House Democrats remove $1 billion to fund Israel’s Iron Dome from spending bill after threats from progressives

House Democrats removed funding for Israel’s Iron Dome missile defense system after several progressive lawmakers threatened to derail a spending bill that would avert a government shutdown.

House Democrats on Tuesday introduced a short-term government funding bill that will fund the government through December this year as well as suspend the debt limit until December 2022. Congress needs to pass a continuing resolution to fund the government by Oct. 6, or else there will be a shutdown until lawmakers agree to resolve their differences and pass a spending bill.

The 94-page bill includes $28.6 billion for disaster aid; $6.3 billion to resettle Afghan refugees; and language requested by Republicans to have the Pentagon issue a report on equipment left behind in Afghanistan, Politico reported.

House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Chuck Schumer (D-N.Y.) announced Monday that the debt limit would be tied to the government funding bill, setting up a confrontation with Senate Republicans, who have vowed to oppose any increase in the debt limit until Democrats agree to cut government spending.

However, a provision in the Democratic bill to spend $1 billion funding Israel’s Iron Dome anti-missile defense system infuriated progressive lawmakers. According to multiple congressional reporters, progressives told House Democratic leaders they would vote against the bill unless the money for Israel was removed.

According to Politico’s Andrew Desiderio, the rebel group of lawmakers includes Reps. Alexandria Occasio-Cortez (D-N.Y.), Ilhan Omar (D-Minn.), and Rashida Tlaib (D-Mich.).

House Minority Leader Kevin McCarthy (R-Calif.) said on Tuesday that Democratic leaders gave in to the demands of progressives and removed the controversial language from the spending bill.

If either Democrats in the House or Republicans in the Senate decline to pass the continuing resolution, the government will shut down on Oct. 6. If the government shuts down, non-essential government employees will be furloughed and national park services and other federally managed agencies will be temporarily closed. The last government shutdown occurred in December 2018 under President Donald Trump and lasted for 35 days, the longest in U.S. history.

More important than a potential shutdown is the debt limit. Failure to increase the debt limit — the amount of money the government is allowed to borrow to cover its payments — would potentially mean Congress would be unable to make its interest payments on the debt. Treasury Secretary Janet Yellen has warned that failure to make the debt payment could “precipitate a historic financial crisis” and risk “widespread economic catastrophe.”

By withholding GOP votes for a debt limit increase, Democrats are blaming Republicans for risking government default.

“Addressing the debt limit is about meeting obligations the government has already made, like the bipartisan emergency COVID relief legislation from December as well as vital payments to Social Security recipients and our veterans,” Pelosi and Schumer wrote in a statement. “Furthermore, as the Administration warned last week, a reckless Republican-forced default could plunge the country into a recession.”

They are also accusing Republicans of hypocrisy for supporting a nearly $8 trillion increase in the national debt and raising the debt limit three times over the four years President Donald Trump was in office.

Republicans, meanwhile, are saying that Democrats can use budget reconciliation to circumvent a filibuster and pass an increase in the debt limit without their support.

“[Democrats] got the votes to keep us from defaulting, let’s see what they do,” Sen. Richard Shelby (R-Ala.) told Insider.





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U.S. House to vote Tuesday to fund gov’t through Dec. 3, raise debt limit

FILE PHOTO: The sun rises behind U.S. Capitol ahead of a weekend “Justice for J6” rally in Washington, U.S., September 13, 2021. REUTERS/Jonathan Ernst

September 21, 2021

WASHINGTON (Reuters) – The U.S. House of Representatives on Tuesday is scheduled to debate and vote on legislation to fund the federal government through Dec. 3 and raise the nation’s borrowing limit, according to the House Appropriations Committee.

(Reporting by Richard Cowan; Writing by Susan Heavey)





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House Democrats pull $1 billion in Israel Iron Dome funding to pass measure to fund government

House Democrats on Tuesday removed roughly $1 billion in funding for Israel’s Iron Dome defense system in a spending bill to keep the U.S. government fully funded through Dec. 3. 

