Massive Stimulus, Infrastructure Package Update

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mckevin.com life hey everyone me kevin

here with a complete update on the next

infrastructure and stimulus package we

have a lot to cover so let's get right

into it first senate majority leader

chuck schumer says he wants to quote

move full speed ahead well apparently

moving full speed ahead to congress is

the senate coming back to work today for

the first time in a month

and they're only coming back to work

until wednesday because then they're

going to take thursday and friday off

and then the house of representatives is

still going to take this entire week off

and they'll be back next monday all of

this right before

we potentially have to shut the

government down on october 1st and try

to get not just the debt ceiling handle

to prevent a government shutdown but

deal with four and a half trillion

dollars worth of stimulus and

infrastructure spending

you know let me just put it this way for

a moment if i ran a business the way

congress runs our government i would be

bankrupt

i'm just putting it out there okay let's

get into what we know is going on so

chuck schumer says we'll have the

infrastructure package for the three and

a half trillion dollars since the one

trillion dollar heart infrastructure

package is already passed in the senate

that's just waiting on nancy pelosi and

the house of representatives to vote on

which they're kind of holding hostage

even though they said they wouldn't

until the three and a half trillion

dollar package gets completed which is

not even written yet but anyway chuck

schumer believes that he'll have the

legislative text for this package by

wednesday

that would be september 15th joe manchin

says this is unlikely and i tend to

agree with joe manchin congress is

generally not on time with these sorts

of things

what we currently do know is there are a

lot of negotiations going on in terms of

what is going to be included in this

three and a half trillion dollar

infrastructure package let's go into

some of the changes including changes to

taxation and stimulus money first senior

democrats are considering sending checks

of six hundred to one thousand dollars

to new medicare recipients or existing

medicare recipients that's because new

medicare benefits like dental vision and

hearing may be included but those might

not actually be available via medicare

for three to five years so they figure

let's just send a check in the meantime

that is just a discussion right now

also being discussed is paid leave for

workers with recent wages who would be

eligible for up to 12 weeks of paid

family leave and paid medical leave

there would be a new public program

available through states and certain

private employers for this we also know

that the child tax credit of two hundred

fifty dollars per month for children

under eighteen and three hundred dollars

per month for children under six is only

available for one year payments will be

paid or made to you between july 1st and

the end of december if you qualify

income wise and then the other six

months will be available on your 2021

tax return but this 3.5 trillion dollar

bill could extend this credit for up to

four to five years which literally means

an extra three thousand to thirty six

hundred dollars per child per year for

the next four to five years that's some

juicy stimulus right there

of course aoc is already applauding this

and calling for this suggesting that

this will be a great opportunity to lift

children and families out of poverty in

essence first those under a certain

income threshold and with children

within these ages this is a form of

universal basic income it's more of a

universal child income though

additionally there are discussions to

lower the cost of prescription drug

prices for medicare

there are also drafts to that that

currently were supposed to at least this

was the belief were supposed to cut some

benefits to the oil and gas industry to

remove some tax breaks that they're

getting but apparently existing drafts

do not include any restrictions of

subsidies to the oil and gas industry

this was a little bit surprising and

environmentalists are unhappy about this

there was a plan originally by the

finance committee that would have

rescinded or modified more than a dozen

oil focused provisions with the goal of

raising like 32 billion over the next 10

years and this is in line with what

biden said he would push for which is no

more fossil fuel subsidies but

apparently right now that is not a

priority and not being included instead

what appears to be a priority is raising

the top corporate tax rate or the

corporate tax rate from 21 percent to

26.5 percent this by the way is

substantially higher than we were

expecting this to come in at we were

expecting that joe biden would be

pushing as he said he was pushing for

somewhere around a 28 corporate tax rate

and now we've uh and sort of wall street

has come to this expectation that well

if we're at 21 and biden wants 28

we'll probably end up with something

like 24 and a half percent so 26.5 is

more than what china charges its

corporations and it's it's a lot higher

than expected so wall street is

understandably a little upset about this

we've got a little bit of a red day in

the market today potentially or at least

in part due to some of these

negotiations there's also talk about

raising the capital gains tax rates

up from 20

to 25

instead of raising taxes on capital

gains long-term capital gains usually

taxed at 20

uh instead of taxing them at the full

39.6 basically removing that capital tax

benefit so a capital gains tax benefit

so in other words capital gains taxes

might be going up for some individuals

who make more of money generally over

four hundred thousand dollars uh but

only from 20 to 25 instead of from 20 to

39.6

there's also now talk about a potential

three percent surcharge on individuals

making more than five million dollars

per year so if you made five million

dollars per year or let's say you made

an extra five million dollars per year

since it would be taxed on the amount

over let's say you made uh instead of

five million you made 10 million dollars

well you would pay an extra 150 000 in

taxes or three percent uh on that extra

money that you made

we are also expecting to raise 900

billion dollars from this increase in

the corporate tax

rate or these changes in the corporate

tax rate we're expecting to raise one

trillion dollars from taxing individuals

more highly and we also

maintain and this is what we're seeing

in discussions right now that there's a

big goal of not raising taxes on anyone

making under four hundred thousand

dollars now missing so far is lifting

the limit on the salt tax deductions

which there are a lot of folks in the

house of representatives and the senate

demanding changes to the salt tax

deductions so in case you don't remember

the salt tax deduction if you're not

familiar with it stands for state and

local tax deductions it's currently

capped at ten thousand dollars never

used to be but it currently is capped at

ten thousand dollars and it limits the

amount of money you could write off on

your federal taxes for state taxes and

things like property taxes so high

income tax state or high property tax

states like texas or california

california for property or for income

taxes and taxes for property taxes

these states would benefit by removing

the cap

of the salt tax deduction

so we do see a lot of talk about this

right now for example we've got

representative swazi saying i've been

consistent for six months no salt no

deal so a lot of excitement about trying

to get that salt tax limit removed but

right now just talk and so far not in

any drafts that we're seeing

now it is worth mentioning that there is

currently a petition for a two thousand

dollar a per month stimulus check that's

circulating online it has almost three

million signatures but right now

congress hasn't been mentioning any kind

of new stimulus check outside of that

child attacks a credit though if you had

a baby this year or you adopted a child

this year you could get up to fourteen

hundred dollars for that child because

remember our 1400 stimulus check hit

this year for the 2021 tax here which

means you'd be able to claim that 1400

if you're within the income thresholds

on your taxes when you file in 2021.

