If there were no tax cheats in America, there would be no Social Security crisis. Benefits could be paid, and payroll taxes kept the same, for the next 75 years.
That’s not me talking. That’s math. It comes from the number crunchers at the Social Security Administration and the Internal Revenue Service.
And it explains why those of us who support Social Security should be pounding the table in outrage over one clause of the Biden-McCarthy debt ceiling deal: The part where the president has to retreat from his crackdown on tax cheats just so McCarthy and the House Republicans would agree to prevent America defaulting on its debts.
It’s just two years since the administration got into law an extra $80 billion for the IRS to beef up enforcement. That was supposed to include hiring an estimated 87,000 IRS agents.
OK, so nobody likes paying taxes and nobody likes the IRS. Cue the inevitable critiques of an IRS tax “army,” and so on. But this isn’t about whether taxes should be higher or lower. It’s about whether everyone should pay the taxes that they owe.
After all, if we’re going to cut taxes, shouldn’t they apply to those of us who obey the laws as well as those who don’t? Or do we just support the “Tax Cuts for Criminals” Act?
Why would any voter rally around a platform of “I stand with tax cheats?”
If this seems abstract, consider the context and how it affects you and your retirement — and the retirements of everyone you know.
Social Security is now running at an $80 billion annual deficit. That’s the amount benefits are expected to exceed payroll taxes this year. (So say the Social Security Administration’s trustees.)
Next year, that deficit is expected to top $150 billion. By 2026, we’re looking at $200 billion and rising. The trust fund will run out of cash by 2034, and without extra payroll taxes will have to slash benefits by a fifth or more.
Over the next 75 years, says the Congressional Budget Office, the entire funding gap for the program will average about 1.7% of gross domestic product per year.
Meanwhile, how much are tax cheats stealing from the rest of us? A multiple of that.
But it still worked out at around 12% of all the taxes people were supposed to pay (including payroll taxes). And around 2.3% of GDP.
Over the next 10 years, based on similar ratios to GDP, that would come to another $3.3 billion.
Sure, Social Security’s trust fund is theoretically separate from the rest of Uncle Sam’s finances. But that’s an accounting issue: A distinction without a difference.
Some people want to cut benefits. Others want to raise the retirement age, which also means cutting benefits. Others want to raise taxes on benefits — which also means cutting benefits. Others want to hike payroll taxes, either on all of us or (initially) only on very high earners.
But if investing some of the trust fund in stocks is a no-brainer, so, too, is insisting everyone obey the law and pay the taxes they actually owe each year. I mean, shouldn’t we do that before we think about raising taxes even further on those who abide by the law?
How could anyone object? Any party that believes in law and order would support enforcing, er, law and order on tax evasion. And any party of fiscal conservatism would support measures, like tax enforcement, to narrow the deficit.
And, actually, any party that truly supported lower taxes for all would be tough on tax evasion: It is precisely this $500 billion in evasion by a small, scofflaw minority that forces the rest of us to pay more. We have, quite literally, a tax on obeying the law.
WASHINGTON — President Joe Biden and House Speaker Kevin McCarthy reached an “agreement in principle” to raise the nation’s legal debt ceiling late Saturday as they raced to strike a deal to limit federal spending and avert a potentially disastrous U.S. default.
However, the agreement risks angering both Democratic and Republican sides with the concessions made to reach it. Negotiators agreed to some Republican demands for increased work requirements for recipients of food stamps that had sparked an uproar from House Democrats as a nonstarter.
Support from both parties will be needed to win congressional approval next week before a June 5 deadline.
The Democratic president and Republican speaker reached the agreement after the two spoke earlier Saturday evening by phone, said McCarthy. The country and the world have been watching and waiting for a resolution to a political standoff that threatened the U.S. and global economies.
“The agreement represents a compromise, which means not everyone gets what they want,” Biden said in a statement late Saturday night. “That’s the responsibility of governing,” he said.
Biden called the agreement “good news for the American people, because it prevents what could have been a catastrophic default and would have led to an economic recession, retirement accounts devastated, and millions of jobs lost.”
McCarthy in brief remarks at the Capitol, said that “we still have a lot of work to do.”
But the Republican speaker said: “I believe this is an agreement in principle that’s worthy of the American people.”
With the outlines of a deal in place, the legislative package could be drafted and shared with lawmakers in time for votes early next week in the House and later in the Senate.
Central to the package is a two-year budget deal that would hold spending flat for 2024 and impose limits for 2025 in exchange for raising the debt limit for two years, pushing the volatile political issue past the next presidential election.
The agreement would limit food stamp eligibility for able-bodied adults up to age 54, but Biden was able to secure waivers for veterans and the homeless.
The two sides had also reached for an ambitious overhaul of federal permitting to ease development of energy projects and transmission lines. Instead, the agreement puts in place changes in the the National Environmental Policy Act that will designate “a single lead agency” to develop economic reviews, in hopes of streamlining the process.
The deal came together after Treasury Secretary Janet Yellen told Congress that the United States could default on its debt obligations by June 5 — four days later than previously estimated — if lawmakers did not act in time to raise the federal debt ceiling. The extended “X-date” gave the two sides a bit of extra time as they scrambled for a deal.
Biden also spoke earlier in the day with Democratic leaders in Congress to discuss the status of the talks.
The Republican House speaker had gathered top allies behind closed doors at the Capitol as negotiators pushed for a deal that would avoid a first-ever government default while also making spending cuts that House Republicans are demanding.
But as another day dragged on with financial disaster looming closer, it had appeared some of the problems over policy issues that dogged talks all week remained unresolved.
Both sides have suggested one of the main holdups was a GOP effort to expand work requirements for recipients of food stamps and other federal aid programs, a longtime Republican goal that Democrats have strenuously opposed. The White House said the Republican proposals were “cruel and senseless.”
Biden has said the work requirements for Medicaid would be a nonstarter. He seemed potentially open to negotiating minor changes on food stamps, now known as the Supplemental Nutrition Assistance Program, or SNAP, despite objections from rank-and-file Democrats.
McCarthy, who dashed out before the lunch hour Saturday and arrived back at the Capitol with a big box of takeout, declined to elaborate on those discussions. One of his negotiators, Louisiana Rep. Garret Graves, said there was “not a chance” that Republicans might relent on the work requirements issue.
Americans and the world were uneasily watching the negotiating brinkmanship that could throw the U.S. economy into chaos and sap world confidence in the nation’s leadership.
Anxious retirees and others were already making contingency plans for missed checks, with the next Social Security payments due next week.
Yellen said failure to act by the new date would “cause severe hardship to American families, harm our global leadership position and raise questions about our ability to defend our national security interests.”
The president, spending part of the weekend at Camp David, continued to talk with his negotiating team multiple times a day, signing off on offers and counteroffers.
Any deal would need to be a political compromise in a divided Congress. Many of the hard-right Trump-aligned Republicans in Congress have long been skeptical of the Treasury’s projections, and they are pressing McCarthy to hold out.
Lawmakers are not expected to return to work from the Memorial Day weekend before Tuesday, at the earliest, and McCarthy has promised lawmakers he will abide by the rule to post any bill for 72 hours before voting.
The Democratic-held Senate has largely stayed out of the negotiations, leaving the talks to Biden and McCarthy. Senate Majority Leader Chuck Schumer of New York has pledged to move quickly to send a compromise package to Biden’s desk.
Weeks of talks have failed to produce a deal in part because the Biden administration resisted for months on negotiating with McCarthy, arguing that the country’s full faith and credit should not be used as leverage to extract other partisan priorities.
But House Republicans united behind a plan to cut spending, narrowly passing legislation in late April that would raise the debt ceiling in exchange for the spending reductions.
With the outlines of a deal in place, the legislative package could be drafted and shared with lawmakers in time for votes early next week in the House and later in the Senate.
Central to the package is a two-year budget deal that would hold spending flat for 2024 and impose limits for 2025 in exchange for raising the debt limit for two years, pushing the volatile political issue past the next presidential election.
Negotiators agreed to some Republican demands for enhanced work requirements on recipients of food stamps that had sparked an uproar from House Democrats as a nonstarter.
