Happy Fat Tuesday and welcome back to On The Money, where we’re sending our thoughts to everyone dealing with severe weather and power outages across the country. 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—Biden extends mortgage relief, moratorium on foreclosures through June: The White House on Monday announced it would extend mortgage relief and a moratorium on home foreclosures through June as thousands of Americans continue to struggle to keep up with payments during the coronavirus pandemic.
“The COVID-19 pandemic has triggered a housing affordability crisis,” the White House said in a statement. “Now, homeowners will receive urgently needed relief as we face this unprecedented national emergency. Today’s action builds on steps the President took on Day One to extend foreclosure moratoriums for federally guaranteed mortgages.”
- The joint effort between the departments of Housing and Urban Development, Veterans Affairs, and Agriculture will extend the foreclosure moratorium for homeowners, keep open the mortgage payment forbearance enrollment window and provide up to six months of additional mortgage payment forbearance, in three-month increments, for borrowers who entered forbearance on or before June 30.
- Those protections were set to expire on March 30.
The White House also called on Congress to pass Biden’s $1.9 trillion pandemic response and economic aid plan, which would create a Homeowners Assistance Fund of $10 billion to help struggling homeowners catch up on mortgage payments and utility bills. The Hill’s Dominick Mastrangelo has more here.
Biden takes COVID relief pitch on the road: Biden is looking to put a focus on his pandemic plan after the impeachment trial of former President Trump consumed Washington over the previous week.
- The president will promote his coronavirus relief plan Tuesday evening at a CNN town hall event in Wisconsin, marking his first official domestic trip since taking office.
- Two days later, Biden is slated to travel to Kalamazoo, Mich., to visit Pfizer’s manufacturing site and speak with workers producing the Pfizer-BioNTech vaccine.
The significance: Biden has been holding meetings with members of Congress and other elected officials from both parties on his COVID-19 relief package in his first weeks as president. But Tuesday’s televised event will present an opportunity for Biden to talk to members of the public concerned about the pandemic as he attempts to build further support for his $1.9 trillion proposal.
The Hill’s Morgan Chalfant gives us a preview here.
LEADING THE DAY
Democrats unveil bill to end tax break for investment managers: A group of House Democrats announced Tuesday that they are reintroducing legislation to end the carried interest tax break that is beneficial for investment managers.
How it works:
- The carried interest tax break allows investment managers, such as private-equity and hedge-fund managers, to pay capital gains tax rates on compensation they receive for providing the service of managing firms’ assets. The top capital gains rate is significantly lower than the top rate for ordinary income.
- The Democrats’ bill would tax carried-interest compensation as ordinary income, rather than as capital gains, and it would treat the compensation as wage income that is subject to employment taxes.
“This year, millions of Americans are struggling to survive and are entitled to a fairer tax system,” said Rep. Bill Pascrell (D-N.J.), sponsor of the bill and chairman of the House Ways and Means Oversight Subcommittee, said in a news release. “This loophole has survived too long and we are going to push hard to see that it is finally closed.” The Hill’s Naomi Jagoda breaks it down here
CBO: Public debt to surpass 200 percent of GDP in 2051: The nation’s debt burden will be twice as large as its annual economic output in 30 years, according to long-term budget projections released by the Congressional Budget Office (CBO) on Tuesday.
By 2051, the debt held by the public would amount to 202 percent of GDP, nearly double its current level. Debt levels surpassed 100 percent of GDP for the first time since World War II last year, and levels are expected to break the all-time record in the coming years.
- The latest projections, an addendum to the short-term budget outlook released last week, show that much of the problem lies in long-term issues.
- While budget watchdogs say the debt shouldn’t hinder COVID-19 relief spending, it will force hard choices down the road.
“We shouldn’t shy away from borrowing what’s needed to end this pandemic, support the recovery, and help sustain households and businesses through this crisis. But along the way, we can’t afford to ignore the long term,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. The Hill’s Niv Elis has more here.
ON TAP TOMORROW:
- The Federal Open Market Committee releases minutes from its January meeting at 2 p.m.
- The Brookings Institution hosts a virtual discussion entitled “Economic impact payments: Uses, payment methods, and costs to recipients” at 3 p.m.
GOOD TO KNOW
- The winter storm that is pummeling Texas with record snow and low temperatures could spark an increase in gas prices, experts said on Tuesday.
- The tax-filing season is now underway after a delayed start, and it’s expected to bring challenges and confusion as taxpayers and the IRS navigate pandemic-related issues, including some pertaining to stimulus checks.
- China surpassed the U.S. as the European Union’s main trading partner in 2020, according to data released on Monday by Eurostat.
ODDS AND ENDS
- Traffic on U.S. passenger airlines fell 60.1 percent in 2020 due to the lack of travel during the coronavirus pandemic, marking the lowest demand since 1984.