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  • AI chip boom sends Nvidia’s stock surging after whopper of a quarter | CNN Business

    AI chip boom sends Nvidia’s stock surging after whopper of a quarter | CNN Business

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    New York
    CNN
     — 

    The AI boom is here, and Nvidia is reaping all the benefits.

    Shares of Nvidia

    (NVDA)     exploded 28% higher Thursday after reporting earnings and sales that surged well above Wall Street’s already lofty expectations. That was enough to make investors temporarily forget about America’s dangerous debt ceiling standoff, sending the broader stock market higher — even after credit rating agency Fitch warned late Wednesday that America could soon lose its sterling AAA debt rating.

    Nvidia makes chips that power generative AI, a type of artificial intelligence that can create new content, such as text and images, in response to user prompts. That’s the kind of AI underlying ChatGPT, Google’s Bard, Dall-E and many of the other new AI technologies.

    “The computer industry is going through two simultaneous transitions — accelerated computing and generative AI,” said Jensen Huang, Nvidia’s CEO, in a statement. “A trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process.”

    Huang said Nvidia is increasing supply of its entire suite of data center products to meet “surging demand” for them.

    Last quarter, Nvidia’s profit surged 26% to $2 billion, and sales rose 19% to $7.2 billion, each easily surpassing Wall Street analysts’ forecasts. Nvidia’s outlook for the current quarter was also significantly — about 50% — higher than analysts’ predictions.

    Nvidia’s stock is up nearly 110% this year.

    “There is not one better indicator around underlying AI demand going on … than the foundational Nvidia story,” said Dan Ives, analyst at Wedbush. “We view Nvidia at the core hearts and lungs of the AI revolution.”

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  • Golf’s new Saudi deal presents questionable political, business and sporting realities | CNN Politics

    Golf’s new Saudi deal presents questionable political, business and sporting realities | CNN Politics

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    CNN
     — 

    The PGA Tour once advertised its brightest stars with the catch phrase “These guys are good.” A better slogan might now be “These guys are even richer.”

    In a bombshell announcement so staggering that many golf fans thought it was fake at first, the venerable PGA Tour unveiled a partnership Tuesday with Saudi Arabia’s public investment fund, the financier of its sworn rival LIV Golf – a breakaway circuit that split the sport and seeded feuds among its top players.

    The deal means that the PGA Tour – built on the image of quintessentially American Arnold Palmer, who epitomized post World War II US values – will now rest atop a pile of money put up by the regime that the US blamed for the murdering and dismemberment of Washington Post columnist Jamal Khashoggi, that was home to 15 of the 19 hijackers of September 11, 2001, attack, and that has frequently been condemned by Washington for infringing women’s rights.

    It is beyond doubt that the new reality of pro-golf will mean a better spectacle for fans since it will end the split between the two rival tours and will also fold in the DP World Tour (formerly known as the European tour) and mean the brightest stars will play one another more often.

    For many sports fans in the US and elsewhere, that’s just fine. They like to plop down on the couch and watch their favorite golfer on the back nine on Sunday or their Gulf-owned Premier League team on TV. Who can begrudge them one oasis free from bitter, tribal modern politics?

    And the deal is also undeniably a great piece of business, assuming PGA Tour players accept it. Global golfers stand to win a lot more money, various tours will be invigorated and Saudi Arabia’s government and its ruthless leader, Crown Prince Mohammed bin Salman (MBS), get to be associated with one of the planet’s most prestigious year-round sporting properties. And all pending litigation between LIV Golf and the PGA Tour was also mutually ended under the new agreement.

    But for others, Tuesday’s peace deal on the links raises painful moral issues. It also exposes top PGA leaders – who had blasted golfers who defected to LIV – to accusations of hypocrisy and reflects the way modern professional sports are hostage to the highest bidders. This can only pose uncomfortable questions to fans whose values and history clash with those of distant and sometimes politically dicey entities who effectively own their teams and top stars.

    PGA Tour Commissioner Jay Monahan, for instance, had some explaining to do – not least to the tour’s players gathered at the Canadian Open this week after many tweeted that they had no advance notice of the deal. Monahan had played the 9/11 card last year at the same event, saying that two families that were close to him had lost loved ones in the worst terror attack on American soil, adding, “I would ask any player that has left, or any player that would ever consider leaving, have you ever had to apologize for being a member of the PGA Tour?”

    Now Monahan stands to be the effective supremo of global golf, save for the four majors – the sport’s most prestigious tournaments – aided by a gusher of Saudi cash.

    9/11 Families United effectively accused Monahan of using the tragedy as leverage in a business deal to reunite golf. He “co-opted the 9/11 community last year in the PGA’s unequivocal agreement that the Saudi LIV project was nothing more than sports washing of Saudi Arabia’s reputation,” the group said in a statement. “But now the PGA and Monahan appear to have become just more paid Saudi shills, taking billions of dollars to cleanse the Saudi reputation so that Americans and the world will forget how the Kingdom spent their billions of dollars before 9/11 to fund terrorism, spread their vitriolic hatred of Americans, and finance al Qaeda and the murder of our loved ones.”

    Monahan was asked about his reversal after what he said was a “heated” meeting with PGA Tour players on Tuesday.

    “I recognize that people are going to call me a hypocrite,” he said. “Anytime I said anything, I said it with the information that I had at that moment, and I said it based on someone that’s trying to compete for the PGA TOUR and our players.”

    Major champions who jumped to the rival circuit last year like Dustin Johnson, Phil Mickelson, Patrick Reed and Cam Smith might also now wonder whether their PGA tour brethren will face the same grilling over human rights that they had to endure at the time.

    One very famous golfer was delighted by the deal and seemed keen to claim some reflected credit – former President Donald Trump. The current front-runner for the 2024 GOP nomination associated himself with LIV after the PGA Tour and other golf governing bodies distanced themselves from him over his radioactive political reputation. Trump has hosted several tournaments at his courses for LIV – a circuit that sits well with his record of refusing to sever links with the Saudis over the murder of Khashoggi in 2018, reasoning that the Saudis were great customers of the US.

    “A big, beautiful, and glamorous deal for the wonderful world of golf. Congrats to all!!!” Trump wrote in block capital letters on his Truth Social platform.

    Some defenders of LIV golfers have pointed out that the players were only making a choice to prioritize personal interests over moral ones in partnering with the Saudis – a calculus that mirrored decades of US foreign policy. Indeed, President Joe Biden had called on the 2020 campaign trail for the kingdom to be treated as a “pariah” because of Khashoggi’s murder only to travel to the kingdom as president to fist-bump MBS when he needed a spike in oil price production to bring down American gas prices.

    On Tuesday, after the LIV/PGA partnership was announced, US Secretary of State Antony Blinken sat down for talks with the Crown Prince in Riyadh.

    The idea that politics and sport shouldn’t mix has always been quaint. The Olympics and the World Cup are two of the planet’s most political spectacles after all. And modern sport has long run on money as monster TV rights contracts translate into huge salaries for top soccer players, Formula One Drivers, NBA stars and the top names in other sports.

    But Tuesday’s LIV/PGA Tour agreement lays bare questions of morality so starkly precisely because of the way golf has sold itself. In a sport where players call penalties on themselves, and commentators idolize top players in whispered tones as paragons of gentlemanly conduct, patriotism and family values, the origin of the sport’s new financial lifeline is glaring.

    The PGA Tour and Saudi partnership may be the most prominent example yet of the phenomenon known as sports washing, whereby an authoritarian nation seeking to buff up its image – despite serious criticism over its political system and human rights performance – woos the world’s top sporting stars. China was accused of such an agenda with its 2008 and 2022 Summer and Winter Olympics, where attempts at political activism largely fizzled under its repressive rule. The Qatar World Cup last year was another example of a nation that used its financial muscle to present a new image to the world. Various controversies during the tournament over LGBTQ rights and the plight of workers who built the stadiums undercut global governing body FIFA’s pretensions to inclusion.

    The Saudis, Qataris and others are using their oil wealth to buy themselves a foothold among the world’s most powerful nations and to create tourism, entertainment and sporting legacies to sustain them when their reserves of carbon energy are depleted.

    This mirrors a global shift in power and especially financial muscle – from the capitals of Western Europe to new epicenters in the emerging economies of the Middle East, India and China. Soccer, like golf, is taking its share of the cash. Traditional working class football clubs knitted into their communities for decades in the UK, for example, now suddenly find themselves owned by foreign energy magnates. Premier League giant Manchester City was bought by a United Arab Emirates-led group. And Newcastle United is owned by a Saudi Arabia-led consortium, forcing fans to consider (or not) the ethical dimensions of their support for their hometown clubs. And global cricket has been transformed by the Indian Premier League, which pays lavish salaries in a shortened form of the game.

    One of the top names in soccer, Cristiano Ronaldo, is playing out the twilight of a glorious career spent at Europe’s top clubs in the up-and-coming Saudi league for a massive salary. And on Tuesday, Saudi team Al-Ittihad announced the signing of Real Madrid and French forward Karim Benzema, completing a sporting double whammy for the kingdom.

    There are as many sporting questions about the PGA Tour/LIV Golf partnership that remain unanswered. The partnership combines the Saudi Public Investment Fund’s golf-related commercial businesses and rights (including LIV Golf) with the commercial businesses and rights of the PGA Tour and DP World Tour into a new, collectively owned, for-profit entity. A spokesman for the PGA tour told CNN that the deal is not a merger.

    “After two years of disruption and distraction, this is a historic day for the game we all know and love,” Monahan said, describing a “transformational partnership” that would “benefit golf’s players, commercial and charitable partners and fans.”

    Yasir Al-Rumayyan, governor of the Saudi Public Investment Fund, told CNBC he expected the partnership to be finalized within weeks and revealed, in a stunning move, that he had told LIV figurehead and Hall of Famer Greg Norman about the deal only moments before going on air.

