A full update today recapping the speech last night from President Biden, the weekly job report, and news on the 1st quarter results from the economy. Additionally, a report shows vaccines are slowing the national spread of the virus, Governor Pritzker unveils a new energy bill, and changes to the gambling laws are being discussed.
Make sure you read all the way through to see the announcement of our May member luncheon!
*Daily Coronavirus update brought to you by Silver Cross Hospital
President Biden Pushes Broad Economic Agenda in Speech to Congress
President Biden declared “America is ready for a takeoff” as he pitched a sweeping vision for greater government investment to boost the economy, including a $1.8 trillion proposal for new spending on childcare, education, and paid leave.
Addressing a joint session of Congress for the first time as president on Wednesday, Mr. Biden sought to strike a hopeful tone just ahead of his 100th day in office, stressing his efforts to combat the pandemic, expand Covid-19 vaccinations—which he urged all Americans to get—and spur economic growth. “America is moving. Moving forward. And we can’t stop now,” he said, in remarks that ran just over an hour. “We’re in competition with China and other countries to win the 21st century.”
The prime-time address looked different this year under pandemic restrictions, with a small group of masked attendees, no in-person guests hosted by the first lady and more muted applause. The President used the moment to sell lawmakers and the public on his economic proposals, including his new American Families Plan, as well as renew his support for a long list of Democratic priorities, including passing legislation on policing, gun control and immigration.
“We have to prove democracy still works. That our government still works and we can deliver for our people,” said Mr. Biden. He appealed to Republicans to work with him. GOP lawmakers have largely opposed his economic agenda, saying he has proposed too much government spending and that his tax plans could hurt the economy.
Taken together, the Democratic president’s proposals represent an ambitious effort to redefine the government’s role in shaping the economy. Betting that government can be a driving force for growth, the White House is shifting away from long-held assumptions within both parties that the public sector is inherently less efficient than the private and that policy makers should generally defer to markets.
President Biden highlighted the American Families Plan, which is paid for largely by raising taxes on the wealthiest Americans, and his $2.3 trillion infrastructure package that includes new spending on bridges, roads, and broadband internet. Mr. Biden cast the massive spending proposals as necessary to help the nation’s economy and workers.
Referring to the family policies, the President said it was time to make a “once in a generation investment in our families and our children.” He said the U.S. had used public spending on things like schools and space exploration to accomplish great things in the past. “These are investments we made together as one country and investments that only the government was in a position to make,” he said. “Time and again, they propel us into the future.”
To pay for all of his proposals, President Biden would raise the top income-tax and capital-gains rates, boost taxes on companies and rely on an expanded Internal Revenue Service to audit and collect more money. Mr. Biden stressed his campaign pledge that people making less than $400,000 wouldn’t pay more in taxes, but he said that it was time for companies and the wealthiest Americans to “pay their fair share.”
The President’s speech marked the first time in the nation’s history that both officeholders flanking the president on the dais were women: Vice President Kamala Harris and House Speaker Nancy Pelosi (D., Calif.).
Sen. Tim Scott (R., S.C.) delivered the Republican rebuttal to the president’s address. The only Black Republican in the Senate, Mr. Scott is considered a possible 2024 presidential candidate. Mr. Scott called Mr. Biden’s infrastructure proposal a “liberal wish list of government waste.” He also said the president hasn’t lived up to his promises to bring the nation together.
In a direct appeal to Republicans, President Biden argued that jobs and infrastructure were bipartisan issues and thanked those Republicans who have offered a counterproposal on infrastructure. “Let’s get to work,” he said.
He also urged Congress to “end our exhausting war over immigration,” pushing for comprehensive changes to immigration laws amid a surge of migrants at the border.
The President also called for Congress to back a slew of Democratic priorities, including raising the federal minimum wage to $15 an hour, closing the gender pay gap and strengthening worker bargaining rights. He called for expanding access to healthcare and reducing prescription drug prices.