Biden also spoke earlier in the day with Democratic leaders in Congress to discuss the status of the talks, according to three people familiar with the situation, who spoke on condition of anonymity because they were not authorized to discuss the matter publicly.
The Republican House speaker had gathered top allies behind closed doors at the Capitol as negotiators pushed for a deal that would raise the nation’s borrowing limit and avoid a first-ever default on the federal debt, while also making spending cuts that House Republicans are demanding.
As he arrived at the Capitol early in the day, McCarthy said that Republican negotiators were “closer to an agreement.”
McCarthy’s comments had echoed the latest public assessment from Biden, who said Friday evening that bargainers were “very close.” Biden and McCarthy last met face-to-face on the matter Monday.
Their new discussion Saturday by phone came after Treasury Secretary Janet Yellen told Congress that the United States could default on its debt obligations by June 5 — four days later than previously estimated — if lawmakers do not act in time to raise the federal debt ceiling. The extended “X-date” gives the two sides a bit of extra time as they scramble for a deal.
Americans and the world were uneasily watching the negotiating brinkmanship that could throw the U.S. economy into chaos and sap world confidence in the nation’s leadership. House negotiators left the Capitol at 2 a.m. the night before, only to return hours later.
Failure to lift the borrowing limit, now $31 trillion, to pay the nation’s incurred bills, would send shockwaves through the U.S. and global economy. Yellen said failure to act by the new date would “cause severe hardship to American families, harm our global leadership position and raise questions about our ability to defend our national security interests.”
Anxious retirees and others were already making contingency plans for missed checks, with the next Social Security payments due next week.
As President Joe Biden and House Speaker Kevin McCarthy prepare to meet Monday afternoon over the debt-ceiling standoff, it’s really getting to be crunch time.
“We need to see a deal by Friday to have confidence that it can clear both chambers before the June 1 deadline,” Height Capital Markets analysts said in a note.
WASHINGTON — President Joe Biden will meet in person Monday with House Speaker Kevin McCarthy about averting an economy-wrecking federal default, and the Republican leader expressed cautious optimism about a possible debt ceiling compromise as Washington races to raise America’s borrowing limit before the funds could be depleted early next month.
The leaders spoke by phone Sunday while the president was returning home on Air Force One after the Group of Seven summit in Japan. McCarthy, R-Calif., told reporters at the Capitol that the call was “productive” and that the on-again, off-again negotiations between his staff and White House representatives would resume in the evening.
Both sides have said progress was being made but that they remain far apart, and talks had lapsed for part of the weekend. Biden’s Treasury Department has said it could run out of cash as soon as June 1, and Treasury Secretary Janet Yellen said Sunday, “I think that that’s a hard deadline.”
McCarthy said after his call with Biden that “I think we can solve some of these problems if he understands what we’re looking at.” The speaker added, “But I’ve been very clear to him from the very beginning. We have to spend less money than we spent last year.”
McCarthy emerged from that conversation sounding upbeat and was careful not to criticize Biden’s trip, as he had before, suggesting the president had used his time overseas to insist on Democratic positions that made compromise harder. He did caution, “There’s no agreement on anything.”
The speaker also gently praised the White House’s negotiating team, saying the sides may have “philosophical” disagreements, but could reach “common ground.”
“We’re looking at how do we have a victory for this country. How do we solve problems,” McCarthy said. He said he did not think the final legislation would remake the federal budget and the country’s debt, but at least “put us on a path to change the behavior of this runaway spending.”
The White House confirmed the Monday meeting and late Sunday talks but did not elaborate on the leaders’ call.
Earlier, Biden used his concluding news conference in Hiroshima, Japan to warn House Republicans that they must move off their “extreme positions” over raising the debt limit and that there would be no agreement to avoid a catastrophic default only on their terms.
Biden made clear that “it’s time for Republicans to accept that there is no deal to be made solely, solely, on their partisan terms.” He said he had done his part in attempting to raise the borrowing limit so the government can keep paying its bills, by agreeing to significant cuts in spending. “Now it’s time for the other side to move from their extreme position.”
Biden had been scheduled to travel from Hiroshima to Papua New Guinea and Australia, but cut short his trip in light of the strained negotiations with Capitol Hill.
Even with a new wave of tax revenue expected soon, perhaps giving both sides more time to negotiate, Yellen said on NBC’s “Meet the Press” that “the odds of reaching June 15, while being able to pay all of our bills, is quite low.”
GOP lawmakers are holding tight to demands for sharp spending cuts, rejecting the alternatives proposed by the White House for reducing deficits.
Republicans want work requirements on the Medicaid health care program, though the Biden administration has countered that millions of people could lose coverage. The GOP additionally introduced new cuts to food aid by restricting states’ ability to waive work requirements in places with high joblessness. That idea, when floated under President Donald Trump, was estimated to cause 700,000 people to lose their food benefits.
GOP lawmakers are also seeking cuts in IRS money and asking the White House to accept parts of their proposed immigration overhaul.
The White House has countered by keeping defense and nondefense spending flat next year, which would save $90 billion in the 2024 budget year and $1 trillion over 10 years.
“I think that we can reach an agreement,” Biden said, though he added this about Republicans: “I can’t guarantee that they wouldn’t force a default by doing something outrageous.”
Republicans had also rejected White House proposals to raise revenues in order to further lower deficits. Among the proposals the GOP objects to are policies that would enable Medicare to pay less for prescription drugs and the closing of a dozen tax loopholes. Republicans have refused to roll back the Trump-era tax breaks on corporations and wealthy households as Biden’s own budget has proposed.
Biden, nonetheless, insisted that “revenue is not off the table.”
For months, Biden had refused to engage in talks over the debt limit, contending that Republicans in Congress were trying to use the borrowing limit vote as leverage to extract administration concessions on other policy priorities.
But with the June 1 potential deadline looming and Republicans putting their own legislation on the table, the White House launched talks on a budget deal that could accompany an increase in the debt limit.
Biden’s decision to set up a call with McCarthy came after another start-stop day with no outward signs of progress. Food was brought to the negotiating room at the Capitol on Saturday morning, only to be carted away hours later. Talks, though, could resume later Sunday after the Biden-McCarthy conversation.
The president tried to assure leaders attending the meeting of the world’s most powerful democracies that the United States would not default. U.S. officials said leaders were concerned, but largely confident that Biden and American lawmakers would resolve the crisis.
The president, though, said he was ruling out the possibility of taking action on his own to avoid a default. Any such steps, including suggestions to invoke the 14th Amendment as a solution, would become tied up in the courts.
“That’s a question that I think is unresolved,” Biden said, adding he hopes to try to get the judiciary to weigh in on the notion for the future.
She doesn’t know how much her student-loan bill will be when the years-long pandemic-era freeze on payments ends. Eminger’s loans were transferred during the pandemic to a new servicer, but she’s struggled to communicate with the organization, which could help her learn her monthly payment amount. She’s also rushing to take steps that could provide her access to a loan-forgiveness program for public servants.
“I am very nervous about them starting again,” Eminger, 37, who has about $175,000 in student debt, said of the loan payments. “There’s just a lot of uncertainty and murkiness around it, which for a loan amount of my size is pretty scary.”
After a more than three-year freeze, payments, collections and interest are scheduled to resume on federal student loans later this year. This is the ninth time — spanning two administrations — that the government has threatened to turn payments back on. Once again, borrowers, advocates and servicers are gearing up for a financial and operational headache.
“It’s going to be frustrating for everybody involved — borrowers, servicers, the Department of Education, advocacy organizations like ours,” said Betsy Mayotte, the president of the Institute of Student Loan Advisors, a nonprofit that helps borrowers manage their student loans.
To advocates who pushed officials to delay restarting payments in the past, this moment in many ways looks similar to the months before the freeze was scheduled to end those eight other times. A challenging economy means borrowers’ budgets are still tight and promised fixes to the student-loan system that could help ensure a smooth transition to repayment and make borrowers’ bills more manageable still haven’t materialized.
