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Ritholtz Partners With WisdomTree to Launch Crypto Index

Ritholtz Wealth Management has teamed up with WisdomTree to launch the RWM WisdomTree Crypto Index that will provide exposure to Bitcoin (36{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}), Ethereum (20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) and 11 other cryptoassets (at 4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} each). Those 11 additional cryptoassets include layer-1 networks, layer-2 protocols, oracle networks, crypto indexing services, decentralized finance (DeFi) and the metaverse.

While the index is currently only available to Ritholtz clients using separately managed accounts on Gemini, Onramp is bringing this to a wider swath of advisors via its cryptocurrency platform, writes Michael Batnick, director of research at Ritholtz.

“In our view, this direct indexing implementation of the RWM WisdomTree Crypto Index via Onramp Invest and Gemini is the best assembled structure and diversified cryptoasset exposure currently available to U.S. investors and particularly the RIA community,” said Jeremy Schwartz, global chief investment officer at WisdomTree, in a statement.

“Cryptoassets show great promise for financial advisors to add value, to be compensated for it, and to do so in a way that can be in line with their fiduciary responsibilities,” said Eric Ervin, chief investment officer and co-founder at Onramp Invest. “Our goal at Onramp from day one was to make this possible.”

The cryptocurrency and investing communities have waited years to have a Bitcoin ETF approved by the Securities and Exchange Commission, and, so far, no ETF that directly invests in Bitcoin has been approved. The Winklevoss twins were the first to file for a Bitcoin ETF in 2014.

SEC Chair Gary Gensler gave a speech on crypto ETFs in August, indicating that the commission would prefer funds that invest in Bitcoin futures. And Gensler just recently doubled down on his concerns about spot Bitcoin ETFs.

ProShares made history in October with the launch of the first bitcoin futures ETF, under ticker BITO. A few other bitcoin futures ETFs have listed since then.

Thrivent Gets Into the ETF Game

Thrivent, the Midwest-based not-for-profit financial services organization founded by Lutherans, has filed an initial registration statement with the SEC for an exchange traded fund.

According to the filing, the firm plans to launch the Thrivent Small-Mid Cap ESG ETF (TSME), which will be actively managed and invest in the companies with market capitalizations at or below the market cap of the largest company in either or both of the Russell 2500 Index or the S&P MidCap Index.

“The new ETF is part of the organization’s long-term strategic growth objectives focused on helping more clients achieve financial clarity,” a spokeswoman said in a statement.

It will use the “proxy portfolio” methodology, under which Thrivent will provide daily disclosures of a proxy portfolio, which reflects the economic exposures and risk characteristics of the portfolio, without revealing the actual holdings. This reduces front-running and intellectual property theft.

 

The ETF will be a completely new fund, not a conversion of one of Thrivent’s existing mutual funds. Several traditionally active managers have announced plans to convert mutual funds into ETFs.

Apollo Continues Its Move Into Retail Wealth Management

Private equity firm Apollo continues to build out its global wealth management solutions business with the acquisition of Griffin Capital, a privately held alternative investment asset manager in Los Angeles. The move adds 60 retail-facing distribution professionals and hundreds of distribution agreements, as Apollo continues to bring its products and services to the retail wealth management market.  

Apollo recently set a target at its investor day of raising $50 billion-plus of organic capital for its global wealth business over the next five years.

In May, the company introduced the new business unit and outlined plans to develop new products that individuals can invest in through financial advisors.

Griffin is particularly strong in its distribution capabilities to the independent channel, Apollo said, a nice complement to its focus on private banks, wirehouses, RIAs and family offices.  

“The democratization of finance brings tremendous opportunity for individual investors to access alternatives,” Apollo CEO Marc Rowan said in a statement. “With the acquisition of Griffin, we will significantly advance our U.S. wealth market growth plans that we presented at our recent Investor Day. As one of the first firms to bring alternative strategies to the individual investor and advisor market in the U.S., Griffin has built trusted relationships over 20-plus years, and in combination with Apollo can offer the market a broader set of solutions.”

First NFT-Focused ETF Goes to Market

Defiance has launched the first exchange traded fund focused on NFTs. The Defiance Digital Revolution ETF (NFTZ) does not directly hold non-fungible tokens, but seeks to provide thematic exposure to the NFT, blockchain and cryptocurrency markets.

The fund has a management fee of 65 basis points, and invests in NFT- and blockchain-related companies, such as Silvergate Capital Corp., Cloudfare, Bitfarms and Coinbase, among others.

