The U.S. budget deficit hit a record $1.7 trillion in the first half of the fiscal year.

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The federal government continued to pump huge sums of money into the economy to help workers and businesses cope with the pandemic.Credit...Emily Elconin for The New York Times

The United States budget deficit grew to a record $1.7 trillion in the six months since October, as the federal government continued to pump huge sums of money into the economy to help workers and businesses cope with the pandemic.

The figure comes in the wake of a $1.9 trillion economic rescue package that Congress passed in March and as the Biden administration and Democrats are considering spending trillions of dollars more on a sweeping legislative package to overhaul the nation’s infrastructure.

Federal spending is far outpacing revenue — the United States is doling out twice as much money as it takes in, having spent a record $3.4 trillion so far this fiscal year, which began Oct. 1, and collected just $1.7 trillion in tax revenue.

The spending continued at a record clip in March, when the government spent $927 billion, the highest total on record for any March and the third highest total of any month to date. The deficit for March was $660 billion.

A Treasury official said that the data showed a substantial increase from a year ago, when the pandemic was just setting in and the economy was starting to shed jobs. The budget deficit, which is the gap between what the government spends and what it takes in, is expected to continue to swell in the coming months as money from the stimulus bill continues to roll out.

In the first six months of the fiscal year, spending was up sharply for nutrition assistance programs, economic impact payments and expanded jobless benefits. Money for small-business loans made through the Paycheck Protection Program and funds for education and health providers also contributed to the record outlays.

Economic policymakers have said that the budget shortfall is a long-term concern but that it is manageable now.

“The U.S. federal budget is on an unsustainable path,” Jerome H. Powell, the Federal Reserve chair, said on CBS’s “60 Minutes” on Sunday. “Meaning the debt is growing faster than the economy. And that’s kind of unsustainable in the long run.”

He added: “That doesn’t mean debt is at an unsustainable level today. It’s not. We can service the debt we have.”

Smartmatic says disinformation on Fox News about the election was ‘no accident.’

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“The First Amendment does not provide the Fox defendants a get-out-of-jail-free card,” Smartmatic’s lawyer, J. Erik Connolly, wrote in a brief.Credit...Eduardo Munoz/Reuters

The election technology company Smartmatic pushed back on Monday against Fox News’s argument that it had covered the aftermath of the 2020 presidential election responsibly, stating that Fox anchors had played along as guests pushed election-related conspiracy theories.

“The First Amendment does not provide the Fox defendants a get-out-of-jail-free card,” Smartmatic’s lawyer, J. Erik Connolly, wrote in a brief filed in New York State Supreme Court. “The Fox defendants do not get a do-over with their reporting now that they have been sued.”

The brief came in response to motions filed by Fox Corporation and three current and former Fox hosts — Maria Bartiromo, Jeanine Pirro and Lou Dobbs — to dismiss a Smartmatic lawsuit accusing them of defamation.

Smartmatic and another company, Dominion Voting Systems, became the focus of baseless conspiracy theories after the Nov. 4 election that they had manipulated vote totals in contested states. Those conspiracy theories were pushed by Rudolph W. Giuliani and Sidney Powell, serving as personal lawyers to former President Donald J. Trump, on Fox News, Mr. Trump’s longtime network of choice. Smartmatic, which says that the conspiracy theories destroyed its reputation and its business, provided election technology in only one county during the election.

Last month, Dominion also sued Fox News. Together, the two suits represent a billion-dollar challenge to the Fox empire, which, after Smartmatic filed its lawsuit, canceled the Fox Business program hosted by Mr. Dobbs.

“The filing only confirms our view that the suit is meritless and Fox News covered the election in the highest tradition of the First Amendment,” the network said in a statement late Monday.

Fox’s motion, as well as those of its anchors, argued that the mentions of Smartmatic were part of its reporting on a newsworthy event that it was duty-bound to cover: A president’s refusal to concede an election and his insistence that his opponent’s victory was not legitimate.

