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Democrats Trillion

Democrats’ new $2.2 trillion bill includes a second round of $1,200 stimulus checks – CNBC

The big question over whether Congress will pass another coronavirus stimulus bill is, will they or won’t they?

From jobs to savings to retirement plans, the coronavirus pandemic has upended many Americans’ financial lives. And that has resulted in millions of people facing serious financial hardship. They are hoping for more relief, including expanded federal unemployment benefits and a second round of $1,200 stimulus checks as the American economy continues to cope with challenges from Covid-19.

Now, House Democrats have introduced a new, updated bill that reduces the total size of the aid they previously sought with the aim of appeasing Republicans.

The proposal, still dubbed the HEROES Act, includes a second round of $1,200 stimulus checks.

This time, they are calling for more generous terms than the first checks that were dispersed in the spring, which would lead to more people qualifying for the money.

Like the first round of stimulus checks, House Democrats are proposing payments of up to $1,200 per individual or $2,400 per married couple who files jointly, plus $500 per eligible dependent.

Full-time students who are younger than 24 and adult dependents also would be eligible for those $500 payments. That marks a change from dependent pay in the first checks, which only went to children under age 17.

Another change Democrats are seeking would have money also go to those with taxpayer identification numbers, not just Social Security numbers.

The payments would be exempt from being reduced or offset for past due child support, unlike the first checks. Democrats are also calling for the second checks to be protected from garnishment.

The measure also seeks to patch delivery issues that occurred with the first checks.

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The new checks would also be based on 2018 or 2019 federal tax returns.

Federal beneficiaries — those who receive Social Security, Supplemental Security Income, veterans or railroad retirement benefits — would stand to get their payments automatically even if they did not file 2018 or 2019 returns.

The Treasury Department would be required to reach out to people who do not typically file tax returns to let them know how they can submit their information in order receive the money.

To be sure, the challenge will be to get both parties to agree on the Democrats’ proposal, which also includes $600 per week in enhanced federal unemployment benefits through January. That’s well above unemployment aid Republicans have said they are willing to give. President Donald Trump’s executive order in August included a $300 per week federal boost to unemployment benefits, that’s now expiring in many states.

There are a number of items that both parties want: the Paycheck Protection Program, child care, enhanced federal unemployment payments, stimulus checks and airline industry funding, said Bill Hoagland, senior vice president at the Bipartisan Policy Center and a former Senate staff member.

“If it was just those items, I would say it could potentially move the needle,” Hoagland said. 

But the Democrats’ $2.2 trillion proposal is still far from the $1.2 trillion in spending Trump has said he will support. Both parties would potentially have to meet in the middle in order to finalize a deal, Hoagland said.

“I remain skeptical that it’s going to somehow result in a quick action on a package,” Hoagland said.


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leaders Trillion

EU leaders reach $2 trillion deal on recovery plan after marathon summit – CNBC

The 27 European Union governments have reached a breakthrough agreement over new fiscal stimulus, following marathon talks in Brussels that lasted four days.

The European Commission, the executive arm of the EU, has been tasked with tapping financial markets to raise an unprecedented 750 billion euros ($857 billion). The funds will be distributed among the countries and sectors most impacted by the coronavirus pandemic, and will take the form of grants and loans. 

European Council President Charles Michel said early Tuesday that he believes this deal will be seen as a “pivotal moment” for Europe.

“Europe, as a whole, has now a big chance to come out stronger from the crisis,” European Commission President Ursula von der Leyen also said.

The heads of state had been locked in talks since Friday morning to discuss the proposed fund and the EU’s next budget. However, deep differences on how to divide the amount between grants and loans, how to oversee its investment and how to link it with the EU’s democratic values prolonged the talks into one of the longest EU summits in history.

In the end, they agreed to distribute 390 billion euros, out of the total 750 billion fund, in the form of grants — a significant reduction from an initial proposal made by France and Germany in May for 500 billion euros of grants. The EU also agreed that net debt issuance will end in 2026 and that they will repay all the new debt by 2058.

