On The Money: Details on timing of the $1,400 stimulus payments

Happy Tuesday and welcome back to On The Money. I’m Naomi Jagoda, in for Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL — Banks point finger at IRS for brief stimulus checks delay

A group of banking and credit union industry groups on Tuesday defended banks from criticism by customers who haven’t received their stimulus payments yet, saying the funds aren’t being sent to financial institutions by the Biden administration until Wednesday.

“The IRS recently sent an initial wave of tens of millions of economic impact payments via the Automated Clearing House (ACH) system,” the banking groups said in a statement. “The actual funds will be sent to the banks and credit unions on March 17, at which time funds will be made available to customers. Until that time, the funds remain with the government.” 

Details on timing of the $1,400 stimulus payments:

• The IRS started the process of sending out the payments last week. The agency said Friday that the official payment date is Wednesday and that some Americans may see pending or provisional payments in their bank accounts before then. 

• Some financial technology companies, such as Chime and Green Dot, have already started to credit customers’ accounts, advancing funds to them. But large banks have said the stimulus payment money won’t start to be available to customers until Wednesday.

• Some customers of large banks are frustrated that they have not yet gotten their payments and have criticized the companies on social media.

I have more for you on the banking groups’ statement here.

LEADING THE DAY – Huge fight looms over raising taxes

Washington is gearing up for a battle over raising taxes as President Biden looks for a way to pay for his agenda while Republicans are planning to dig in their heels ahead of the 2022 elections.

Biden last week signed a $1.9 trillion coronavirus relief package that was mostly deficit-financed. The White House and congressional Democrats are now turning their attention to another economic recovery package, possibly focused on infrastructure, jobs and climate change. A key question will include if and how to pay for such a proposal.

Biden proposed a slew of tax increases during his presidential campaign that are expected to be on the table as part of the discussions. But they will face fierce opposition from Republicans and business groups, jeopardizing any attempt to pass an economic package on a bipartisan basis.

Biden’s proposals: Biden’s campaign tax proposals included raising the corporate tax rate from 21 percent to 28 percent, as well as raising the top individual income tax rate and the capital gains tax rate for high-income taxpayers. 

White House press secretary Jen Psaki said Monday that there isn’t a proposed infrastructure package yet but also said that Biden’s tax priority is ensuring that the wealthy and corporations pay their “fair share.”

“That remains his overarching approach, but there isn’t a package yet where we’re talking about pay-fors yet,” she said.

The politics of tax increases: Conservatives argue that corporate tax increases would hurt the economy and voters’ 401(k) retirement accounts. Progressives say that it would be smart politics to pay for infrastructure through tax increases on the wealthy and corporations because polling shows public support for those types of tax hikes.

I have more for you here about the coming fight over tax increases. 

Also be sure to read this article from The Hill’s Jordain Carney about Senate Republicans pushing back on the idea of raising taxes to help pay for an infrastructure package.

GOOD TO KNOW

• Financial markets are settling into what’s becoming familiar territory of record highs on the first anniversary of the worst one-day decline in decades, underscoring the gap between Wall Street and the economy.

• The Senate on Tuesday confirmed Isabel Guzman to lead the Small Business Administration (SBA), approving another member of President Biden’s economic team.

• Retail sales plummeted by 3 percent in February, according to a report released Tuesday by the Census Bureau, as extreme winter weather kept people at home.

• A group of more than 100 House members on Tuesday urged the IRS to extend the tax filing and payment deadlines — the latest effort from lawmakers to press the IRS to postpone the April 15 due date.

ODDS AND ENDS 

• Treasury Secretary Janet Yellen last week provided her official signature that will be used on the 2021 series of U.S. paper currency, the department said Tuesday.

• Sen. Tom Cotton (R-Ark.) on Tuesday slammed the U.S. Chamber of Commerce, saying the powerful business lobbying organization has lost its way and is siding more often with Democrats and progressive causes.