Welcome back to On The Money, where we’re sending love to the AAPI community on a difficult day. 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—IRS plans to extend tax filing deadline to mid-May: The IRS is planning to extend the tax-filing deadline to mid-May, according to two top House Democrats, after lawmakers in both parties called on the agency to do so.
A news release Wednesday from House Ways and Means Committee Chairman Richard Neal (D-Mass.) and Ways and Means Oversight Subcommittee Chairman Bill Pascrell (D-N.J.) states that the deadline will be moved from April 15 to May 17.
“This extension is absolutely necessary to give Americans some needed flexibility in a time of unprecedented crisis,” Neal and Pascrell said.
“Under titanic stress and strain, American taxpayers and tax preparers must have more time to file tax returns. And the IRS itself started the filing season late, continues to be behind schedule, and now must implement changes from the American Rescue Plan.”
The Hill’s Naomi Jagoda tells us more here.
Why the delay? The IRS extended last year’s filing deadline from April 15 to July 15 because of the coronavirus pandemic, so many lawmakers and tax preparers pressed the agency to take similar action this year since COVID-19 isn’t exactly history yet. There are a few other factors at play too:
- The IRS has already extended the filing deadline to June 15 for residents of Texas, Louisiana and Oklahoma because of winter storms.
- Those in favor of an extension noted that this year’s tax-filing season started later than usual and that the agency has processed fewer tax returns than it had at a similar point last year.
- Also, the IRS has its hands full right now implementing Biden’s relief bill, which also includes a few other tax-related provisions that could be hard for folks to figure out right away.
Naomi breaks it all down here.
LEADING THE DAY
Powell voices cautious optimism as COVID-19 recovery ramps up: Federal Reserve Chairman Jerome Powell on Wednesday struck a note of cautious optimism as the central bank signaled it believes the recovery from the coronavirus recession is accelerating.
The Fed chief said the U.S. is poised to avoid much of the long-term damage economists feared would occur due to the pandemic, thanks to trillions of dollars in support, and is primed for a quicker recovery as the country makes progress toward herd immunity.
Even so, Powell said it would still be challenging to bring roughly 10 million people who lost their jobs due to COVID-19 back into the labor force and that the process could be disrupted if new, more infectious coronavirus variants hinder the recovery.
“We’re clearly on a good path with cases coming down,” Powell said, “but we’re not done and I’d hate to see us take our eye off the ball before we actually finish the job.”
The background:
- Powell’s remarks were his first since President Biden signed a $1.9 trillion coronavirus relief plan into law.
- The Fed earlier Wednesday announced, as expected, that it would not raise interest rates or cut back on its monthly purchases of $120 billion in Treasury and mortgage bonds as the economy continued to recover from the COVID-19 recession.
- Fed officials on Wednesday also upgraded their 2021 projections for growth and unemployment for the second consecutive quarter, indicating growing optimism in the path of the economy.
Speaking of stimulus: The Treasury Department and Internal Revenue Service (IRS) said Wednesday that they’ve disbursed about 90 million stimulus payments authorized by the coronavirus relief law President Biden signed last week.
- The payments that have been issued have a value of more than $242 billion, Treasury said.
- The $1.9 trillion coronavirus relief package provides for direct payments for most Americans of up to $1,400 per person.
If you didn’t get your payment yet: Treasury and the IRS are expected to distribute more payments by direct deposit, paper check and debit card in the coming weeks. You can check the status of your payment by using the IRS’s “Get My Payment” web tool.
House Republicans vote to support earmarks: House Republicans passed a resolution during their conference meeting on Wednesday in support of restoring earmarks.
The House GOP’s 102-84 vote comes as Democrats gear up to revive the practice, which allows members to secure federal funding for specific projects.
The history:
- House Republicans stopped the practice in 2011, citing a number of controversies stemming from earmarks including the so-called Bridge to Nowhere and the Jack Abramoff scandal.
- The effort to support earmarks’ restoration with a number of reforms — including a requirement that they must be publicly disclosed with written justification and members can’t have a financial interest — was led by Rep. Mike Rogers (R-Ala.).
Earmark supporters say Congress handed too much power to the executive branch by eliminating the practice, arguing they are needed to restore the power of the purse. But opponents, including members of the conservative House Freedom Caucus, call them “legislative bribery” and a path to corruption.
The Hill’s Juliegrace Brufke has more here.
The impact: Earmarks may be a useful tool for Democrats if they need to garner Republican support for an eventual infrastructure package. While earmarks may not get them the 10 GOP votes they’d need to avoid a filibuster, they may be able to get enough senators to make it a little bipartisan.
ON TAP TOMORROW:
- A House Financial Services subcommittee holds a hearing on diversity and inclusion data at 10 a.m.
- The Senate Banking Committee holds a hearing on the financial risks of climate change at 10 a.m.
- The Senate Finance Committee holds a hearing on using trade laws to fight forced labor at 10 a.m.
- IRS Commissioner Charles Rettig testifies before a House Ways and Means subcommittee at 2:30 p.m.
GOOD TO KNOW
- The Senate on Wednesday unanimously approved the nomination of Katherine Tai to be President Biden’s chief trade negotiator, making her the first woman of color and the first Asian American to serve as the nation’s top ambassador on trade policy.
- A Treasury Department watchdog report found that the IRS failed to collect over $2.4 billion in back taxes from those making more than $1 million a year.
- Wells Fargo on Wednesday apologized to customers who experienced problems with online banking on the same day that many received their $1,400 direct payments included in the latest coronavirus relief package.
- President Biden said in an interview with ABC News’s George Stephanopoulos that he wants households making more than $400,000 to see “a small to a significant tax increase” and that he thinks he can get votes from congressional Democrats for the tax hikes.
ODDS AND ENDS
- Ford Motor Company told tens of thousands of employees on Wednesday that they will be permitted to work from home even when the coronavirus pandemic is over.
- Uber announced Tuesday that it would reclassify more than 70,000 drivers in the United Kingdom as “workers” who will receive a minimum wage while completing trips, holiday time and eligibility for a pension plan.