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Retaining Human Talent in Finance

Popular discussions surrounding “the rise of the robots” often manifest as hyperbolic sci-fi posturing, though it is unlikely that the Terminator prophecy will come to fruition any time soon. But that does not mean “robots” (or at least digitally automated processes) are not rising in our world. In fact, according to an August 2020 Deloitte/IMA survey, 51.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of finance leaders reported that automation would impact the way their organization worked in the coming five years.

And yet, despite fears of an AI takeover, the Bureau of Labor Statistics (BLS) reported almost 300,000 financial services job openings as of September 2021. Job openings in for positions that are not as easy to automate, such as accounting, bookkeeping, and auditing, are expected to rise over the next decade. With more job options available to them, employees, especially top talent, may become harder to retain. Given that more than half of workers in the US are currently considering a career change, there should be no illusions that the finance industry will be immune to such trends.

To retain top financial analysts and talent, employers must take care of their employees’ professional and personal needs. But they must also harness automation and digital processes not as a means to replace the need for human workers, but to help make their jobs simpler, more efficient, and more enjoyable.

Take care of your employees

It seems obvious, but if more employers took this call to action more seriously, the “Great Resignation” may not have become as widespread. In these challenging pandemic times and amid an increasingly challenging labor landscape, businesses now more than ever need to keep their fingers on the pulse of employee satisfaction – both professionally and personally. 

Employees are saying this loud and clear, and it falls on the business leadership to listen. A recent corporate survey found that more than half of employees considered good benefits essential to their employment. However, only 31{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of those surveyed were satisfied with their current conditions. Even negative candidate experiences at the interview stage can have an impact on the perception of a company, and employee retention begins with satisfaction.

Meeting employee wellness needs can take many forms, from offering individualized benefits and tangible compensation to providing flexibility with options like hybrid working, which has taken off in the wake of the pandemic. COVID-19 has also brought a barrage of new and unique challenges, and accordingly, considerations like mental health promotion and childcare benefits are more pressing than ever. 

On a professional level, taking care of employees can mean anything from prioritizing an engaged and continuous process of feedback to providing opportunities for workers to broaden and sharpen their skillsets. For example, supplementary educational courses can be a good way to imbue employees with a sense of self-determination, vision, and meaning. This kind of dynamic, initiative-taking approach to employee management can go a long way toward stopping employees from heading for the exits.

Simplify, simplify, simplify

Burnout is a further challenge, with 61{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of people experiencing this at some point in their career. Financial professionals are often especially overworked and overwhelmed, often at the hand of complex and slow paper-based workflows. Frustration with such inefficiencies could drive some workers to more “streamlined” positions that would reduce the symptoms of burnout. Here’s where it pays to try and simplify day-to-day processes in a way that benefits both employees and the company’s bottom line.

If CFOs simplified their operations accordingly, beginning with the hiring process itself, they would be more likely to hire and retain more satisfied and more productive employees. Indeed, Deloitte reports that employees who feel their talents are being utilized well are more likely to stay in their positions. 

Figuring this out can’t be a one-way conversation: Engaging employees in improving organizational operations and structure is crucial. Those who are doing the work itself on a daily basis are very likely to have the keenest understanding of where improvements can be made, and asking for employee input will not only yield practical outcomes, but it also provide employees with a sense of inclusion and authenticity that in turn fosters greater loyalty. 

Make technology work for you

Technology can help relieve the burden of overworked accountants and CFOs, but only if used and implemented with savvy. Workers who feel that technology is being implemented in ways specifically designed to help them will be happier with their ability to do their jobs, more likely to stay in their positions, and more resilient down the line to technologically driven changes. On the other hand, technological processes that are too complex can have the reverse effect, turning financial professionals away. 

For employers navigating the post-pandemic needs of their workforces, it will also prove essential to use data, AI, and other technologies to glean in-depth insights into employee satisfaction and employment trends, both within their company as well as in the wider industry. 

The age of tenured employment has given way to an era of “job-hopping,” raising the stakes for employers. As such, employers must pay attention now more than ever to the shifting dynamics of the workforce and react accordingly in order to preserve their top talent.

This is hardly the first major challenge to confront the industry in recent years. The 2008 crash shook the world of finance, and the recent shocks that have come about due to the pandemic also have the potential to radically reshape the industry. Cultural shakeups are likely to continue, and businesses must develop thoughtful talent recruitment and retention strategies now if they want to mitigate their impact on their workforce. 

The good news is that employees are also aware of, and even catalyzing, these changes. Employees are feeling a heightened sense of responsibility in working with employers to meet their needs. Out of this moment’s challenges comes a rare opportunity to leap to the forefront of the financial industry.

Written by Didi Gurfinkel.