In the meantime, member states will also have to develop plans outlining how they will invest the new funds. These so-called Reform and Recovery plans will have to be approved by their European counterparts, by qualified majority — rather than by unanimity as had been insisted upon by the Netherlands at one point. 

In addition to the recovery fund, the EU said its next budget, which will fund initiatives between 2021 and 2027, will total 1.074 trillion euros. The two combined bring upcoming investments to the level of 1.824 trillion euros.

“This recovery fund will help us to almost double the European budget for the years to come,” French President Emmanuel Macron said Tuesday morning.

They committed 30% of their total expenditure from the recovery fund and the next EU budget to address climate concerns. The EU has said it wants to be climate neutral by 2050. 

The recovery fund will be available from January 2021 and there will be no new bridge financing until then. This is because the EU has taken other measures since the crisis struck to provide liquidity to the member states if they are needed.

In April, finance ministers had already approved a 540 billion euro package of short-term fiscal stimulus and this comes on top of what the individual governments announced separately for their own economies since the pandemic first struck Europe.

In addition, the European Central Bank is buying government bonds as part of its Pandemic Emergency Purchase Program, which totals 1.35 trillion euros.

Taxation

European governments will have to find new financial resources to repay some of the additional debt, and this includes new taxes. 

The deal states that there should be a non-recycled plastic waste levy introduced as of Jan. 1, 2021, and that a carbon border adjustment mechanism and a digital duty should be in place by Jan. 1, 2023. The latter represents almost a two-year delay from what an earlier proposal suggested in terms of digital taxation.

Dutch Prime Minister Mark Rutte smiles during a last roundtable discussion following a four days European summit at the European Council in Brussels.

STEPHANIE LECOCQ | AFP | Getty Images

Why it matters

The latest deal from Brussels marks a precedent for common debt borrowing at the EU level, something that many countries, including Germany, opposed for a long time. But this oppositional stance had softened in the wake of the Covid-19 crisis.

“With the biggest-ever effort of cross-border solidarity, the EU is sending a strong signal of internal cohesion. Near-term, the confidence effect can matter even more than the money itself,” analysts at Berenberg bank said in a note Tuesday.

The European Union is often criticized for not having a common fiscal policy, as is the case in the United States. Recent surges in anti-EU sentiment in some nations have sparked concerns over a potential break-up of the union.

“The EU and the euro zone are not en route towards fiscal union. But they are taking a significant step towards stronger fiscal co-ordination when it matters. The deal sets a precedent. The EU issues debt in a crisis. Expect some common fiscal response to play a greater role in future crises as well,” the Berenberg analysts said.

Some analysts had weighed the possibility of an impasse at the summit and further talks at a later stage, given how far apart the leaders were when they arrived in Brussels.

Analysts at Goldman Sachs said Tuesday that they were “encouraged that leaders were able to find agreement earlier than expected. Taken together, we therefore see the agreement as welcome, supporting our view that the Euro area is well placed to recover from the Covid shock.”

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bytes Trillion

5 trillion bytes a day: SpaceX engineers flash some facts about Starlink satellites – GeekWire

Starlink satellites
An artist’s conception shows the deployment of SpaceX’s Starlink satellites. (SpaceX Illustration)

SpaceX’s Starlink satellite constellation is still deep into testing mode, but it’s already generating 5 trillion bytes of data on a daily basis and getting software updates on a weekly basis.

Those are a couple of the nuggets coming from a weekend Reddit “Ask Me Anything” session featuring SpaceX’s software team.

The main focus of the online chat was SpaceX’s successful mission sending NASA astronauts Bob Behnken and Doug Hurley to the International Space Station in a Crew Dragon capsule — but one of the team members, Matt Monson, has moved on from Dragon to take charge of Starlink software development.