But a few key factors are different, some of which are upping the pressure on the Biden administration to turn the student-loan system back on: the official end to the pandemic emergency, congressional Republicans taking aim at the payment pause in two pieces of legislation and multiplelawsuits challenging the freeze. Other elements unique to this moment are exacerbating the uncertainty and challenges related to restarting payments. Servicers will have fewer resources than in the past to handle a likely crush of calls.
“The Department remains focused on doing everything in its power to better serve students and borrowers, and we are fully committed to supporting student loan borrowers as they successfully navigate returning to repayment,” a Department of Education spokesperson wrote in an email. “The Department is deeply concerned about the lack of adequate annual funding made available to Federal Student Aid this year,” the spokesperson said, referring to Congress’s decision not to increase funding for FSA, despite the agency’s request. “As the Department has repeatedly made clear, restarting repayment requires significant resources to avoid unnecessary harm to borrowers.”
For Eminger, and other borrowers, part of the anxiety surrounding the restart to payments stems from major upheaval to the student-loan system that’s been announced during the pause that will make her loans more manageable. But accessing these benefits requires both diligence — staying on top of announcements and paperwork — and patience while she and others wait for the full implementation of these initiatives.
“The rules have been changing so much,” Eminger said. “Before the pandemic I felt like I very much understood what I was required to do. I always felt very on top of it. Now it just feels like a completely moving target.”
Kate Eminger says she’s nervous about the looming resumption of student-loan payments.
Courtesy of Kate Eminger
Compounding her uncertainty is a lack of clarity surrounding exactly when payments will resume. In November, President Joe Biden told borrowers they could expect the pause to end in the late summer, but he didn’t give an exact date. In addition, it’s hard for Eminger to see how this deadline for payments to restart is different from all the others, where student-loan bills never materialized. All of that has made it difficult for Eminger to figure out exactly when to take steps to make sure her student-loan payment can fit in with the rest of her budget such as the sale of her car.
“It does not feel real at all,” she said of the restart of student-loan payments. “It would be great to name a date. If they could name a date and if that date felt certain then you could plan.”
Tied up in court
The Biden administration has said that the freeze will end 60 days after litigation surrounding its plan to cancel up to $20,000 in debt for a wide swath of borrowers is resolved or 60 days after June 30, 2023, whichever comes first.
“When payments turn back on, it’s going to be a big problem,” said Eleni Schirmer, a researcher and organizer with the Debt Collective, a debtor activist group, “but to not even be granted the dignity of a clear date of when that happens just makes it even more of a problem.” She described providing a ballpark estimate for the restart of payments instead of an exact date as signaling an “almost cruel indifference” to how resumed monthly student-loan bills will impact borrowers.
That uncertainty could exacerbate the stress that student debt already places on borrowers, according to Daniel A. Collier, an assistant professor of higher education at the University of Memphis, who is studying the impact of student debt on mental health. What he’s found is that people who are the most uncertain about what’s going on with their student loan have the highest rates of psychological distress and suicidal ideation. For example, these borrowers worry they’re not getting an accurate sense of their balance or the number of payments they need to make before qualifying for a forgiveness plan.
“People are concerned about the pause because they don’t know what a restart looks like, this has never been done before,” he said. In the past, when payments have resumed after more limited pauses, delinquencies and defaults spiked — part of the Biden administration’s legal rationale for tying mass debt cancellation to the restart of payments. Borrowers don’t know “when it’s going to start, what their repayments are actually going to be,” Collier added.
Kevin Noonan, who together with his wife has about $100,000 in student debt, said he’s benefited from the pause. The couple has used the extra room in their budget to pay down private student loans. Still, Noonan is “frustrated” with the lack of clarity surrounding the resumed payments and the status of the Biden administration’s loan-forgiveness plan.
“Not knowing is the hardest part,” he said. “I have a Google alert set up, every time student loans come up I check everything. You kind of just have to plan for the worst-case scenario.”
Megan and Kevin Noonan have about $100,000 in student debt.
Courtesy of Kevin Noonan
The decision to tie the resumption of payments to the court’s decision “added an element of unpredictability,” said Persis Yu, managing counsel and deputy executive director at the Student Borrower Protection Center, an advocacy group.
“There’s the choice to not land on a certain date, but there’s also the choice of 60 days,” Yu said, referring to the 60-day delay between the court’s decision and payments resuming.
“I really wonder whether or not 60 days is enough time for borrowers,” she said. “When we think about the amount of work that is really going to have to happen to effectively turn on this system, 60 days does not seem like a lot of lead time.”
Secretary of Education Miguel Cardona said in a congressional hearing this month that the agency is “preparing to restart repayment because the emergency period is over.” He told another congressional panel that the agency is “geared up and ready to go,” to resume payments.
Scott Buchanan, the executive director of the Student Loan Servicing Alliance, a trade group, said that 60 days should be enough time for student-loan servicers to implement the restart. In order to accomplish that, they’ll need to be able to communicate with borrowers in the coming weeks about the end of the payment pause and be allowed to offer flexibilities like forbearance and allowing borrowers to verbally recertify their income for payment plans.
When the end of the payment freeze loomed in the past, servicers didn’t have the go-ahead from the Department of Education to communicate with borrowers, Buchanan said. They still don’t, but servicers have been working closely with officials to discuss the “communication playbook” in recent weeks and hope to roll it out shortly.
The Department of Education “remains in constant contact with servicers,” the department spokesperson wrote in an email, and will be in “direct contact” with borrowers before the end of the payment freeze. “Engaging with servicers to ensure they are communicating directly with borrowers about successfully returning to repayment is an important part of the Department’s efforts to smoothly transition borrowers back into repayment,” the spokesperson wrote.
Still, the uncertainty surrounding exactly when payments will start could create an obstacle to a seamless return to repayment, Buchanan said.
“If you’re a family and you’re planning a budget you need to know what is the date that I need to be prepared to make this payment,” he said. “Having a fuzzy date doesn’t do anyone any good including servicers, but especially for borrowers.”
Borrowers will receive a bill at least 21 days before their payments are scheduled to resume and likely won’t end up having to make a payment until October, Politico reported last month. Officials are also considering offering borrowers a grace period when the freeze ends, according to the report.
Servicers will be implementing plans the department previously developed to restart payments, Buchanan said. But they’ll be working with fewer resources than previously anticipated. The Department of Education cut the amount it’s paying servicers to manage each account. The agency has said the cuts are due to lawmakers’ decision not to increase funding for the Office of Federal Student Aid for the 2023 fiscal year. The lack of funds will mean fewer customer-service representatives and reduced call-center hours, including none on weekends.
“What is the right level of resources? How many staff should you have? It’s not a definable thing,” Buchanan said. “What I can say is having fewer than we had before does not make it better.”
The department spokesperson said the agency will keep working with Congress to fully fund President Biden’s fiscal 2024 budget request. The department asked for a $620 million increase in funding for FSA.
“Restarting repayment requires significant resources to avoid unnecessary harm to borrowers,” the spokesperson wrote in the email.
Members of the Class of 2022 at the University of Delaware.
Mandel Ngan/Agence France-Presse/Getty Images
In addition, the Department of Education recently announced an overhaul of the student-loan servicing system aimed at increasing accountability for servicers. For years, borrowers and advocates have complained that the firms don’t provide borrowers with enough information or the right information. Without that in place, Yu worries that ensuring borrowers have a truly affordable payment will be “a nightmare.”
“At this inflection point where you need the best servicing possible, we don’t have it,” she said. “It seems irresponsible to turn on the payment system into a broken servicing system and into a broken system overall.”
Though the new servicing system won’t go live until 2024, “our servicer contracts continue to include the same requirements that all vendors effectively serve our customers and still provide that servicers compete against each other to maintain low call-abandonment rates,” the department spokesperson wrote.
Fixing servicing is just one of many initiatives from the Biden administration aimed at overhauling the student-loan system in the process of being implemented and won’t be fully realized before the end of the summer.