    LIV lured some of the PGA Tour’s top stars with massive signing bonuses and huge purses at substantially fewer events than the PGA tour, prompting the premier US circuit to unveil its own select “designated events” with upped prize money. The two sides were locked in bitter legal battles that have now been resolved.

    It remains unclear, however, what steps LIV stars will have to take to potentially be able to return to events like The Players Championship, currently hosted on the PGA tour from which they were banned.

    Then there is the question of how current PGA Tour members will respond.

    Former British Open Champion Collin Morikawa tweeted, “I love finding out morning news on Twitter.”

    The sudden announcement also did not specify what would happen to LIV tour events, which have struggled to draw a strong TV audience, beyond this season. Monahan’s announcement did hint that the new entity was committed to the new format of team events that has been introduced by LIV, to compliment golf’s traditional reliance on individual tournaments.

    The golfer with the widest smile on Tuesday was probably Mickelson. The three-time Masters champion took the most heat for deserting the PGA tour for a reported massive payday, and was one of the most outspoken supporters of LIV – a breakaway he argued was a way to revolutionize the structure of professional golf and to secure more rewards for players.

    Mickelson was also open about the reality of partnering with the Saudis, calling them “scary m*therf**kers to get involved with,” in an interview with golf journalist Alan Shipnuck that he later claimed was off the record. Shipnuck has written that he offered Mickelson no such agreement.

    On Tuesday, Mickelson simply tweeted: “Awesome day today,” with a smiley sunshine emoji.

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  • Tax prep companies shared private taxpayer data with Google and Meta for years, congressional probe finds | CNN Business

    Tax prep companies shared private taxpayer data with Google and Meta for years, congressional probe finds | CNN Business

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    CNN
     — 

    Some of America’s largest tax-prep companies have spent years sharing Americans’ sensitive financial data with tech titans including Meta and Google in a potential violation of federal law — data that in some cases was misused for targeted advertising, according to a seven-month congressional investigation.

    The report highlights what legal experts described to CNN as a “five-alarm fire” for taxpayer privacy that could lead to government and private lawsuits, criminal penalties or perhaps even a “mortal blow” for some industry giants involved in the probe including TaxSlayer, H&R Block and TaxAct.

    Using visitor tracking technology embedded on their websites, the three tax-prep companies allegedly sent tens of millions of Americans’ personal information to the tech industry without consent or appropriate disclosures, according to the congressional report reviewed by CNN.

    Beyond ordinary personal data such as people’s names, phone numbers and email addresses, the list of information shared also included taxpayer data — details about people’s filing status, adjusted gross income, the size of their tax refunds and even information about the buttons and text fields they clicked on while filling out their tax forms, which could reveal what tax breaks they may have claimed or which government programs they use, according to the report.

    The report, which drew on congressional interviews and written testimony from Meta, Google and the tax-prep companies, also found that every taxpayer who used TaxAct’s IRS Free File service while the tracking was enabled would have had their information shared with the tech companies. Some of the tax-prep companies still do not know whether the data they shared continues to be held by the tech platforms, the report said.

    “On a scale from one to 10, this is a 15,” said David Vladeck, a law professor at Georgetown University and a former consumer protection chief at the Federal Trade Commission, the country’s top privacy watchdog. “This is as great as any privacy breach that I’ve seen other than exploiting kids. This is a five-alarm fire, if what we know about this so far is true.”

    It is also an example, Vladeck said, of why the United States needs federal legislation guaranteeing every American a basic right to data privacy — an issue that has languished in Congress for years despite electronic data becoming an ever-larger part of the global economy.

    The congressional findings represent the latest claims of wrongdoing to hit the embattled tax-prep industry after a report last year by the investigative journalism outlet The Markup highlighted the tracking practice.

    Wednesday’s bombshell report adds to those earlier revelations by identifying a previously unreported category of data that was allegedly being collected and shared: the webpage titles in online tax software that can reveal what tax forms users have accessed, said an aide to Democratic Sen. Elizabeth Warren, who helped lead the congressional probe. For example, taxpayers who entered information about their college savings contributions or rental income may have done so on webpages bearing titles reflecting that information, which would then have been shared with the tech companies, the aide said.

    During the probe, Meta told investigators it used the taxpayer data it received to target third-party ads to users of its platform and to train its artificial intelligence algorithms, the report said. The Warren aide told CNN it was unclear whether Meta knew it was inappropriately using taxpayer data at the time. A Meta spokesperson said the company instructs its partners not to use its tools to share sensitive information and that Meta’s systems are “designed to filter out potentially sensitive data it is able to detect.”

    The technology behind the data collection, known as a tracking pixel, is commonly used across the entire internet. A small snippet of code that website owners can insert onto their sites, tracking pixels gather information that can help companies, including but not limited to Meta and Google, understand the behavior or interests of website visitors.

    Because of the tracking technology used by TaxAct, TaxSlayer and H&R Block, “every single taxpayer who used their websites to file their taxes could have had at least some of their data shared,” the report said.

    The tax-prep companies at the center of the investigation told lawmakers the collected data had been scrambled to help protect privacy, according to the report. But the report also said some of the tax-prep firms themselves were not fully aware of how much information was being exposed to the tech platforms, and the report cited past FTC research concluding that even “anonymized” data can be easily reverse-engineered to identify a person.

    The pixels’ use in a taxpayer context resulted in the “reckless” sharing of legally protected data that could put taxpayers at risk, according to the report by Warren and her Democratic colleagues Sens. Ron Wyden; Richard Blumenthal; Tammy Duckworth; and Sheldon Whitehouse; Sen. Bernie Sanders, an independent who caucuses with Democrats; and Democratic Rep. Katie Porter.

    The FTC, the Internal Revenue Service, the Justice Department and the Treasury Inspector General for Tax Administration “should fully investigate this matter and prosecute any company or individuals who violated the law,” the lawmakers wrote in a letter dated Tuesday to the agencies and obtained by CNN. The FTC and DOJ declined to comment; the IRS and TIGTA didn’t immediately respond to a request for comment.

    In a statement, H&R Block said it takes client privacy “very seriously, and we have taken steps to prevent the sharing of information via pixels.” Wednesday’s report said H&R Block had testified to using the tracking technology for “at least a couple of years.”

    TaxAct and TaxSlayer didn’t immediately respond to a request for comment. The report said TaxAct had been using Meta’s tools since 2018 and Google’s since about 2014, while TaxSlayer began using Meta’s tools in 2018 and Google’s in 2011. The investigation found that all three tax-prep companies had discontinued their use of Meta’s pixel after The Markup’s report last November.

    Intuit, the maker of TurboTax, received an initial inquiry letter from the lawmakers in December but was not a focus of Wednesday’s report because the company did not use tracking pixels to the same extent, the investigation found.

    Tax preparation firms have faced mounting scrutiny in recent years amid reports that many have turned to data harvesting as a business model and that the largest among them have spent millions lobbying against legislation that could make it easier for Americans to file their tax returns. An IRS report this year found that 72% of Americans would be interested in using a free, electronic tax filing service if it were provided by the agency as an alternative to private online filing services. The IRS plans to launch a pilot version of that service to a limited number of taxpayers in the 2024 tax filing season.

    Google told CNN it prohibits business customers from uploading to its platform sensitive data that could be traced back to a person.

    “We have strict policies and technical features that prohibit Google Analytics customers from collecting data that could be used to identify an individual,” a Google spokesperson said. “Site owners — not Google — are in control of what information they collect and must inform their users of how it will be used. Additionally, Google has strict policies against advertising to people based on sensitive information.”

    Wednesday’s report focuses more heavily on Meta’s use of taxpayer data, the Warren aide told CNN, because Google did not appear to have used the information for its own commercial purposes as overtly as Meta and the investigation was unable to fully determine whether Google may have used the data for other applications.

    The allegations could nevertheless create extensive legal risk for both the tech companies as well as the tax-preparation firms, according to tax and privacy legal experts.

    The tax-prep companies could face billions in fines under US tax law if the federal government decides to sue, said Steven Rosenthal, a senior fellow at the Urban-Brookings Tax Policy Center. In addition, the US government could seek criminal penalties.

    “The scope of ‘taxpayer information’ is broad by design,” Rosenthal said, adding that tax-prep companies can be sued for “knowingly” or “recklessly” leaking that information. “The companies shouldn’t be sharing it in a way that some third party could obtain it.”

    Theoretically, he said, the tax code also affords individual taxpayers the right to file private lawsuits against the tax-prep companies. But most if not all of those firms require customers to submit to mandatory arbitration that could realistically make bringing a private claim more challenging, said the Warren aide.

    Apart from the tax code, both the tech giants as well as the tax-prep firms could also face civil liability from the FTC — which can police data breaches and hold companies accountable for their commitments to user privacy — and potentially from state governments that have their own privacy laws on the books, said Vladeck.

    Depending on the strength of the allegations, the tax-prep companies could quickly be forced into a binding settlement, said a former FTC official who requested anonymity in order to speak more freely.

    “If the facts are really strong, these companies would probably rather settle than go to court. This is very embarrassing,” the former official said. “It could be a mortal blow to the tax prep companies.”

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  • Manchin rails against Biden’s clean energy plans as he faces tough political headwinds in West Virginia | CNN Politics

    Manchin rails against Biden’s clean energy plans as he faces tough political headwinds in West Virginia | CNN Politics

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    CNN
     — 

    West Virginia political observers were not surprised when Sen. Joe Manchin appeared on Fox News on Monday to make a stunning threat: He could be persuaded to vote to repeal his own bill, the Inflation Reduction Act, if the Biden administration pushed him far enough.

    The conservative Democratic senator reiterated this to CNN, saying he would “look for every opportunity to repeal my own bill” if the administration continued to use the IRA to steer the US quickly towards the clean energy transition and away from fossil fuels.

