Business week: a debt deadline looms
What’s new? (19-25 Sep)
The Federal Reserve said on Wednesday that it may soon relax the measures it has put in place to support the economy from the depths of the pandemic crisis. Fed Chairman Jerome H. Powell said the central bank’s $ 120 billion monthly purchases of government-guaranteed bonds “still have a use, but it’s time for us to start cutting them back. “, and indicated that this could slow down the program because as early as November. Meanwhile, half of the Fed’s policymakers said they expected to raise interest rates next year.
New protections for workers
New York City Council has set new rules for how app-based delivery companies should treat their delivery people in groundbreaking legislation. The set of laws require companies to disclose their tip policies, give delivery people more control over their workplace, and require restaurateurs to make bathrooms available to delivery people. Unlike laws in other cities and states that have sparked battles with odd-job economy companies, New York law does not challenge the independent contractor status of delivery people. Delivery companies like Grubhub, DoorDash, and Uber Eats weren’t the only tech companies facing new controls over their work practices. The governor of California signed a bill that prohibits warehouse employers from setting productivity quotas that prevent workers from taking breaks or following health and safety laws, a move that could change working in the Amazon warehouses.
Boosters and other vaccine related activities
The Food and Drug Administration on Wednesday cleared booster shots for people over 65 who received the Pfizer-BioNTech coronavirus vaccine, as well as for people at high risk of becoming seriously ill or working in certain jobs. at high risk, such as teaching or those in grocery stores. Hours later, the director of the Centers for Disease Control and Prevention rescinded a recommendation from an agency advisory board and approved the additional doses for frontline workers. The measures added to a debate over the need for booster shots for healthy Americans, especially when much of the world is still unvaccinated. President Biden set a goal last week to vaccinate 70% of the world by next year as overseas health officials step up pressure on U.S. drug companies to share their vaccine formulas with manufacturers in other countries.
And after? (Sep 26-Oct 2)
A debt maturity looms
Thursday is the deadline for the Senate to pass a bill that would avoid a partial government shutdown the next day. A bill the House passed last week would keep the government funded until early December and lift the debt ceiling before the government hits its borrowing limit, which could be as early as next month. House Democrats bundled spending measurement and raising the debt ceiling in hopes of pressuring Republicans to drop their opposition to raising the debt ceiling, but Senate Republicans said they were standing firm. To avoid a government shutdown or the very first government default on debt, Democrats and Republicans could vote before Thursday’s deadline to keep government open, letting Democrats pass the increase in the debt limit by through a process that bypasses the obstruction but is more time consuming. Or they could make raising the debt ceiling part of their $ 3.5 trillion social policy bill.
Tax the rich
President Biden has continued his efforts to raise taxes on the rich as he seeks to unify Democrats around his infrastructure plan. Last week, White House economists released an analysis estimating an effective tax rate for the wealthiest 400 households of just over 8%, lower than the average rate of around 14% for all taxpayers. . To fund his plans to improve the social safety net, Mr Biden has proposed increasing the capital gains tax on profits from the sale of assets to match the wage income rate. , and eliminate a provision that wipes out investment gains for income tax purposes when assets are inherited. But a House-approved tax plan stopped before the two proposals. (That is still subject to change.) Some Democrats have opposed Mr. Biden’s proposals while others have argued they don’t go far enough. Progressive senators criticized the House tax plan for omitting a wealth tax, which would tax the value of billionaires’ assets.
The Evergrande problem
Huge Chinese real estate developer Evergrande is on the brink of financial collapse. The company appeared to miss a deadline for an $ 83 million interest payment on Thursday, but has a 30-day grace period before the missed payment results in default. This possibility has upended global financial markets and angered suppliers, homebuyers and employees who demanded their money. Markets have stabilized amid assurances from China that it can contain a crisis. But it was still not clear whether China would bail out Evergrande directly or what the collapse of Evergrande would mean for the Chinese economy.
Facebook’s chief technology officer will step down next year. China has banned cryptocurrency transactions and issued a nationwide ban on cryptocurrency mining. Delta Air Lines wants airlines to create a national no-fly list for unruly customers. And the United States will lift travel restrictions for visitors from November, provided they show proof of vaccination and a negative coronavirus test.