But the response Smartmatic filed on Monday, which runs for 120 pages, said that argument amounted to wishful thinking and that Fox had not covered the claims about Smartmatic objectively or fairly.

“The Fox defendants wedded themselves to Giuliani and Powell during their programs,” the brief said. “They cannot distance themselves now.”

Fox will have several weeks to respond to the brief, and a judge will eventually consider whether to allow Smartmatic’s case to proceed.

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A Los Angeles movie theater chain won’t be reopening after the pandemic.

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The owner of the Cinerama Dome in Hollywood and 15 other movie theaters said it would not reopen after the pandemic.Credit...Kate Warren for The New York Times

ArcLight Cinemas, a beloved chain of movie theaters based in Los Angeles, including the Cinerama Dome in Hollywood, will permanently close all its locations, Pacific Theaters announced on Monday, after the pandemic decimated the cinema business.

ArcLight’s locations in and around Hollywood have played host to many a movie premiere, in addition to being favorite spots for moviegoers seeking out blockbusters and prestige titles. They are operated by Pacific Theaters, which also manages a handful of theaters under the Pacific name, and are owned by Decurion.

“After shutting our doors more than a year ago, today we must share the difficult and sad news that Pacific will not be reopening its ArcLight Cinemas and Pacific Theaters locations,” the company said in a statement.

“This was not the outcome anyone wanted,” it added, “but despite a huge effort that exhausted all potential options, the company does not have a viable way forward.”

Between the Pacific and ArcLight brands, the company owned 16 theaters and more than 300 screens.

The movie theater business has been hit particularly hard by the pandemic. But in recent weeks, the majority of the country’s largest theater chains, including AMC and Regal Cinemas, have reopened in anticipation of the slate of Hollywood films that have been put back on the calendar, many after repeated delays because of pandemic restrictions. A touch of optimism is even in the air as a result of the Warner Bros. movie “Godzilla vs. Kong,” which has generated some $70 million in box office receipts since opening over Easter weekend.

Still, the industry’s trade organization, the National Association of Theater Owners, has long warned that the punishing closures were most likely to affect smaller regional players like ArcLight and Pacific. In March, the Alamo Drafthouse Cinema chain, which operates about 40 locations across the country, announced that it had filed for Chapter 11 bankruptcy protection but would keep most of its locations operational while it restructured.

That does not seem to be the case for Pacific Theaters, which, according to two people with knowledge of the matter, fired its entire staff on Monday.

The reaction to ArcLight’s closing around Hollywood has been emotional, including an outpouring on Twitter.

Some local reporters were barred from a news conference after Daunte Wright’s death.

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The death of 20-year-old Daunte Wright prompted protests in Brooklyn Center, Minn.Credit...Aaron Nesheim for The New York Times

Reporters from multiple local organizations were denied entry to a news conference on Monday about the shooting of Daunte Wright, whose death at the hands of a police officer in Minnesota has set off protests.

Mr. Wright, 20-year-old Black man, was killed by the officer on Sunday during a traffic stop in Brooklyn Center, Minn., a suburb of Minneapolis. As national and international media flooded in, Brooklyn Center officials organized a news conference for Monday to address the shooting and release body-camera video.

Andy Mannix, a federal courts reporter for The Star Tribune, the largest newspaper in Minnesota, said on Twitter that he and his colleagues were denied access to the news conference while he watched national and international media be let in.

Suki Dardarian, a senior managing editor of The Star Tribune, said in an email that the paper had sent three journalists to the news conference. Two were denied entry, while one, a videojournalist, was able to get in, she said.

A spokeswoman for Minnesota Public Radio said that credentialed M.P.R. journalists also were not granted access. An article in The Star Tribune said journalists from the Minnesota Reformer, a nonprofit newsroom, were also denied.

Ms. Dardarian said local media should be allowed to attend police news conferences and ask questions.