For example, some borrowers have debts that should be wiped off the books, Yu said. The Biden administration has launched several initiatives over the past few years aimed at making it easier for borrowers to access the forgiveness already available to them under the law. So far, the department has announced more than $66 billion in discharges for nearly 2.2 million borrowers, including public servants, borrowers with severe disabilities and borrowers who were scammed by schools.
Still, there are more borrowers eligible to have their debt canceled under these programs who haven’t received relief, Yu said. “These borrowers are going to be thrown into a system to make payments on loans they shouldn’t be making payments on anymore,” she said.
In addition, a promise to make repaying student loans more manageable hasn’t fully materialized. At the same time that President Biden announced the mass debt-cancellation plan, he also unveiled sweeping changes to the repayment system aimed at making student-loan bills more affordable. But the program, which Biden called “a game changer” when he announced it in August, likely won’t be ready by the end of the summer. It’s also been a target for criticism by conservative advocacy groups and Republican members of Congress.
“The only way that that could be available to borrowers when payments resume is with another extension,” Yu said.
The proposed plan, which the department spokesperson described as “the most affordable student loan plan in history,” builds on an existing income-driven repayment plan called REPAYE. Eligible borrowers who enroll in REPAYE now will have their monthly payments automatically updated as the terms of the new plan are “finalized and implemented, starting later this year,” the spokesperson wrote.
‘Almost like a tax increase’
For many borrowers, the financial burden of resuming student-loan payments will be significant. Thomas Simons, a senior economist at Jefferies, estimates the return to repayment will cost borrowers about $18 billion per month.
“It’s almost like a tax increase for these people,” Simons said. “They have to pay it, [and] it doesn’t get them anything tangible right now.”
The amount borrowers are saving by not making student-loan payments accounts for about 2% of discretionary spending, Simons said. He sees the hit to borrowers’ wallets as analogous to the impact of a payroll-tax increase in 2013, which impacted a smaller share of discretionary spending for a larger number of Americans.
“‘It’s almost like a tax increase for these people. They have to pay it, [and] it doesn’t get them anything tangible right now.’”
— Thomas Simons, senior economist, Jefferies
“If you look at what happened in the economy in 2013 after those tax increases were announced, the first half of the year spending decelerated quite significantly,” he said. “It really didn’t recover until the latter part of the year.”
“I would be very surprised if we don’t see a similar slowdown in spending coming out of this,” Simons added.
And if payments resume in late summer or early fall, as planned, the hits to borrowers’ bank accounts will be arriving at “the worst possible time,” Simons said, when the labor market will likely start to feel the effects of the Federal Reserve’s battle against inflation.
“That could be a double whammy where people are starting to have significant questions about their income and then having a pretty significant expense,” Simons said.
Many borrowers will likely be juggling other bills, too. For one, the costs of rent, groceries and other basic needs have risen since the advent of the coronavirus pandemic. And borrowers’ other debt payments have actually become less manageable in the three years since the freeze was first implemented.
As of September of last year, about 7% of student-loan borrowers who were not in default on their student loans at the start of the pandemic were more than 60 days delinquent on other debt, compared with 6.2% at the beginning of the pandemic, according to the Consumer Financial Protection Bureau. Their monthly payments on other credit products have also increased during the pause period — 46% of borrowers saw their monthly payments on credit cards and car loans increase by at least 10% since the start of the pandemic, the agency found.
For Kelly, a Charleston, W. Va., student-loan borrower and her husband, the freeze on student-loan payments created financial space to take care of emergency expenses, like a leaking roof. Kelly, who declined to use her last name in order to more freely discuss her financial circumstances, owes about $23,000 in student debt from studying to become a paralegal. Her husband owes about $20,000 from his nursing-school studies.
Kelly, 45, found a job in her field after graduating, but was laid off during the pandemic. She started working some side gigs and eventually launched a dog-grooming business. Despite the business’s success and her passion for it, it likely won’t be enough to cover her bills once she has to start paying on her student loan again. She’s considering getting a second job when the payment freeze ends.
“We’re dual-income, no kids. One car is paid off, the other one is modest — a Volkswagen VOW, -0.43%
VWAGY, +0.22%,
” she added. “We don’t finance things, we don’t live a high and mighty life, but it seems like every month we’re budgeting to the penny.”
“I don’t know how much we can cut back,” she added. “Our entertainment as it is, is Netflix NFLX, -1.60%,
or we go out to eat once a month or so. I guess we can cut back on that.
President Joe Biden on Sunday called for Republicans to agree to compromises in debt-ceiling negotiations, as he wrapped up a visit to Japan for a G-7 summit and prepared to fly back to Washington, D.C.
“Now it’s time for the other side to move from their extreme positions, because much of what they’ve already proposed is simply, quite frankly, unacceptable,” Biden said during a news conference in Japan.
“It’s time for Republicans to accept that there is no bipartisan deal to be made solely — solely — on their partisan terms. They have to move, as well,” he said.
Biden’s comments on movement were similar to what House Speaker Kevin McCarthy said two days ago. The House Republican from south-central California told reporters on Friday that there needs to be “movement by the White House, and we don’t have any movement yet, so, yeah, we’ve got to pause.”
The president’s remarks in Hiroshima came as investors are watching for fresh signs of a bipartisan deal that would lift the federal government’s borrowing limit and prevent a market-shaking default.
Biden accused some Republicans of risking the economic damage of a default because of the 2024 White House race.
“I think there are some MAGA Republicans in the House who know the damage that it would do to the economy, and because I am president and presidents are responsible for everything, Biden would take the blame, and that’s the one way to make sure Biden is not re-elected,” he said.
“My guess is he’s going to want to deal directly with me,” the president said, adding that it had to do with “making sure we’re on the same page.”
“Our teams are going to continue working,” Biden also said.
When asked about McCarthy’s call for government spending to be less next year than this year, Biden said his side is “willing to cut spending, as well as raise revenue,” referring to tax increases. He also said his team is waiting for a GOP response to the White House’s latest counterproposal.
Graves, the Louisiana Republican, had, with his Friday-morning characterization of debt-ceiling negotiations as at a “pause,” suggested the Biden White House’s representatives were being “unreasonable.” Talks resumed Friday evening, but negotiators quickly called it quits for the night, and there was little progress reported Saturday, with McCarthy telling reporters that he didn’t think there would be an ability to “move forward until the president can get back.”
President Joe Biden on Sunday called for Republicans to agree to compromises in debt-ceiling negotiations, as he wrapped up a visit to Japan for a G-7 summit and prepared to fly back to Washington, D.C.
“Now it’s time for the other side to move from their extreme positions, because much of what they’ve already proposed is simply, quite frankly, unacceptable,” Biden said during a news conference in Japan.
“It’s time for Republicans to accept that there is no bipartisan deal to be made solely — solely — on their partisan terms. They have to move, as well,” he said.
Biden’s comments on movement were similar to what House Speaker Kevin McCarthy said two days ago. The House Republican from south-central California told reporters on Friday that there needs to be “movement by the White House, and we don’t have any movement yet, so, yeah, we’ve got to pause.”
The president’s remarks in Hiroshima came as investors are watching for fresh signs of a bipartisan deal that would lift the federal government’s borrowing limit and prevent a market-shaking default.
Biden accused some Republicans of risking the economic damage of a default because of the 2024 White House race.
“I think there are some MAGA Republicans in the House who know the damage that it would do to the economy, and because I am president and presidents are responsible for everything, Biden would take the blame, and that’s the one way to make sure Biden is not re-elected,” he said.
“My guess is he’s going to want to deal directly with me,” the president said, adding that it had to do with “making sure we’re on the same page.”
“Our teams are going to continue working,” Biden also said.
When asked about McCarthy’s call for government spending to be less next year than this year, Biden said his side is “willing to cut spending, as well as raise revenue,” referring to tax increases. He also said his team is waiting for a GOP response to the White House’s latest counterproposal.
Graves, the Louisiana Republican, had, with his Friday-morning characterization of debt-ceiling negotiations as at a “pause,” suggested the Biden White House’s representatives were being “unreasonable.” Talks resumed Friday evening, but negotiators quickly called it quits for the night, and there was little progress reported Saturday, with McCarthy telling reporters that he didn’t think there would be an ability to “move forward until the president can get back.”