Leaders of the Democrat-controlled chamber reportedly removed the money from the so-called “continuing resolution” to get enough voters from progressives in their conference to pass the measure, according to the Jerusalem Post

Congressional Republicans have vowed not to support the short-term spending measure, resulting in House Speaker Nancy Pelosi having to compromise with the conference’s dozens of progressives because she has only a three-seat majority.

House leadership said the Iron Dome funding will be included in an eventual bipartisan defense bill for fiscal 2022.

A spokesperson for House Appropriations Committee Chairwoman Rep. Rosa DeLauro, a Connecticut Democrat, said the Iron Dome funding “will be included in the final, bipartisan and bicameral” defense funding bill later this year, according to The Hill newspaper



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Former BoE policymaker Vlieghe joins hedge fund Element Capital

FILE PHOTO: Bank of England Monetary Policy Committee Member, Gertjan Vlieghe looks on during a Reuters Newsmaker event in London, Britain July 12, 2019. REUTERS/Henry Nicholls

September 20, 2021

LONDON (Reuters) – Former Bank of England policymaker Gertjan Vlieghe has agreed to join major U.S. hedge fund Element Capital as its chief economist, a representative for the company said on Monday.

Vlieghe served for six years on the BoE’s Monetary Policy Committee before stepping down at the end of August when his second three-year term as an external member expired. Prior to joining the MPC he had been a partner at hedge fund Brevan Howard.

Element Capital manages around $15 billion of assets. The fund closed to new investment in 2018 and returned $2 billion to investors early this year.

Vlieghe will be based in London and is expected to start his new role before the end of the year. News of his appointment was first reported by the Financial Times.

During his time as a policymaker, Vlieghe was generally fairly dovish and favoured cutting interest rates below zero if Britain’s economy weakened further.

A few months later as Britain’s economy continued to recover from the COVID-19 pandemic, he said the BoE was likely to raise rates in 2022.

In his final BoE speech https://www.bankofengland.co.uk/speech/2021/july/gertjan-vlieghe-speech-at-the-london-school-of-economics in July, Vlieghe highlighted the role of ageing populations and higher income inequality in pushing down global interest rates, as well as the limited capacity of central banks to ease financial conditions in future downturns.

(Reporting by David Milliken; editing by Michael Holden)





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Government Watchdog Calls on New York Pension Fund to Divest From Ben and Jerry’s Parent Company

A government watchdog group is calling on New York’s public pension fund to divest from Unilever, the parent company of Ben & Jerry’s, in response to the ice cream company’s decision to boycott Israel.

The National Legal and Policy Center asked New York state comptroller Thomas DiNapoli in a Thursday letter to “effect the immediate divestiture” of the state pension fund’s $73 million holdings in Unilever, arguing that the company has not taken sufficient steps to oppose anti-Semitism and the anti-Israel Boycott, Divestment, and Sanctions movement.

The letter comes after Arizona and New Jersey announced they would pull investments from Unilever, and as Florida and Illinois have said they are looking at taking similar action. DiNapoli said in July that Ben & Jerry’s boycott decision would make New York reconsider its investments with Unilever in the future.

“Unilever’s position that it is opposed to anti-Semitism is belied by the actions and associations of Anuradha Mittal, the chair of Ben & Jerry’s Board of Directors,” wrote NLPC chairman Peter Flaherty in the Sept. 16 letter. “Mittal is the architect of the ice cream company’s policy of ending sales in Israeli ‘occupied territories.’ Reportedly, Mittal also proposed a boycott of all of Israel. Her Twitter account has many anti-Israel tweets and contain specific endorsements of the Boycott, Divestment, Sanctions movement.”

Flaherty also noted that Mittal is a trustee of Ben & Jerry’s nonprofit arm, which issued $170,000 in grants to an unrelated nonprofit that Mittal also controls called the Oakland Institute. The arrangement could violate IRS rules against self-dealing, according to the NLPC, which filed a complaint with the IRS about the financial activities last month.