california is also sending a 600 vote

buying a check oh sorry that says golden

state stimulus check to those uh in

california who qualify

notable exceptions to those who qualify

are people on social security benefits

who do not show income other than social

security and they're being left out of

that california stimulus

we also have eight thousand dollars of a

child and dependent a tax credit that

you can still take advantage of keep in

mind this part is already law so if you

spend money on children or dependents

you can write off your expenses up to

sixteen thousand dollars for two or more

dependents and then take a tax credit up

to eight thousand dollars it's a

refundable tax credit which means you

don't even have to pay a full eight

thousand dollars in taxes to receive it

and the phase out is currently set for

125 000

also we've got elizabeth warren still

calling for 50 000 in student debt

forgiveness to help close the racial

wealth gap however so far no student at

debt forgiveness is included in this

package what instead we do have are

changes to taxation for tobacco and

cryptocurrency and intended to help pay

for the social infrastructure package

cryptocurrency taxes are might include

things like know your customer rules

which could be very difficult for

certain brokerages to comply with and

the entire goal of a kyc or know your

customer is really to reduce fraud but

also to make sure people pay taxes

there's even talk about closing the wash

sale loopholes on cryptocurrencies which

i will talk about in a separate video

we also have to talk about the debt

limit and the shutdown that is a

potential by october 1st we are

expecting a stop gap measure to keep the

government funded through probably the

first or second week of december however

republicans like mitch mcconnell are

saying you know what shut down the

government and the reason is mitch

mcconnell is saying look we passed the

one trillion dollar infrastructure

package for hard infrastructure in good

faith that you would sign it without

holding it hostage to the 3.5 trillion

dollar package well now you're holding

it hostage to the 3.5 trillion dollar

package and so if you're going to hold

that hostage fine

we won't help you pass an extension to

the debt ceiling and so we're just going

to sandbag this process until we we get

what we want which is a smaller or

potentially no 3.5 trillion dollar

process or

infrastructure package so expect some

kind of showdown to occur over this

shutdown debate keep in mind the

government is funded through september

30th the treasury department currently

says we will run out of money in the

middle of october or early november if

we do not raise the debt limit or the

debt ceiling now it is worth mentioning

that joe manchin says quote it concerns

me very very much that we might be

challenged on inflation and debt no one

is even talking about it you haven't

heard a word about that referring to the

debt

now it's also worth mentioning that uh

there is a lot of talk right now about

including almost with certainty

universal pre-k and two years of free

community college in this package this

is something that has regularly come up

in almost every discussion regarding the

infrastructure package so we do expect

to see universal pre-k for three and

four-year-olds and two years of free

community college we might see a two

percent excise tax on stock buybacks by

corporations

we are going to see or we're expecting

to see as part of this package 135

billion dollars for agricultural and

forestry 332 billion dollars for banking

including money for public housing 198

billion dollars for clean energy

67 billion dollars for environmental and

public work projects

21 billion of which by the way going to

pop pollution cleanup like dealing with

old wells and mines like oil wells

1.8 trillion dollars going to finance

which will include things like lowering

the cost of prescription drugs and other

benefits like the child tax credit 100

i'm sorry 726 billion dollars for health

and labor and education including that

free preschool we talked about and this

will also include expansion of the pell

grant program for colleges more funding

for historically black colleges and

universities and that as we said

universal pre-k for three and

four-year-olds 37 billion dollars for

electrifying the federal vehicle fleet

rehabbing buildings cyber securities

greener material purchases 107 billion

dollars to speed up illegal immigration

20.5 billion dollars for the department

of indian affairs 25 billion for small

businesses which keep in mind joe biden

just mentioned that he's

increasing the size of the eidl loans

you can get those are not the forgivable

ones like the ppp which if you need to

get your ppp loan forgiven you can go to

medkevin.com forgiveness and that should

redirect you to the sba portal on that

you're looking for an sba forgiveness

portal although check with your lender

they might not allow direct forgiveness

so it gets a little complicated

hopefully your ppp does allow direct

forgiveness but changes to these eidl

loans would be good for businesses who

