americans to continue to collect extra unemployment
benefits.

A short-term extension seems unlikely for now, though, as it would
remove some deadline pressure that may be needed to get a broader deal
done. White House Chief of Staff Mark Meadows late Wednesday told
Politico's Jake Sherman
that the
White House opposes a short-term deal.

**Some top Democrats object, too:**Democrats have proposed continuing
the $600 payments through January, and top Democratic lawmakers
expressed concerns about a shorter-term extension. "I would prefer to
reach agreement on a comprehensive response to the crisis, including an
extension of unemployment assistance; state, local and tribal government
assistance; and other priorities," House Majority Leader Steny Hoyer
said Wednesday, according to Bloomberg News
.
Sen. Ron Wyden of Oregon, the ranking Democrat on the Senate Finance
Committee, reportedly accused Republicans of trying to stall.

**The risk:** Some economists are expressing concerns about the
shockwave that could be caused by bringing the unemployment payments to
an end. In an analysis

published by the Peterson Institute for International Economics earlier
this month, former Obama economic adviser Jason Furman said that
allowing the enhanced benefits to come to an abrupt halt would remove
some $50 billion a month from the economy, reducing household spending,
business operations and GDP.

Eliminating the federal benefit boost permanently would cause GDP to
shrink by more than 2% in the second half of 2020, Furman said, while
reducing employment by about 2 million (see the chart below).

Lowering the weekly payment, which seems more likely than total
elimination, also carries economic risk. Economist Ernie Tedeschi, who
worked in the Treasury Department during the Obama administration, told
The Washington Post that cutting the payment by two-thirds would have a
powerful negative economic effect. "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," Tedeschi 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."

The timing poses challenges, too, since most states will send out their
last checks in the program at the end of this week, creating a rapidly
approaching fiscal cliff as clunky state-level unemployment offices shut
the program down, while likely needing weeks to turn it back on again in
the event of new legislation.

Quote of the Day

**"Given the sharp drop in economic activity as a direct result of the
pandemic economic shutdown and the corresponding reduction in tax
receipts, state budgets are in tatters. Governors have already cut
budgets and reduced our payrolls by 1.5 million people, but without
Senate action, we will need to make steeper cuts and reduce payrolls
even more, at precisely the time when these services are needed
most."**

- Maryland Gov. Larry Hogan and New York Gov. Andrew Cuomo, the
Republican and Democratic leaders of the National Governors Association,
in a joint statement

again calling for a $500 billion state stabilization fund as part of the
next congressional coronavirus relief package.

US Agrees to Pay $1.95 Billion for 100 Million Doses of Vaccine

The federal government has agreed to pay Pfizer and German biotechnology
firm BioNTech nearly $2 billion to produce 100 million doses of a
Covid-19 vaccine currently under development, if the vaccine is found to
be safe and effective in humans. The agreement also gives the U.S. the
option to acquire an additional 500 million doses.

"By entering into this agreement now, a safe and effective vaccine can
be shipped quickly if FDA [Food and Drug Administration] grants EUA
[Emergency Use Authorization] or licensure," the Department of Health
and Human Services said in a statement

Wednesday. "This approach helps meet the U.S. government's Operation
Warp Speed goal to begin delivering 300 million of doses of safe and
effective vaccine to the American people by the end of the year."

Paycheck Protection Program Helped Save as Many as 3.2 Million Jobs:
Study

The more than $500 billion in forgivable Paycheck Protection Loans from
the government to small businesses helped save between 1.4 million and
3.2 million jobs through the first week of June, according to a
preliminary study by economists
at the Massachusetts Institute of Technology and Federal Reserve.

The researchers noted that assessing the impact of the loan program was
made more difficult by "the absence of granular, high-frequency
employment data that can precisely capture any causal effect of the PPP
on employment." They used data from payroll-processing company
Automatic Data Processing to compare employment levels at businesses
that were and were not eligible for PPP loans. They estimate that the
program boosted employment at eligible firms by 2% to 4.5%.

An earlier working paper by
researchers at Harvard and Brown Universities using different data
concluded that "the PPP had little material impact on employment at
small businesses" and that "it is clear that the program did not
restore the vast majority of jobs that were lost following the COVID
shock."

New York Pop-Up Hospital Cost $52 Million, Treated 79 Patients: Report

A field hospital built by New York City as the coronavirus pandemic was
peaking in April cost more than $52 billion. Located at the U.S.T.A.
Billie Jean King National Tennis Center in Queens, the hospital had
hundreds of beds and dozens of medical professionals. But it treated
just 79 patients over the month it was open, Brian M. Rosenthal of The
New York Times reports:

"Doctors at the Queens Hospital Center, a public hospital in Jamaica,
and at other medical centers wanted to transfer patients to Billie Jean
King. But they were blocked by bureaucracy, turf battles and
communication failures, according to internal documents and interviews
with workers.