Mittal’s Oakland Institute has published defenses of Hezbollah and Hamas, the Washington Free Beacon reported in July.

In one article published by the Oakland Institute, former Green Party Senate candidate Todd Chretien argued that progressives should support Hezbollah during the Israel-Lebanon war in 2006.

“You do not have to agree with all of Hezbollah’s ideas to support their resistance to Israel,” Chretien wrote. “Condemning ‘both sides’ in the Middle East is just like condemning ‘both sides’ in the American Civil War. During the Civil War, with all its complications, one side fought for slavery and the other fought for emancipation. Today in the Middle East, one side fights to rob and pillage, the other seeks self-determination and dignity.”

The institute also directed a Ben & Jerry’s foundation grant to an organization called the Badil Resource Center for Palestinian Residency and Refugee Rights, which the European Union barred from receiving public funding last year for refusing to sign an anti-terror clause.

“If Unilever were truly opposed to anti-Semitism, it would have already severed its relationship with Mittal,” wrote Flaherty. “Moreover, Unilever’s anti-Israel bias is underscored by the fact that it has announced no intention to end ice cream sales in China, where it is a leading foreign brand.”

The New York comptroller’s office did not immediately respond to a request for comment.





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Tax Hike on Mostly Middle, Lower Classes Would Fund $3.5T Spending Spree

During his campaign for the presidency, President Biden promised to not raise taxes on any Americans making less than $400,000 a year.

If H0use Democrats are successful in passing their new tax proposal, that promise will soon be broken.

According to CNBC, the proposal is meant to pay for a healthy portion of their new $3.5 trillion spending plan, bringing in as much as $96 billion in revenue over the next decade.

A plan summary released by Democrats reveals that part of the tax plan would target tobacco and nicotine products, including cigarettes, e-cigarettes, small cigars, smokeless tobacco and roll-your-own tobacco.

Multiple studies have shown that the majority of the users of these products are low-income Americans.

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For example, research from the Truth Initiative found that 72 percent of tobacco smokers come from low-income communities.

Other peer-reviewed studies have found small cigar and roll-your-own tobacco consumers also tend to be disproportionately low-income.

Among U.S. adults, even e-cigarettes, despite their relative novelty, were found to be used most often by those classified as either “poor” or “near poor,” according to the Centers for Disease Control and Prevention.

Given these studies, it is safe to say that the majority of the $96 billion in revenue Democrats hope to take in will come from lower-income communities, not from those making over $400,000 a year, as Biden promised.

Even without the tobacco tax, however, many critics of the current administration have noted that Biden already subverted his promise by drastically raising the level of inflation, which American economist Milton Friedman famously described as “taxation without representation.”

As noted by Andy Puzder of Real Clear Politics on Aug. 12, Biden and the Democrats’ willingness to “pour massive amounts of dollars into the economy” is drastically lowering the value of the American dollar.

As the government inflates the economy by printing off more money, the average American’s savings become less and less valuable.

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Democrats Block Bills Prohibiting Tax Increases Until Unemployment, Inflation Return to Pre-COVID Levels

In order to combat this, Republican Reps. Kevin Hern of Oklahoma and Lloyd Smucker of Pennsylvania introduced amendments to the Democrats’ spending plan on Tuesday that would essentially block any new tax increases until inflation and unemployment returned to pre-pandemic levels.

“It’s not hard to understand that this is the wrong time for Democrats to shove one of the largest tax increases in American history on the American people that have not regained their strength from the brutal blow of COVID-19,” Hern said during the Tuesday hearing.

“Inflation is a tax on all Americans and it hurts working-class Americans the most.”

Democrats blocked the bills, meaning middle-class and lower-income Americans may soon be paying even more money to the federal government.