Following a series of mass shootings, President Biden urged Congress to take action on gun control. And he asked lawmakers to pass a policing bill named for George Floyd by the anniversary of his May 25 death.
The White House said the new families proposal includes $1 trillion in new spending over 10 years and $800 billion in tax cuts, largely extensions of breaks created or expanded in this year’s Covid-19 relief law. Mr. Biden is calling for a universal preschool program for 3- and 4-year-olds and two years of tuition-free community college for all Americans. He would also provide money to make childcare more affordable for low- and middle-income families and establish a national paid-leave program for those needing time to care for a child or loved one or to recover from illness, among other reasons.
To pay for the new programs, the administration proposes raising the top income-tax rate to 39.6% from 37%. For households making more than $1 million, Mr. Biden would also raise the top rate on capital-gains and dividends to 39.6% from 20%. Including existing payroll and investment taxes—each 3.8%—the top rates on wages and capital gains would reach 43.4%, up from 23.8%. He would expand the 3.8% tax to some new types of income.
Mr. Biden would also adjust how capital gains are taxed at death. And the plan relies on $700 billion in revenue that the administration says would come from an expansion of the IRS that has shrunk after a decade of budget cuts.
The president plans to hit the road to promote his plans following the speech. He will be in Atlanta Thursday for a car rally and on Friday will go to Philadelphia for an event marking Amtrak’s 50th anniversary. During his trip to Georgia, Mr. Biden and Dr. Biden will travel to Plains to meet with former President Jimmy Carter and Rosalynn Carter.
Consumer-Fueled Economy Pushes GDP to 6.4% First-Quarter Gain
Economic activity boomed to start 2021, as widespread vaccinations and more fuel from government spending helped get the U.S. closer to where it was before the Covid-19 pandemic struck, the Commerce Department reported Thursday.
Gross domestic product, the sum of all goods and services produced in the economy, jumped 6.4% for the first three months of the year on an annualized basis. Outside of the reopening-fueled third-quarter surge last year, it was the best period for GDP since the third quarter of 2003. Economists surveyed by Dow Jones had been looking for a 6.5% increase. Q4 of 2020 accelerated at a 4.3% pace. “This signals the economy is off and running and it will be a boom-like year,” said Mark Zandi chief economist at Moody’s Analytics. “Obviously, the American consumer is powering the train and businesses are investing strongly.”
The boost in GDP came across a spectrum of areas, including increased personal consumption, fixed residential and nonresidential investment, and government spending. Declines in inventories and exports as well as an increase in imports subtracted from the gain.
Consumers, who account for 68.2% of the economy, accelerated spending by 10.7% in the quarter, compared with a 2.3% increase in the previous period. The expenditures were largely focused on goods, which increased 23.6%, but spending on services, which had been the missing link in the recovery, still grew by 4.6%. On the goods side, spending exploded by 41.4% on durable goods like appliances and other long-lasting purchases.
Big consumer spending came thanks to another round of stimulus checks, this time for $1,400. While the numbers indicated that many used the free money to spend, they also tucked a good portion of it away, as the savings rate soared to 21%, from 13% in Q4. “With the elevated saving rate, households are still flush with cash and, now that restrictions are being eased as the vaccination program proves a success, that will allow them to boost spending on the worst-affected services, without needing to pull back too much on goods spending,” wrote Paul Ashworth, chief U.S. economist at Capital Economics.
Imports also continued to increase, rising 5.7%, while exports declined by 1.1%. Imports subtract from GDP.
Jobless Claims Drop
The number of Americans applying for unemployment benefits dropped by 13,000 last week to 553,000, the lowest level since the pandemic hit last March and another sign the economy is recovering from the coronavirus recession.
The Labor Department reported Thursday that jobless claims were down from 566,000 a week earlier. They have fallen sharply over the past year but remain well above the 230,000 weekly figure typical before the pandemic struck the economy in March 2020. The four-week moving average, which smooths out weekly gyrations, fell 44,000 to 611,750.
Nearly 3.7 million people were receiving traditional state unemployment benefits the week of April 17. Including federal program designed to ease economic pain from the health crisis, 16.6 million were receiving some type of jobless aid the week of April 10.
“Layoffs are elevated but are gradually easing, consistent with an economy that is reopening, ″ said Rubeela Farooqi, chief U.S. economist at Hgh Frequency Economics. “We expect further declines in filings as businesses move closer towards normal capacity which will boost job growth over coming months.″
Unemployment claims are a proxy for layoffs, and economists have long viewed them as an early indicator of where the job market and the economy are headed. But the figures have become less reliable in recent months as states struggle to clear backlogs of applications and suspected fraud muddies the actual volume of claims.
The job market has been bouncing back in recent months. Employers added an impressive 916,000 jobs in March, and the Labor Department is expected to report next week that they hired another 875,000 in April, according to a survey from the data firm FactSet. The unemployment rate has dropped to 6% from a peak of 14.8% in April 2020. (Before the pandemic, unemployment was just 3.5% in February 2020.)
Employers are beginning to complain that they can’t find workers — despite an elevated unemployment rate. Americans may be reluctant to return to work because they still fear contracting the virus or because they need to care for children who haven’t returned to school. Another factor could be a federal supplemental unemployment benefit of $300 a week, on top of state aid, that means some low-income workers can earn more from jobless benefits than they did from their old jobs.
Vaccines Appear to Be Slowing Spread of Covid-19 Infections
Vaccines appear to be starting to curb new Covid-19 infections in the U.S., a breakthrough that could help people return to more normal activities as infection worries fade, public-health officials say.
By Tuesday, 37.3% of U.S. adults were fully vaccinated against Covid-19, with about 2.7 million shots each day. Data from Johns Hopkins University shows the seven-day average for new U.S. cases has fallen below the 14-day average for more than a week, which epidemiologists said is a strong signal that cases are starting to slide again after a recent upswing. When the seven-day average is higher than the 14-day average, it suggests new cases are accelerating.
With the U.S. recently averaging at least 50,000 new daily cases, the pandemic is far from over. But the U.S. is nearing a nationwide benchmark of having 40% of adults fully vaccinated, which many public-health experts call an important threshold where vaccinations gain an upper hand over the coronavirus, based on the experience from further-along nations such as Israel.
“When you get to somewhere between 40 and 50%, I believe you’re going to start seeing real change, the start of a precipitous drop in cases,” said Anthony Fauci, the top U.S. infectious-disease expert, in an interview.
“When you do, that’s when people are going to be able to start doing things that they’ve been craving,” Dr. Fauci said about returning to more normal patterns of life. Health authorities also note that millions of unvaccinated Americans carry some protection, too, because they previously had Covid-19.
The decline in cases marks a hopeful turn after the U.S. saw cases tumble from a wintertime spike but then plateau and start edging higher again last month. One likely reason was the spread of a more contagious variant known as B.1.1.7 in places like Michigan, which saw a significant increase that is now cooling off again. Some epidemiologists also have said people and states were getting too lax too quickly.
In the U.S., the first clear sign of the vaccines’ impact came in nursing homes, where cases and deaths among residents have plummeted, federal data have shown. Soon after, federal data showed declining hospitalizations and deaths among the elderly, who have represented a significant share of Covid-19 fatalities since the pandemic began.
Knocking down cases among the broader population can be trickier, especially when younger people, who are less likely to be vaccinated and often spread the virus without symptoms, are getting infected. Eventually, the virus’s spread starts to slow because it can’t reach as many vulnerable people, experts said.
In early March, new cases in Israel began a steep decline—after a short spike at the end of February—around the same time that the fully vaccinated portion of the population passed 40%. On Feb. 27, the seven-day rolling average of new confirmed cases in Israel hit 4,117, according to Our World in Data, an Oxford University project that tracks the pandemic. By April 22, when the fully vaccinated level reached 58%, Israel was averaging just 129 new daily cases.