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Meta Nears Bear Market After $224 Billion Value Wipeout

(Bloomberg) — Facebook parent Meta Platforms Inc. dropped on Friday, bringing its shares closer to a bear market after months of volatility triggered by a whistle-blower’s revelations and disappointing quarterly results.

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The selloff was 19.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} since its closing record on Sept. 7, erasing about $224 billion in market value. Meta’s stock has been pressured this week as investors grappled with uncertainty surrounding the omicron variant and the possibility that the Federal Reserve will end its pandemic support program sooner than expected. It closed 1.1{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} lower to $306.84 on Friday, paring an earlier drop of as much 3.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

Meta shares have been hurt in recent months by negative comments about Facebook’s business model from whistle-blower Frances Haugen, according to David Trainer, who covers Meta for investment research firm New Constructs. Haugen appeared before the House subcommittee on technology earlier this week, after accusing the social media giant of putting “profit over safety” of its users in October.

Mounting concerns about the impact of Apple Inc.’s data collection rules and supply-chain challenges have also contributed to the decline and spurred Meta’s biggest drop in nearly a year in October.

Meta shares fell 7.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} for the week, suffering their worst weekly decline since June 2020.

A weaker-than-expected quarterly report released in October also hurt investor sentiment. The company’s third-quarter revenues fell short of consensus estimates, as did its expectations for the fourth quarter. Several analysts trimmed their price targets for the stock in the wake of results, though they remained broadly positive on the firm, citing its long-term growth potential and valuation.

Prior to the pandemic-driven market rout last year, the company last entered a technical bear market in June 2019, when the U.S. Federal Trade Commission began an investigation into potential antitrust violations.

Still, the stock rallied through the pandemic and had been on a tear this year, rising 42{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from Jan. 4 to its Sept. 7 peak, outperforming peers like Twitter Inc. and Netflix Inc. But its recent plunge has the shares trading around 19.8 times forward earnings, making Meta the cheapest stock among mega-cap U.S. technology companies.

Newbridge Securities Chief Market Strategist Donald Selkin said Meta appears reasonably valued at current levels, with the decline discounting a lot of the bad news surrounding Facebook.

“It’s worth sticking your toe in the water,” he said in a phone interview.

The lower valuation doesn’t make the stock more attractive to Trainer of New Constructs, who views Meta as the worst positioned company among its mega-cap peers. He expects the stock to be a “perennial underperformer” for the next several years given the headwinds at the legacy Facebook business. Trainer said he is interested to monitor the company’s shift in focus toward the metaverse, especially the pace of the transition as competition in the field increases.

Yet, Meta has so far held on to its fans on Wall Street, with more than 80{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of analysts recommending that investors snap up shares, according to data compiled by Bloomberg. The stock’s 12-month average analyst price target of $400 implies about 31{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} return potential from current levels.

(Updates share price moves throughout and chart.)

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We Wouldn’t Be Too Quick To Buy The Williams Companies, Inc. (NYSE:WMB) Before It Goes Ex-Dividend

It looks like The Williams Companies, Inc. (NYSE:WMB) is about to go ex-dividend in the next four days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company’s books as a shareholder in order to receive the dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. This means that investors who purchase Williams Companies’ shares on or after the 9th of December will not receive the dividend, which will be paid on the 27th of December.

The company’s upcoming dividend is US$0.41 a share, following on from the last 12 months, when the company distributed a total of US$1.64 per share to shareholders. Last year’s total dividend payments show that Williams Companies has a trailing yield of 6.0{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} on the current share price of $27.11. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Williams Companies has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Williams Companies

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Williams Companies distributed an unsustainably high 196{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of its profit as dividends to shareholders last year. Without more sustainable payment behaviour, the dividend looks precarious. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Over the last year it paid out 75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of its free cash flow as dividends, within the usual range for most companies.

It’s good to see that while Williams Companies’s dividends were not covered by profits, at least they are affordable from a cash perspective. Still, if the company repeatedly paid a dividend greater than its profits, we’d be concerned. Very few companies are able to sustainably pay dividends larger than their reported earnings.

Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.

historic-dividend

historic-dividend

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it’s easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it’s a relief to see Williams Companies earnings per share are up 4.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} per annum over the last five years.

Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, Williams Companies has lifted its dividend by approximately 13{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} a year on average. We’re glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

The Bottom Line

Should investors buy Williams Companies for the upcoming dividend? Earnings per share have not grown all that much, and the company is paying out an uncomfortably high percentage of its income. Fortunately it paid out a lower percentage of its cash flow. With the way things are shaping up from a dividend perspective, we’d be inclined to steer clear of Williams Companies.

