CARES Versus HEROES
Dear Rundown Reader,
Another reader’s take on the great labor “un-incentivizer” — stimulus money — compliments of the federal government in light of historical examples at Jamestown and Plymouth Colony…
“In today’s terms then, 5% deserve most of the world’s wealth? Just sayin.’”
Nah, we wouldn’t go that far.
Taking another look at the HEROES act today, we find these two opposite headlines this morning…
The first: “The HEROES Act fixes what the CARES Act broke” (The Hill). And the second? An opinion piece from Jon Coupal titled, “The Heroes Act just rewards bad behavior and poor governance.”
The crux of the article at The Hill: “With CARES, Congress gave a six-month, interest-free payment ‘pause’ to about 35 million debtors in the process of repaying the federal government for their education… The government imposed no penalties or credit consequences. Direct loan borrowers didn’t even have to sign up. Automatic payments just stopped.”
But that doesn’t go far enough to alleviate the $1.6-trillion student loan burden, according to The Hill, because borrowers with private student loans (not federal) got left out of the payment pause afforded federal student-loan borrowers under the CARES Act.
Pressured to follow suit, some private lenders offered borrowers a 60-day reprieve from loan payments; notwithstanding, interest would continue to accrue for those two months.
“HEROES would end the profiteering and provide protections for private debtors neglected by CARES,” The Hill says.
Read on for a major provision of the HEROES Act…
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Your Rundown for Monday, June 1, 2020
We Could Be HEROES?
“HEROES’ Title V requires private lenders to modify all private loans to provide the same repayment and forgiveness terms available to direct loan borrowers,” The Hill reports. “It suspends involuntary collections and negative credit reporting and requires retroactive application of forbearance to address delinquencies. These relief measures would last until September 30, 2021.”
For contrarian Jon Coupal of Howard Jarvis Taxpayers Association, where the HEROES Act is broken is providing bailouts for underfunded, mismanaged state coffers.
Mr. Coupal says: “When politicians and bureaucrats are rewarded with more money after wasting the taxpayer dollars they already receive, what makes anyone think their behavior will change?
“The Democrat-controlled House of Representatives has passed a staggering $3 trillion stimulus plan called the Heroes Act. Nearly a trillion of that is slated for state and municipal governments.”
He goes on to quote David McIntosh of Club for Growth who said last week: “As Congress considers what to include in the next phase of coronavirus relief, Nancy Pelosi and the Democrats have pushed for $875 billion in taxpayer money to go to bail out irresponsible states and local governments.
“Why should taxpayers in well-managed states… be on the hook for bailing out poorly run states?”
Why indeed? So where do you fall on the CARES Act/HEROES Act debate?
Market Rundown for Monday, Jun. 1, 2020
The S&P 500 Index futures down 10 points to 3,032.
Oil’s down $1.03 to $34.46 for a barrel of West Texas Intermediate.
Gold is down $10.50 per ounce to $1,741.20.
Bitcoin is up 1.4% to $9,561.21.
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Have a great start to your week. We’ll talk again Wednesday.
For the Rundown,