    The IRA, passed and signed into law last year, was a sweeping $750 billion bill that lowered prescription drug costs, raised taxes on large corporations, and invested $370 billion into new tax credits for cleaner energy. Even though Manchin carved out space for fossil fuels, the bill represents by far the biggest climate investment in US history.

    From the start, Manchin has insisted the IRA was an “energy security bill,” rather than a clean-energy bill. Still, experts said he must be sensitive to the idea that he ushered in what ended up being the nation’s largest climate law, given he represents West Virginia – a state where coal and natural gas reign supreme.

    Manchin’s repeal threat “was probably good politics,” West Virginia University political science professor Sam Workman told CNN. If he decides to seek reelection in 2024, the 75-year-old senator will face his toughest political fight yet, as popular West Virginia Republican Gov. Jim Justice jumped into the race this week.

    Justice’s bid for the seat “doesn’t change anything at all,” Manchin told CNN. But political experts from his home state see a man who is gearing up for a fight.

    Since delivering President Joe Biden one of his biggest legislative wins with the IRA last summer, Manchin has spent the last few months on a rampage against the administration, homing in on what he calls its “radical climate agenda.” Manchin has voted against Biden’s nominees for high-ranking administration positions, bashed new rules from the Environmental Protection Agency and Treasury Department and clashed with members of the president’s cabinet at Senate hearings.

    Manchin’s appearance on Fox to slam Biden and threaten to repeal the law he had an outsized role in writing “is a pretty good indicator to me that he’s running,” said John Kilwein, chair of West Virginia University’s political science department.

    Manchin has been silent on whether he’ll run for reelection, but as Justice announced his candidacy, Manchin expressed confidence. “Make no mistake, I will win any race I enter,” he said in a statement.

    The Democrat beat his Republican challenger by just three percentage points in 2018. And though Justice still must get through a primary against Republican Rep. Alex Mooney, the governor is already backed by Senate Republicans’ electoral arm and many in the state think he will present a serious challenge to Manchin.

    “Justice is a likable candidate – he takes that ‘aw shucks’ thing to the next level,” Kilwein said. “This is going to be [Manchin’s] toughest fight, but I think anyone who thinks this is going to be a piece of cake is wrong. I don’t think he’s going to be easy to beat.”

    Manchin is “in danger” politically, his Democratic colleague Sen. Richard Blumenthal of Connecticut told CNN.

    “Joe Manchin is the last remaining statewide elected Democrat [in West Virginia], and we want [him] back in the United States Senate,” Blumenthal said, adding Manchin was a “pillar of strength to Democrats in the last session.”

    Justice made little mention of Manchin during his official campaign launch but came out swinging against Biden and his agenda. On Friday, Justice told Fox News that Manchin “would be a formidable opponent” if he runs for reelection, but added that he’s “done some things that have really alienated an awful lot of West Virginians.”

    There is no denying that West Virginia is incredibly conservative; the state went nearly 40 percentage points for Trump in the 2020 election. But even with those fundamentals, political experts said Manchin has had tremendous staying power through retail politics and argue he can deliver for the state while standing up to Biden.

    “His whole appeal is a retail appeal; every blueberry festival, huckleberry festival, Joe Manchin’s there,” former West Virginia political science professor Patrick Hickey told CNN. “He’s a really smart and talented politician. He gets all the benefits that come from supporting (the IRA), but the next time he’s in West Virginia, he’ll be in a diner telling voters how terrible Biden is.”

    Behind the political rhetoric, the Inflation Reduction Act’s energy provisions could be a windfall for West Virginia, and Manchin is walking a tightrope in his messaging around the law.

    Despite blasting the Biden administration, Manchin has spent the past few months at home touting the benefits of the IRA and jobs it is already bringing to the state.

    Several major clean energy companies have invested hundreds of millions of dollars to build new manufacturing plants in the state: a battery factory, a new industrial facility totally powered by renewable energy, and a plant to make electric school buses.

    “The way Manchin talked about those, he’s crediting the IRA and saying, ‘see, these are the good things that have happened,’” said Angie Rosser, executive director of environmental group West Virginia Rivers. “Those are hundreds of jobs reaching into the thousands, which for our small state is a big, big deal.”

    The John E. Amos coal-fired power plant in Poca, West Virginia. Fossil fuel energy is still a mainstay in state.

    Rosser and others pointed out that Manchin designed the IRA specifically to deliver money to West Virginia, designing tax credits to incentivize more manufacturing in coal country and funding to help these communities during the transition to clean energy.

    Morgan King, a staff member of West Virginia Rivers, has been traveling across the state recently to talk to local officials about how they can apply for federal IRA funding. The response has been overwhelmingly positive, King told CNN.

    “We’ve spoken with people of all parties,” she said. “People don’t care [about] the politics of how this bill was created so long as this funding can make it into their communities. West Virginia is set to disproportionately benefit from this bill more than any other state.”

    Manchin has been at odds with the Biden administration on several fronts, but the administration’s climate policies and implementation of the Inflation Reduction Act seem to have struck a particular nerve – and Republicans have continued to heavily criticize the law.

    A political ad from Republican dark money group One Nation is already circulating in the state, claiming that the IRA would kill 100,000 jobs in West Virginia.

    “The notion that this is just a climate bill … it is damaging here in the state because we’re pretty far to the right on these issues, especially energy issues,” Workman said. “When you sell something as a climate bill, given the economic context here and our history, it’s somewhat harder for people to see indirect benefits like jobs.”

    Manchin recently voted alongside Republicans on Congressional Review Act bills to undo EPA emissions rules for heavy-duty trucks as well as a climate-focused Labor Department rule (Biden has already vetoed one and promised to veto the other). In March, Manchin tanked top Interior Department nominee Laura Daniel-Davis, claiming she wasn’t upholding a part of the IRA that mandates offshore oil drilling in certain federal waters.

    The dynamic has put Senate Democrats in a tough spot. Democrats have a slightly expanded Senate majority after the midterms, but the continued absence of California Sen. Dianne Feinstein, who has been away from Washington as she recovers from shingles, has made for nailbiter votes.

    “He’s one of the most independent US senators out there,” Democratic Sen. Brian Schatz of Hawaii told CNN. “When he is frustrated, he’s not going to be shy about it. And right now, he’s obviously extremely frustrated with the administration, and that has to get sorted.”

    Manchin has also spent the last few months lobbing a steady stream of blistering statements aimed at Biden’s agencies. When the Environmental Protection Agency proposed strong new vehicle emissions regulations intended to push the US auto market towards electric vehicles in the next decade, Manchin said the agency was “lying to Americans” and called the regulations “radical” and “dangerous.”

    And when the Treasury Department issued guidance on IRA’s new EV tax credits – which were written by Manchin – the senator called it “horrific” and said it “completely ignores the intent” of his law.

    Some of his Democratic colleagues have panned his comments about repealing the IRA.

    “Maybe he should run for president,” Democratic Sen. Martin Heinrich of New Mexico told CNN. “He’s got one job; the president’s got another. The IRA is working.”

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  • Biden’s student loan forgiveness program faces a new threat from Senate Republicans | CNN Politics

    Biden’s student loan forgiveness program faces a new threat from Senate Republicans | CNN Politics

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    Washington
    CNN
     — 

    President Joe Biden’s student loan forgiveness program may face a new threat from Senate Republicans even before the US Supreme Court rules on whether it can be implemented.

    Republican Sens. Bill Cassidy of Louisiana, Joni Ernst of Iowa and John Cornyn of Texas are planning to introduce a resolution to overturn Biden’s debt relief program, which promises up to $20,000 of debt relief for eligible borrowers, as soon as this week.

    Biden would very likely veto the measure if it succeeds in both the Senate and House. But votes would force members of his own party, who have not all been in support of the student loan forgiveness program, to take a public stance.

    The program is currently blocked. The Supreme Court is expected to issue its ruling in late June or early July.

    “President Biden’s student loan scheme does not ‘forgive’ debt, it just transfers the burden from those who willingly took out loans to those who never went to college, or sacrificed to pay their loans off,” Cassidy said in a statement.

    The Republican senators plan to introduce their resolution using the Congressional Review Act, which allows Congress to roll back regulations from the executive branch without needing to clear the 60-vote threshold in the Senate that is necessary for most legislation.

    It was unclear whether the Congressional Review Act would apply to Biden’s student loan forgiveness program until the Government Accountability Office made a determination on the matter earlier this month.

    Biden issued his first veto last week concerning a retirement investment resolution, which was also brought under the Congressional Review Act.

    While many key Democratic lawmakers have urged Biden to cancel some federal student loan debt, not every member of the party has been supportive.

    Sen. Catherine Cortez Masto, a Democrat from Nevada who won a competitive reelection race last year, has previously been critical of Biden’s forgiveness plan.

    “I’ll review the full text of the CRA when it is released, but like I said before, I disagree with President Biden’s executive action on student loans because it doesn’t address the root problems that make college unaffordable,” she said in a statement sent to CNN.

    Her statement was first reported by The Wall Street Journal.

    Democratic Sen. Joe Manchin of West Virginia has previously called Biden’s student loan forgiveness program “excessive.” His office did not respond to a request for comment for this story.

    Biden’s one-time student debt forgiveness program is estimated to cost $400 billion over time.

    Individual borrowers who made less than $125,000 in either 2020 or 2021 and married couples or heads of households who made less than $250,000 a year could see up to $10,000 of their federal student loan debt forgiven.

    If a qualifying borrower also received a federal Pell grant while enrolled in college, the individual is eligible for up to $20,000 of debt forgiveness. Pell grants are awarded to students from very low-income families who are more likely to struggle paying back their student loans.

    While the debt relief would help borrowers with student loans now, the program wouldn’t change the cost of college in the future – and some critics argue that it could even lead to an increase in tuition. A separate proposal from Biden, expected to take effect later this year, would create a new income-driven repayment plan that could lower monthly payments for both current and future borrowers.

