Welcome to the Weekly Scan. Here’s what we’re following for the week of May 24, 2021.
Earning extra credit. Starting July 15, 2021 many families with children will be eligible for federal cash payments of up to $300 per child per month for the 2021 tax year, according to an announcement last week from the Internal Revenue Service and the U.S. Department of Treasury. Payments reportedly will be sent by direct deposit, similar to the stimulus checks in the spring. Individuals earning adjusted gross income up to $75,000 and couples with an adjusted gross income up to $150,000 will be eligible. Payments will phase out for incomes over these amounts, and for unmarried heads of households who earn more than $112,000 a year.
- The takeaway. This money is part of the $1.9 trillion stimulus package, called the American Rescue Plan, signed into law in March, 2021. It is an expansion of the existing child tax credit of $2,000 per child. The child tax credit began in the 1990s at $400 a month to help children living in poverty. The money is expected to reach 90% of families with children. Approximately 1 in 7 children lives in poverty, according to research. The expansion of the tax credit is expected to cost $105 billion in 2021, and the Biden administration reportedly hopes to make the expansion a permanent part of the tax code.
FedCoin? The Federal Reserve, the nation’s central bank, is reportedly making plans for its own digital currency, called a Central Bank Digital Currency (CBDC) and will release a paper on its efforts this summer. The Fed is taking it slowly, however, over concerns that it gets the currency right. The project may take four or five years to complete, and is anticipated to be a “stable coin,” pegged to the value of the dollar. The Fed is reportedly working with the Boston Federal Reserve and Massachusetts Institute of Technology for the project.
- The takeaway. Numerous countries have plans to develop their own digital currency, although it currently has limited economic use. Most notably, China has developed a digital version of the yuan, its home currency. Financial experts in the U.S. are reportedly fearful that it could eventually undermine dominance of the U.S. dollar as a global reserve currency.
Emergent takes the stage. Executives from the Johnson & Johnson vaccine manufacturer, Emergent BioSolutions, testified before Congress last week regarding its alleged role in ruining 100 million doses. The company’s chief executive, Robert Kramer, revealed that 30 million more doses were included in the doses put on hold. Initially, 70 million doses were thought to be tainted. Those doses are currently on hold while federal regulators investigate the issue. Amid questioning, Kramer admitted that there were unsanitary conditions at the facility, including chipping paint and mold. Emergent received a $628 million contract last year to produce vaccine doses.
- The takeaway: Emergent’s political connections and its history of giving out big bonuses to executives came under fire during the hearing. The biotechnology firm spent $3 million annually lobbying for its interests, about the same amount as big pharmaceutical companies AstraZeneca and Bristol Myers Squibb spend. Additionally, Emergent issued Kramer a $1.2 million cash bonus during 2020. Kramer also sold $10 million worth of his stock in the company. Emergent chairman Fuad El-Hibri, meanwhile, sold shares and options worth $42 million last year.
Find out what we covered in last week’s Scan.