On The Money — Millions could be eligible for COVID stimulus: report

Sylvan Lane
·5 min read
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Millions of Americans may still be entitled to receive a COVID-19 stimulus payment, a new report by the government’s internal watchdog finds. We’ll also look at the risks President Biden faces as the Federal Reserve raises rates and a dour forecast for the global economy.

But first, see why Biden and some lawmakers want to “reassess” the U.S. relationship with Saudi Arabia.

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.

Some Americans may be entitled to stimulus

As many as 10 million people may still be entitled to receive a COVID-19 stimulus payment, the government’s internal watchdog said Tuesday.

Americans with little or no income, who are not required to pay taxes, have until
Nov. 15 to complete a simplified tax return in order to get their stimulus checks, the Government Accountability Office (GAO) said.

  • The GAO found that people who don’t have to file tax returns, first-time filers, mixed immigrant status families and people experiencing homelessness were among those likely not to have received a payment owed to them. 

  • Many in the tax world have come to the defense of the IRS over the course of the pandemic, saying it was beyond the call of duty for a tax collection agency to become the primary administrator of emergency economic stimulus payments. 

  • Still, the added duties for the IRS have led to a backlog of tens of millions of unprocessed tax returns and unanswered phone calls that have left millions of Americans waiting for their annual refunds.

The look ahead: A recent spending package from Democrats is set to give the IRS its biggest funding boost in decades, with $80 billion going to the agency in the next 10 years.

While more than half of that will go toward increased enforcement efforts like audits, around $33 billion will go toward operational support, services for payers and systems modernization.

The Hill’s Tobias Burns digs into this here.

NEW RULES

Labor Department proposes rule to reclassify contractors as employees

The Labor Department on Tuesday unveiled a proposed rule that would reclassify some independent contractors as company employees, a move that could disrupt the gig economy.

The highly anticipated rule takes aim at companies that the Biden administration says “misclassify” their employees as contractors. By becoming employees, those workers would be covered by overtime and minimum wage laws that don’t apply to contractors.

  • The Labor Department said that misclassification is a problem in a host of industries, including home care, janitorial services, delivery, trucking and construction. 

  • The department said the widespread issue makes it difficult for some businesses to compete with those that misclassify their workers as contractors. 

  • If the rule were to apply to gig companies such as Uber and Lyft, it could significantly disrupt their business models.

Karl has more here.

RISING RISKS

Biden finds himself tethered to Fed’s inflation fight

President Biden pledged to let the Federal Reserve do whatever it takes to bring inflation down.

The political implications could be dire.

  • Fed officials have vowed not to let up in their fight against inflation, even if it means driving the economy toward a recession.  

  • The central bank has already boosted interest rates to a range officials believe will slow the economy — and it plans to raise them again before the end of the year, even at an expected cost to the job market.

As the U.S. economy slows and the global one faces deeper peril, Biden is facing growing pressure to avert a major slowdown without allowing inflation to spiral higher. But doing so would risk violating his pledge not to interfere with the Fed’s plans — a precedent set by several of his predecessors.

Sylvan explains here.

‘THE WORST IS YET TO COME’

IMF cuts global growth forecast, saying 2023 will ‘feel like a recession’ for many people

The International Monetary Fund (IMF) on Tuesday reduced its forecast for global economic growth for 2023, saying that next year will “feel like a recession” for many people.

The IMF said in a blog post that its outlook for 2022 remained unchanged from its July prediction of 3.2 percent growth, but it lowered its 2023 prediction by 0.2 points, to 2.7 percent growth. It said the economic slowdown will be widespread, with countries making up one-third of the global economy projected to experience an economic contraction this year or next.

“Overall, this year’s shocks will re-open economic wounds that were only partially healed post-pandemic,” the IMF stated. “In short, the worst is yet to come and, for many people, 2023 will feel like a recession.”

Here’s more from The Hill’s Jared Gans.

Good to Know

The White House released a preview of what the student debt relief application looks like as the site is expected to drop this month for borrowers.

In a Twitter post, the administration previewed what the application looks like if a person is applying on their phone, showing a relatively simple process for borrowers.

Here’s what else we have our eye on:

  • Hurricane Ian, which made landfall in Florida late last month and ravaged the area as it pushed north to the Carolinas, is the latest of 15 billion-dollar climate and weather disasters logged in the U.S. this year, according to the NOAA.

  • The Biden administration on Tuesday announced it will invest nearly $60 billion from the bipartisan infrastructure law towards roads, bridges, tunnels, carbon emission reduction and safety improvements in all 50 states.

  • Nearly one million additional Americans will have access to ObamaCare subsidies next year under a final rule issued Tuesday by the Biden administration.

  • Democratic Sen. Richard Blumenthal (Conn.) and Rep. Ro Khanna (Calif.) introduced a bill on Tuesday that would suspend all U.S. arm sales to Saudi Arabia for one year.

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.

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