US ECONOMY & POLITICS

Trump Asks Congress to Amend Covid-19 Package, Boost Direct Payments – Wall Street Journal, 12/23/20

• President Trump on Tuesday criticized the roughly $900 billion coronavirus relief deal passed by Congress, saying the bill has “almost nothing to do with Covid” and called on lawmakers to increase direct payments to Americans to $2,000 from $600.
• “I am asking Congress to amend this bill and increase the ridiculously low $600 to $2,000 or $4,000 for a couple,” he said in a tweeted video.
• Hours before he posted his video, White House director of social media Dan Scavino on Facebook called the bill a “TOTAL DISGRACE, INSULT, and EMBARRASSMENT!!!”
• The legislation, which includes $900 billion in coronavirus relief and a $1.4 trillion spending bill that funds the government through September, passed both chambers by wide margins—92-6 in the Senate and 359-53 in the House—and had been expected to be signed by the president.
• If he vetoes it, lawmakers would need to either pass new legislation meeting his demand for larger stimulus checks or vote to override his veto—which requires a two-thirds threshold for passage in each chamber.
• House Speaker Nancy Pelosi (D., Calif.) said on Twitter she would try to pass a bill with unanimous consent to approve $2,000 direct checks. That vote is expected Thursday, an aide said.
• Most lawmakers have already left Washington for the holidays following the bill’s passage.

U.S. weekly jobless claims fall; consumers cutting back on spending – Reuters, 12/23/20

• The number of Americans filing first-time claims for unemployment benefits unexpectedly fell last week, though remaining elevated as more businesses face restrictions and consumers hunker down amid an explosion of new COVID-19 cases.
• Initial claims for state unemployment benefits fell 89,000 to a seasonally adjusted 803,000 for the week ended Dec. 19, the Labor Department said. Economists polled by Reuters had forecast 885,000 applications in the latest week.
• Including a government-funded program for the self-employed, gig workers and others who do not qualify for the regular state unemployment programs, 1.3 million people filed claims last week.
• There were at least 20.3 million people collecting unemployment benefits in early December.
• A second report from the Commerce Department on Wednesday showed consumer spending, which accounts for more than two-thirds of U.S. economic activity, declined 0.4% in November after increasing 0.3% in October.
• Personal income decreased 1.1% in November, pulled down by the expiration of a government loan program for businesses hit by COVID-19.
• There were also decreases in coronavirus-related government payments to farmers and ranchers, as well as unemployment subsidies. Income fell 0.6% in October.
• With incomes dwindling, Americans are dipping into savings.
• The saving rate fell to a still-high 12.9% from 13.6% in October. It peaked at record 33.6% in April.
• Inflation remained muted in November. The personal consumption expenditures (PCE) price index excluding the volatile food and energy components was unchanged for a second straight month.
• In the 12 months through November, the so-called core PCE price index increased 1.4%, matching October’s gain.

U.S. core capital goods orders, shipments rise in November – Reuters, 12/23/20

• New orders for key U.S.-made capital goods increased for a seventh straight month in November, suggesting business investment could offset slowing consumer spending and keep the economy on a moderate growth path in the fourth quarter.
• Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.4% last month. These so-called core capital goods orders jumped 1.6% in October.
• Core capital goods orders increased 0.8% year-on-year in November.
• Shipments of core capital goods increased 0.4% last month. They surged 2.6% in October.
• Orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, rose 0.9% in November after advancing 1.8% in October.

Despite ‘three martini’ tax break, COVID-19 bill leaves struggling U.S. restaurants cold – Reuters, 12/23/20

• The $900 billion coronavirus relief package passed by the U.S. Congress here on Monday contains a high-profile tax loophole for business meals, but not the one thing most requested by independent U.S. restaurants which have been devastated by the pandemic: cash.
• The Republican-backed “three-martini lunch deduction” doubles an existing tax break, allowing companies to write off 100% of business dining expenses through 2022.
• However, it has been derided by economists, Democrats, and even the staunchly conservative Wall Street Journal op-ed page as politically tone deaf, given the millions of sick and out-of-work Americans.
• The tax break will cost taxpayers $6.3 billion through 2023, analysis by a congressional committee shows here.
• It will also fail to boost the restaurant industry in a big way, at least initially.
• “When less than 10% of workers have returned to their offices in Midtown and Lower Manhattan, and indoor dining is closed and it’s freezing outside, this deduction doesn’t do much,” said Andrew Rigie, director of the New York City Hospitality Alliance.
• The coronavirus relief bill does include loans and tax breaks the restaurant industry could tap, but not the dedicated grants trade groups had spent months lobbying for, arguing that the restaurant industry deserved similar subsidies to airlines and farms.
• The National Restaurant Association (NRA) believes 17% of all U.S. restaurants – about 110,000 – have already closed permanently or long-term.