“We were offered no explanation for why the reporter and photographer were not allowed in (as well as some other local journalists), except for someone saying the room was full,” Ms. Dardarian said. “Our videojournalist observed that there was still space in the room.”

“The chief indicated in his remarks that he is committed to transparency,” she said. “We believe that should include allowing the local media to attend a press conference to which they were invited — and agreeing to answer our questions following his statement.”

Dan Shelley, the executive director of Radio Television Digital News Association, a national industry group, said local journalists should be included in news conferences because they are part of the communities on which they’re reporting.

“If you have a genuine desire to be transparent, why would you exclude local journalists from a news conference?” Mr. Shelley said.

The city of Brooklyn Center and the city’s police department did not respond to requests for comment.

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Amid a chip shortage, the White House gathers business leaders to discuss supplies.

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‘We Have to Step Up Our Game,’ Biden Says on Chip Shortage

President Biden met with business executives on Monday to discuss semiconductor supply chains and the global microchip shortage.

Today, I received a letter from 23 senators, bipartisan and 42 House members, Republican and Democrats, supporting the Chips for America program. Let me quote from the letter. It says the Chinese Communist Party aggressively plans to reorient and dominate the semiconductor supply chain, and it goes into how much money they’re pouring into being to be able to do that. But I was saying for some time now, China and the rest of the world is not waiting, and there’s no reason why Americans should wait. We’re investing aggressively in areas like semiconductors and batteries. That’s what they’re doing and others. So must we. For too long as a nation, we haven’t been making the big, bold investments we need to outpace our global competitors. We’ve been falling behind on research and development and manufacturing, and to put it bluntly, we have to step up our game. And I’m not ready to give up. I’m ready to work with all of you, with the congress, both parties, to pass the American Jobs Plan and to make a once-in-a-generation investment in America’s future again.

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President Biden met with business executives on Monday to discuss semiconductor supply chains and the global microchip shortage.CreditCredit...Amr Alfiky/The New York Times

The White House convened a meeting of business executives on Monday to discuss semiconductor supply chains amid a global chip shortage, with President Biden using the moment to pitch his $2.3 trillion infrastructure plan, which aims in part to bolster high-tech domestic manufacturing.

“China and the rest of the world is not waiting, and there’s no reason why Americans should wait,” Mr. Biden said.

At one point, he held up a silicon wafer and declared, “This is infrastructure.”

Participants in the meeting, described by the White House as a “virtual C.E.O. summit on semiconductor and supply chain resilience,” included executives from AT&T, Ford Motor, General Motors, Google, Intel, Samsung and Taiwan Semiconductor Manufacturing Company. The meeting was closed to the news media, aside from a brief portion when Mr. Biden gave remarks.

The global semiconductor shortage has disrupted auto production in the United States and elsewhere, underscoring both a short-term and long-term challenge for the Biden administration with economic and national security implications.

Mr. Biden faces the immediate need to try to help automakers obtain supplies. Jen Psaki, the White House press secretary, said on Monday that the president wanted to “hear directly from companies about the impacts, what would help them most through this period of time.”

In the longer term, Mr. Biden faces the task of trying to bolster chip manufacturing in the United States, part of his desire to expand domestic production in critical areas and lessen the country’s risk of shortages for key products.

In February, Mr. Biden signed an executive order directing his administration to conduct a 100-day review of supply chains for semiconductors and several other types of critical goods.

His infrastructure plan also seeks to strengthen supply chains for chips and other important products.

It includes $50 billion for semiconductor research and manufacturing, and another $50 billion to create an office at the Commerce Department focused on the country’s industrial capacity and support for the production of critical products. It also includes $50 billion for the National Science Foundation, where Mr. Biden would create a technology directorate focused on areas like semiconductors.

Will Smith’s production pulls out of Georgia, citing the state’s voting law.