need lower cost financing or need to

refinance so do check out the eidl if

you want to work with the sba

they've made the process a lot easier

than it used to be 18 billion going to

the department of veterans affairs 83

billion dollars going to the commerce

committee for technology transportation

research and economic development and of

course many of these specific details

being worked out and supposedly being

written into a bill by the 15th of this

month which is in two days

and so in theory this is going to get

done we'll see if it actually does uh we

are seeing about 400 uh 450 billion

dollars in child care of related funding

and a lot of this has to do with not

just that pre-kindergarten but also

higher wages to caregivers a lot of this

really fluid but uh it's worth noting

that today only one in six children

eligible for some of these benefits or

subsidies that come from the government

actually get their benefits which is

really unfortunate now what we're not

seeing this package so far are a major

employment benefits other than the paid

leave and medical leave provisions and

we're not seeing any kind of changes to

the way states administer the eviction

money help or rent relief help a lot of

states are really punting on

distributing rental relief california

has 5.2 billion dollars they've only

given about seven percent attendance

which is an utter disgrace

in terms of supporters and detractors

it's worth mentioning that joe manchin

says he's for putting the guard rails up

that we don't need to rush into this

deadlines or that this we don't have to

rush into this particular deadline

coming up

and that job mansion really would rather

see the bill get cut by somewhere around

60 and pass a substantially smaller bill

potentially even under two trillion

dollars to this other senators have said

that 3.5 trillion dollars is really the

ceiling for the bill and that maybe two

trillion dollars is the floor and so

somewhere between here is where a

negotiation is going to occur especially

since you do have folks like kirsten

cinema also expressing concerns over the

cost although it's not just those two

there are plenty of others as well house

democrats like nancy pelosi and of

course joe biden national democrats do

believe that they're going to get these

moderate democrats to cave towards the

middle and end up passing this

legislation kevin brady says quote this

is a republican our economy will only

get worse if democrats succeed in

ramming through trillions of dollars in

spending and tax hikes

bernie sanders says the money isn't a

problem he says what the problem is is

poor children and that we need to help

the people who need help poor children

poor families help everyone who needs

help

it uh it is something that i do like to

bring up though that both bernie sanders

and joe manchin have drawn red lines

before but both of them have caved

before for example bernie sanders made a

big stink about the 600 stimulus check

being too small and that there was no

way he was going to vote for it we

covered this live while he was

protesting it and then he ended up after

making his loud stink and putting up his

posters and everything voting with the

group and going for the 600 stimulus

check

this has led to a lot these sorts of

hard-line discussions though have really

brought up talk again about threats to

ending the filibuster like senator alex

padilla who was appointed by a senator

i'm sorry governor newsom appointed alex

padilla

alex padilla in california said that

quote i think if we're not successful in

getting 10 republicans to vote along

with the 3.5 trillion infrastructure

package then we'll have no choice but to

revisit the rules of the senate in other

words implying that they will eliminate

the filibuster and start passing bills

with just 51 votes for all bills of

course this is a classic threat that we

hear from biden and others though we

believe that ending the filibuster would

be unlikely because

that'll go both ways and the filibuster

now if republicans get strong power

again in the senate they'll have

complete control with just 51 votes

again and so this is that delicate

balance that's occurring between the

saber-rattling we see between democrats

and republicans and so this gives you a

thorough catch-up of all the madness

that's going on i don't expect the

actual text by wednesday i expect we're

going to have potentially a temporary

shutdown of the government and a lot of

uncertainty because of this i don't

believe that inflation is a big issue in

this negotiation because we're seeing

inflection is starting to at least

inflect downwards though tomorrow on

september 14th we'll get a cpi data

release and so we'll see where we stand

are we right is inflection or is

inflation inflecting downwards or are we

potentially overinflating again are we

having too much inflation and would this

bill just contribute to those issues so

tomorrow could be a big tell in terms of

which direction the infrastructure

negotiation goes but hey stay tuned

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