The White House and Congress have not made much progress in their talks to avert an unprecedented, and potentially calamitous, national default that could occur as soon as early June. But on the most fundamental point of dispute, President Joe Biden has already caved: He’s negotiating with Republicans over the debt ceiling.
For months, the president’s ironclad position has been that the debt ceiling is not a bargaining chip. No longer would Democrats allow Republicans to hold hostage the nation’s creditworthiness and economic prestige. Paying the government’s bills by raising the U.S.’s statutory borrowing limit would be nonnegotiable. As recently as Friday, White House Press Secretary Karine Jean-Pierre declared without equivocation, “We are not going to negotiate over the debt limit.”
But Biden himself has dropped the pretense that his weeks-long budget discussions with the GOP have not revolved around the debt ceiling. Asked specifically about the debt ceiling on Sunday—in anticipation of a second White House visit by congressional leaders, planned for today—Biden told reporters, “Well, I’ve learned a long time ago, and you know as well as I do: It never is good to characterize a negotiation in the middle of a negotiation.”
So there you go: It’s a negotiation. Exactly what the two parties are discussing is only starting to become clear. According to variousreports, a deal to avert default could include some changes to permitting rules that would speed up domestic-energy production; a revocation of unused COVID funds; additional work requirements for some federal programs (although the president has ruled out any modifications to Medicaid); and, most significant, a cap on overall federal spending.
The Biden administration still claims to be haggling only over the budget, not the debt ceiling. “The president has been emphasizing for months that he’s eager to have budget negotiations,” a White House official, who requested anonymity to explain the administration’s somewhat tortured position, told me. “That’s of course different from avoiding default, which is nonnegotiable.”
Biden’s no-negotiation stance was born of past experience, when in 2011 Republicans dragged out debt talks with the Obama administration to the brink of default, resulting in a downgrade of the U.S.’s credit rating. But Biden’s approach this time is proving to be neither realistic nor sustainable, especially after Speaker Kevin McCarthy defied expectations last month by getting a budget-slashing debt-ceiling bill through his narrow House majority.
Crucially, Biden failed to win strong support for his strategy from House centrists. Democrats had been hoping to persuade Republicans representing swing districts to buck McCarthy and help pass a debt-ceiling increase. But those lawmakers have stuck by the speaker. Complaining about a lack of outreach from the White House, they instead criticized Biden over his refusal—until recently—to negotiate. With Republicans unwilling to budge, Democratic centrists began to lose patience with Biden’s approach and conducted their own bipartisan negotiations.
“We believe it’s very important in general that both sides sit down and try to work this out,” Representative Josh Gottheimer of New Jersey, the Democratic co-chair of the bipartisan Problem Solvers Caucus, told me before Biden’s first meeting last week with McCarthy and other top congressional leaders. “This can’t become a part of a political back-and-forth as the country drives off the cliff.”
Last month the Problem Solvers offered their own plan, which they presented as a fallback option that could win bipartisan support should Biden and McCarthy fail to strike a deal in time. The proposal would immediately suspend the borrowing limit through the end of the year to buy time for broader budget talks. If Congress agrees to unspecified budget limits and creates a fiscal commission to tackle the nation’s long-term deficits and debt, the plan stipulates that the debt ceiling would be increased through the 2024 elections.
The compromise has yet to gain momentum, but its release seemed to undermine the Biden administration’s insistence that Democrats would not tie a debt-ceiling increase to spending reforms. “We didn’t try to fill in every blank, but we thought this was a really good framework to become the meat of the deal,” Representative Scott Peters of California, a Democrat who helped write the Problem Solvers plan, told me.
It could still prove handy. Biden struck an optimistic note on Sunday, telling reporters, “I really think there’s a desire on [Republicans’] part, as well as ours, to reach an agreement, and I think we’ll be able to do it.” But McCarthy is sounding more dour. “I still think we’re far apart,” he told NBC News yesterday morning. The speaker said that Biden “hasn’t taken it serious” and warned that an agreement needed to happen by this weekend in order for the House and Senate to have time to debate and pass it by early June.
Whether a Biden-McCarthy deal could even get through the House is also in question. Democrats have largely stayed quiet on Biden’s evident capitulation to Republicans, and the talks initially did not stir a backlash. But that may be changing as the president openly considers concessions that would be anathema to progressives, such as the possibility of adding work requirements to social safety-net programs. Still, the lack of a credible primary challenge to Biden’s reelection has helped give him room to negotiate, as Democrats fret about the effect that a default could have on the president’s already tenuous public standing.
“As long as he continues to try to avoid default, and avoid the middle class having to pay the cost for it, then he’s in the position that the majority of the electorate wants him to be,” Jesse Ferguson, a longtime Democratic strategist, told me.
McCarthy has much more to worry about. He traded away his own job security to win the speakership in January, agreeing to rule changes that would make it easier for hard-right conservatives to depose him. A debt-ceiling deal that fails to secure deep enough spending cuts or policy concessions from Democrats could threaten his position. “Default can be avoided. The question is whether Kevin McCarthy could withstand putting that bill on the floor,” Ferguson said.
The speaker has secured no substantive commitments from Biden, nothing specific that he can sell to his party. But McCarthy has elicited one major concession from the president, which serves as a prerequisite for any others to come. Biden has come to the table with default in the balance, and he’s negotiating on the GOP’s terms.
President Joe Biden rolled out a plan on Monday that targets how airlines handle flight cancellations and significant delays that are within a carrier’s control.
Biden said his administration will propose a new regulation later this year that would require airlines to provide cash compensation in addition to refunds and amenities for stranded passengers.
Foreign investors and businesspeople with exposure to China are becoming increasingly unnerved. And for good reason.
In March, Chinese authorities detained an employee of Japanese drug manufacturer Astellas Pharma JP:4503 ALPMY for alleged espionage violations. The Chinese seem confident in their case. Beijing’s ambassador to Japan said there was ample evidence of wrongdoing, and, despite the uproar, the Astellas employee remains detained.
“I hate the way you talk to me, And the way you cut your hair. / I hate the way you drive my car, I hate it when you stare. / I hate your big dumb combat boots, and the way you read my mind. / I hate you so much it makes me sick, It even makes me rhyme. / I hate the way you’re always right, I hate it when you lie. / I hate it when you make me laugh, Even worse when you make me cry. / I hate it when you’re not around, And the fact that you didn’t call. / But mostly I hate the way I don’t hate you, Not even close, Not even a little bit, Not even at all.”
President Biden officially announced his bid for reelection Tuesday morning, saying in a solemn launch video that he wants to “finish the job” he started when the country was racked by a deadly pandemic, a reeling economy and a teetering democracy. What do you think?
“Who better to capture my weariness?”
Donny Latimer, Unemployed
“If he needs the money to retire that badly, maybe he should just have a fundraiser.”
Hank Brennan, Building Climber
“Okay, but can anyone tell me if this is the most important election of my lifetime or not?”
Some clarity is emerging regarding statements from Biden administration officials that no one making less than $400,000 will see higher audit rates by the Internal Revenue Service, which is about to step up its scrutiny of wealthy taxpayers.
The Inflation Reduction Act — the tax and climate package enacted last summer — earmarked $80 billion for the IRS over the next decade and a half. The money is intended in part to facilitate more audits of corporations and wealthier individuals.
Ahead of the bill’s passage, Treasury Secretary Janet Yellen pledged that there would be no increase in the audit rate for households and small businesses with annual incomes below $400,000 “relative to historical levels.”
But Republican critics and other observers have asked what “historical levels” might actually mean.
The audit rate on returns for tax year 2018 is the reference point to keep in mind, IRS Commissioner Danny Werfel told senators on Wednesday. He emphasized that “there’s no surge coming for workers, retirees and others.”
The IRS audited fewer than 1% of 2018 returns with total positive incomes — the sum of all positive amounts shown for various sources of income reported on an individual income-tax return, which excludes losses — of between $1 and $500,000, according to statistics that the tax agency released last week.