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Will Smith, left, and director Antoine Fuqua announced on Monday that they were moving production of their upcoming film out of Georgia.Credit...Associated Press

Will Smith and the director Antoine Fuqua said on Monday that they were pulling their upcoming film production “Emancipation” out of Georgia because of the state’s new voting law, which has been denounced by activists as an effort to make voting harder for the state’s Black population.

The slavery-era drama, which is being produced and financed by Apple Studios, is the first major production to cite the law as a reason to leave the state, which offers generous tax incentives to Hollywood productions and has become a major hub for Marvel Studios, Netflix and other industry heavyweights.

“At this moment in time, the nation is coming to terms with its history and is attempting to eliminate vestiges of institutional racism to achieve true racial justice,” Mr. Smith and Mr. Fuqua said in a joint statement. “We cannot in good conscience provide economic support to a government that enacts regressive voting laws that are designed to restrict voter access. The new Georgia voting laws are reminiscent of voting impediments that were passed at the end of Reconstruction to prevent many Americans from voting. Regrettably, we feel compelled to move our film production work from Georgia to another state.”

In the film, set to begin production this summer, Mr. Smith was set to play the real-life enslaved man named Peter, who emancipated himself from a Southern plantation and joined the Union Army. His story became famous after photographs of his back, scarred by whippings, appeared in the pages of Harper’s Weekly.

Whether or not this move will prompt other studios to reconsider productions in Georgia is not clear. Stacey Abrams, along with Tyler Perry, who owns his own studio in Atlanta, and others have urged Hollywood not to uproot productions despite outrage over the new law.

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Topps is jumping into the NFT craze with new digital baseball cards.

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Topps will soon start issuing digital versions of its baseball cards.Credit...Benjamin Norman for The New York Times

A classic American pastime — baseball-card collecting — is getting a 21st-century update. Topps, the collectibles and candy company, and Worldwide Asset Exchange, a blockchain platform, are selling NFTs, or nonfungible tokens, of this season’s Major League Baseball trading card series, the DealBook newsletter reports.

WAX minted more than a million NFTs for 75,000 digital card packs. The series digitizes nearly 2,000 images to be sold in packs of six or 45 cards starting next week.

For M.L.B., the tokens essentially will act as an annuity, with the league receiving a fraction of every resale via conditions written into their code. That is a new source of revenue that didn’t exist with old-fashioned cards.

Top Shots, the National Basketball Association’s NFTs, are among the most popular assets to take off in the recent craze. They have generated nearly $150 million in sales over the past month alone, according to DappRadar, and the company behind the Top Shots recently raised $305 million in funding.

With physical cards it has been difficult to establish how many cards were issued and to ensure the authenticity of a supposedly rare one, said William Quigley, WAX’s co-founder, but NFTs have built-in authentication and verification data.

Topps is riding high as the pandemic has driven new interest in memorabilia, especially trading cards. And NFTs are not the only hot trend Topps is betting on: The company is going public via a SPAC — a special purpose acquisition company, described as the “new way of doing an M.&.A deal” — in a deal that values it at $1.3 billion, DealBook reported last week.

As England reopens, Apple and Google block update to tracing app.

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A QR code in a London cafe, for use with the British government’s contact tracing app.Credit...Neil Hall/EPA, via Shutterstock

An update to the contact tracing app used in England and Wales has been blocked from release by Apple and Google because of privacy concerns, renewing a feud between the British government and the two tech giants about how smartphones can be used to track Covid-19 cases.

In an attempt to trace possible infections, the update to the app would have allowed a person who tests positive for the virus to upload a list of restaurants, shops and other venues they recently visited, data that would be used by health officials for contact tracing. But collecting such location information violates the terms of service that Google and Apple forced governments to agree to in exchange for making contact tracing apps available on their app stores.

The dispute, first reported by the BBC, highlights the supernational role that Apple and Google have played responding to the virus. The companies, which control the software of nearly every smartphone in the world, have forced governments to design contact tracing apps to their privacy specifications, or risk not having the tracking apps made available to the public. The gatekeeper role has frustrated policymakers in Britain, France and elsewhere, who have argued those public health decisions are for governments, not private companies to make.