    The legal challengers to the student loan forgiveness program argue that the Biden administration is abusing its power and using the Covid-19 pandemic as a pretext for fulfilling the president’s campaign pledge to cancel student debt.

    The White House has said that it received 26 million applications before a lower court in Texas put a nationwide block on the program in November, and that 16 million of those applications have been approved for relief – though no debt has been canceled yet. It’s possible the government moves quickly to forgive those debts if it gets the green light from the Supreme Court.

    If the justices strike down Biden’s student loan forgiveness program, it could be possible for the administration to make some modifications to the policy and try again – though that process could take months.

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  • Amazon is ‘investing heavily’ in the technology behind ChatGPT | CNN Business

    Amazon is ‘investing heavily’ in the technology behind ChatGPT | CNN Business

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    CNN
     — 

    Amazon wants investors to know it won’t be left behind in the latest Big Tech arms race over artificial intelligence.

    In a letter to shareholders Thursday, Amazon

    (AMZN)     CEO Andy Jassy said the company is “investing heavily” in large language models (LLMs) and generative AI, the same technology that underpins ChatGPT and other similar AI chatbots.

    “We have been working on our own LLMs for a while now, believe it will transform and improve virtually every customer experience, and will continue to invest substantially in these models across all of our consumer, seller, brand, and creator experiences,” Jassy wrote in his letter to shareholders.

    The remarks, which were part of Jassy’s second annual letter to shareholder since taking over as CEO, hint at the pressure that many tech companies feel to explain how they can tap into the rapidly evolving marketplace for AI products. Since ChatGPT was released to the public in late November, Google

    (GOOG)    , Facebook

    (FB)     and Microsoft

    (MSFT)     have all talked up their growing focus on generative AI technology, which can create compelling essays, stories and visuals in response to user prompts.

    Amazon’s goal, according to Jassy, is to offer less costly machine learning chips so that “small and large companies can afford to train and run their LLMs in production.” Large language models are trained on vast troves of data in order to generate responses to user prompts.

    “Most companies want to use these large language models, but the really good ones take billions of dollars to train and many years, most companies don’t want to go through that,” Jassy said in an interview with CNBC on Thursday morning.

    “What they want to do is they want to work off of a foundational model that’s big and great already, and then have the ability to customize it for their own purposes,” Jassy told CNBC.

    With that in mind, Amazon on Thursday unveiled a new service called Bedrock. It essentially makes foundation models (large models that are pre-trained on vast amounts of data) from AI21 Labs, Anthropic, Stability AI and Amazon accessible to clients via an API, Amazon said in a blog post.

    Jassy told CNBC he thinks Bedrock “will change the game for people.”

    In his letter to shareholders, Jassy also touted AWS’s CodeWhisperer, another AI-powered tool which he said “revolutionizes developer productivity by generating code suggestions in real time.”

    “I could write an entire letter on LLMs and Generative AI as I think they will be that transformative, but I’ll leave that for a future letter,” Jassy wrote. “Let’s just say that LLMs and Generative AI are going to be a big deal for customers, our shareholders, and Amazon.”

    In the letter, Jassy also reflected on leading Amazon through “one of the harder macroeconomic years in recent memory,” as the e-commerce giant cut some 27,000 jobs as part of a major bid to rein in costs in recent months.

    “There were an unusual number of simultaneous challenges this past year,” Jassy said in the letter, before outlining steps Amazon took to rethink certain free shipping options, abandon some of its physical store concepts and significantly reduce overall headcount.

    Amazon disclosed in a securities filing Thursday that Jassy’s pay package last year was valued at some $1.3 million, and that the CEO did not receive any new stock awards in 2022. (When Jassy took over as CEO in 2021, he was awarded a pay package mostly comprised of stock awards that valued his total compensation package at some $212 million.)

    Despite the challenges at Amazon, however, Jassy said in his letter that he finds himself “optimistic and energized by what lies ahead.” Jassy added: “I strongly believe that our best days are in front of us.”

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  • Lyft stock plunges nearly 15% on weaker than expected revenue forecast | CNN Business

    Lyft stock plunges nearly 15% on weaker than expected revenue forecast | CNN Business

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    CNN
     — 

    Lyft may have a bumpy road ahead to recovery.

    The ride-hailing company reported revenue of $1 billion for the quarter ending in March, marking a 14% year-over-year increase and beating Wall Street estimate’s. But the company forecast weaker-than-expected revenue for the current quarter, which was enough to jitter investors.

    Shares of Lyft plunged nearly 15% in after-hours trading Thursday following the earnings results.

    The latest earnings report comes on the heels of Lyft shaking up its the C-suite and announcing plans to cut 26% of its employees as it fights for market share and profitability.

    David Risher, who previously worked at Amazon and Microsoft, recently took over as CEO of Lyft and the company’s two co-founders stepped down from their management positions at the company. Risher has been a member of the Lyft board since 2021.

    On a conference call with analysts on Thursday to discuss the results, Risher said Lyft is currently at “an inflection point” as people return to pre-pandemic social habits.

    “I am very aware of our current levels of growth and profitability are not acceptable,” Risher said on the call, his first as CEO. “I am committed to growing Lyft into a large, durable, profitable business, that our riders, drivers and shareholders love, and I look forward to keeping you informed on our progress.”

    Compared to its chief rival Uber, Lyft has so far struggled to bounce back from the pandemic’s hit to its business. While Uber diversified its business beyond ride-hailing by delivering meals and grocery items during the health crises, Lyft never did. Uber also was able to attract drivers back to the platform better than Lyft as pandemic restrictions eased in the U.S.

    Earlier this week, Uber said in its quarterly earnings report that revenue was up 29%, as demand for its rideshare and delivery services held firm despite lingering recession fears.

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  • Apple is now worth $3 trillion, boosted by the Nasdaq’s best start in 40 years | CNN Business

    Apple is now worth $3 trillion, boosted by the Nasdaq’s best start in 40 years | CNN Business

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    New York
    CNN
     — 

    Apple’s stock ended trading Friday valued at $3 trillion, the only company ever to reach that milestone. It has been riding a Big Tech stock wave that has given the Nasdaq its best first half gain in 40 years.

    Shares of Apple rose more than 2% Friday at a record $193.97. With 15.7 billion shares outstanding, that stock price pushed Apple to its historic market value.

    Apple has been here once before: On January 3, 2022, Apple hit the $3 trillion mark during intraday trading, but it failed to close there.

    The company’s stock closed Thursday at a record high share price for the third-straight day, but it merely budged 0.2% higher. Apple easily surpassed the $190.73 level it needed to break $3 trillion at Friday’s market open.

    The sky-high valuation for the tech giant comes on the heels of its risky launch of the Apple Vision Pro earlier this month and a stronger-than-expected quarterly earnings report in May – even though sales and profit slumped.

    The Vision Pro, which will go on sale next year, impressed tech journalists who got an early preview of the augmented reality device. But it is entering a nascent market with little mainstream consumer adoption. Apple plans to charge a hefty $3,499 for its headset, which currently has limited apps and experiences, and requires users to stay tethered to a battery pack the size of an iPhone.

    Apple’s

    (AAPL)     stock has skyrocketed 49% this year, boosted by a broader surge in Big Tech stocks as investors have jumped onto the AI bandwagon. Nvidia

    (NVDA)     leads the S&P 500 with a 190% jump this year, followed by Meta

    (META)     at 138%.

    The Nasdaq grew by 31.7% in the first half of the year, notching its largest first half percentage gain since 1983.

    This year’s stock market success for Apple comes in sharp contrast to 2022. At the start of 2023, Apple’s market cap fell below $2 trillion in trading for the first time since early 2021.

    Wall Street ended the first half of 2023 on a positive note as the tech rally led markets to close higher for both the month and second quarter of the year.

    The S&P 500 gained 6.5% in June, its best monthly performance since January. It also notched its third consecutive quarter of growth, up 8.3% in the second quarter. The S&P 500 is about 15.9% higher so far this year, its best half since 2019.

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  • Chinese star banker Bao Fan detained by country’s top anti-graft body, state media says | CNN Business

    Chinese star banker Bao Fan detained by country’s top anti-graft body, state media says | CNN Business

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    Hong Kong
    CNN
     — 

    One of China’s top tech bankers, who went missing in February, has been in the custody of the country’s top anti-graft watchdog since his disappearance and has had his detention extended, according to a state media report.

    The Economic Observer, a well regarded financial publication, reported that Bao Fan — founder and CEO of Hong Kong-listed China Renaissance, a boutique investment bank -— was taken away on February 7 by officials from the Central Commission for Discipline Inspection (CCDI) in an investigation into suspected corporate bribery.

    It said, citing an unnamed source, that his detention was extended on May 7 for three months.

    The mysterious disappearance of Bao has sent a chill through financial markets and China’s tech sector. Shares in China Renaissance had plunged more than 20% until they were suspended from trading in early April. The company also delayed the release of its annual results, because its auditors were unable to reach Bao.

    China Renaissance, which was responsible for a string of major Chinese tech deals since it was founded in 2005, didn’t immediately respond to a CNN request for comment.

    The CCDI is the top anti-graft body of the ruling Communist Party and is responsible for investigating corruption.

    China Renaissance had previously revealed only that Bao was “cooperating in an investigation” being carried out by certain authorities in the country. But it gave no other details.

    Bao is known as a veteran dealmaker who worked closely with top tech companies in China. He helped broker the 2015 merger between two of the country’s leading food delivery services, Meituan and Dianping. Today, the combined company’s “super app” platform is ubiquitous in China.

    His February disappearance coincided with a sweeping anti-corruption crackdown launched by the ruling Communist Party into the financial sector, which has ensnared more than a dozen senior executives at China’s biggest financial institutions.