The agency has three years to start an audit from the time it receives a return.
The numbers show that 0.4% of returns for taxpayers earning up to $25,000 were audited. That figure was 0.3% for returns between $200,000 and $500,000 and more than 9% for returns over $10 million, the IRS data show. Six years earlier, more than 13% of returns over $10 million were scrutinized, according to the IRS.
“Help us with understanding what the words ‘historic level’ means,” Sen. James Lankford, a Republican from Oklahoma, asked Werfel during a Wednesday budget hearing.
“We will take the most recent final audit rate, and it’s historically low … and we allow that to be the marker for least several years, and then we’re revisit it,” Werfel said. The 2018 audit rates were the newest final rates, he added.
“So the 2018 number is what it’s going to be?” Lankford asked.
“Yes,” Werfel replied.
“Werfel’s explanation that 2018 audit levels will be the reference point is the most detail I’ve heard so far,” Erica York, s senior economist at the Tax Foundation, told MarketWatch. “He did seem to leave open the possibility of revisiting the reference year for ‘historical’ in the future,” she added.
Another open question has been how the $400,000 income threshold will be determined. Months after the Inflation Reduction Act passed, IRS and Treasury officials still hadn’t finalized what counted as $400,000 in income, according to a January Treasury Department watchdog report.
“How are you arriving at this number?” asked Sen. Marsha Blackburn, a Republican from Tennessee. Blackburn’s state has many self-employed entrepreneurs who might appear richer on paper than they actually are, she said. “While they may have a higher gross, their net is very low,” she added.
“We’re going to look at total positive income as our metric,” Werfel said. He later added that “there would be no increased likelihood of an audit if they have less than $400,000 in total positive income.”
The IRS description of total positive income as “the sum of all positive amounts shown for the various sources of income reported on an individual income tax return and, thus, excludes losses” represents, effectively, a tally of income before taxpayers subtract their losses.
Total positive income is a metric the IRS usually applies to categorize audits, the Tax Foundation’s York noted. But one challenge of strict thresholds for more audits, she said, “is that it creates incentives for underreporting income” to stay under the line.
Compared with recent years, there are now more specifics about how the IRS will implement additional audits of higher-income taxpayers, said Janet Holtzblatt, a senior fellow at the Tax Policy Center.
“But still there are questions,” she noted, about how the agency will treat situations when taxpayers don’t provide full picture of their income.
The Biden administration, pushing for more U.S. manufacturing, has issued its updated list of all-electric and gas-electric hybrid vehicles that qualify for the full $7,500 tax credit, and those that can earn at least a partial sweetener for buyers.
With the update, 16 models are now eligible for a full or partial tax credit, based on new thresholds that require a certain percentage of the battery parts and the minerals used in those batteries to come from North America, meaning the U.S., or a country with select trade agreements with the U.S.
The total is down from 25 electric and plug-in models previously eligible for a U.S. tax break, which were first introduced about 10 years ago.
The revision limits the selection to vehicles built by four car companies: Tesla Inc. TSLA, -0.96%,
Ford Motor Co. F, -0.04%,
General Motors Co. GM, +0.17%
and Stellantis NV STLA, +0.03%,
which owns Jeep and Chrysler.
The government site also advises on tax incentives for used vehicles and leased vehicles.
For buyers to claim the full $7,500 tax credit, a percentage of the pre-determined battery parts must be made in North America and a percentage of critical minerals sourced in the U.S. or from certain trade-friendly countries. A partial $3,750 credit is available for meeting one of these two battery-sourcing requirements.
Terrence Horan
Not a single electric model from a foreign brand is eligible for the subsidy as revised. And EVs from startups, such as passenger- and commercial-truck maker Rivian Automotive Inc. RIVN, -1.64%
and luxury brand Lucid Group Inc. LCID, -0.19%,
also missed making the list. That’s largely because their vehicles are too expensive for the price contingencies that inform which autos qualify. Income levels of buyers are also a consideration.
Still, the new rules make for certain immediate winners over others.
Nearly all of GM’s new EV models are eligible for the full $7,500 tax credit. Six Ford electric and plug-in hybrid models also qualify for a partial or full tax credit, including the Mustang Mach-E and F-150 Lightning.
Among Tesla’s models, some entry-level Model 3 sedans will get a $3,750 credit. That is because the car uses battery cells made in China. Higher-end Model 3s and all its Model Y configurations qualify for the full $7,500 credit.
Tesla has been cutting its retail prices, a move to boost sales and bring some offerings in line with the tax breaks. And analysts say the maker likely isn’t done cutting prices.
The tax credits made a big splash when they were included in 2022’s Inflation Reduction Act, the broad spending bill that observers labeled the biggest pro-climate action by an administration to date. But Biden’s pro-America stance soon came in conflict with the heart of the existing EV market, much of which is sourced abroad.
The latest changes, which are intended to attract auto manufacturers into building domestically, apply to vehicles delivered to customers starting Tuesday. Several overseas makers, including Hyundai and Honda, have started to build battery plants in the U.S.
Other actions are intended to push EVs as well. The Environmental Protection Agency last week proposed its toughest restrictions ever on tailpipe emissions, a target that can likely only be met by turning out more EVs from assembly lines. The new standards aim for two-thirds of U.S. car sales to be electric by 2032.
As the fire at an Indiana plastics-recycling storage facility burned over several days and officials scrambled to calm evacuated residents and measure air quality, larger safety questions emerged across a nation that relies on recycling to help offset the impact of teeming landfills and littered waterways.
Authorities in the eastern part of the state on Sunday finally lifted a dayslong evacuation order after it was determined immediate environmental concerns related to the fire had passed.
But the man-made disaster had already done its part, leaving many wondering if recycling centers — challenging to regulate because they range from small community-led efforts to major industrial facilities — are as safe as Americans think they are?
Public health experts told MarketWatch the nation needs to take a harder look at how we store and dispose of chemicals-heavy plastics in particular, along with other recycled materials that can act as a tinderbox in certain conditions. It may be a wakeup call to the scores of Americans who embrace recycling as one of the longest-tested and straightforward solutions to help the environment. What happens after recyclable materials leave the home can be quite another story, however.
Worker safety in the handling of large recycling machinery remains a priority of the Occupational Safety and Health Administration (OSHA) and other agencies, but less scrutiny may be given to the emissions those workers breathe in, and in the case of the Indiana emergency, what pollution community members near a recycling center may be exposed to.
“Any company, regardless of its intentions, must be held accountable for regulations, not only for the safety of its employees, but for the communities around it,” Dr. Panagis Galiatsatos, a pulmonologist, who is the national spokesperson for the American Lung Association, told MarketWatch.
“This [Indiana crisis] is alarming — a good deed [such as recycling] undone by the consequences of not having sound safety precautions,” said Galiatsatos, who is also an assistant professor at the Johns Hopkins School of Medicine and helps lead community engagement for the Baltimore Breathe Center.
As for the fire in Richmond, Ind., a college town and county seat of about 35,000 people near the Ohio border, the city’s fire chief, Tim Brown, made clear that there were known code violations by the operator of the former factory that had been turned into plastics storage for recycling or resale. This dangerous fire was a matter of “when, not if,” Brown said in the initial hours that the fire, whose origin is not yet known, burned.
The city of Richmond’s official site about the disaster described the fire as initially impacting “two warehouses containing large amounts of chipped, shredded and bulk recycled plastic, [which] caught fire.” The site does offer cleanup help advice.
Brown, the fire chief, reported that just over 13 of the 14 acres which made up the recycling facility’s property had burned, according to nearby Dayton, Ohio, station WDTN. Brown told reporters the six buildings at the site of the fire were full of plastic from “floor to ceiling, wall to wall,” along with several full semi-trailers. He said Sunday that fire fighters would continue to monitor for flare-ups, according to the Associated Press.
Richmond Mayor Dave Snow said the owner of the buildings has ignored citations that dinged his operation for code violations, and the city has continued to go through steps to get the owner to clean up the property, including preventing the operator from taking on additional plastic.