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Democrats Need Middle-Class Taxes to Fund Agenda

President Joe Biden delivers remarks on the June jobs report at the White House in Washington, D.C., July 2, 2021. (Kevin Lamarque/Reuters)

If Biden wants to fund his spending proposals, he can’t just tax the rich.

The progressive goal of moving toward a European-style social democracy is colliding with America’s anti-tax reality.

President Biden’s American Jobs Plan and American Families Plan proposed a total of $3.3 trillion in new taxes over the next decade to partially finance $4.5 trillion in new benefits. In response, the Senate has passed a $550 billion infrastructure bill with few legitimate pay-fors, and Congress has pledged a $3.5 trillion reconciliation bill that would add up to $1.75 trillion in new deficits.

Yet the president and Congress are hitting the mathematical, economic, and political limits of the progressives’ long-standing promise to finance European spending levels on the backs of the very rich.

Biden was elected on the most aggressive tax-the-rich platform of any president since Franklin Roosevelt. His proposed $1.8 trillion in new corporate taxes (five times as large as the tax cuts they received in 2017) includes returning the U.S. corporate-tax rate to the highest in the OECD. His campaign and current proposals include $1.5 trillion in tax increases for families earning over $400,000 annually — a combination of income and payroll taxes that would bring marginal tax rates (including federal, state, and payroll taxes) above 62 percent in some states.

Most of these new upper-income and corporate-tax proposals are already facing increasing resistance from congressional Democrats. They note that the huge tax hike on corporations’ overseas earnings would place American multinational companies at a severe competitive disadvantage, and large new taxes on investors would be largely punitive and unworkable. The promised $780 billion in tax-enforcement savings far exceeds what the Congressional Budget Office deems plausible.

Still, let’s pretend for the sake of argument that the president achieved full progressive “tax the rich” nirvana. In addition to his $3.3 trillion in proposed taxes on corporations, investors, and upper-income families, let’s add the Biden campaign proposals to cap the value of tax deductions at 28 percent and reimpose the full Social Security tax on wages over $400,000. For good measure, let’s also hit the wealthy with Senator Sanders’s 8 percent wealth tax and 77 percent estate-tax rate, Representative Ocasio-Cortez’s 70 percent income-tax rate, and progressive Wall Street financial and bank-tax proposals. Altogether, that combined $7.9 trillion tax increase — generously assuming the economy continues humming along despite combined marginal tax rates approaching 100 percent for some families — would barely cover the sum of the President’s $4.5 trillion in current proposals plus his $3 trillion in leftover campaign pledges across health care, Social Security, education, and elsewhere.

Most important, using up all the “tax the rich” options for the president’s new proposals would leave the wealthy unable to close the underlying — and unsustainable — $112 trillion in baseline deficits over the next 30 years, or finance progressive fantasies such as Medicare for All and the Green New Deal.  Which means — just as Presidents Clinton and Obama discovered — promises of no new middle-class taxes will likely be revisited sooner rather than later.

Progressives are already lining up the arguments. They tell us that the middle class wants aggressive new spending on health care, education, infrastructure, family leave, child tax credits, and Social Security. The $11,400 in total pandemic relief checks for the typical family of four means they won’t even notice a middle-class tax increase. Two decades of middle-class tax relief has reduced the middle-earning quintile family’s average federal income tax rate to 0.5 percent (10 percent including payroll and other taxes). A value-added tax (essentially a complicated form of a national sales tax) will be hidden in higher prices.

Polling, legislative history, and electoral history all converge on the reality that Americans support raising taxes only for those wealthier than themselves (in part because they underestimate the current tax rates paid by the wealthy).

In fact, a 2019 Harris poll revealed that, while 59 percent of registered voters support imposing a 70 percent tax rate on annual incomes above $10 million, that figure drops to 40 percent when respondents are told to assume they had won a $30 million lottery jackpot and would therefore be subject to the higher tax rates. Even Democratic voters split to roughly 50-50 on this policy if it includes their own mega-millions wealth.