    Analysts believe the crackdown is a new wave of leader Xi Jinping’s existing anti-graft campaign, through which he is believed to be further consolidating his power amid domestic and external challenges.

    The specific agencies handling Bao’s case include the CCDI’s international cooperation bureau and Beijing’s municipal anti-graft authorities, the Economic Observer said.

    Bao’s detention was related to another case involving Cong Lin, a former executive at his company, who had previously worked for China’s largest state owned bank for more than two decades, the newspaper added.

    Cong Lin, who became president of China Renaissance in July 2020, had previously served in a variety of executive roles at the Industrial and Commercial Bank of China, according to public company records.

    Cong has been detained by anti-corruption authorities since September for matters related to his tenure at ICBC Financial Leasing, the Economic Observer said. The details of Cong’s detention were previously reported by several Chinese media outlets.

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  • Biden’s student loan forgiveness program was rejected by the Supreme Court. Here’s what borrowers need to know | CNN Politics

    Biden’s student loan forgiveness program was rejected by the Supreme Court. Here’s what borrowers need to know | CNN Politics

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    Washington
    CNN
     — 

    The Supreme Court struck down President Joe Biden’s student loan forgiveness program Friday, blocking millions of borrowers from receiving up to $20,000 in federal student debt relief, just months before student loan payments are set to restart after a yearslong pause.

    Biden had announced the student loan forgiveness program last August, but it never took effect, having been tied up in the courts for months.

    Later Friday, the president announced that his administration will pursue another pathway to providing some student debt relief, which is based on a different law than the one the now-defunct student loan forgiveness program was linked to.

    This pathway requires the Department of Education to undertake a formal rule-making process, which typically takes months. Details were not released Friday on who might benefit if that process is successful.

    Biden also announced that the administration will take steps to ease the transition period for borrowers when monthly student loan repayments resume in October. This “on-ramp” period will help borrowers avoid penalties if they miss a payment during the first 12 months.

    The Biden administration has made it easier for many borrowers to seek federal student loan forgiveness from several existing debt cancellation programs.

    New rules set to take effect in July could broaden eligibility for the Public Service Loan Forgiveness program, which is aimed at helping government and nonprofit workers.

    And a new income-driven repayment plan proposal is meant to lower eligible borrowers’ monthly payments and reduce the amount they pay back over time. The administration said this plan was finalized Friday and borrowers will be able to take advantage of it this summer, before loan payments are due.

    The Department of Education has also made it easier for borrowers who were misled by their for-profit college to apply for student loan forgiveness under a program known as borrower defense to repayment, as well as for those who are permanently disabled.

    Altogether, the Biden administration has approved more than $66 billion in targeted loan relief to nearly 2.2 million borrowers.

    Regardless of the way the Supreme Court ruled on the one-time forgiveness program, the Biden administration had said that student loan payments will be due starting in October.

    Most student loan borrowers have not been required to make payments on their federal student loans since March 2020, when Congress passed a sweeping aid program to help people struggling financially because of the Covid-19 pandemic.

    Since then, the pause has been extended eight times – under both the Trump and Biden administrations.

    A law passed in early June that addresses the debt ceiling prohibits another extension of the pause.

    But the Biden administration said Friday that it will provide a 12-month on-ramp period for borrowers reentering payment.

    “Borrowers who can make payments should do so as payments will resume and interest will accrue,” Education Secretary Miguel Cardona said in a statement.

    “But the on-ramp to repayment will help borrowers avoid the harshest consequences of missed, partial, or late payments like negative credit reports and having loans referred to collection agencies,” he added.

    Borrowers will not be reported to credit bureaus, be considered in default or referred to collection agencies for late, missed or partial payments during the on-ramp period, according to a fact sheet from the White House.

    Student loan experts recommend that borrowers reach out to their student loan servicer with any questions about their loans as soon as possible.

    After such a long pause, many borrowers may be confused about how much they owe, when to pay and how. Millions of borrowers will have a different servicer handling their student loans since the last time they made a payment.

    Borrowers should also reach out to their servicer if they are worried they will not be able to afford their monthly payment. They may be eligible for an income-driven repayment plan, which set payments based on income and family size, but require borrowers to submit some paperwork.

    Federal student loan borrowers can check the FSA website for updates on resuming payments.

    Borrowers will also have to reauthorize the automatic debit from their accounts to pay their monthly loan bill even if they authorized the withdrawals before the pause began.

    The National Association of Student Financial Aid Administrators warns that borrowers may need to have patience when contacting their student loan servicer, which might be overwhelmed with a high volume of inquiries at this time.

    “It is possible you may not reach your servicer via phone the first time you call, and you may need to call a few times before getting connected,” the group says.

    No debt had been canceled, even though the Biden administration had received about 26 million applications for relief last year and approved 16 million of them.

    The forgiveness program, estimated to cost $400 billion, would have fulfilled a campaign promise of Biden’s to cancel some student loan debt. But a group of Republican-led states and other conservative groups took the administration to court over the program, claiming that the executive branch does not have the power to so broadly cancel student debt in the proposed manner.

    Critics also point out that the one-time student loan forgiveness program does nothing to address the cost of college for future students and could even lead to an increase in tuition. Some Democrats joined Republicans in voting for a bill to block the program. Both the Senate and the House passed the measure, but Biden vetoed the bill in early June.

    Under Biden’s student loan forgiveness proposal, individual borrowers who made less than $125,000 in either 2020 or 2021 and married couples or heads of households who made less than $250,000 a year would have seen up to $10,000 of their federal student loan debt forgiven.

    If a qualifying borrower also received a federal Pell grant while enrolled in college, the individual would have been eligible for up to $20,000 of debt forgiveness.

    Pell grants are awarded to millions of low-income students each year, based on factors including their family’s size and income and the cost charged by their college. These borrowers are also more likely to struggle to repay their student debt and end up in default.

    The administration estimated that roughly 20 million borrowers would have seen their entire federal student loan balance wiped away.

    An independent analysis from the Penn Wharton Budget Model found that about two-thirds of the student debt cancellation would have gone to households making $88,000 a year or less.

    This story has been updated with additional information.

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  • Google-parent stock drops on fears it could lose search market share to AI-powered rivals | CNN Business

    Google-parent stock drops on fears it could lose search market share to AI-powered rivals | CNN Business

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    CNN
     — 

    Shares of Google-parent Alphabet fell more than 3% in early trading Monday after a report sparked concerns that its core search engine could lose market share to AI-powered rivals, including Microsoft’s Bing.

    Last month, Google employees learned that Samsung was weighing making Bing the default search engine on its devices instead of Google’s search engine, prompting a “panic” inside the company, according to a report from the New York Times, citing internal messages and documents. (CNN has not reviewed the material.)

    In an effort to address the heightened competition, Google is said to be developing a new AI-powered search engine called Project “Magi,” according to the Times. The company, which reportedly has about 160 people working on the project, aims to change the way results appear in Google Search and will include an AI chat tool available to answer questions. The project is expected to be unveiled to the public next month, according to the report.

    In a statement sent to CNN, Google spokesperson Lara Levin said the company has been using AI for years to “improve the quality of our results” and “offer entirely new ways to search,” including with a feature rolled out last year that lets users search by combining images and words.

    “We’ve done so in a responsible and helpful way that maintains the high bar we set for delivering quality information,” Levin said. “Not every brainstorm deck or product idea leads to a launch, but as we’ve said before, we’re excited about bringing new AI-powered features to Search, and will share more details soon.”

    Samsung did not immediately respond to a request for comment.

    Google’s search engine has dominated the market for two decades. But the viral success of ChatGPT, which can generate compelling written responses to user prompts, appeared to put Google on defense for the first time in years.

    In March, Google began opening up access to Bard, its new AI chatbot tool that directly competes with ChatGPT and promises to help users outline and write essay drafts, plan a friend’s baby shower, and get lunch ideas based on what’s in the fridge.

    At an event in February, a Google executive also said the company will bring “the magic of generative AI” directly into its core search product and use artificial intelligence to pave the way for the “next frontier of our information products.”

    Microsoft, meanwhile, has invested in and partnered with OpenAI, the company behind ChatGPT, to deploy similar technology in Bing and other productivity tools. Other tech companies, including Meta, Baidu and IBM, as well as a slew of startups, are racing to develop and deploy AI-powered tools.

    But tech companies face risks in embracing this technology, which is known to make mistakes and “hallucinate” responses. That’s particularly true when it comes to search engines, a product that many use to find accurate and reliable information.

    Google was called out after a demo of Bard provided an inaccurate response to a question about a telescope. Shares of Google’s parent company Alphabet fell 7.7% that day, wiping $100 billion off its market value.

    Microsoft’s Bing AI demo was also called out for several errors, including an apparent failure to differentiate between the types of vacuums and even made up information about certain products.

    In an interview with 60 Minutes that aired on Sunday, Google and Alphabet CEO Sundar Pichai stressed the need for companies to “be responsible in each step along the way” as they build and release AI tools.

    For Google, he said, that means allowing time for “user feedback” and making sure the company “can develop more robust safety layers before we build, before we deploy more capable models.”

    He also expressed his belief that these AI tools will ultimately have broad impacts on businesses, professions and society.

    “This is going to impact every product across every company and so that’s, that’s why I think it’s a very, very profound technology,” he said. “And so, we are just in early days.”

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  • House passes bill to block Biden’s student loan forgiveness program | CNN Politics

    House passes bill to block Biden’s student loan forgiveness program | CNN Politics

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    Washington
    CNN
     — 

    The Biden administration’s one-time student loan forgiveness program is facing a fresh threat from House Republicans while it awaits a ruling from the Supreme Court about whether the proposal can take effect.

    The House voted Wednesday to pass a resolution seeking to block the forgiveness program as well as end the pandemic-related pause on federal student loan payments.