The release of the app update was to coincide with England’s relaxation of lockdown rules. On Monday, the country began loosening months of Covid-related restrictions, allowing nonessential shops to reopen, and pubs and restaurants to serve customers outdoors.

An older version of the contact tracing app continues to work, but the data is stored on a person’s device, rather than being kept in a centralized database.

To use the app, visitors to a store or restaurant take a photo of a poster with a QR code displayed in the business, and the software keeps a record of the visit in case someone at the same location later tests positive.

Apple and Google are blocking the update that would let people upload the history of the locations they have checked into directly to health authorities.

The Department of Health and Social Care said it is in discussions with Apple and Google to “provide beneficial updates to the app which protect the public.”

Apple and Google declined to comment.

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Battery makers’ trade dispute ends in a $1.8 billion settlement.

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A General Motors assembly line for the Chevrolet Bolt electric vehicle. A dispute between two South Korean battery makers threatened the future of a plant in Georgia.Credit...Rebecca Cook/Reuters

Two South Korean manufacturers of electric vehicle batteries that are building plants in the United States said on Sunday that they had reached a $1.8 billion settlement in a trade secrets dispute that threatened the domestic battery supply and, with it, the Biden administration’s green agenda.

The announcement came on the day of a deadline set by the United States’ trade representative to decide whether to veto a ruling by another federal agency, the U.S. International Trade Commission, in an intellectual property case between LG Energy Solution and SK Innovation, reports Ephrat Livni for The New York Times.

The commission’s ruling in favor of LG would have banned SK from supplying batteries in the U.S. market after it fulfills existing contracts with Ford and Volkswagen and could have put at risk a plant that the company is building in Georgia.

Both Democratic and Republican officials from that state had urged the Biden administration to veto the ruling, arguing that it could cost thousands of jobs and billions of dollars in investment.

President Biden called the settlement “a win for American workers and the American auto industry” in a statement on Sunday. “A key part of my plan to Build Back Better is to have the electric vehicles and batteries of the future built here in America, all across America, by American workers,” he said.

After its worst recession in 300 years, the U.K. economy is like a ‘coiled spring,’ economists say.

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Decorating a restaurant before its reopening on April 12.Credit...Andrew Testa for The New York Times

For the past year, the British economy has yo-yoed with the government’s pandemic restrictions. On Monday, as shops, outdoor dining, gyms and hairdressers reopened across England, the next bounce began.

The pandemic has left Britain with deep economic wounds that have shattered historical records: the worst recession in three centuries and record levels of government borrowing outside wartime.

Last March and April, there was an economic slump unlike anything ever seen before when schools, workplaces and businesses abruptly shut. Then came a summertime boom, when restrictions eased and the government helped usher people out of their homes with a popular meal-discount initiative called “Eat Out to Help Out.”

Beginning in the fall, a second wave of the pandemic stalled the recovery, though the economic impact wasn’t as severe as it had been last spring. Still, the government has spent about 344 billion pounds, or $471 billion, on its pandemic response. To pay for it, the government has borrowed a record sum and is planning the first increase in corporate taxes since 1974 to help rebalance its budget.

Britain’s economy hasn’t recovered from the pandemic recession.

Percent change in British G.D.P. from the end of 2010

Source: Office for National Statistics

The New York Times

By the end of the year, the size of Britain’s economy will be back where it was at the end of 2019, the Bank of England predicts. “The economy is poised like a coiled spring,” Andy Haldane, the central bank’s chief economist said in February. “As its energies are released, the recovery should be one to remember after a year to forget.”

Even though a lot of retail spending has shifted online, reopening shop doors will make a huge difference to many businesses.

