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Why the employee retention credit is an overlooked stimulus issue

D.C. remains deadlocked on the next stimulus package, days after extended unemployment benefits ended and days before PPP is set to expire.

Where it stands: One unresolved issue that hasn't gotten enough attention is a proposed expansion of the employee retention credit, which could have a significant impact for companies that have experienced severe revenue declines.


The backdrop: The CARES Act established the initial version, a refundable payroll tax credit that could cover up to $5,000 per employee, for businesses that had suffered at least 50% revenue loss.

  • Caveat #1: If a company received a PPP loan, it wasn't eligible.
  • Caveat #2: If a company had more than 100 employees who remained working full time, including remotely, it wasn't eligible.
  • Caveat conclusion: For most companies, this credit wasn't too valuable.

What's new: Both new stimulus plans — HEROES Act (D), HEALS Act (R) — are much more generous.

  • HEROES increases the credit to up to $36k per employee (or up to 80% of wages paid per retained employee), with sliding-scale revenue eligibility for companies with revenue drop of between 10% and 50%. It increases the limit on working employees to 1,500.
  • HEALS increases the credit to up to $30k per employee (or up to 65% of wages paid per retained employee), with the revenue decline threshold cut to 25%. It increases the limit on working employees to 500.
  • Neither proposal restricts companies that received PPP loans, although they're silent on companies that participate in a possible PPP extension.

The bottom line: There are still partisan differences, but both sides are moving in the same direction on this, which suggests more flexibility than on thornier issues like school funding and liability protections.

Naftali Bennett: How Israel's new PM plans to handle relations with Biden

New Israeli Prime Minister Naftali Bennett is signaling he intends to move cautiously at first on issues like Iran and the Israeli-Palestinian conflict, an approach that will suit the Biden administration just fine.

Why it matters: Bennett is aiming to avoid an early confrontation with the U.S., and his fragile and ideologically diverse government will have a hard time taking any groundbreaking steps on foreign policy in the first place.

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Biden: Consequences for Russia would be "devastating" if opposition leader Navalny dies

President Biden said he warned Russian President Vladimir Putin during Wednesday's summit that if jailed Russian opposition leader Alexei Navalny dies in prison, the consequences "would be devastating for Russia."

Why it matters: Although the White House had previously warned the Russian government over Navalny's imprisonment, Biden personally delivered the message to Putin on Wednesday.

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Republican Leader Kevin McCarthy will support Juneteenth bill

House Republican Leader Kevin McCarthy will support a bill to make Juneteenth a federal holiday when it comes to the floor later Wednesday, his office tells Axios.

Why it matters: The House is slated to pass a bill making June 19 — Juneteenth — a federal holiday that memorializes when the last enslaved people in Texas learned about their freedom under the Emancipation Proclamation.

  • It will then go to President Biden for his signature just days before the occasion and one day after the Senate passed the bill unanimously.

Biden says he raised human rights issues in Putin summit

President Biden said he raised issues including nuclear arms control, cybersecurity, election interference and violations of human rights in Russia in his meeting with Vladimir Putin in Geneva on Tuesday.

What he's saying: "My agenda is not against Russia or anybody else. It's for the American people," Biden said at a press conference following the summit, which was shorter than expected.

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Putin calls talks with Biden "constructive," says ambassadors will return to posts

Russian President Vladimir Putin of Russia said Wednesday that his summit with President Biden was "constructive," and that the countries had agreed their ambassadors would imminently return to their posts in Moscow and Washington.

What he's saying: "Many of our joint positions are divergent but nevertheless I think both sides manifested a determination to try and understand each other and try and converge our positions," Putin told reporters at a press conference immediately following the meetings.

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Southwest heat wave intensifies, 40 million likely to see 100-degree temperatures

A punishing and long-enduring heat wave is intensifying in parts of the West and Southwest, with heat warnings and advisories in effect across seven states Wednesday. The heat will not relent until late in the weekend.

Threat level: In the coming days, 40 million are likely to see temperatures reach or exceed 100 degrees.

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Lordstown Motors: A tale of hubris, political pandering and regulatory failure

Lordstown Motors is the quintessential business fiasco. Equal parts hubris, political pandering and regulatory failure.

Why it matters: There's no indication that anyone will learn their lesson, except perhaps for some random retail investors who didn't diversify.

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GM boosts investment in electric, autonomous vehicles by $8 billion

General Motors plans to boost its cumulative investment in electric and autonomous vehicles to $35 billion from 2020-2025, a significant jump from a $27 billion target.

Driving the news: GM said this morning that the initiative will include building two new battery cell manufacturing plants in addition to the two already under construction in Tennessee and Ohio.

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