So if you’re still interested in Williams Companies despite it’s poor dividend qualities, you should be well informed on some of the risks facing this stock. Our analysis shows 2 warning signs for Williams Companies and you should be aware of them before buying any shares.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} yield and an upcoming dividend.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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2 big market risks for 2022, according to Bank of America

Markets should be wary of high inflation and the potential spread of new COVID variants in 2022, a new Bank of America (BAC) report warns.

“Future COVID waves are the biggest downside risk,” the report noted. “On the upside, the supply-side wakes up to meet the gains in demand.”

Authored by several Bank of America Global Research economists, the report mainly focuses on the various threats to the global economy in 2022 and beyond.

Among these economic risks are high inflation rates, the spread of variants like the recent Omicron strain, climate change, and supply constraints.

The emergence of the Omicron variant in November left its mark on markets at the end of last month, with the Dow Jones falling over 1500 points the week following Thanksgiving.

Earlier this month, World Health Organization chief scientist Soumya Swaminathan spoke at the Reuters NEXT Conference where she emphasized the variant’s high transmissibility and noted that it could one day become the dominant COVID strain around the world.

The report found that the unprecedented fiscal stimulus enacted by the federal government to counter COVID-related economic issues should ensure that “the U.S. will resume its role as an engine of global growth, while China will be a reluctant laggard.”

China-US relations were a cause for concern for the global economy as well, the authors wrote in the report. “There is also considerable uncertainty about how relations between China and the West will develop. A rapid unravelling of economic interlinkages could trigger a global recession.”

Even if the new COVID variants which emerge in the next year are controlled to the utmost extent, inflation concerns still might make for a murky future for US economic growth.

Trader John Romolo works on the floor of the New York Stock Exchange, Thursday, Dec. 2, 2021. Stocks are opening mostly higher on Wall Street Thursday as investors continue to monitor the spread of the new coronavirus variant as well as measures that the U.S. and other governments are taking to restrain it. (AP Photo/Richard Drew)

Trader John Romolo works on the floor of the New York Stock Exchange, Thursday, Dec. 2, 2021. Stocks are opening mostly higher on Wall Street Thursday as investors continue to monitor the spread of the new coronavirus variant as well as measures that the U.S. and other governments are taking to restrain it. (AP Photo/Richard Drew)

A ranking from the report of 10 different currencies from around the world found that the U.S. had the highest inflation score, at 46. It was followed by the New Zealand dollar, at 38, and the Great Britain Pound, at 37.

“It’s been a bit nerve wracking to watch the recent very strong inflation readings,” the report noted. “In the summer, most of the increase was driven by spikes in specific sectors, but in the last few months the pressure has moved into the middle of the inflation distribution … Relative to a year ago, we have raised our global CPI inflation forecast for this year from 2.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 3.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and for next year from 2.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} to 3.8{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.”

Overall, inflation should cool, even in the U.S. The CPI was 6.2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in October, continuing the rampant inflation not seen domestically in decades. Although this rate of inflation may subside slightly, Bank of America Global Research cautioned that inflation may still be a significant issue for the economy in the short run. BofA’s Chief US Economist Michelle Meyer and VP Alexander Lin wrote that three rate hikes in 2022 were very possible, looking forward.

“Inflation will cool from the current highs but remain well above target, leaving the Fed to move into action,” the report predicted. “While 2021 was a story of excess demand and a dearth of supply, we think 2022 will be one of rebalancing, albeit only gradually. This should take some of the heat off of inflation but not quickly enough, leaving the Fed to hike three times starting in June and continuing on a quarterly cadence.”

Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.

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Today’s Live Business News: Jobs Report, Inflation and Stocks

The United States faces a default sometime between Dec. 21 and Jan. 28 if Congress does not act to raise or suspend the debt ceiling, a Washington think tank warned on Friday.

The projection from the think tank, the Bipartisan Policy Center, was a narrower window than it provided last month, and the nonpartisan group suggested that the actual deadline, or X-date, could be toward the earlier end of that range.

Democrats and Republicans appear to have tempered their tone around raising the debt limit this time around. While lawmakers have not settled on a path to lifting the borrowing cap, they are exploring a series of ways to raise it, including some that could ultimately hand more power to the White House to avoid the kind of standoffs that have routinely crippled Washington.

Republicans continue to publicly insist that Democrats must act alone to address the issue, while Democrats have countered that raising the borrowing cap is a shared responsibility given that both political parties have incurred big debts over the last several years.

