Is the recession over? The May jobs report shows the US added 2.5 million jobs in May and the unemployment rate dropped to 13.3 percent. Cornell’s Erica Groshen, a former BLS commissioner, told The Hill that “the main takeaway is actually that the policy steps that were taken were quite effective.” Moody’s Analytics chief economist Mark Zandi believes the economy has bottomed out but adds that the 2.5 million new jobs could be revised away in future reports. Republicans read the news as evidence the next stimulus bill should be modest and focused on getting people back to work. Democrats think it means far more relief still is necessary.
Congress may soon make a choice between wage credits or more unemployment benefits. TPC’s Howard Gleckman explains the options. The federal government could extend unemployment benefits, offer a lump-sum payment to those who return to work, or expand a wage credit for employers who hire, rehire, or retain workers. But how much does Congress want to spend? Is the real problem a lack of workers or an absence of consumer demand? And when is it the right time for the government to encourage people to go back to work?
On the Hill tomorrow: A bigger charitable giving incentive? TaxNotes reports (paywall) that a bipartisan coalition of senators supports a permanent and larger universal charitable contribution deduction for non-itemizers than the temporary $300 above-the-line deduction included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Would it be as large as Sen. James Lankford’s plan to allow non-itemizers to deduct charitable gifts up to one-third of the standard deduction—$4,000 for individuals and $8,000 for married couples—for the 2020 tax year? The Joint Economic Committee holds a hearing tomorrow at 2:30 on how to support charitable giving during the COVID-19 crisis.
Also on the Hill this week. Tomorrow, the Senate Finance Committee will hold a hearing on unemployment benefits and the CARES Act. On Wednesday, the Senate Committee on Small Business and Entrepreneurship will hold its own hearing.Treasury Secretary Steven Mnuchin and Small Business Administration Administrator Jovita Carranza will testify. And on Thursday, the House Committee on Financial Services will hold a hearing on using digital tools to deliver stimulus payments.
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