The Day at a Glance | December 17 2021

The Top

*Democrats will postpone approving Biden`s social spending plan until 2022 after disagreements were had within the Party.

*Central Bank of Japan rejects monetary normalization in the near future.

*The U.S. economy slowed down in December: IHS/Markit.

*Business environment in Germany deteriorated for a sixth consecutive month (Ifo 94.7).

*S&P Global Ratings confirmed Evergrande`s default.

Economic environment

Democrats failed to approve Biden`s economic plan. The Democratic Party was not successful in resolving differences within its own organization in order to approve the President`s proposed 2 trillion dollar social spending plan before Christmas. The biggest opposition within the Party is Democratic Senator Joe Manchin, who`s opposed to the size of the plan and is preventing majority in the Upper Chamber. Progressives and Moderates within the Party have disagreed on the size of the spending package – as well as some of its main points. President Biden has spoken to Manchin at least twice this week without successfully unblocking negotiations. The President`s “Build Back Better” plan, which has now been delayed once more, has been discussed in Congress since April of this year. Republicans are firmly opposed to programs that entail more spending on healthcare and welfare, considering that this would lead to greater inflationary risks in the economy. The plan includes up to 2.2 trillion dollars in tax facilities for households with children, childcare subsidies, maternity and paternity leave of absence (subsidized by the government), more services regarding Obamacare and Medicaid, in addition to fees on the production of methane, subsidizing the consumption of electric vehicles and tax facilities for renewable energy. In order to pay for this, the plan proposes imposing a 15% minimum corporate tax, a 5% tax on individuals with income greater than 10 million annual dollars, and a 3% tax on persons with income greater than 25 million; in addition to other taxes on retirement accounts and share repurchases. Voting on the plan will be postponed to 2022, year in which intermediary elections will take place in the country.