“Those who believe the debt limit can safely be pushed to the back of the December legislative pileup are misinformed,” said Shai Akabas, the director of economic policy at the Bipartisan Policy Center. “Congress would be flirting with financial disaster if it leaves for the holiday recess without addressing the debt limit.”

Treasury Secretary Janet L. Yellen warned lawmakers in November that the United States could be unable to pay its bills soon after Dec. 15. During testimony before the Senate Banking Committee this week, she underscored the urgency of the matter.

“I cannot overstate how critical it is that Congress address this issue,” Ms. Yellen said. “America must pay its bills on time and in full. If we do not, we will eviscerate our current recovery.”

In September, Ms. Yellen called for the debt limit to be eliminated, explaining that it had become a destructive policy that posed unnecessary risks to the economy. After approaching the first default in American history, Congress in October raised the statutory debt limit by $480 billion, an amount the Treasury Department estimated would allow the government to continue borrowing through early December.

Congressional leaders have been quietly discussing ways to address the debt ceiling, after Republicans warned that they would not help Democrats clear the 60-vote threshold needed to break a Republican filibuster against legislation to raise the borrowing cap.

Senators Chuck Schumer of New York, the majority leader, and Mitch McConnell of Kentucky, the minority leader, have spoken repeatedly in recent weeks about the issue, but they have remained tight-lipped in public about a possible solution.

The debate has been further complicated by former President Donald J. Trump and his continued influence over the Republican Party. He has repeatedly railed at Mr. McConnell and the other Republican senators who backed a procedural vote in October that cleared the way for Democrats to raise the debt limit.

But Mr. McConnell, while pushing for Democrats to raise the borrowing cap without help from his conference, pledged this week that a default would be avoided.

Credit…Al Drago for The New York Times

“Let me assure everyone the government will not default, as it never has,” Mr. McConnell said on Tuesday. Pressed further, he added, “We’re having useful discussions about the way forward.”

Cut out of both the $1.9 trillion coronavirus relief package that passed in March and the $2.2 trillion climate, tax and spending plan that Democrats are trying to push through the Senate, Republicans have refused to help Democrats accommodate debt incurred by both parties. They have taken that position even though leaders of both parties signed off on the spending that helped the debt balloon.

Democrats, in turn, have balked at a Republican demand to use a fast-track process known as budget reconciliation to raise the debt limit without Republican votes. Democrats used the process to pass the coronavirus relief package and they are using it again for the climate, tax and spending plan, but they have argued that Republicans should help keep the government from defaulting.

Aides in both parties, while cautioning that a solution has not been agreed to, noted that party leaders had so far refrained from publicly trading blame over the issue.

As a way of navigating around the impasse, some officials have discussed the possibility of handing the authority of raising the debt limit to the administration, while granting Congress the ability to disapprove the decision with just a simple majority.

Some lawmakers, however, may be unwilling to hand that power to the White House or lose a cudgel often used by the minority party to exert pressure, particularly while 60 votes are needed to end a filibuster in the Senate.

Other officials have floated attaching legislation raising the debt limit to the sprawling annual defense policy bill, which is the last major must-pass piece of legislation that lawmakers plan to approve in December.

But it is unclear whether such a plan would be successful: Attaching a debt ceiling increase could jeopardize the Republican votes needed to counter the bloc of liberal Democrats who typically oppose the defense bill in protest of military spending. Representative Kevin McCarthy, Republican of California and the minority leader, warned on Friday that such a maneuver could tank passage of the entire package.

The Bipartisan Policy Center said that there was additional uncertainty surrounding the debt limit this year because of the pandemic and the various economic relief programs that are still ongoing.

Dec. 15 is a particularly important date because the Treasury Department is required to make a $118 billion payment to the Highway Trust Fund. If corporate tax receipts that are due that day come in weak, Treasury could face a cash crunch and the United States could be unable to meet all of its obligations, such as paying out Social Security and funding military paychecks.

The Congressional Budget Office said this week that it expected that Treasury might run out of cash by the end of December if Congress failed to act. The budget office suggested, however, that Treasury might be able to defer some Highway Trust Fund payments that were mandated in the recently passed infrastructure law, potentially staving off a default until sometime in January.

Along with its updated projection, the Bipartisan Policy Center unveiled a new proposal for dealing with the debt limit, although it is unlikely to help lawmakers this time around.

The proposal, which is being introduced by Representatives Jodey C. Arrington, Republican of Texas, and Scott Peters, Democrat of California, would establish a process giving the president authority to suspend the debt limit through the following fiscal year as long as Congress does not pass a resolution blocking the move within 30 days. The president would then have to offer a debt reduction proposal for Congress to consider separately.