Although SpaceX’s HQ is in Hawthorne, Calif., most of the work relating to the Starlink satellites is being done at the company’s facilities in Redmond, Wash.

SpaceX tends to play its satellite cards close to the vest, in part because the process of building a satellite system is “highly proprietary” — as one of the company’s vice presidents, Patricia Cooper, said in a 2016 filing with the Federal Communications Commission. For that reason, any nuggets about Starlink’s workings are avidly sought by SpaceX’s fans as well as the occasional inquiring journalist.

SpaceX employees in Redmond, Wash., give a cheer during the countdown to a Falcon 9 launch that put the company’s second batch of 60 Starlink satellites into orbit last November. (SpaceX via YouTube)

This weekend’s Reddit AMA attracted more than 7,000 questions and comments, and the engineers could reply to only a few of them. That made it easy to avoid sensitive subjects — for example, the timetable for adding satellite-to-satellite laser communication links to the constellation. Despite the limitations, Monson and the other developers shed light on Starlink’s inner workings, including these highlights:

  • The technology used for the display screens on the Crew Dragon also provided the basis for the user interface on the first two prototype Starlink satellites, launched in 2018. “It’s grown a ton since then, but it was awesome to see Bob and Doug using something that somehow felt familiar to us too,” Monson wrote.
  • SpaceX relies on the Linux operating system in its satellites as well as its rockets. “Each launch of 60 satellites contains more than 4,000 Linux computers,” Monson said. “The constellation has more than 30,000 Linux nodes (and more than 6,000 microcontrollers) in space right now. And because we share a lot of our Linux platform infrastructure with Falcon and Dragon, they get the benefit of our more than 180 vehicle-years of on-orbit test time.”
  • Not everything has gone right with Starlink’s software. “We’ve had many instances where a satellite on orbit had a failure we’d never even conceived of before, but was able to keep itself safe long enough for us to debug it, figure out a fix or a workaround, and push up a software update,” Monson wrote. He said SpaceX usually updates the software on all the satellites about once a week, “with a bunch of smaller test deployments happening as well.”
  • Monson said “we’re currently generating more than 5TB [5 trillion bytes] a day of data” for Starlink. “Doing the detection of problems onboard is one of the best ways to reduce how much telemetry we need to send and store (only send it when it’s interesting). The alerting system we use for this is shared between Starlink and Dragon.”

As of last week, SpaceX has launched eight batches of 60 Starlink satellites, forming a constellation of roughly 480 spacecraft (with a few that have gone out of service). There’s a continuing controversy over the satellites’ visibility and potential interference with astronomical observations. If the skies are clear, you can use Heavens-Above.com as your guide to spot the satellite train passing across the sky.

The broadband data network is already being tested for military applications. Just last month, SpaceX and the U.S. Army struck a deal for three more years of experimentation and evaluation. Limited commercial service could begin later this year, though it’s not yet clear exactly how the service will be marketed.

Eventually, thousands of Starlink satellites could offer always-on broadband internet access to billions of people around the world. Other ventures, ranging from now-bankrupt OneWeb to Canada’s Telesat to Amazon’s Project Kuiper, have been going after the satellite internet market as well. But based on Monson’s comments, they’ll have a lot of catching up to do on the technical front.

Monson said his favorite moment at SpaceX came a little more than a year ago, when the first batch of 60 satellites was deployed in orbit like a deck of cards.

“We’d designed the all-at-once deployment mechanism, but it’s hard to model, and we couldn’t really be 100% sure it would work right,” he wrote. “I remember sitting there, with Falcon lifting off the pad, thinking: OK. In an hour we’re either going to be idiots for trying a thing that obviously never could have worked, or geniuses for doing the thing that’s obviously the right way to deploy lots of satellites. Luckily it went well.”

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Another Trillion

With Another $3 Trillion Stimulus Package On The Line, Here’s Everything The Government Has Done To Rescue The Economy So Far – Forbes

US Capitol and waving american flag

Lawmakers have passed trillions of dollars in rescue legislation while the Fed has crossed into … [+] uncharted territory.