"New York paid as much as $732 an hour for some doctors at Billie Jean
King, but the city made them spend hours on paperwork. They were
supposed to treat coronavirus patients, but they did not accept people
with fevers, a hallmark symptom of the virus. Officials said the site
would serve critically ill patients, but workers said it opened with
only one or two ventilators."

City and state officials told the Times that the hospital treated such a
small number of patients because the spread of the virus was brought
under control and the city concluded that patients were best treated at
existing hospitals. Those hospitals were expanding capacity, but they
were still overcrowded and their medical staffs were stretched thin.

"I basically got paid $2,000 a day to sit on my phone and look at
Facebook," Katie Capano, a nurse practitioner from Baltimore who
worked at the pop-up hospital told the Times. "We all felt guilty. I
felt really ashamed, to be honest."

An aide to New York City Mayor Bill de Blasio told the Times that she
expected the federal government to reimburse the city for the cost of
the hospital.

Read the full story at The New York Times.

Number of the Day: $12 Trillion

Offshore accounts, which are often used to evade taxes, held at least 10
trillion euros -
roughly $12 trillion - in 2019, according to a report

from the Organization for Economic Co-operation and Development.

The OECD analyzed data on 84 million financial accounts held offshore by
resident in nearly 100 countries - but not including the U.S., which
does not cooperate with the OECD on this issue. James Henry of the
U.K.-based Tax Justice Network said

Thursday that the OECD results are consistent with his group's own
efforts to track offshore accounts. According to the group, such
accounts are worth upwards of $30 trillion once the wide variety of
financial assets are taken into account.

News

* Senate GOP Struggles to Finalize $1 Trillion Coronavirus Bill

- Washington Post

* Senate GOP Starts to Unveil Coronavirus Proposal Amid Deep Discord

- Politico

* As Coronavirus Aid Talks Stumble, Senate GOP Mulls Possible Fallbacks

- Roll Call

* U.S. Coronavirus Deaths Could Reach 300,000 by Year-End If Trends
Continue: Dr. Scott Gottlieb

- CNBC

* Some Vaccine Makers Say They Plan to Profit From Coronavirus Vaccine

- New York Times

* Economists Think Congress Should Keep Paying Unemployed Workers $600 a
Week - or Even More

- FiveThirtyEight

* More Than Half of U.S. Business Closures Permanent, Yelp Says

- Bloomberg

* 'It's Insane': Millions of Kids Could Lose Access to Free Meals If
This Program Expires

- Politico

* Study Finds Black and Latino Students Face Significant 'Funding
Gap'

- Washington Post

* NAACP Sues Betsy DeVos Over Federal Aid Money For Private Schools

- NPR

* Groups Ask Supreme Court to Halt Construction of Trump Border Wall

- The Hill

* FEMA Chief: Meeting Domestic PPE Demand 'Months Away'

- Roll Call

* Experts Call for More Federal Testing Oversight as Cases Surge

- Roll Call

* Insurers Worry Drug Companies Could Game Changes to Medicaid Rebate
Program in New Rule

- Fierce Healthcare

* Space Force Unveils Logo, 'Semper Supra' Motto
-
Space News

Views and Analysis

* These Four Elements Map Out Sound Fiscal Policy

- Mohamed A. El-Erian, Bloomberg

* America Looks Hopelessly Broke. It Isn't.

- Farhad Manjoo, New York Times

* As the Pandemic Surges There Are Three Scenarios of What Happens Next

- Leanna S. Wen, Washington Post

* If Congress Cuts Jobless Benefits, 'It Would Be a Disaster'

- Talmon Joseph Smith, New York Times

* In Relief-Bill Talks, 'Donald From Queens' Isn't Much Help

- Jonathan Bernstein, Bloomberg

* Covid-19 Testing Is Broken and There's No Plan to Fix It

- Timothy L. O'Brien, Bloomberg

* A $2 Billion Bet on Pfizer's Covid Vaccine Is Worth It

- Max Nisen, Bloomberg

* The U.S. Is on the Verge of Lockdown 2.0

- Noah Smith, Bloomberg

* Major Trust Funds Headed for Insolvency Within 11 Years

- Committee for a Responsible Federal Budget

* Lower the $600 a Week Unemployment Bonus - and Give Bigger Tax
Credits to Businesses - So People Get Back to Work

- Robert Pozen, MarketWatch

* Americans Need Medical Expense Relief Amid COVID-19 Uncertainty

- Rep. David Schweikert (R-AZ), The Hill

* The Trump Administration's Medicaid Proposal Would Increase
Patients' Prescription Drug Costs

- Lindsay Bealor Greenleaf, Morning Consult

* In Defense of Our Teachers

- Dave Grohl, The Atlantic

**Copyright © 2020 The Fiscal Times, All rights reserved.**
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