Daunt Books, a small chain of independent bookstores, was busy preparing to reopen for the past week, including offering a click-and-collect service in all of its stores. Throughout the lockdown, a skeleton crew “worked harder than they’ve ever worked before, just to keep a trickle” of revenue coming in from online and telephone orders, said Brett Wolstencroft, the bookseller’s manager.

“The worst moment for us was December,” Mr. Wolstencroft said, when shops were shut in large parts of the country beginning on Dec. 20. “Realizing you’re losing your last bit of Christmas is exceptionally tough.”

He says he is looking forward to having customers return to browse the shelves and talk to the sellers. “We’d sort of turned ourselves into a warehouse” during the lockdown, he said, “but that doesn’t work for a good bookshop.”

With the likes of pubs, hairdressers, cinemas and hotels shut for months on end, Brits are expected to build up £180 billion in excess savings by June, according to estimates by the Office for Budget Responsibility. That money, once people can get out more, is expected to be the engine of this recovery — even though economists are debating how much of this windfall will end up in the tills of these businesses.

Monday is just one phase of the reopening. Pubs can serve customers only in outdoor seating areas, and less than half, about 15,000, have such facilities. Hotels will also remain closed for at least another month alongside indoor dining, museums and theaters. The next reopening phase is scheduled for May 17.

Two-fifths of hospitality businesses have outside space, said Kate Nicholls, the chief executive of U.K. Hospitality, a trade group.

“Monday is a really positive start,” she said. “It helps us to get businesses gradually back open, get staff gradually back off furlough and build up toward the real reopening of hospitality that will be May 17.”

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Here’s what happened in markets today.

Global stocks drifted lower from recent highs on Monday ahead of a batch of first-quarter earnings reports.

The S&P 500 was marginally lower after reaching a record on Friday. The Stoxx Europe 600 also declined from a high reached on Friday, dropping 0.5 percent. The FTSE 100 in Britain fell 0.4 percent.

Stocks have recently been propelled higher by expectations that the global economy will recover strongly from the pandemic this year. Much of the impetus is expected to come from the United States, where trillions of dollars are being spent on various economic recovery packages. On Sunday, Federal Reserve chair, Jerome H. Powell, said the economy was at an “inflection point” and on the cusp of growing more quickly.

But there are still concerns about the uneven nature of the recovery within countries and between them. For example, parts of Europe and South America are still struggling to contain outbreaks of the coronavirus and the vaccine rollout is slower than in the United States and Britain.

Oil prices and Treasury notes

  • Oil futures rose. Futures of West Texas Intermediate, the U.S. crude benchmark, rose was up 0.7 percent to $59.73 a barrel.

  • Yields on 10-year U.S. Treasury notes were up slightly at 1.68 percent.

Retail sales

  • Retail sales in the eurozone rose more than economists forecast, data published Monday shows. Sales jumped 3 percent in February from the previous month, compared with predictions of a 1.7 percent increase.

  • In England, nonessential retail stores opened on Monday for the first time in more than three months. Shares in JD Sports, a clothing retailer, rose in the morning and hit a record high. But by midmorning shares were down alongside several other large British brands, including Marks & Spencer and Next. Foot traffic in shopping locations across Britain was three times greater than last week, according to data from Springboard.

The latest: Salesforce announces plans to reopen its global offices.

  • Salesforce unveiled plans on Monday to reopen its offices around the world, starting in May with Salesforce Tower in San Francisco, the company’s headquarters, followed by offices in two California cities, Palo Alto and Irvine. “To start, fully vaccinated employees will be able to volunteer to join groups of 100 or fewer people to work on designated floors in certain offices,” the company said on its website. Salesforce said it had already reopened 22 offices using the model, which it hoped other companies would duplicate. All Salesforce employees are allowed to continue working from home through at least Dec. 31.

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Today in On Tech: Hearing aids for the masses.

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Credit...Yoshi Sodeoka

In today’s On Tech newsletter, Shira Ovide looks at what could be a revolution for our ears — hearing aids at a fraction of the cost and hassle of conventional devices.

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