On The Money: Battle lines form over coronavirus fight in lame duck | Economy adds 638K jobs in October, unemployment drops to 6.9 percent
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THE BIG DEAL—Battle lines form over coronavirus fight in lame duck: A fight is looming over the prospect of passing a coronavirus relief deal in an upcoming lame-duck session, as both sides claim leverage in the battle.
Congressional leaders and the White House each say they are interested in getting a fifth deal before the end of the year, as coronavirus cases climb across the country and public health officials warn of a brutal winter. But deep differences remain.
- Top Republicans are digging in on a smaller coronavirus relief deal, signaling that they believe Democrats should make concessions ahead of a looming lame-duck fight.
- But Democrats are sticking by their pledge to “go big.” House Democrats initially passed a $3.4 trillion coronavirus relief deal in May and then a second smaller $2.2 trillion coronavirus relief deal. The Senate has not taken up either.
The Hill’s Jordain Carney explains here.
October jobs report looms large: The release of the October jobs report Friday morning prompted both sides to dig in deeper on their previous demands. Republicans who prefer a smaller measure could credibly cite the better than expected gain of 638,000 jobs and dip in the unemployment rate to 6.9 percent as surprisingly good. Democrats in favor of a larger package, however, can point to the slowing pace of job gains and sharp rise in long-term unemployment as signs of deepening weakness.
We’ve got more on the jobs report just ahead.
LEADING THE DAY
Economy adds 638K jobs in October, unemployment dips below 7 percent:
- The October jobs report showed the U.S. continuing to recover jobs lost to the coronavirus pandemic and slightly exceeded economists’ projections.
- Economists had expected the U.S. to gain roughly 600,000 jobs in October after adding 672,000 in September and seeing the unemployment rate fall to 7.9 percent, according to revised figures.
- October’s decline in unemployment came as the labor force participation rate increased by 0.3 percentage points, meaning that a greater portion of Americans were both seeking and finding jobs last month than in September. The number of workers who permanently lost their jobs also stayed flat at 3.7 million, a welcome sign after several months of increases.
I break it down here.
Tax ballot measures yield mixed results for progressives: The outcomes of state tax ballot measures on Election Day were a mixed bag for progressives.
In one high-profile contest, Arizona voters approved a tax increase for high earners. In other states, voters rejected revenue raisers or supported tax cuts.
Experts said messaging likely played a key role in the results. Measures that don’t specify a use for the new funds, they said, typically fare worse than those that explain to voters how the additional money will be allocated. The Hill’s Naomi Jagoda explains here.
- Voters in the battleground state of Arizona approved a measure, Proposition 208, to impose a 3.5 percent surcharge on income above $250,000 for individuals and $500,000 for married couples. That will have the effect of raising the top state income tax rate from 4.5 percent to 8 percent.
- Meanwhile, voters in Illinois, a state that consistently votes Democratic in presidential elections, rejected a ballot measure that would have raised taxes on high-income households.
- In Colorado, a state that has trended Democratic in recent elections, voters approved a ballot measure to lower the state’s flat income tax rate from 4.63 percent to 4.55 percent. The change is retroactive to the beginning of the year.
ON TAP NEXT WEEK
- Federal Reserve Vice Chair of Supervision Randal Quarles, Federal Deposit Insurance Corp. Chairman Jelena McWilliams, Acting Comptroller of the Currency Brian Brooks, and National Credit Union Administration Chairman Rodney Hood testify before the Senate Banking Committee, 10 a.m.
- Federal Reserve Governor Lael Brainard gives a speech on Community Reinvestment Act modernization, 5 p.m.
- Federal Reserve Vice Chair of Supervision Randal Quarles, Federal Deposit Insurance Corp. Chairman Jelena McWilliams, Acting Comptroller of the Currency Brian Brooks, and National Credit Union Administration Chairman Rodney Hood testify before the House Financial Services Committee, 12 p.m.
GOOD TO KNOW
Recap the week with On The Money: