The Government Will Not Shut Down Next Week.

Taxes

Pelosi and Mnuchin make a deal. The House passed a stopgap spending bill after Speaker Nancy Pelosi reached a deal with Treasury Secretary Steven Mnuchin to keep the government open to December. She says Mnuchin agreed to $8 billion in additional child nutrition money and she agreed to increase spending for farm aid, a demand by President Trump. 

$1 billion in CARES Act funds went to… defense contractors. One pot of Coronavirus Aid, Relief, and Economic Security (CARES) Act funds was reserved to “prevent, prepare for, and respond to coronavirus” by purchasing medical equipment and the like. Instead, The Washington Post reports that the Department of Defense spent much of the fund on jet engine parts, body armor, and dress uniforms. Some defense contractors received money even though they also got loans through the Paycheck Protection Program. The Pentagon and defense contractors are asking for an additional $11 billion in any future coronavirus relief package. 

Tax fraud may be part of New York investigation into Trump’s personal and business finances. The most recent filing by Manhattan District Attorney Cyrus Vance lists news reports and public testimony that would justify a grand jury inquiry into crimes including tax fraud. President Trump expects his fight over the investigation to end up in the Supreme Court. 

Next week: State of the Cities 2020. The Urban Institute and TPC’s State and Local Finance Initiative host a virtual event on how cities are responding to the pandemic. Current and former city leaders and policy experts will discuss how large and small communities are coping and what that could mean for services, jobs, and an inclusive economic recovery. Learn more and register here for next Tuesday’s event. 

In case you missed last week’s Prescription… You can watch the conversation between Irena Asmundson, chief economist for the California Department of Finance, and TPC’s Howard Gleckman here. They talk about how California’s economy is coping with the concurrent challenges of the pandemic and wildfires

For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at dailydeduction@taxpolicycenter.org.

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