“We just wish the property owner and the business owner would’ve taken this more serious from day one,” Snow said, according to the report out of Dayton, which cited sister station WXIN. “This person has been negligent and irresponsible, and it’s led to putting a lot of people in danger,” the mayor added.
But some environmental groups say lax enforcement puts citizens at risk.
“Indiana is already top in the nation for water and air quality violations, but the consequences are too negligible here for industry to adhere to the laws,” said Susan Thomas, communications director at Just Transition Northwest Indiana, a climate justice group based in the state.
“We need real solutions to the climate crisis, not more false ones that shield chronic polluters from justice,” she said.
The Environmental Protection Agency (EPA) had collected debris samples from the Richmond fire and searched nearby grounds for any debris, which will be sampled for asbestos given the age of the buildings housing the recycling facility. Residents have been warned not to touch or mow over debris until the sample results are available. Testing was also carried out on the Ohio side of the border.
No doubt, the catastrophe had impacted daily life. Wayne County, Ind., health department officials and fire-safety officials told residents to shelter in place and reduce outdoor activity if they even smelled smoke. According to the health department’s help line, symptoms that may be related to breathing smoke include repeated coughing, shortness of breath or difficulty breathing, wheezing, chest tightness or pain, palpitations, nausea or lightheadedness.
Any safer than a landfill?
When a lens on recycling is widened, it comes to light that how facilities handle their plastic and other materials may not involve much more care than that given to chemical-emitting plastic left to break down in a landfill, say the concerned public health officials.
Of the 40 million tons of plastic waste generated in the U.S., only 5%-6%, or about two million tons, is recycled, according to a report conducted by the environmental groups Beyond Plastics and The Last Beach Cleanup. About 85% went to landfills, and 10% was incinerated. The rate of plastic recycling has decreased since 2018, when it was at 8.7%, per the study.
Generally speaking, when plastic particles break down, they gain new physical and chemical properties, increasing the risk they will have a toxic effect on organisms, says the environmental arm of the United Nations. The larger the number of potentially affected species and ecological functions, the more likely it is that toxic effects will occur.
And although the conditions of the Indiana fire differ from those experienced earlier this year when a Norfolk Southern Corp. NSC, +0.30%
freight train carrying hazardous materials in several cars derailed near East Palestine, Ohio, the public’s concern for that event — which also sparked an evacuation after a chemical plume from a controlled burn — spread widely on social media.
Now, add in Richmond. The public, at large, is increasingly wondering if officials are doing their job to prevent such disasters, and whether the full extent of chemical exposure is known.
“This [fire in Indiana] overlaps in a general sense the chemical safety question raised by the Ohio derailment — and it shouldn’t have just been raised by that one event, but that certainly brought it into focus,” said Dr. Peter Orris, chief of occupational and environmental medicine at the University of Illinois – Chicago.
Orris said lasting solutions pushing awareness and safety around the storage and transportation of chemicals and chemical-based plastic must span political differences over the reach of regulation. He recalled a time just after the 9/11 terror attacks when a fresh look at the transportation of toxic chemicals and the storage and shipment of ammonia and other substances that can have nefarious uses in the wrong hands drew support from unusual partners.
“Shortly after 9/11 a rather broad coalition, including environmental interests such as Greenpeace, and consumer groups, with congressional support, alongside Homeland Security all pushed a model bill about where and how you could transport toxic chemicals, especially going through populated areas,” he said. “Dealing with new concerns around chemicals and recycling plastic may require the same breadth of interests.”
Already, the Biden administration has shown the will to target chemical exposure in U.S. water. Earlier this year, the EPA moved to require near-zero levels of perfluoroalkyl and polyfluoroalkyl substances, part of a classification of chemicals known as PFAS, and also called “forever chemicals” due to how long they persist in the environment. Both the chemical companies and their trade groups have pushed their own steps toward reducing risk, they say. Exposure to some of the chemicals has been linked to cancer, liver damage, fertility and thyroid problems, as well as asthma and other health effects.
And, Orris stressed, regulating recycling with a one-size-fits-all approach may not work.
Surprisingly, it can be the smaller recycling facilities that take bigger steps in curbing emissions than their larger counterparts. Orris in recent years reported on efforts of a San Francisco recycling plant that made emissions reduction a priority, including by banning incineration. The same research trip turned up issues with a Los Angeles-area plant, exposing “real problems with its policies and procedures beginning with the neighborhood smell from organic materials to other issues with toxins.”
How can plastic be so dangerous?
Specifically, the chemicals that help fortify plastic for its many uses present their own unique conditions.
As plastic is heated at high temperatures, melted and reformed into small pellets, it emits toxic chemicals and particulate matter, including volatile gases and fly ash, into the air, which pose threats to health and the local environment, says a Human Rights Watch paper, citing environmental engineering research. When plastic is recycled into pellets for future use, its toxic chemical additives are carried over to the new products. Plus, the recycling process can generate new toxic chemicals, like dioxins, if plastics are not heated at a high enough temperature.
There are other concerns. Plastic melting facilities can emit volatile organic compounds (VOCs) and carcinogens, which in higher concentrations can pollute air both inside facilities and in areas near recycling facilities.
“Plastics, the way they burn, put out dangerous toxins. And plastic can create its own unique chemistry even when it comes into interaction with benign chemicals,” said Galiatsatos of Johns Hopkins.
“There are the lung issues from people breathing in these chemicals and the toxins associated with them. But there is more: systemic inflation from breathing in chemicals, and that can lead to heart disease,” he said.
“I wish we would pay the same amount of attention to plastics, their recycling and their disposal, as we do with sewer systems. When was the last time we heard of a waste system-based cholera outbreak in the U.S.?” he asked rhetorically. “Exactly. That we care about. Yet plastics, especially the burning of chemicals, we treat too lightly.”
The contest to become the Republican Party’s 2024 presidential nominee is heating up, with Nikki Haley, a former U.S. ambassador to the United Nations, and longshot candidate Vivek Ramaswamy each announcing runs since the beginning of the year, and former Arkansas Gov. Asa Hutchinson joining the fray in a Sunday-show appearance on April 2.
And former President Donald Trump appears to be getting a political lift from a Manhattan district attorney’s case against him, though some analysts don’t see the boost lasting.
Biden gave a fresh hint on Monday about his re-election bid at the annual White House Easter Egg Roll, saying in an interview with Al Roker of NBC’s “Today” show that he aims to take part in “at least three or four more Easter egg rolls. Maybe five. Maybe six.”
“I’m planning on running, Al, but we’re not prepared to announce it yet,” the president said.
Support the Agreement to End Hostilities, 2012, former prison artist Michael D. Russell
Prime Minister Tony Blair and his Irish counterpart Bertie Ahern sign the Good Friday Agreement on 10 April 1998
MinisterKingXPyeface putting his arm around fellow prison abolitionist Angela Davis.
Self portrait of prison artist C-Note
MinisterKingXPyeface contemplating on his dream to go from the KAGE to the STAGE.
The Good Friday Agreement of 1998 and the California Prisoner Racial Groups Agreement to End Hostilities of 2012 are examples of successful conflict resolution.
SILICON VALLEY, CALIFORNIA, UNITED STATES, April 8, 2023/EINPresswire.com/ — On April 11-12, 2023, US President Joe Biden will travel to the UK and Ireland to mark the 25th anniversary of the Good Friday accord. The Good Friday Agreement (GFA), was signed a quarter century ago, as a US brokered agreement to help end decades of deadly sectarian violence in Northern Ireland.
Last year, in 2012, marked the 10 year anniversary of the Agreement to End Hostilities (AEH). The AEH was an agreement amongst California prisoners being housed in the most extreme form of long-term solitary confinement, Pelican Bay State Prison’s Short Corridor.
The AEH was an agreement between the various ethnic groups in the Short Corridor to end racial violence amongst California’s General population housed prisoners,…
MADISON, Wis. — A Democratic-backed Milwaukee judge won the high stakes Wisconsin Supreme Court race Tuesday, ensuring liberals will take over majority control of the court for the first time in 15 years with the fate of the state’s abortion ban on the line.