More broadly, polls have long shown less than half (and sometimes far less) of Americans are willing to pay much higher taxes, even for more government services. And when the new taxes are specified, support often drops further. For example, despite the general popularity of fighting climate change, a 2019 survey showed that less than half of Americans are willing to pay even $2 per month in new taxes or utility costs as part of a climate agenda (and only a quarter of Americans would pay $10 per month). Polls by the Associated Press and Reuters produced nearly identical results. In fact, the mere possibility of new taxes has reduced support for spending trillions on the Green New Deal to 30 percent. Virtue signaling is cheap; taxes are not.

Similarly, support for Medicare for All falls when respondents are reminded that it would require new taxes. Just wait until they discover that fully financing the proposal would require trading their premiums and deductibles for a 25 percentage-point increase in the payroll tax.

This tax resistance is not limited to conservatives and moderates. Even two-thirds of Bernie Sanders supporters would not be willing to accept more than $1,000 in new taxes to ensure universal health coverage or free public-college tuition. The revolution is acceptable only if funded by “the billionayas,” not “the people.”

Democratic Congressional leaders recognize that their coalition of upper-income coastal professionals (buried in mortgage, property-tax, and child-care costs) and young urban hipsters (buried in student loans and high rent) are not eager to surrender more money to historic tax increases. That is why the Democrats’ most aggressive repeal votes on the 2017 tax cuts have been to restore the full State and Local Tax (SALT) deduction. The last Democratic Congress showed little interest in reversing the law’s tax cuts for estates or corporations. But they scheduled House and Senate votes to undo the one part of the law that raised taxes on their upper-income, coastal voter base.

Republicans would love nothing more than for Democrats to break their promise on middle-class taxes. The conservative movement may seem dispirited, disorganized, and distracted by symbolic issues. But nothing unifies the Right like going to war against Democratic middle-class tax increases. Conservative think tanks, grassroots organizations, and lobbyists are designed specifically to eviscerate middle-class tax-increase proposals with the same precision and ruthlessness that the progressive political infrastructure employs against threats to Social Security and Medicare. There will be TV blitzes, interactive tax calculators, and warnings that a proposed 2 percent value-added tax (costing perhaps $700 for the typical family) would be merely a down payment on the 15 to 25 percent VAT rates that prevail in Europe. Vulnerable Democratic House members from swing districts — whose support would be required given their party’s razor-thin majority — would be committing political suicide by voting yes.

These outcomes may sound hyperbolic only because many of today’s tax advocates are too young to remember why Democrats long ago stopped embracing middle-class tax hikes. In 1993, the last time Democrats proposed broad-based middle-class taxes (breaking President Clinton’s familiar promise of taxing only the rich), they lost 54 House seats and eight Senate seats the following year. All it took was some gas taxes, as well as income and payroll tax increases for upper-middle class families and seniors. President Clinton also proposed a modest BTU energy tax that would be passed on to consumers, and when Democratic representative Marjorie Margolies Mezvinsky cast the deciding House vote in favor, House Republicans chanted “’Bye Marjorie!” (she indeed lost reelection the following year). Senate Democrats then noted the political headwinds and dropped the BTU tax proposal without a vote. Lawmakers still refer to the pointless sacrifice of taking a career-ending vote for an unpopular proposal that ultimately does not even get enacted as “getting BTU’d.”

Temporarily learning the lesson, President Obama was elected promising no new taxes for families earning under $250,000. He immediately broke the pledge by more than doubling tobacco taxes, and then imposed several indirect taxes on the middle class to finance Obamacare. The most controversial tax — a 40 percent excise tax on high-cost health plans known as the “Cadillac” tax — received such an immediate public backlash that Congress never allowed it to be implemented, voting to repeatedly delay it before killing it altogether in 2019. Several other Obamacare taxes were also occasionally delayed and then ultimately repealed. Democrats lost the House in 2010 and the Senate in 2014.