    Two Democrats, Rep. Jared Golden of Maine and Rep. Marie Gluesenkamp Perez of Washington, joined Republicans in voting for the bill.

    The proposed forgiveness program, which promises up to $20,000 in federal student debt relief to millions of low- and middle-income borrowers, was halted by lower courts late last year before any student debt was canceled. The pause on payments, which has been in place since March 2020, is set to end later this year.

    President Joe Biden has pledged to veto the Republican-led resolution if it passes in both the House and Senate. The administration said that the resolution would “weaken America’s middle class.”

    “The president’s plan is a good one. It’s a popular one. And it will help prevent borrowers from default when loan payments restart this summer,” said White House press secretary Karine Jean-Pierre earlier Wednesday.

    But Republicans argue that the student loan forgiveness program is unlawful and shifts the cost of the debt to taxpayers who chose not to go to college or already paid off their student loans. Blocking the program could reduce the deficit by nearly $320 billion, according to the Congressional Budget Office.

    “President Biden’s so-called student loan forgiveness programs do not make the debt go away, but merely transfer the costs from student loan borrowers onto taxpayers to the tune of hundreds of billions of dollars,” said Rep. Bob Good, a Republican from Virginia, in a statement released when he introduced the resolution in March.

    Even though Biden has pledged to veto the bill, votes in the House and Senate could force more moderate members of the Democratic Party to take a public stance regarding the student loan forgiveness program. Some lawmakers have been critical of the proposal in the past.

    The Senate has yet to schedule a vote on the resolution, but nearly all of the 49 Republican senators have signed on as sponsors.

    Republican lawmakers introduced their joint resolution in late March, using the Congressional Review Act, which allows Congress to roll back regulations from the executive branch without needing to clear the 60-vote threshold in the Senate that is necessary for most legislation.

    If the student loan forgiveness program is allowed to move forward, individual borrowers who made less than $125,000 in either 2020 or 2021 and married couples or heads of households who made less than $250,000 a year could see up to $10,000 of their federal student loan debt forgiven.

    If a qualifying borrower also received a federal Pell grant while enrolled in college, the individual is eligible for up to $20,000 of debt forgiveness.

    While the debt relief would help borrowers with student loans now, the program wouldn’t change the cost of college in the future – and some critics argue that it could even lead to an increase in tuition.

    In February, the Supreme Court heard two legal challenges to Biden’s student loan forgiveness program. One was filed by six Republican-led states, and the other was brought by two student loan borrowers who did not qualify for the full benefits of the program. The individuals are backed by the Job Creators Network Foundation, a conservative organization.

    The lawsuits argue that the Biden administration is abusing its power and using the Covid-19 pandemic as a pretext for fulfilling the president’s campaign pledge to cancel student debt.

    The White House has said that it received 26 million applications before a lower court in Texas put a nationwide block on the program in November, and that 16 million of those applications have been approved for relief.

    No debt has been canceled yet. But if the Supreme Court allows the program to take effect, it’s possible the government moves quickly to forgive those debts.

    If the justices strike down Biden’s student loan forgiveness program, it could be possible for the administration to make some modifications to the policy and try again – though that process could take months.

    The Supreme Court is expected to issue its ruling in late June or early July.

    Biden has extended the pause on federal student loan payments several times. Accounts have been frozen and most federal borrowers have not been required to make a payment for more than three years.

    But the pause is set to end later this year. The Biden administration has tied the restart date to the litigation over the separate student loan forgiveness program. Payments are set to resume 60 days after the Supreme Court issues its ruling or 60 days after June 30, whichever comes first.

    But the Biden administration has also made some lesser-known but potentially longer-lasting changes to the federal student loan system.

    New rules set to take effect in July could broaden eligibility for the Public Service Loan Forgiveness program, which is aimed at helping government and nonprofit workers. And a new income-driven repayment plan proposal is meant to lower eligible borrowers’ monthly payments and reduce the amount they pay back over time. Parts of that new repayment plan are expected to go into effect later this year.

    The Department of Education has also made it easier for borrowers who were misled by their for-profit college to apply for student loan forgiveness under a program known as borrower defense to repayment, as well as for those who are permanently disabled.

    Altogether, the Biden administration has approved more than $66 billion in targeted loan relief to nearly 2.2 million borrowers.

    This headline and story have been updated with additional information.

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  • ‘Verified’ Twitter accounts share fake image of ‘explosion’ near Pentagon, causing confusion | CNN Business

    ‘Verified’ Twitter accounts share fake image of ‘explosion’ near Pentagon, causing confusion | CNN Business

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    CNN
     — 

    A fake image purporting to show an explosion near the Pentagon was shared by multiple verified Twitter accounts on Monday, causing confusion and leading to a brief dip in the stock market. Local officials later confirmed no such incident had occurred.

    The image, which bears all the hallmarks of being generated by artificial intelligence, was shared by numerous verified accounts with blue check marks, including one that falsely claimed it was associated with Bloomberg News.

    “Large explosion near the Pentagon complex in Washington DC. – initial report,” the account posted, along with an image purporting to show black smoke rising near a large building.

    The account has since been suspended by Twitter. It was unclear who was behind the account or where the image originated. A spokesperson for Bloomberg News said the account is not affiliated with the news organization.

    Under owner Elon Musk, Twitter has allowed anyone to obtain a verified account in exchange for a monthly payment. As a result, Twitter verification is no longer an indicator that an account represents who it claims to represent.

    Twitter did not respond to a request for comment.

    The false reports of the explosion also made their way to air on a major Indian television network. Republic TV reported that an explosion had taken place, showing the fake image on its air and citing reports from the Russian news outlet RT. It later retracted the report when it became clear the incident had not taken place.

    “Republic had aired news of a possible explosion near the Pentagon citing a post & picture tweeted by RT,” the outlet later posted on its Twitter account. “RT has deleted the post and Republic has pulled back the newsbreak.”

    In a statement Tuesday, the RT press office said, “As with fast-paced news verification, we made the public aware of reports circulating and once provenance and veracity were ascertained, we took appropriate steps to correct the reporting.”

    In a post on the Russian social media platform VKontakte Tuesday, RT tried to make light of its apparent error.

    “Is the Pentagon on fire? Look, there’s a picture and everything. It’s not real, it’s just an AI generated image. Still, this picture managed to fool several major news outlets full of clever and attractive people, allegedly,” a post from RT read.

    In the moments after the image began circulating on Twitter, the US stock market took a noticeable dip. The Dow Jones Industrial Average fell about 80 points between 10:06 a.m. and 10:10 a.m., fully recovering by 10:13 a.m. Similarly, the broader S&P 500 went from up 0.02% at 10:06 a.m. to down 0.15% at 10:09 a.m.. By 10:11 a.m., the index was positive again.

    The building in the image does not closely resemble the Pentagon and, according to experts, shows signs it may have been created using AI.

    “This image shows typical signs of being AI-synthesized: there are structural mistakes on the building and fence that you would not see if, for example, someone added smoke to an existing photo,” Hany Farid, a professor at the University of California, Berkeley, and digital forensic expert told CNN.

    The fire department in Arlington, Virginia, later responded in a tweet, stating that it and the Pentagon Force Protection Agency were “aware of a social media report circulating online about an explosion near the Pentagon. There is NO explosion or incident taking place at or near the Pentagon reservation, and there is no immediate danger or hazards to the public.”

    – CNN’s David Goldman contributed reporting.

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  • Here’s what’s left for the Supreme Court’s final week of the term | CNN Politics

    Here’s what’s left for the Supreme Court’s final week of the term | CNN Politics

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    Editor’s Note: A previous version of this story ran in early June.



    CNN
     — 

    All eyes are on the Supreme Court for its final week, as the justices will release cases on issues such as affirmative action, student loan payments, election law and LGBTQ rights.

    Of the 10 cases remaining, several that most capture the public’s attention are likely to lead to fiery opinions and dissents read from the bench.

    In addition, they will come down as the court finds itself in the center of a spotlight usually reserved for members of the political branches due to allegations that the justices are not transparent enough when it comes to their ethics disclosures, most recently with Justice Samuel Alito last week.

    Here are some of the remaining cases to be decided:

    The court is considering whether colleges and universities can continue to take race into consideration as a factor in admissions, a decision that could overturn long standing precedent that has benefited Black and Latino students.

    At issue are programs at Harvard and the University of North Carolina that the schools say help them to achieve diversity on campus.

    During oral arguments, the right side of the bench appeared ready to rule against the schools. Such an opinion would deliver a long-sought victory for opponents of affirmative action in higher education who have argued for decades that taking race into consideration – even in a limited manner – thwarts the goal of achieving a color-blind society.

    John Roberts skewers Harvard attorney’s comparison of race and music skills as qualities in applicants

    At the center of another case is a graphic designer, Lorie Smith, who seeks to expand her business and create custom websites to celebrate weddings – but does not want to work with gay couples out of religious objections to same-sex marriage.

    Smith has not yet moved forward with her new business venture because of Colorado’s public accommodations law. Under the law, a business may not refuse to serve individuals because of their sexual orientation. Smith, whose company is called 303 Creative LLC, said that she is willing to work with all people, regardless of their sexual orientation, but she draws the line at creating websites that celebrate same-sex marriage because expressing such a message would be inconsistent with her beliefs.

    The state and supporters of LGBTQ rights say that Smith is simply seeking a license to discriminate.

    The conservatives on the court were sympathetic at oral arguments to those put forward by Smith’s lawyer. They viewed the case through the lens of free speech and suggested that an artist or someone creating a customized product could not be forced by the government to express a message that violates her religious beliefs.

    Moore v. Harper has captured the nation’s attention because Republican lawmakers in North Carolina are asking the justices to adopt a long dormant legal theory and hold that state courts and other state entities have a limited role in reviewing election rules established by state legislatures when it comes to federal elections.

