On The Money: Pessimism grows as coronavirus talks go down to the wire | Jobs report poised to light fire under COVID-19 talks | Tax preparers warn unemployment recipients could owe IRS

On The Money: Pessimism grows as coronavirus talks go down to the wire | Jobs report poised to light fire under COVID-19 talks | Tax preparers warn unemployment recipients could owe IRS

Happy Thursday and welcome back to On The Money, where we’re seriously craving a lobster roll. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL — Pessimism grows as coronavirus talks go down to the wire: Lawmakers are increasingly pessimistic about the chances of a quick agreement as negotiations over a fifth coronavirus relief bill continue down to the wire. 

Congress and the White House are barreling toward an end-of-the-day Friday deadline set by the main negotiators: House Speaker Nancy PelosiNancy PelosiCoronavirus talks on life support as parties dig in, pass blame On The Money: Pessimism grows as coronavirus talks go down to the wire | Jobs report poised to light fire under COVID-19 talks | Tax preparers warn unemployment recipients could owe IRS Top Democrats say postmaster confirmed changes to mail service amid delays MORE (D-Calif.), Senate Minority Leader Charles SchumerChuck SchumerCoronavirus talks on life support as parties dig in, pass blame Senate Democrats push to include free phone calls for incarcerated people in next relief package Trump backs plan to give airlines another billion in aid MORE (D-N.Y.), White House chief of staff Mark MeadowsMark Randall MeadowsCoronavirus talks on life support as parties dig in, pass blame On The Money: Pessimism grows as coronavirus talks go down to the wire | Jobs report poised to light fire under COVID-19 talks | Tax preparers warn unemployment recipients could owe IRS Top Democrats say postmaster confirmed changes to mail service amid delays MORE and Treasury Secretary Steven MnuchinSteven Terner MnuchinCoronavirus talks on life support as parties dig in, pass blame On The Money: Pessimism grows as coronavirus talks go down to the wire | Jobs report poised to light fire under COVID-19 talks | Tax preparers warn unemployment recipients could owe IRS Top Democrats say postmaster confirmed changes to mail service amid delays MORE

But despite weeks of near-daily meetings, the four are struggling to overcome steep political headwinds and policy differences to reach an agreement and have little progress to show so far, raising the probability that they will blow past their self-imposed timeline. The Hill’s Jordain Carney updates us here.

What lawmakers are saying: 

Though the Senate will technically be in session next week, members were not told when they should expect to return. The House left Washington last week, with House Majority Leader Steny HoyerSteny Hamilton HoyerOn The Money: Pessimism grows as coronavirus talks go down to the wire | Jobs report poised to light fire under COVID-19 talks | Tax preparers warn unemployment recipients could owe IRS Overnight Health Care: Ohio governor tests positive for COVID-19 ahead of Trump’s visit | US shows signs of coronavirus peak, but difficult days lie ahead | Trump: COVID-19 vaccine may be ready ‘right around’ Election Day Pessimism grows as coronavirus talks go down to the wire MORE (D-Md.) planning to give his members a 24-hour heads up.

Jobs report poised to light fire under COVID-19 talks: As talks lag, the July jobs report is poised to shake up stalled negotiations between the White House and Democrats over another coronavirus stimulus bill as Republicans threaten to walk away from the table.

  • The national employment report from the Labor Department on Friday morning is projected to show a sharp slowdown after two months of strong job gains. 
  • Expectations range from a gain of roughly 1 million jobs to a loss of several thousand following the 8 million added during May and June.

An unexpectedly positive report could buy Trump administration officials more time to negotiate, and even give them some leverage, as President TrumpDonald John TrumpBiden says his faith is ‘bedrock foundation of my life’ after Trump claim Coronavirus talks on life support as parties dig in, pass blame Ohio governor tests negative in second coronavirus test MORE attempts to circumvent Congress’s COVID-19 relief talks with executive action. But a disappointing downturn could spur Trump to strike a quick deal with Democrats to avert deeper economic pain ahead of the November election. I explain why here.

LEADING THE DAY

Tax preparers warn unemployment recipients could owe IRS: Tax preparers are concerned that many of the millions of Americans receiving unemployment benefits due to the pandemic are unaware that they might owe money to the IRS next year.

  • Jobless benefits are subject to federal income taxes, as well as state income taxes in most parts of the country.
  • But workers who are collecting benefits for the first time may not be aware of those tax implications, or they might opt against having taxes withheld from their benefit payments.
  • People who do not have enough money withheld during the year could end up with smaller refunds or balances due to the IRS when they file their 2020 tax returns.

“It’s a bigger issue now because the volume of people who are unemployed is higher than usual,” said Cari Weston, director for tax practice and ethics at the American Institute of CPAs.

The Hill’s Naomi Jagoda explains here.

A record rush for jobless benefits: The coronavirus pandemic has led to the highest unemployment rate since the Great Depression and record numbers of workers applying for unemployment benefits. Tens of millions of Americans have filed claims for unemployment benefits since March, and many may have to pay taxes on those benefits.

The often unknown implications: 

  • Recipients of unemployment benefits have to pay federal income taxes on the money they receive from the federal government, but not payroll taxes. Additionally, most states require people to pay state taxes on their unemployment benefits.
  • When people apply for unemployment benefits with their state, they have the option to have 10 percent of each payment withheld for federal income taxes. But tax professionals said some people may not know how to sign up for withholding.
  • Additionally, tax professionals said some recipients may choose not to have taxes withheld from their unemployment benefits because they need as much money as possible immediately.

 

Trump touts economic agenda in battleground state of Ohio: President Trump visited Ohio on Thursday for official and campaign business, targeting a battleground state where he finds himself in a tight race with presumptive Democratic nominee Joe BidenJoe BidenBiden says his faith is ‘bedrock foundation of my life’ after Trump claim Biden clarifies comments comparing African American and Latino communities Kanye West may have missed deadline to get on Wisconsin ballot by minutes: report MORE.

  • Trump delivered brief campaign-style remarks at the airport in Cleveland and then traveled to Clyde to deliver a speech on his economic agenda at a Whirlpool plant. 
  • There, he highlighted a new executive order intended to boost domestic drug manufacturing and revealed that he had signed a proclamation reimposing 10 percent aluminum tariffs on Canada.

The president’s remarks on Thursday were mainly focused on the economy, once considered his greatest asset heading into the 2020 election. Instead, he attempted to contrast his ability to steward the nation through its recovery from the coronavirus pandemic with that of Biden. The Hill’s Brett Samuels takes us there.

GOOD TO KNOW

ODDS AND ENDS

  • The rush of armchair traders investing through Robinhood, an easy-to-use app for trading stocks, may be helping inflate a stock bubble and setting up investors for a potential bust.
  • Gaming giant Nintendo has seen its operating profits soar during the coronavirus pandemic, reporting an increase of more than 400 percent on Thursday.
  • President Trump is struggling to win over Maine voters with his recent pledge to lift restrictions for the state’s lobster industry.