President Donald Trump failed to sign the Covid relief bill into law leaving millions of Americans without their unemployment benefits.
President-elect Joe Biden had warned of “devastating consequences” if President Trump continued to delay signing but the December 26 deadline has now passed.
Unemployment benefits and a ban on evictions will be affected.
The package worth $900 billion was approved by Congress after months of difficult negotiations and compromises.
President Trump says he wants to give people bigger one-off payments.
The bill includes the payment of $600 to Americans earning less than $75,000 a year.
President Trump says he wants Americans to receive $2,000 but Republicans in Congress refused to agree to the change.
In a tweet on December 26, President Trump again defended his position on the issue, blaming China for the coronavirus outbreak.
The coronavirus economic relief is part of a $2.3 trillion spending package that includes $1.4 trillion for normal federal government spending. A partial government shutdown will begin on December 29 unless legislators pass a stopgap bill before then – but this would not include coronavirus aid and President Trump would still have to sign it.
About 14 million Americans would be affected by a lapse in unemployment benefit payments and new stimulus cheques.
In a strongly worded statement published on the transition website on December 26, Joe Biden described President Trump’s refusal to sign the bill as an “abdication of responsibility”.
He said: “It is the day after Christmas, and millions of families don’t know if they’ll be able to make ends meet because of President Donald Trump’s refusal to sign an economic relief bill approved by Congress with an overwhelming and bipartisan majority.”
Joe Biden praised the example of members of Congress in compromising and reaching a bipartisan agreement, adding: “President Trump should join them, and make sure millions of Americans can put food on the table and keep a roof over their heads in this holiday season.”
President Trump had reiterated his objection to the bill, saying: “I simply want to get our great people $2000, rather than the measly $600 that is now in the bill.”
The coronavirus aid relief bill – with the larger budget bill rolled in – overwhelmingly passed the House of Representatives and Senate on December 21 but, a day later, President Trump issued an implied veto threat, describing the package as a “disgrace” full of “wasteful” items.
He baulked at the annual aid money for other countries in the federal budget, arguing that those funds should instead go to struggling Americans.
According to his schedule, President Trump spent Christmas at his Mar-a-Lago residence in Florida with his family, where he held “many meetings and calls”.
More than 6.6 million Americans filed jobless claims in the week ended on March 28, the Department of Labor said.
The number of people seeking unemployment benefits has hit a record high for the second week in a row as the economic toll tied to the coronavirus intensifies.
Last week’s number is nearly double the week earlier, which was also a new record.
The deepening economic crisis comes as the number of cases in the US soars to more than 216,000.
With the death toll going above 5,000, the White House recently said it would retain restrictions on activity to try to curb the outbreak.
Analysts at Bank of America warned that the US could see “the deepest recession on record” amid forecasts that the unemployment rate could hit more than 15%.
The outlook is a stark reversal for the world’s biggest economy where the unemployment rate had been hovering around 3.5%.
However, more than 80% of Americans are now under some form of lockdown, which has forced the closure of most businesses.
More than 3.3 million people filed claims two weeks ago, eclipsing the previous record of 695,000, set in 1982 and bringing the two-week total to about 10 million.
An estimated 1.3 million Americans will lose their unemployment benefits after an emergency federal program expired on Saturday.
Lawmakers failed to agree on an extension of the scheme before the Congress began its winter recess.
Former President George W. Bush introduced the assistance plan in 2008 at the start of the recession.
Under the program, jobless people received an average monthly stipend of $1,166 for up to 73 weeks.
The White House says the benefits have kept millions of families out of poverty, but many Republicans argue that the scheme’s annual $25 billion price tag is too expensive.
The stalemate comes two months after a budget fight in the US Congress led to the partial shutdown of the government.
President Barack Obama has vowed to push for the renewal of the expired program when Congress reconvenes in early January.
An estimated 1.3 million Americans will lose their unemployment benefits after an emergency federal program expired
“The president said his administration would, as it has for several weeks now, push Congress to act promptly and in bipartisan fashion to address this urgent economic priority,” White House spokesman Josh Earnest said.
An estimated 1.3 million people will initially be cut off with the end of the “emergency unemployment compensation”, US officials say.
Millions more could be affected next year after they lose state benefits, which in many states expires after six months.
The financial aid was designed to help US citizens who lost their jobs during the recession and were unable to find new work while receiving the state benefits.
The US unemployment rate fell to a five-year low of 7% in November, according to the US Labor Department.
But the long-term jobless rate remains a problem for the economy, with some 4.1 million Americans currently out of work for six months or longer.
There has been repeated political wrangling between the Republicans, who control the lower house – the House of Representatives – and the Democrats, who have a majority in the upper house, the Senate.
Because of disagreements between the two houses over federal government spending, the Congress failed to pass a budget before the fiscal year ended on September 30.
Both sides eventually struck a last-gasp deal in October to end the federal shutdown and raise the federal debt limit.
The US trade deficit, meaning the gap between the value of imports and exports, widened in January 2013.
The trade deficit grew to $44.45 billion in January from December’s figure of $38.14 billion, the Commerce Department said.
There was better news on unemployment, with a fall in the number of initial claims for unemployment benefits.
The Labor Department said the number of initial claims for state benefits fell 7,000 to 340,000.
The figure had been expected to rise.
The initial claims news will not affect the week’s most important economic news, which is Friday’s non-farm payrolls figure for February, because the weekly claims figures are for the beginning of March.
Much of the rise in imports came from a 12% increase in imports of oil.
The trade deficit for the whole of 2012 was revised down slightly to $539.5 billion, which was 3.6% below the level from 2011.
The US trade deficit, meaning the gap between the value of imports and exports, widened in January 2013
US Congress last night finally passed a deal to avoid the so-called fiscal cliff, as critics attacked the Republican party for giving in and allowing tax hikes on wealthy Americans in return for minimal spending cuts.
President Barack Obama was in a triumphant mood as he addressed the nation after the vote on Capitol Hill, even winking at photographers before flying back to Hawaii to resume his vacation.
Income tax rates: Extends decade-old tax cuts on incomes up to $400,000 for individuals, $450,000 for couples. Earnings above those amounts would be taxed at a rate of 39.6%, up from the current 35%. Extends Bill Clinton-era caps on itemized deductions and the phase-out of the personal exemption for individuals making more than $250,000 andcouples earning more than $300,000.
Estate tax: Estates would be taxed at a top rate of 40%, with the first $5 million in value exempted for individual estates and $10 million for family estates. In 2012, such estates were subject to a top rate of 35%.
Capital gains, dividends: Taxes on capital gains and dividend income exceeding $400,000 for individuals and $450,000 for families would increase from 15% to 20%.
US Congress finally passed a deal to avoid the so-called fiscal cliff
Alternative minimum tax: Permanently addresses the alternative minimum tax and indexes it for inflation to prevent nearly 30 million middle- and upper-middle income taxpayers from being hit with higher tax bills averaging almost $3,000. The tax was originally designed to ensure that the wealthy did not avoid owing taxes by using loopholes.
Other tax changes: Extends for five years Obama-sought expansions of the child tax credit, earned income tax credit, and an up to $2,500 tax credit for college tuition. Also extends for one year accelerated “bonus” depreciation of business investments in new property and equipment, a tax credit for research and development costs and a tax credit for renewable energy such as wind-generated electricity.
Unemployment benefits: Extends jobless benefits for the long-term unemployed for one year.
Cuts in Medicare reimbursements to doctors: Blocks a 27% cut in Medicare payments to doctors for one year. The cut is the product of an obsolete 1997 budget formula.
Social Security payroll tax cut: Allows a 2 percentage point cut in the payroll tax first enacted two years ago to lapse, which restores the payroll tax to 6.2%.
Across-the-board cuts: Delays for two months $109 billion worth of across-the-board spending cuts set to start striking the Pentagon and domestic agencies this week. Cost of $24 billion is divided between spending cuts and new revenues from rules changes on converting traditional individual retirement accounts into Roth IRAs.
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