Milwaukee County Circuit Judge Janet Protasiewicz, 60, defeated former Justice Dan Kelly, who previously worked for Republicans and had support from the state’s leading anti-abortion groups.
The victory speaks to the importance of abortion as an issue for Democrats in a key swing state, with turnout on pace to be the highest ever for a Wisconsin Supreme Court race that didn’t share the ballot with a presidential primary.
In a jubilant scene at her victory party, the other three liberal justices on the court joined Protasiewicz on the stage and raised their arms in celebration.
Protasiewicz tried to downplay the importance of abortion as an issue in her victory, even though she and her allies, including an array of abortion rights groups including Planned Parenthood, made it the focus of much of her advertising and messaging to voters.
“It was really about saving our democracy, getting away from extremism and having a fair and impartial court where everybody gets a fair shot in the courtroom,” Protasiewicz told The Associated Press after her win. “That’s what it was all about.”
The new court controlled 4-3 by liberals is expected to decide a pending lawsuit challenging the state’s 1849 law banning abortion enacted a year after statehood. Protasiewicz said during the campaign that she supports abortion rights but stopped short of saying how she would rule on the lawsuit. She had called Kelly an “extreme partisan” who would vote to uphold the ban.
In addition to abortion, Protasiewicz’s win is likely to impact the future of Republican-drawn legislative maps, voting rights and years of other GOP policies. It will also ensure that liberals will have the majority leading up to the 2024 presidential election and immediately after.
Four of the past six presidential elections in Wisconsin have been decided by less than a percentage point and Trump turned to the courts in 2020 in his unsuccessful push to overturn his roughly 21,000-vote loss in the state. The current court, under a 4-3 conservative majority, came within one vote of overturning President Joe Biden’s win in the state in 2020, and both major parties are preparing for another close race in 2024.
Kelly is a former justice who has also performed work for Republicans and advised them on a plan to have fake GOP electors cast their ballots for Trump following the 2020 election even though Trump had lost.
Ahead of the vote, Protasiewicz called Kelly “a true threat to our democracy” because of his advising on the fake elector scheme.
Kelly had expressed opposition to abortion in the past, including in a 2012 blog post in which he said the Democratic Party and the National Organization for Women were committed to normalizing the taking of human life. He also had done legal work for Wisconsin Right to Life.
Kelly was endorsed by the state’s top three anti-abortion groups, while Protasiewicz was backed by abortion rights advocates.
Kelly was appointed to the state Supreme Court by then-Gov. Scott Walker, a Republican, in 2016. He served four years before being defeated in 2020 on the same ballot as the Democratic presidential primary. Kelly was endorsed by Trump that year.
Trump did not endorse this year. Protasiewicz’s endorsements included Hillary Clinton.
Kelly tried to distance himself from his work for Republicans, saying it was “irrelevant” to how he would work as a justice. He tried to make the campaign about Protasiewicz’s record as a judge, arguing that she was soft on crime and accusing her of being “bought and paid for” by Democrats.
The Wisconsin Democratic Party gave Protasiewicz’s campaign more than $8 million, leading her to promise to recuse herself from any case brought by the party.
Protasiewicz said that while she anticipates many of the issues raised in the campaign will come before the court in the coming years, she pledged to be impartial and not beholden to Democrats and her liberal backers who poured an unprecedented amount of money into the race.
“I’ve told everybody on the entire time that I was running, despite the fact that I was sharing my personal values, every single decision that I will render will be rooted in the law,” she said. “And that is the bottom line. They’re independent and rooted in the law.”
Kelly, in a statement after his loss, said Protasiewicz “made her campaign about cynical appeals to political passions, serial lies, and a blatant disregard for judicial ethics and the integrity of the court.”
“I wish Wisconsin the best of luck,” he said. “I think it will need it.”
Protasiewicz was outspoken on Wisconsin’s gerrymandered legislative maps, calling them “rigged.” Kelly accused her of prejudging that case, abortion and others that could come before the court.
The state Supreme Court upheld Republican-drawn maps in 2022. Those maps, widely regarded as among the most gerrymandered in the country, have helped Republicans increase their hold on the state Legislature to near supermajority levels, even as Democrats have won statewide elections, including Tony Evers as governor in both 2018 and 2022 and Biden in 2020.
Protasiewicz will serve a 10-year term starting in August replacing retiring conservative Justice Pat Roggensack.
“This landmark agreement has the potential to transform the Middle East by realigning its major powers,” the journal Foreign Affairs declared, adding that the gambit is “weaving the region into China’s global ambitions. For Beijing, the announcement was a great leap forward in its rivalry with Washington.”
“ ‘China has seen a space where it is hard for the West to really block off — heading into issues [that the Western powers] feel are too intractable or too toxic to touch and trying to demonstrate that there might be a different way to mediate or involve yourself in these problems.’ ”
— Kerry Brown, King’s College London
“There are changes coming that haven’t happened in 100 years,” Xi told Putin as the self-described “dear friends” concluded their talks. “When we are together, we are driving these changes.”
China’s assertiveness comes after three years of COVID restrictions that saw the country close off from the world in an attempt to tame the virus, a policy that was suddenly scrapped in December.
“It has sunk in that China needs friends. It has ended up too isolated, and that has cut across the narrative of the Xi third term, which was due to be somewhat more sunny,” Kerry Brown, director of the Lau China Institute at King’s College London, told MarketWatch.
Others agreed. “China certainly is exiting a period of diplomatic isolation during the height of COVID,” said Victor Shih, the Ho Miu Lam chair in China and Pacific relations at the University of California, San Diego, and an expert on Chinese elite politics.
That exit has been swift, with Beijing taking concrete steps toward a belief that previously had been mostly rhetoric — that the U.S.-led global system is not the only path.
“China has seen a space where it is hard for the West to really block off — heading into issues [that the Western powers] feel are too intractable or too toxic to touch and trying to demonstrate that there might be a different way to mediate or involve yourself in these problems,” Brown said.
Those sentiments are increasingly pervasive across China, particularly in government, academia and media.
“The U.S., which is accustomed to enjoying the spotlight, is now puzzled for it never thought that one day China would be more popular than it,” state tabloid Global Times said in a front-page story last Thursday.
Wang Yong, director of the Center for International Political Economy and the Center for American Studies at Peking University, told MarketWatch, “The rise of China as a great power is facing an increasingly complicated situation, mainly because U.S. elites judge China as the foremost strategic and systemic threat, and attack China’s development.”
In fact, Taiwanese President Tsai Ing-wen is stopping over in the U.S. this week after visits to the island’s few remaining allies in Central America. Beijing has threatened for weeks against her being welcomed by any high-level American officials.
Those threats turned to ire on Monday, when Republican House Speaker Kevin McCarthy said he would meet with Tsai on Wednesday in California. China said this could lead to “serious confrontation” and that Beijing would “resolutely fight back” — without giving specifics.
“ ‘Why is it assumed we live in a U.S. world?’ ”
— Alan Ma, graduate student, Tsinghua University.
“Gradually deviating from the past promise of ‘one China,’ promoting Taiwan independence and using Taiwan to contain China’s development — these could trigger a China-U.S. war,” Peking University’s Wang said from Beijing.
Average citizens including younger people expressed frustration with U.S. policy.
Taiwan’s president, Tsai Ing-wen, arrives on Thursday at her hotel in New York.
AP/John Minchillo
“Why isn’t it China’s time to lead? Why is it assumed we live in a U.S. world?” asked 27-year-old Alan Ma, a graduate student in politics at Beijing’s Tsinghua University.
Other areas are reaching heightened levels of tension. China’s military said last month it drove out an American destroyer ship that had “illegally” entered the South China Sea. And the CEO of Chinese-owned video sensation TikTok appeared before U.S. lawmakers in hopes of preventing an American ban on the app over national-security concerns.
But China’s rise, however rapid, must be put in a realistic context, experts said.
“I don’t think that we can say China has entered a new period as a global power until it has deployed large troop contingents overseas on its own,” said UC San Diego’s Shih.
Tanner Brown covers China for MarketWatch and Barron’s.