Getty

With job losses caused by the coronavirus pandemic reaching more than 36 million in just two months, the economy is in uncharted territory. Businesses across the country are shuttered and entire industries are in hot water. The House of Representatives passed the $3 trillion Heroes Act on Friday, in the latest attempt by the federal government to contain the damage. Before that bill reaches the Senate, here’s everything the government has done so far. 

Emergency Money For Testing And Paid Leave

In mid-March, Congress passed two bipartisan bills in response to the rapidly spreading pandemic. The first allocated $8.3 billion for healthcare organizations and coronavirus treatment research. The second, worth about $100 billion, set up free testing, established paid emergency leave, and bulked up unemployment and Medicaid funding. 

Tax And Student Loan Extensions

In March, Treasury Secretary Steven Mnuchin extended the deadline for tax payments (for both individuals and businesses) by 90 days, from April 15 to July 15. Student loan payments and interest accrual on student loans were also suspended for federally held student debt.  

The $2.2 Trillion CARES Act

The historic rescue legislation package, signed into law by President Trump at the end of March, authorized the IRS to send out stimulus checks directly to Americans. It established the Paycheck Protection Program—a $350 billion program administered by the Small Business Administration to provide forgivable loans to cover payroll and overhead expenses, intended to keep mom-and-pop shops from folding. The CARES Act also included a $500 billion corporate bailout fund, expanded unemployment payments, aid for hospitals and healthcare providers, and $150 billion for state and local governments. 

The $484 Billion ‘Interim’ CARES Act

This legislation package, passed by a scrambling Congress after the PPP exhausted its funding after just two weeks, added $310 billion for the PPP, with $60 billion of that money reserved for smaller businesses without existing banking relationships. That move was prompted by the intense backlash that emerged after news broke that dozens of public companies—with ample access to capital markets—had received millions of dollars in loans. The interim bill also provided another $75 billion for healthcare providers and $25 billion for coronavirus testing, $11 billion of which was reserved for states.

The Federal Reserve’s Emergency Initiatives 

A slew of emergency initiatives enacted by the Federal Reserve during the crisis—including rate cuts, lending programs, and credit facilities—have the potential to inject a collective $6 trillion in cash into the financial system, CNBC estimates.

Over the past three months, the Fed has cut rates twice, down to near-zero levels. It’s slashed the reserve requirement for banks and begun buying up commercial paper (a form of short-term corporate debt). It’s buying municipal bonds for the first time and taking its first steps into certain types of riskier corporate bonds, and it’s promised to buy an unlimited amount of government debt for the duration of the crisis. It launched two credit facilities for big companies and announced a massive lending program for small and medium-sized businesses. It will also backstop loans from bank lenders participating in the Paycheck Protection Program. 

What’s Next? 

The $3 trillion Heroes Act—the sweeping coronavirus rescue bill introduced by House Democrats this week—passed the House on Friday evening. The cornerstone of the bill is $875 billion in additional funding for state and local governments and $20 billion each for tribal governments and U.S. territories. The legislation also includes another $75 billion for testing, new provisions for hazard pay for essential workers, $75 billion in mortgage relief, $100 billion for rental assistance, plus another $25 billion for the Postal Service and provisions for a second round of $1,200 stimulus checks. There’s also $3.6 billion for elections, $10 billion for the Supplemental Nutrition Assistance Program and $10 billion for small businesses. If it passes the Senate in its current form (which it is unlikely to do), the bill’s astronomical price tag would make it the largest piece of stimulus legislation in American history. 

Who’s Footing The Bill?

The Treasury Department announced last week that it intends to borrow $3 trillion during the current quarter to cover the massive cost of the federal government’s response to the coronavirus crisis. That number only accounts for the legislation that has been passed to date, however, and it will grow dramatically if the Heroes Act (or any other piece of major stimulus legislation) becomes law.

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