For the most part, Democratic politicians have rebuilt their brand by promising to tax only “the rich.” Perhaps each generation of Democrats has to propose middle-class tax increases once (and then lose their congressional majority) to learn for themselves why previous generations rarely tried it a second time.

For better or worse, pandering to the middle class is the only route to electoral success. Republicans cut their taxes, and Democrats hand them spending. Raising middle-class taxes is as politically perilous as cutting their spending. Which means Democrats face a severe budget-math problem that can otherwise be addressed by either scaling back their voracious spending appetite or engaging in a reckless and unprecedented peacetime borrowing spree. In the meantime, dispirited Republicans are begging for another middle-class tax increase battle to unite around.





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Combined Social Security Trust Fund only 13 years away from insolvency, trustees report

The combined Social Security Trust Fund is only 13 years away from insolvency, according to the latest annual report published by its trustees, because of large, rising imbalances and deteriorating finances, among other factors. 

Created by FDR’s New Deal, the Old-Age and Survivors Insurance (OASI) Trust Fund — the nation’s largest social welfare program — will deplete its reserves by 2033, while the Social Security Disability Insurance (SSDI) trust fund will become insolvent by 2057. These two funds combined are expected to exhaust their reserves by 2034, when individuals currently age 54 will reach their full retirement age. Once the Social Security Trust Fund becomes insolvent, all beneficiaries would see their benefits cut by 22%, unless Congress implemented policy changes before then.

“Social Security cannot guarantee full benefits to current retirees under current law,” warns fiscal policy watchdog group the Committee for a Responsible Federal Budget. 

As of Aug. 31, 2020, the OASDI program provided payments to roughly 65 million people, having substantially expanded beyond providing retirement benefits to those who paid into the system as it was first designed to do. In 2020, 49 million retired workers and dependents of retired workers received Social Security benefits, in addition to 6 million survivors of deceased workers, and 10 million disabled workers and dependents of disabled workers. 

In April 2019, nearly a year before state shutdowns began last year, the trustees warned that Social Security’s total costs would exceed its income in 2020 for the first time since 1982. Without policy changes, costs were expected to exceed income every year thereafter, they warned. 

Based on 2020 data, the trustees warned that Social Security’s total cost “is projected to be higher than its total income in 2021 and all later years,” running cash deficits of $2.4 trillion over the next decade.

While the program’s total cost has exceeded its non-interest income since 2010, interest earnings bumped up total income to surpass total cost. In 2020, the total cost of Social Security was $1,107 billion, with a total income of $1,118 billion (comprised of $1,042 billion in non-interest income and $76 billion in interest earnings). 

While Social Security has generally accounted for the largest chunk of the federal budget, in 2020 income security payments exceeded Social Security payouts after the federal government began providing payments to states and individuals to offset losses due to state pandemic shutdowns imposed by governors. Over a course of nine months, the federal government provided weekly additional federal unemployment payments, in addition to direct cash payments in the form of stimulus checks. These payments were on top of federal retirement and disability payments, increased funding for food and nutrition payments, and rental payment assistance. States also received billions in federal bailouts through the CARES Act.

The federal government’s emergency income security efforts totaled $1.3 trillion, or 19% of the budget in 2020, compared to Social Security’s $1.1 trillion, or 17%. Meanwhile, the national debt has grown to almost $29 trillion, and the national deficit to $3.13 trillion, meaning the government spent more than it received in revenue as a result of less people working — lost workers who, combined with their employers, would have otherwise paid more in income and payroll taxes.

“Employment, earnings, interest rates, and GDP dropped substantially in the second calendar quarter of 2020 and are assumed to rise gradually thereafter toward recovery by 2023,” the report states, “with the level of worker productivity and thus GDP assumed to be permanently lowered by 1 percent. In addition, the pandemic and recession are assumed to lead to elevated mortality rates over the period 2020 through 2023 and delays in births and immigration in the near term. Taken together, these data and assumptions cause the reserve depletion date.”

In 2020, more than half of the entire population in the United States — an estimated 175 million people — had their earnings covered by Social Security and paid payroll taxes on those earnings, the report states. 