“At somewhere between 35% and 50% vaccinated, you will see a plateau and then a decline in new cases” in the U.S., said Eyal Leshem, director of the Center for Travel Medicine and Tropical Diseases at Israel’s Sheba Medical Center.
Still, there are reasons to be cautious, public-health experts said. While the national trend is pointing toward declining cases, not every state and county has been quick to vaccinate its population. Better vaccination rates among states and counties don’t necessarily equate to fewer cases compared with less-vaccinated places, a Wall Street Journal analysis of data shows. Factors like population density can make comparisons difficult. Even in some areas with high rates of vaccination, Covid-19 can still cause outbreaks.
Governor Pritzker Unveils Energy Bill
Governor Pritzker is out with his long-awaited comprehensive energy bill, an expansive blueprint for advancing clean-energy goals that includes a bailout for two Exelon-owned nuclear plants, doubling of ratepayer charges to finance new wind and solar projects, a phaseout of coal-fired electricity by 2030 and natural gas by 2045, and a new price on the carbon those power plants emit in the meantime.
Money for all these major initiatives would come from the same source: business and residential ratepayers across the state.
At the same time, the governor is proposing to immediately end the formulaic rate-setting that has boosted utility bottom lines since Commonwealth Edison first won the authority from Springfield in 2011 to re-do its delivery rates every year under a formula that removed much of the authority previously available to regulators. Likewise, on the natural gas side, Pritzker would do away with surcharges by which Peoples Gas now dings the average Chicago household by well over $10 a month. Pritzker’s goal is to make Illinois’ power-generation industry 100 percent carbon-free by 2050.
With the new legislation, the governor seeks to take some control over a legislative process that has seen separate coalitions propose jarringly different approaches to accomplishing the same goal. A union coalition has put forward legislation that arguably would raise utility bills even more, would provide a higher subsidy to Exelon and would preserve some of ComEd’s formula-rate system. A set of environmental groups, along with the Citizens Utility Board, has pushed the Clean Energy Jobs Act, which would have the state assume oversight of the wholesale power market in northern Illinois with the goal of incentivizing renewable power and disincentivizing fossil fuels. And a coalition of renewable power developers has endorsed legislation, which like Pritzker’s bill, would substantially increase ratepayer charges to finance more projects.
To this point, Springfield has struggled to make choices, with House committees endorsing the various bills on lopsided votes even when they were at cross purposes. The governor’s bill, Deputy Gov. Christian Mitchell said in an interview, “deals with our energy system from soup to nuts.” Asked how much more Pritzker’s bill would cost ratepayers, Mitchell said the governor’s office is working on an estimate, which should be made public next week.
Still, he defended the measure against criticisms that it doesn’t appear consumer friendly. The proposed subsidy for Exelon’s Dresden and Byron nukes, which an independent auditor hired by the administration agreed needed financial help to stave off planned closures this coming fall, is $71 million annually for the next five years—well below the $235 million annually over 10 years that former Gov. Bruce Rauner signed into law in 2016. The end to formula rates and gas-utility surcharges will save consumers “hundreds of millions,” he said.
And the Illinois Commerce Commission, which the Legislature increasingly has sidelined over the past decade at the behest of utilities, is given much more authority to oversee how much utilities spend on infrastructure with more funding to bolster staff and improve its effectiveness, he said.
The ball now is in the court of the various interests with stakes—both financially and policy-wise—in Illinois’ energy future. Observers expect Exelon and its union allies to argue that the nuke subsidy is too low. Asked how Pritzker will respond if Exelon says it will close Byron and Dresden at his proposed subsidy levels, Mitchell said the governor would call on the company to find its own independent auditor (that is, one that hasn’t done work for it before) to produce an alternative.
The new carbon tax is likely to raise power prices, so Exelon’s financially troubled nukes won’t need as much of a subsidy as they would otherwise, according to Synapse Energy Economics, the governor’s auditor. Likewise, consumer groups may balk at the costs to ratepayers.
The bill includes many provisions aimed at shielding low-income households from those higher costs. Most prominent among them is a call for “tiered” electricity rates, in which those below 80 percent of the median income level for the area would pay less for power than everyone else. Those above that threshold, however, would pay higher rates to make up the difference for the utilities. That’s likely to exacerbate the higher costs middle- and upper-income households already would be paying for the measure’s various initiatives.
A separate section seeks to dramatically expand electric vehicle adoption in the state, with a goal of 1 million cars and trucks on the road by 2030. It includes $4,000 rebates to purchasers of electric vehicles and financial incentives for the construction of charging stations.
Pritzker proposes a host of ethics reforms meant to respond to the bribery scandal that engulfed ComEd last year when it admitted in an agreement with federal prosecutors to a nearly decade-long scheme to influence then-Speaker Michael Madigan by furnishing no-work contracts to his friends and allies. They include an end to recovery from ratepayers of charitable contributions by utilities and bribery-linked restitution to ComEd ratepayers to be determined by the ICC.
Springfield now has just over a month, with its spring session ending May 31, to agree on a measure that arguably would be the state’s most audacious among the many sprawling energy laws it’s enacted over the past 25 years. Is there enough time? Mitchell said yes. “We think we’ve put out a pretty good roadmap.”
Illinois House Exec Committee Talks Changes to Recently Passed Gambling Expansion Law
State lawmakers are considering a number of changes to Illinois gambling laws, including a measure that would lift the prohibition on gambling on in-state colleges and universities. Other measures discussed by the House Executive Committee Wednesday would legalize and regulate certain internet gambling programs, or I-gaming, and ban “sweepstakes” machines which mirror video gambling but are otherwise not regulated by the state the same way slot machines are.
Rep. Mike Zalewski, a Riverside Democrat who was one of the lead architects of the gambling expansion bill in 2019 which legalized sports betting, said the prohibition on betting on Illinois collegiate sports teams was put into the law “at the behest of the universities.” But as sports betting becomes widespread in neighboring states, it would be easy for an Illinois gambler to travel to place a bet on an Illinois team, Zalewski said.
He said the prohibition “reduces our marketplace and makes us less of a robust marketplace than we otherwise would be.” University of Illinois Athletic Director Josh Whitman addressed the committee as well, noting his opposition to the bill. Whitman said crossing the border to gamble is “easier said than done,” and Rep. Tim Butler, R-Springfield, said as someone who lives right in the middle of the state, he agrees. Whitman said it was a “major concern” that U of I athletes may be in direct contact with someone who is betting on them.
Zalewski said his amendment to House Bill 849 allows universities to petition the Illinois Gaming Board to suspend wagering on in-state universities or colleges for a period of up to six months if “the college or university has a reasonable belief that a player of that team has been influenced, has suffered mental or physical injury, or has otherwise been affected by a wager.” Whitman said that he appreciated the amendment, but it would be insufficient in remedying such an incident.
Trevor Hayes, head of government relations at the sports gambling company William Hill, said Illinoisans today can bet on Illinois college teams from within the state, but that action would have to be taken on illegal, unregulated, untaxed websites. “The reality is there are apps in these kids’ hands today from overseas companies that are illegal,” he said. “No one has to drive half an hour to make a bet on any Illinois college team.”
In terms of gambling apps, Rep. Daniel Didech, D-Buffalo Grove, agreed that they are prevalent. That’s why he said it is time to have a broader conversation about legalizing and regulating them. “We’re talking about playing games for money on the internet, against the house, such as blackjack, slots and roulette. And we’re also talking about games for money on the internet against other players such as poker,” he said.
He said the status quo that allows such websites to operate without regulation is “very dangerous.” The websites are predatory and ripe for cheating or other scandals, he said, and they also don’t pay taxes or create jobs in Illinois. “Money that is deposited into accounts on these illegal websites is not safe,” he said. “It is not uncommon for there to see significant delays in the ability for consumers to cash out their money, and sometimes people never receive their money at all.” Didech said better regulation would make the practice safer and would only be detrimental to the illegal gambling market.