    The doctrine – called the Independent State Legislature theory – was pushed by conservatives and supporters of Trump after the 2020 presidential election.

    The North Carolina controversy arose after the state Supreme Court struck down the state’s 2022 congressional map as an illegal partisan gerrymander, replacing it with court-drawn maps that favored Democrats. GOP lawmakers appealed the decision to the US Supreme Court, arguing that the North Carolina Supreme Court had exceeded its authority.

    They relied upon the Elections Clause of the Constitution that provides that rules governing the “manner of holding Elections for Senators and Representatives” must be prescribed in “each state by the legislature thereof.”

    Under the independent state legislature theory, the lawmakers argued, state legislatures should be able to set rules with little to no interference from the state courts.

    The justices heard oral arguments in the case last winter and some of them appeared to express some support for a version of the doctrine. The justices could, however, ultimately dismiss the dispute due to new partisan developments in North Carolina.

    After the last election, the North Carolina Supreme Court flipped its majority to Republican. In April, the newly composed state Supreme Court reversed its earlier decision and held that the state constitution gives states no role to play in policing partisan gerrymandering. After that decision was issued, the justices signaled they may dismiss the case.

    exp juneteenth anita hill amanpour intw 061901PSEG2 cnn us_00002001.png

    Anita Hill: America “has lost confidence in the Supreme Court”

    The Supreme Court is also considering two challenges to President Joe Biden’s student loan forgiveness program, an initiative aimed at providing targeted debt relief to millions of student-loan borrowers that has so far been stalled by legal challenges.

    Republican-led states and conservatives challenging the program say it amounts to an unlawful attempt to erase an estimated $430 billion of federal student loan debt under the guise of the pandemic.

    At the heart of the case is the Department of Education’s authority to forgive the loans. Several of the conservative justices have signaled in recent years that agencies – with no direct accountability to the public – have become too powerful, upsetting the separation of powers.

    They have moved to cut back on the so-called administrative state.

    In court, Chief Justice John Roberts as well as some other conservatives seemed deeply skeptical of the Biden administration’s plan.

    A former mail carrier, an evangelical Christian, seeks to sue the US Postal Service because it failed to accommodate his request not to work on Sundays.

    A lower court had ruled against the worker, Gerald Groff, holding that his request would cause an “undue burden” on the USPS and lead to low morale at the workplace when other employees had to pick up his shifts.

    There appeared to be consensus, after almost two hours of oral arguments, that the appeals court had been too quick to rule against Groff.

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  • Inside the Treasury Department team monitoring early economic warning signs as default threat looms | CNN Politics

    Inside the Treasury Department team monitoring early economic warning signs as default threat looms | CNN Politics

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    CNN
     — 

    Nearly five months before the US was projected to hit the debt ceiling, a small team inside the Treasury Department began alerting top officials to early effects already being felt in the US financial system.

    The cost of insuring US debt, as measured by the price of credit-default swaps, was rising – a sign that investors were beginning to view US bonds and other securities as increasingly risky.

    That early warning – and subsequent ones over the last month as the swaps pricing has surged – came out of the Treasury Department’s Markets Room and its eponymous team of nine financial analysts who are responsible for monitoring and analyzing global financial markets to inform the policy work of top Treasury Department and White House officials.

    As the US rapidly approaches a potential default date in early June, top US officials are increasingly relying on the Markets Room to monitor for signs of disruption in the financial markets.

    “In the same way that a doctor wants to understand the vital signs of a patient as they’re thinking about how to treat them, at Treasury keeping abreast of understanding the various ways in which the economy is healthy or unhealthy. And part of that is understanding the market,” Deputy Treasury Secretary Wally Adeyemo told CNN in an interview.

    “So, we’re spending a lot of time with them better understanding what the costs are today, in order to make sure that we’re in a position to share that information with Congress, in order to prevent us from getting into a position where for the first time in our history, we’re unable to pay all of our obligations on time.”

    That work begins each day before dawn, when staffers take turns waking up around 3:30 a.m. ET to compile data about overnight market developments and begin making calls to contacts working in European and Asian markets.

    At around 7 a.m. ET, those data and insights land in the inboxes of top policymakers at the White House and Treasury Department.

    At 9 a.m. ET, before the US markets open, Treasury Secretary Janet Yellen and her senior leadership team huddle virtually with the Markets Room and other key Treasury Department aides for a briefing on the state of the financial markets and issues to watch for that day.

    “Almost every American is influenced by what’s happening around the globe and global markets either through your 401(k), or your attempt to borrow money for your small business or for your home. So, this team of individuals, every morning, provides us a briefing and an update on what’s happening around the world,” Adeyemo said.

    In recent weeks, that daily briefing has heavily focused on reverberations of the debt limit standoff, from updates on auctions of Treasury bills to market reactions and commentary from market analysts and economists.

    Much of the rest of the day is spent monitoring developments in the financial markets and fielding inquiries from top policymakers at Treasury and the White House for analysis on those developments.

    And at the end of the day, the Markets Room also helps policymakers digest the biggest developments in the financial markets with another widely read one-page memo delivered after the US markets close and before the Asian markets open.

    Beyond the Treasury Department, a White House spokesperson said the unit’s twice-daily memos are “a valuable asset” for officials at the National Economic Council and Council of Economic Advisers.

    “Those offices also rely on the Markets Room’s real-time updates – either in memos or meetings – when more regular monitoring is warranted,” the spokesperson said.

    Officials say the Markets Room is focused on monitoring the global economy’s recovery from the pandemic-induced recession, lingering inflation and the trajectory of the global economy.

    Albert Lee, the Markets Room director, described the unit as an early warning system on the global financial system for top US policymakers.

    In the early days of the coronavirus pandemic, the team was among the first to sound alarm bells inside the federal government about early shocks in pockets of the financial system and predicting rate cuts from the Federal Reserve.

    The team also played a critical role during the banking crisis earlier this year, tracking the sharp selloff of stock and outflows of deposit at Silicon Valley Bank that ultimately triggered the bank’s collapse.

    As the Treasury Department acted to address the second-largest bank failure in US history and prevent any spillover effects in the banking sector, top Treasury Department officials leaned on the Markets Room team to track the feedback of their policy actions.

    “It was critically important for us to understand how markets were interpreting the actions that we took that made clear to the American people that your deposits were safe,” Adeyemo said. “We were monitoring signs of distress in the banking sector.”

    With one week until the government can potentially no longer pay its bills, the US stock market is only just beginning to show signs of concern about a potential default and Treasury officials say the team is focused on tracking further reactions from the stock market as well as the Treasury securities market.

    The stock market’s reaction has, up until now, been relatively muted – especially as compared to the 17% drop the S&P 500 suffered amid the 2011 debt ceiling crisis. But Treasury officials say volatility in the securities market is already affecting the federal government, raising the cost to borrow.

    Yields on short-term Treasury securities have surged and recent auctions for securities are leaving a heftier price tag for the federal government, which Adeyemo said recently incurred $80 million in additional costs for a recent auction of Treasury bills.

    “So, the cost of borrowing has already gotten more expensive when it comes to us borrowing in the short term for the US government,” Adeyemo said. “So as the debt limit manufactured crisis goes on, and costs go up for the government, it also means that costs will go up for the American people as well.”

    Adeyemo declined to disclose what contingencies are being prepared should the US default. But when the US faced a similar standoff on the debt in 2011, Federal Reserve officials and Treasury Department officials quietly prepared a plan to prioritize payments on US debt and delay paying other government bills and obligations, like Social Security and payments to veterans, according to transcripts of a central bank meeting released in 2017.

    “The most important thing for the American people, for our country, for our credibility, not only with our creditors, but with the American people is to pay all of our bills on time. That’s what our system is built to do,” Adeyemo said. “I’ve spent a good part of a decade working here at the Treasury Department. What I can tell you is that there’s no plan that would allow us to meet all of our commitments other than Congress, raising the debt limit.”

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  • New Film, Bit X Bit: In Bitcoin We Trust Gives Insider’s View Into the Futuristic World of Bitcoin and Its Secrets

    New Film, Bit X Bit: In Bitcoin We Trust Gives Insider’s View Into the Futuristic World of Bitcoin and Its Secrets

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    Press Release
    –


    updated: Jun 4, 2019


    HOLLYWOOD, Calif., June 4, 2019 (Newswire.com)
    –
    A new Bitcoin documentary, “Bit x Bit: In Bitcoin We Trust,” takes an in-depth look at the beginnings and development of what has become a widespread global advance in digital commerce. The third film from director David Foox, which is currently available on iTunes and a list of other platforms (see www.bitxbitmovie.com for more listings), aims to educate everyone about a new value transfer system based on blockchain technology, an innovative technology revolutionizing the world.​​​​​​​​

    “The journey led me and my filmmaking team to travel to 18 cities interviewing the futurists making Bitcoin a reality. What I discovered filled me with hope that our world will change, and I wanted to contribute to this epic transformation,” said David Foox.

    This film tells the story of the emerging technology from its conception in the 2008 Satoshi Nakamoto whitepaper, “Bitcoin: A Peer-to-Peer Electronic Cash System,” through Bitcoin’s successes and setbacks defined by the explorers who blazed the trail from early 2014 to the beginning of its integration in 2018. With so many willing participants looking to utilize and build related value around this technology, it has touched everything from startups to some of the largest financial institutions in the world and shows no signs of slowing down the possibilities for its adoption.

    With predictions from the Winklevoss twins, the infamous “Bitcoin Billionaires” who reportedly held talks with Mark Zuckerberg about Facebook’s newly announced “GLOBALCOIN” cryptocurrency slated for 2020 — and through interviews highlighting the passion and intrigue expressed by the futurists and pioneers building these new systems, such as Andreas Antonopolous, Nolan Bushnell, Marshall Long, Pamela Morgan, Peter Todd, and many others — Bit x Bit: In Bitcoin We Trust stays true to its vision: “Futurists enlightening the minds of the many for the acceptance of a digital value exchange system focused on prosperity and transforming our world.”