But unfunded Social Security benefits — what the government owes and has not paid — adds another $41.2 trillion to the national debt, Chicago-based Truth in Accounting calculates in its annual analysis of the federal budget.

The national debt is around $123 trillion — more than four times what the Treasury Department reports — when accounting for factors like the amounts owed in unfunded Social Security and Medicare benefits, Truth in Accounting argues.

“The federal government argues that the massive unfunded obligations in Social Security should not be a liability on its balance sheet because the government controls the law, and can change it at any time,” explained Bill Bergman, director of research at TIA. “On that reasoning, the government should stop including Social Security as a ‘mandatory’ program in the federal budget.”

In response to fears that the program is going bankrupt, the Council for Retirement Security says Social Security “can’t” and “won’t” go bankrupt. Rather, “it’s insolvent,” says the group. “Insolvency is when a person or entity is unable to pay debts with incoming revenue. This might sound a whole lot like bankruptcy, but you can be insolvent long before you declare bankruptcy. Insolvency just means your income doesn’t keep up with your debts and you’re operating at a loss.”



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Replenishing New York’s unemployment insurance trust fund a ‘serious challenge,’ comptroller says

With a $9 billion tab to the federal government in play, New York state faces choppy waters ahead in rebuilding the exhausted trust fund used to pay unemployment insurance benefits, Comptroller Thomas DiNapoli said recently.

In a new report this week , DiNapoli sounded an urgent call to state lawmakers to seek additional federal support or face the prospect of charging employers higher UI rates to replenish the fund and pay the debt owed to Washington, D.C.

The massive uptick in unemployment claims across the state quickly depleted the trust fund’s balance in the early months of the pandemic in 2020. To make good on the claims, the state took out a loan from the federal government.

“The pandemic put many New Yorkers out of work and forced the state to borrow heavily from the federal government to meet their urgent unemployment claims,” DiNapoli said in a statement.

As 2021 has progressed, the state has slowly chipped away at its debt to the federal government. In March, the balance hovered $10.2 billion, meaning $1.2 billion has been paid back.

DiNapoli said the state is faced with the two-pronged realities of repaying the remaining federal balance and replenishing the existing depleted trust fund.

“The obligation to pay back this money and rebuild the trust fund balance presents a serious challenge for the state and businesses struggling to recover from the pandemic,” DiNapoli said. “Action is needed to avoid hiking costs for New York businesses and slowing the state’s economic recovery.”

The state has already taken measures to address the dual challenges, which has resulted in higher payouts from employers.

New York state’s UI rates in 2021 increased to a range of 2.1% to 9.9%. Last year, the state’s UI rates were 0.6% to 7.9%. Several factors play into the amount employers pay for UI, including length of time as a liable employer and prior tax contributions into the trust fund.

While the unexpected swiftness of the pandemic took an immediate toll on the trust fund’s health a year-and-a-half ago, DiNapoli in his report asserted the state has historically been ill-equipped to deal with sharp increases in UI claims.

In early 2020, months before the pandemic hit, the U.S. Department of Labor singled out 22 states and territories for having UI trust fund balances below recommendations for maintaining solvency. New York, with a balance at the time of $2.65 billion, was on the list.

In a list of forward-looking recommendations, DiNapoli in the report encouraged lawmakers to seek further federal relief as mitigation to a slowed economic recovery.

“Specifically, the federal government could extend interest waivers that expired on Sept. 6, 2021,” DiNapoli wrote in the report. “This would avoid interest assessments that would begin to be assessed in 2021.”

Other recommendations in DiNapoli’s report include monitoring COVID-19 relief programs that could potentially strengthen the trust fund balance.

Additionally, DiNapoli is recommending against lawmakers taking out any new debt. For two consecutive years, the state’s debt limits have been waived.

“These practices have been cited by bond rating agencies as counter to best practices and detrimental to the state’s credit rating and fiscal outlook,” the report states.