Hunter Biden’s Family Name Aided Deals with Foreign Tycoons – Wall Street Journal, 12/23/20

• Hunter Biden ramped up business activities with European and Chinese tycoons as his father exited the vice presidency four years ago. For him it was a potential path to income; for the tycoons, the Biden family name promised to burnish their reputations.
• These arrangements now loom over President-elect Joe Biden.
• A federal criminal tax investigation into Hunter Biden’s business dealings is under way, with findings potentially trickling out in coming months.
• His business ties to well-connected people in China and other places could add to scrutiny of foreign-policy decisions taken by the Biden administration over possible conflicts of interest.
• All are likely to provide ammunition to Republicans.
• Sen. Chuck Grassley (R., Iowa), who has led the Senate Finance Committee whose Republican staff helped investigate Hunter Biden, has said he would continue to look into what he says are possible counterintelligence and criminal concerns related to Mr. Biden’s business dealings.
• None of the Journal’s reporting found that Joe Biden was involved in his son’s business activities.
• The tax investigation doesn’t implicate the president-elect, according to people familiar with the matter.

New Population Data Suggest Which States Will Win and Lose Seats in Congress – Wall Street Journal, 12/23/20

• New population estimates show how Southern and Western states are poised to gain political power when the U.S. reshuffles congressional seats and Electoral College votes next year.
• The Census Bureau on Tuesday released annual state population estimates as of July 1. That data was gathered separately from decennial census responses pegged to April 1, which lawmakers will use in early 2021 to redistribute seats in the House of Representatives.
• Tuesday’s census estimates show that many midwestern and northeastern states continue to see their populations shrink while large southern states draw in residents.
• In a separate development, California’s population declined for what appears to be the first time since at least 1900, according to Brookings Institution demographer William Frey, as the state lost nearly 70,000 residents since the annual estimate released last year.
• The new population estimates suggest that 10 states are likely to lose one congressional seat each: Alabama, California, Illinois, Michigan, Minnesota, New York, Ohio, Pennsylvania, Rhode Island and West Virginia.
• Texas is expected to gain three seats, and Florida is expected to pick up two.
• Five others are expected to gain one seat: Arizona, Colorado, Montana, North Carolina and Oregon.

EUROPE & WORLD

Brexit Deal Negotiations Narrow to One Sensitive Subject: Fish – Wall Street Journal, 12/23/20

• A dispute over fish worth just tens of millions of dollars annually is holding up a new trade accord between the U.K. and the European Union, but officials on both sides say a deal could still come before Christmas.
• The two teams continued negotiations Wednesday in Brussels, with eight days left to reach a deal covering post-Brexit economic, trade and security ties between the U.K. and the EU.
• Failure to reach a deal would mean from Jan. 1, tariffs would be applied for the first time in almost a half-century on some trade between the U.K. and the EU. The U.K. sends 43% of its exports to the bloc.
• At the Brexit negotiating table, the rights of EU fishing boats to access U.K. waters from 2021 have dominated the latest phase of talks.
• While fishing has minor economic significance—affecting overall some 600 million euros, equivalent to $730 million, annually of fish caught by EU boats in British waters—it is politically hugely sensitive in the U.K. and EU coastal states including France, Belgium and the Netherlands.

Israel Faces Fourth Election in Two Years After Parliament Is Dissolved – Wall Street Journal, 12/23/20

• Israel’s Parliament was dissolved after the short-lived unity government led by Prime Minister Benjamin Netanyahu failed to pass a new budget, sending the country to a fourth election in less than two years.
• The parties making up Mr. Netanyahu’s coalition—which have been squabbling over senior judicial appointments and power-sharing since the government’s inception this past spring—failed to agree on a new budget in time for a midnight deadline on Tuesday.
• The result was the automatic dissolution of the Knesset, Israel’s parliament, which triggered fresh national elections that are set to be held on March 23, according to the parliament’s speaker.
• The collapse brings to an end a government that was established only in May, when Benny Gantz, leader of the centrist Blue and White party, set aside his opposition to joining a Netanyahu government and agreed to form a unity coalition that would guide the country through the twin coronavirus and economic crises.

France to Reopen Border to Trucks from England, but Says Drivers Must Take Covid-19 Test – Wall Street Journal, 12/23/20

• The British and French governments said on Tuesday they would reopen their border to trucks from the U.K. after the busy frontier was closed for 48 hours in an effort to keep out a new strain of the coronavirus that is spreading rapidly in England.
• Around a quarter of British goods trade takes place from the port of Dover, along with the nearby Channel Tunnel, and its usual speed means it is the preferred route for fresh produce, such as fish, vegetables and fruit.
• Rail, air and sea services will resume Wednesday, with all people traveling to France from the U.K. required to show proof of a negative coronavirus test taken within the previous 72 hours, the U.K. Department for Transport said Tuesday.

Factmonster – TODAY in HISTORY

• President Woodrow Wilson signed the act creating the Federal Reserve System. (1913)
• The transistor was unveiled by American physicists John Bardeen, Walter H. Brattain, and William Shockley. (1947)
• Hideki Tojo and six other Japanese war leaders were executed. (1948)