    These predictions and already some companies have already started to see the substantial value and increased investment paying off. A recent Bloomberg article showcased the historic investments and returns coming from Block.one, a cryptocurrency startup led by billionaire Peter Thiel. With these kinds of potential returns and a number of creative minds driving potential future investment in the space, the future is looking bright. ​

    Media Contact:

    David Foox, Independent Filmmaker
    bitxbitmovie@gmail.com

    ABOUT THE DIRECTOR:

    David Foox began his journey into the making of “Bit x Bit: In Bitcoin We Trust” in January 2014 at the Sundance Film Festival, where he was celebrating an earlier successful film project – “Love Child.” In the production of “Love Child,” his eyes were opened to the effects of technology on the collective consciousness in ways that defied humanity. Therefore, when introduced to Bitcoin by friends who used the new digital technology to arrange airfare and hotel accommodations to attend the festival – David was fascinated. This simple encounter became the driving force behind David’s desire to create a film that brings the topic to a broad audience and perhaps even to those that will play a part in its future.

    About Gravitas Ventures

    Gravitas Ventures, a Red Arrow Studios company, is a leading all rights distributor of independent feature films and documentaries. Founded in 2006, Gravitas connects independent filmmakers and producers with distribution opportunities across the globe. Working with talented directors and producers, Gravitas Ventures has distributed thousands of films into over a hundred million homes in North America or over one billion homes worldwide.

    About Red Arrow Studios

    Red Arrow Studios is one of the world’s leading creators and distributors of entertainment content. Red Arrow Studios is comprised of 20 production companies in seven territories, including 10 companies based in the United States; world-leading multi-platform digital network Studio71, based in six countries; and global film and TV distributors Red Arrow Studios International and Gravitas Ventures. The group’s significant output includes scripted, non-scripted and formatted content and IP, from TV and film to short-form and branded content, made for an array of global networks and platforms. Red Arrow Studios is part of ProSiebenSat.1 Media SE, one of Europe’s leading media groups.

    URL: https://bitxbitmovie.com

    Bit x Bit: In Bitcoin We Trust is the third movie by David Foox and has been released with the support of Gravitas Ventures. It is currently available for download on iTunes – https://itunes.apple.com/us/movie/bit-x-bit-in-bitcoin-we-trust/id1457252026

    Source: David Foox

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  • Celsius Network Selected by Fifth Element Fund to Manage Crypto Assets

    Celsius Network Selected by Fifth Element Fund to Manage Crypto Assets

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    Blockchain lending & borrowing platform chosen as founding member of SDG Impact Fund

    Press Release
    –


    updated: Sep 21, 2018


    NEW YORK, September 21, 2018 (Newswire.com)
    –
    Announced today at the United Nations, Fifth Element is launching its SDG Impact Fund and will be the first to accept and deploy traditional assets and all forms of crypto, token and digital assets for the mission of meeting the UN Sustainable Development Goals.

    Celsius Network is a founding member of the fund and will be its preferred digital wallet. The fund plans to raise several hundred million dollars and deploy them in both fiat and digital format using public blockchains.

    We see a great opportunity to use this technology to deliver the value collected by different UN organizations in a more precise and effective way to the people and organizations that need it most.

    Scott Stornetta, Adviser, Celsius Network

    At the SDG Frontier Finance forum event today, held in conjunction with the International Day of Peace, Bryan Doreian, Chief Development Magus, Fifth Element Fund, announced the selection and partnership. The event also included the first few donors to contribute to the fund. Celsius Network was named as a founding member.

    Scott Stornetta, adviser to Celsius and one of the original inventors of blockchain technology, commented, “We see a great opportunity to use this technology to deliver the value collected by different UN organizations in a more precise and effective way to the people and organizations that need it most.”

    The Fifth Element Fund plans to use the public blockchain to implement its global programs and use the technology to both monitor and implement its mission in line with the UN Sustainable Development Goals.

    Celsius Network aims to bring power back to the people by providing banking services typically reserved for the top 1 percent. “By offering earned interest rates up to 7.1 percent, we allow individuals to make the same passive income Wall Street has been making for years,” says Celsius CEO, Alex Mashinsky. “Joining forces with Fifth Element will ensure our services reach those most deserving.”

    If you would like more information please call Kristen Ryan at 603-401-5897 or email kristen@celsius.network

    Source: Celsius Network LTD

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  • Britain’s ‘profound economic crisis’ gives Rishi Sunak only unpleasant choices | CNN Business

    Britain’s ‘profound economic crisis’ gives Rishi Sunak only unpleasant choices | CNN Business

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    London
    CNN Business
     — 

    Rishi Sunak, Britain’s third prime minister in seven weeks, took office on Tuesday with a pledge to fix the “mistakes” of predecessor Liz Truss and tackle a “profound economic crisis.”

    The task won’t be an easy one, he acknowledged.

    “This will mean difficult decisions to come,” Sunak said in his first speech from No. 10 Downing Street.

    The United Kingdom was already sliding towards a recession when Truss took office in September, as soaring energy bills ate into spending. Now, Sunak has another headache: He must restore the government’s credibility with investors after Truss’ unfunded tax cuts sparked a bond market revolt, forcing the Bank of England to intervene to prevent a financial meltdown. Borrowing costs, including mortgage rates, shot higher.

    Accomplishing this goal will require delivering a detailed plan to put public finances on a more sustainable path. (A government watchdog warned in July that without major action, debt could reach 320% of the UK’s gross domestic product in 50 years.)

    The problem? There’s little appetite for government spending cuts after years of austerity in the wake of the 2008 global financial crisis. Plus, failing to help households deal with surging living costs could prove politically devastating and further weigh on the economy.

    “It’s not a particularly pleasant economic hand to be dealt [as] a new prime minister,” said Ben Zaranko, a senior research economist at the Institute for Fiscal Studies.

    Finance minister Jeremy Hunt got the ball rolling last week when he reversed £32 billion ($37 billion) in tax cuts that formed the bedrock of Truss’ plan to boost growth.

    Yet Sunak and Hunt — who will stay in his job — still need to find between £30 billion and £40 billion in savings to bring down public debt as a share of the economy in the next five years, according to calculations by IFS, an influential think tank.

    “It is going to be tough,” Hunt said in a tweet. “But protecting the vulnerable — and people’s jobs, mortgages and bills — will be at the front of our minds as we work to restore stability, confidence and long-term growth.”

    Sunak and Hunt won’t have the option of going light on the details. If investors don’t buy into their plan and borrowing costs shoot up again, getting the situation under control would only become trickier, as interest payments on government debt rise.

    “If markets don’t [see] the plans as credible, then filling the fiscal hole could become even harder,” said Ruth Gregory, senior UK economist at Capital Economics.

    One area Sunak may be tempted to tap is the social welfare budget. Questions have swirled about whether the Conservative government may try to avoid boosting state benefits in line with inflation, as is customary. (American recipients of Social Security will receive the biggest cost-of-living adjustment in more than four decades next year.)

    Most UK working-age benefits would typically go up by 10.1% next April based on inflation data. But there’s speculation the increase could be linked instead to average earnings, which are growing at a much slower rate than inflation. That could save £7 billion ($8 billion) in 2023-24, according to IFS.

    Such a move would prove controversial, however — especially since benefits have not kept up with rampant inflation in 2022.

    “I would like to see if we could find a way to increase benefits by inflation, but what I will say is that trade-offs are involved,” former Conservative cabinet minister Sajid Javid told ITV this week.

    A more palatable option, at least for households, would be extracting more taxes from corporations.

    Hunt has already said that corporate taxes will rise from 19% to 25% next spring. The Financial Times has reported that Hunt could also target earnings from oil and gas companies by extending a windfall tax on profits.

    In an interview with the BBC earlier this month, Hunt said he was “not against the principle” of windfall taxes and that “nothing is off the table.” Higher taxes on the financial sector are also under consideration, according to the Financial Times.

    Industry groups are already circling the wagons. Banking trade association UK Finance said its members already pay “a higher rate of taxation overall than any other sector,” and urged the government not to “risk the competitiveness of the UK’s banking and finance industry.”

    Sunak could also walk back Truss’ commitment to boosting defense spending to 3% of the economy by 2030, though that carries its own political risks given Russia’s war in Ukraine. Other countries in the region, such as Germany, have said they will ramp up military investments, and the United Kingdom may be loath to fall behind, Zaranko said.

    Investors and economists expect that the government will announce a mixture of tax increases and spending cuts shortly. Hunt is due to reveal his plans in greater depth on October 31.g

    “Despite the fiscal U-turns, the government will still need to show a fiscally credible path next week in the budget to balance the books,” Sonali Punhani, an economist at Credit Suisse, said in a note to clients this week.

    That could exacerbate the country’s downturn. The Bank of England has projected that the United Kingdom is already in a recession, and a gauge of business activity in October slumped to its lowest level in 21 months.

    “We are seeing quite a dramatic shift in the fiscal outlook from being much looser than we expected just a few weeks ago to being much tighter than we expected,” Gregory of Capital Economics said. “I think the risk is that the recession is deeper or longer than we expect.”

    A weaker economy would present its own complications.

    No one wants to repeat the errors of the brief Truss era, when her gamble that unfunded tax cuts would jumpstart growth backfired spectacularly.

    But business groups are warning that completely abandoning the objective of boosting Britain’s anemic economic growth would create problems, too.

    The austerity of the 2010s produced “very low growth, zero productivity and low investment,” Tony Danker, head of the Confederation of British Industry, told the BBC on Tuesday.

    “The country could end up in a similar doom loop where all you have to do is keep coming back every year to find more tax rises and more spending cuts, because you’ve got no growth.”

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