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Norwegian Pension Fund Boycotts Israel While Investing in Companies Linked to Chinese Slave Labor 

A Norwegian pension fund that recently announced it planned to blacklist Israeli companies in the West Bank has poured hundreds of millions into Chinese companies linked to slave labor and Russian entities on the U.S. sanctions list.

Norges Bank’s Government Pension Fund Global, Norway’s largest pension fund, placed several Israeli companies in the West Bank on its “excluded companies” list earlier this month, citing “serious infringements of the rights of the individual in situations of war or conflict in connection with the construction of roads linked to Israeli settlements in the West Bank.”

At the same time, Norges held over $150 million in investments in at least seven companies that operated in or are suspected of using forced labor from the Xinjiang province of China, where Uyghur Muslims face human rights abuses, according to the fund’s most recent financial disclosures from last December. And the fund also held $1.8 billion in shares in at least six Russian energy companies and banks that are under U.S. financial restrictions or sanctions.

The fund’s investments raise questions about its decision-making process for divestments. While Norges Bank cut ties with Israeli companies, it has yet to bar controversial Russian and Chinese companies from future investments. Anti-Israel boycotts are growing more common in progressive circles. Earlier this year, Ben & Jerry’s announced it was ending its operations in the West Bank, prompting a wave of public backlash and the threat of financial penalties against the ice cream company from several U.S. states.

“The decisions made by the Executive Board of Norges Bank, announced last week, were made based on recommendations from the Council on Ethics,” said Line Aaltvedt, a spokesman for Norges Bank. “The Ministry of Finance has established the independent Council on Ethics to evaluate whether or not the fund’s investments in specified companies is consistent with its Ethical Guidelines.”

Norges Bank did not indicate whether it still holds shares in Chinese companies linked to slave labor or Russian firms under U.S. sanctions. The fund said last year that it would be reviewing its investments in companies that are linked to forced labor in Xinjiang, but the entities are not included on the fund’s list of “excluded companies,” which was updated earlier this month.

The list is overseen and approved by the fund’s executive board, which acts based on formal recommendations from the Council on Ethics. Such recommendations are kept private until the bank unloads its shares.

According to Norges Bank’s most recent investment disclosure from last December, the pension fund held $28 million in investments in Daqo New Energy Corp., whose Xinjiang subsidiary was blacklisted by the U.S. Department of Commerce this summer for “accepting or utilizing forced labor in the implementation of the People’s Republic of China’s campaign of repression against Muslim minority groups.” The fund also held a $35 million stake in JinkoSolar Holding Co. Ltd., a solar panel company that is supplied by Daqo—over 1 percent of JinkoSolar’s shares.

The Government Pension Fund Global listed a $30 million investment in GCL-Poly Energy Holdings Ltd., a company that was also designated by the Commerce Department.

In addition, it held stakes in several Xinjiang-based manufacturers, including Xinjiang Goldwind Science & Technology, which has been accused of supporting forced Uyghur labor and has come under scrutiny for its work with Apple.

Other Government Pension Fund Global investments have been subject to U.S. sanctions. This includes a subsidiary of China’s state-owned Aviation Industry Corporation of China, which produces military aircraft and was placed on an investment blacklist by the U.S. Department of Defense.

The fund also disclosed stakes in subsidiaries of Russia’s Lukoil, Novatek, Surgutneftegas, Sberbank, and Gazprom, which have been sanctioned by the Treasury Department related to their work in the Russian energy sector and oil production.

Johan H. Andresen, chair of the fund’s Council on Ethics, told Reuters in March that he was “concerned that some of our companies in the fund may make use of this [forced] labour” in Xinjiang.

“If we were to make a recommendation [to exclude these companies from investments] it would be in the first half of this year,” Andresen told Reuters.

The Chinese foreign ministry denied that it persecutes Uyghurs and urged Norway to “respect the facts” and avoid “politicizing economic trade and cooperation,” according to Reuters.





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