While advocates said I-gaming entices a different market than those that would go to casinos to gamble, operators of video gambling terminals opposed the measure. Dan Clausner, executive director of the Illinois Licensed Beverage Association, said internet gambling would discourage Illinoisans from going to local slot machine parlors or restaurants that have video gaming terminals. Clausner also advocated that the law should make clear that sweepstakes machines are illegal.
The committee’s discussion was subject matter only, meaning no votes were taken on any of the provisions. Dave McCaffrey, executive director of the Illinois Thoroughbred Horsemen’s Association, lobbied the committee for changes to the law to benefit the horseracing industry. His group represents employees such as trainers, jockeys, and groomers, among others. In 2006, he said, Illinois had more than 10,000 people licensed to work at racetracks in various positions. But that number has fallen to about 3,800, he said.
While the 2019 gambling bill was designed to help the horse racing industry by allowing tracks to become hybrid casinos, called racinos, it has not been as effective as intended, he said. “Unfortunately, in the last few years since it passed, no track has opened or even constructed racinos permitted by the 2019 law,” McCaffrey said, noting that the announced closure of the Arlington Park racetrack has had a negative impact on the industry.
While the 2019 law provided for sports wagering licenses for tracks, it did not dedicate a cut of any revenues from sports gambling to horse racing purses, which largely sustain the industry, he said. He praised House Bill 3214, sponsored by committee chair Rep. Bob Rita, D-Blue Island, which would require the tracks and their partners to dedicate some revenues to horse racing purses and services for the backstretch workers, which make the industry run.
Program Notices & Reminders – Expanded Information
Small Business Development Center (SBDC) at Joliet Junior College
Small Business Administration Restaurant Revitalization Fund
Please join the Illinois Department of Commerce and Economic Opportunity’s Office of Regional Economic Development for one of these upcoming webinars to learn more about the US Small Business Administration’s Federal Restaurant Revitalization Fund. This program is designed to provide assistance to restaurants, bars, food trucks and other similar places that serve food or drink.
Presenter: Kim Watson, Southern Region Senior Account Manager of Regional Economic Development, Illinois Department of Commerce and Economic Opportunity with Darrah Perryman, U.S. Small Business Administration
Date and Time: Wednesday, May 5, 2021 at 12:00 pm CST (Chicago, GMT-05:00)
Register Here: https://illinois.webex.com/illinois/onstage/g.php?MTID=e2e09f02802d5e93c11b7796b4f06acc7
Presenter: Tracey Glenn, Southwest Regional Manager of Regional Economic Development, Illinois Department of Commerce and Economic Opportunity with Darrah Perryman, U.S. Small Business Administration
Date and Time: Thursday, May 6, 2021 at 3:00 pm CST (Chicago, GMT-05:00)
Register Here: https://illinois.webex.com/illinois/onstage/g.php?MTID=ebc9484f1ce1a446c702f7025b5aaab6d
As the SBA builds and prepares to roll out the program, this dedicated SBA website is the best source for up-to-date information for eligible restaurants interested in the RRF.
Small Business Administration Shuttered Venue Operators Grant Program
The SBA has completed rigorous testing and the Shuttered Venue Operators Grant application portal reopened on Saturday, April 24 at 12:30pm ET. Updated guidance documents have been posted below. Applicants may continue to register for an application portal account.
- FAQ regarding Shuttered Venue Operators Grant
- SVOG preliminary application checklist
- Cross-program eligibility on SBA COVID-19 relief options
- SVOG-specific version of IRS Form 4506-T
- SVOG applicant user guide
Finally, make plans to join us for our May member luncheon on Thursday, the 13th and meet Dawn Malec, Chief of the Joliet Police Department and Greg Blaskey, Chief of the Joliet Fire Department. For more info and to register, click here – http://jolietchamber.chambermaster.com/events/details/2021-member-lunch-may-13-meet-greet-with-joliet-police-fire-chiefs-6046
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry