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  • Biden administration tells student loan forgiveness applicants it is ‘confident’ in face of Supreme Court skepticism | CNN Politics

    Biden administration tells student loan forgiveness applicants it is ‘confident’ in face of Supreme Court skepticism | CNN Politics

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    CNN
     — 

    The Biden administration is projecting confidence about the fate of President Joe Biden’s student loan cancellation program in a message to applicants, even in the face of skepticism from conservative Supreme Court justices in Tuesday’s high-stakes oral arguments.

    Education Secretary Miguel Cardona said in an email sent to millions of borrowers who applied for debt cancellation that the administration “mounted a powerful case” in support of Biden’s executive action.

    “Our Administration is confident in our legal authority to adopt this plan, and today made clear that opponents of the program lack standing to even bring their case to court,” Cardona wrote in the email update obtained by CNN.

    The email update to applicants reflects a position administration officials have maintained in the wake of the oral arguments. But it also implicitly lays out the administration’s view of the political dynamics of a move that has became an immediate partisan flashpoint. As applicants and administration officials alike settle in for what will likely be months of waiting for a final decision, the update sent to roughly 7 million people also provides a window into the reach the administration would have to frame the debate – and consequences – should the program be struck down.

    Cardona’s message comes as millions of borrowers remain in limbo as they await a Supreme Court decision on whether Biden’s action to cancel up to $20,000 in student loan debt will stand.

    White House officials, who closely monitored the oral arguments in two challenges, have maintained the position that they will ultimately prevail in the cases that challenge Biden’s authority to discharge millions of dollars in federally held loans. While they remain confident on the merits, sources continue to highlight the view inside the administration that the plaintiffs lack standing to bring the challenges – which would render the arguments over the authority itself moot.

    One source familiar told CNN that the White House remains confident that things will go their way, simply saying: “We’ll win.”

    A particular flashpoint in the hearing was the states’ arguments that the loan forgiveness program’s potential harms to MOHELA – the Missouri-created entity that services loans in the state – gives Missouri standing.

    Justice Amy Coney Barrett stood out among the conservatives for asking particularly pointed questions of the GOP states about their standing arguments, setting her apart as a potential pickup vote for the court’s three liberal members.

    “If MOHELA is an arm of the state, why didn’t you just strong-arm MOHELA and say you’ve got to pursue this suit,” Barrett asked Nebraska Solicitor General James Campbell.

    The question was one of several directed at Campbell, who represented the group of Republican-led states that argue the administration exceeded its authority, about the states’ standing claims.

    Another source familiar said that Barrett’s comments only raised optimism within the administration.

    But as several conservative justices leveled sharp questions related the government’s authority on the matter, Cardona’s update appeared intended to assuage overarching concerns.

    It also previewed a political contrast officials will likely elevate should Supreme Court strike down Biden’s actions – one White House officials have repeatedly pressed as the challenges have made their way through the courts.

    “While opponents of this program would deny relief to tens of millions of working- and middle-class Americans, we are fighting to deliver relief to borrowers who need support as they get back on their feet after the economic crisis caused by the pandemic,” Cardona wrote.

    Biden’s plan would cancel as much as $10,000 in federal student loan debt for people earning less than $125,000 a year, or less than $250,000 for married couples. Individuals on Pell Grants could see up to $20,000 forgiven. In all, more than 40 million federal borrowers would qualify for some level of debt cancelation, with roughly 20 million who would have their balance forgiven entirely.

    The Biden administration received 26 million applications for the program, which has been frozen as the court battles have played out, and more than 16 million applications had already been approved.

    Cardona reiterated that a pause on federal loan payments, which was implemented during the Trump administration in response to the pandemic and was set to restart at the same time cancellation was implemented, remain on hold as the Supreme Court deliberations play out.

    “While we await the Supreme Court’s decision, the pause on student loan payments remains in effect,” Cardona wrote. “Payments will resume 60 days after the Supreme Court announces its decision.”

    If the litigation is not resolved by June 30, payments are scheduled to resume 60 days after that date. If it has not made a decision or resolved the litigation by June 30, payments will resume 60 days after that.

    The Supreme Court’s decision is expected to come this summer.

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  • Inflation is doing a crab walk and Fed officials fear its pinch | CNN Business

    Inflation is doing a crab walk and Fed officials fear its pinch | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    The possibility of a 2023 market rally ground to a halt last week amid an onslaught of unfortunate inflation and economic data that spooked investors and increased the likelihood that the Federal Reserve will continue its economically painful rate hikes campaign for longer than Wall Street hoped.

    All major indexes notched their largest weekly losses of 2023 on Friday. The S&P 500 fell by 2.7%. The Dow Jones Industrial Average sank 3%, and the tech-heavy Nasdaq fell 3.3%.

    What’s happening: It appears that after months of steady decline, the pace of inflation is going sideways. January’s Personal Consumption Expenditures price index – the Fed’s favored inflation gauge – came in hotter than expected on Friday.

    Prices rose a whopping 5.4% in January from a year earlier, the Commerce Department’s Bureau of Economic Analysis reported. In December, prices rose 5.3% annually.

    In January alone, prices were up 0.6% from the prior month, a higher monthly gain from December’s increase of 0.2%.

    This inflationary crab walk is almost certainly causing Fed officials to rethink their policy.

    A paper presented Friday at the Booth School of Business Monetary Policy Forum in New York argued that disinflation will likely be slower and more painful than markets anticipate.

    “Significant disinflations induced by monetary policy tightening are associated with recessions,” said the paper. “An ‘immaculate disinflation’ would be unprecedented.” (Immaculate, in this instance, refers to the possibility of inflation falling quickly to the Fed’s 2% goal without any serious economic damage).

    Several Fed presidents, governors and top economists were on hand at the Booth School forum to discuss the paper and monetary policy on Friday. The majority of those speaking expressed deep concern about the stubbornness of inflation and general market reaction.

    Inflation won’t quit: Cleveland Fed President Loretta Mester said that while price growth has moderated from its recent high, the overall pace of inflation remains too high and could be more persistent than her colleagues currently anticipate.

    “I anticipate further rate increases to reach a sufficiently restrictive level, then holding there for some, perhaps extended, time,” echoed Boston Fed President Susan Collins at the conference.

    Collins referred to inflation as “recalcitrant,” a loaded million-dollar word that means uncooperative, or defiant to authority.

    Fed Governor Philip Jefferson struck a more befuddled stance on Friday, observing that inflation continues to baffle economists. “The inflationary forces impinging on the US economy at present represent a complex mixture of temporary and more long-lasting elements that defy simple, parsimonious explanation,” he said. Parsimonious being another million-dollar word for frugal.

    Economists stressed that more pain lies ahead. “It’s important that markets understand that ‘no landing’ is not an option,” said Peter Hooper, vice chair of research at Deutsche Bank, an author of the report.

    While recent data has signaled that the US economy remains strong, “by the time we get to the middle of this year we expect to see some bad news coming and the sooner the markets get that message the more helpful it will be to the Fed,” he said.

    The final word: Former Bank of England Governor Lord Mervyn King summed up what many were thinking on Friday: Given the complexity of the current monetary situation, he said, “I wouldn’t want to give advice to any central banks about what we should do.”

    Researchers at the Federal Reserve Bank of New York have issued a dire warning: If President Joe Biden’s student loan forgiveness plan doesn’t come to fruition, the US could face another credit crisis.

    Some background: The Covid-19 crisis triggered a sudden shift in student loan policy and a new openness to forgiveness. In March 2020, Congress passed the CARES Act, which automatically paused required payments on all federally held student loans.

    That forbearance has since been extended eight times and is set to end as late as August, 40 months after it began.

    The Biden Administration had announced an unprecedented debt cancellation proposal which would provide relief to more than 40 million borrowers. An analysis by the New York Fed found that roughly $441 billion of federal student loans are eligible for forgiveness under the proposal, canceling about 30% of all outstanding federal student loan debt.

    That forgiveness proposal is now on hold after an injunction by the 8th US Circuit Court of Appeals. On Tuesday, The Supreme Court of the United States will hear the case with its decision expected by June 2023.

    What’s on the line: If the Biden Administration’s forgiveness plan survives the court challenge, it will mark the largest mass discharge of consumer debt in modern history, according to the New York Fed. About 40% of those with federal student loan debt would have a zero balance; even more would have a much smaller monthly payment.

    But, “if payments resume without debt relief, we expect both student loan default and delinquencies to rise and potentially surpass pre-pandemic levels,” warned Fed researchers.

    “We note a stark increase in new credit card and auto loan delinquency for borrowers with eligible student loans over the past few quarters, growing at a faster pace than those without student loans and those with ineligible loans,” they wrote.

    Those missed payments suggest that some federal student loan borrowers are having trouble meeting their monthly debt obligations. “We expect these delinquency patterns to worsen if federal student loan payments resume without relief,” said the report.

    The data “may be suggestive of problems to come, a sign of economic distress that may appear particularly concerning when the burden of student loan payments resumes.”

    Future concerns: If student loan borrowers expect future debt cancellation, they may borrow even more, said researchers, which would increase debt balances even more sharply. “Absent direct policies to address this growing burden, taxpayers may be again called to for relief in the future,” they concluded.

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  • How an old debate previews Biden’s new strategy for winning senior voters | CNN Politics

    How an old debate previews Biden’s new strategy for winning senior voters | CNN Politics

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    CNN
     — 

    In pressing Republicans on Social Security and Medicare, President Joe Biden is reprising one of the most dramatic moments of his long career.

    During the 2012 vice-presidential debate, Biden engaged in a nearly 11-minute exchange with GOP nominee Paul Ryan over Republican plans to reconfigure the two massive programs for the elderly, several of which Ryan had authored himself.

    Biden and many Democrats felt he had won the argument on stage. Yet on Election Day, Ryan and GOP presidential nominee Mitt Romney routed Biden and President Barack Obama among White seniors, and beat them soundly among seniors overall, exit polls found.

    That outcome underscores the obstacles facing Biden now as he tries to recapture older voters by portraying Republicans as threats to the two towers of America’s safety net for the elderly. While polls consistently show that voters trust Democrats more than Republicans to safeguard the programs, GOP presidential nominees have carried all seniors in every presidential election back to 2004 and have reached at least 58% support among White seniors in each of the past four contests, exit polls have found. Democrats have likewise consistently struggled among those nearing retirement, older working adults aged 45-64.

    Those results suggest that for most older voters, affinity for the GOP messages on other issues – particularly its resistance, in the Donald Trump era, to cultural and racial change – has outweighed their views about Social Security and Medicare. Those grooves are now cut so deeply, over so many elections, that Biden may struggle to change them much no matter how hard he rails against a range of GOP proposals that could retrench or restructure the programs.

    Biden’s charge that Republicans are threatening the two giant entitlement programs for the elderly – which triggered his striking back and forth exchanges with GOP legislators during the State of the Union – fits squarely in his broader political positioning as he turns toward his expected reelection campaign.

    As I’ve written, the 80-year-old Biden, at his core, “remains something like a pre-1970s Democrat, who is most comfortable with a party focused less on cultural crusades than on delivering kitchen-table benefits to people who work with their hands.” As president he’s expressed that inclination primarily through what he calls his “blue-collar blueprint to rebuild America” – the planks in his economic plans, such as generous incentives to revive domestic manufacturing, aimed at creating more opportunity for workers without a college degree. Politically, Biden’s staunch defense of Social Security and Medicare, programs critical to the economic security of financially vulnerable retirees, represents a logical bookend to that emphasis.

    “We all know that whose side you are on is a critical debate point for every election and this debate over Social Security and Medicare really helps crystallize whose side Biden is on versus whose side Republicans are on in a very effective way for him,” said Democratic pollster Matt Hogan, who helped conduct an extensive series of bipartisan polls during the 2022 campaign measuring attitudes among seniors for the AARP, the giant lobby for the elderly.

    From Franklin Roosevelt through Hubert Humphrey and Tip O’Neill, generations of Democrats have framed themselves as the defenders of the social safety net for seniors against Republicans who they say would unravel it. Biden showed how comfortable he was stepping into those shoes during his 2012 vice-presidential debate with Ryan, then a young representative from Wisconsin who Romney had selected as his running mate.

    Nearly 30 years Biden’s junior, Ryan was an unflinching advocate of restructuring Social Security and Medicare to reduce costs over time. In particular, Ryan was the principal supporter of a conservative plan to convert Medicare, the giant federal health insurance program for the elderly, into a system called “premium support.” Under that proposal, Medicare would be transformed from its current structure, in which the government directly pays doctors and hospitals who provide care for beneficiaries, into a voucher (or “premium support”) system, in which the government would provide recipients a fixed sum to purchase private insurance. Ryan had also drafted proposals to partially privatize Social Security by allowing workers to divert part of their payroll taxes into private investment accounts, a change that would have reduced the tax dollars flowing into the system and eventually required substantial cuts in guaranteed benefits.

    For nearly 11 minutes during the debate in October 2012, moderator Martha Raddatz of ABC skillfully guided Biden and Ryan through a heated, but civil and substantive, discussion of Social Security and Medicare’s future. Ryan insisted that changes were needed to preserve the programs’ long-term viability and that current seniors and those near retirement would not see their benefits reduced.

    Biden appealed openly to the Democrats’ historic image as the programs’ protectors and condemned Ryan and the GOP for wanting to partially privatize them. At one point in the debate, Biden declared: “we will be no part of a [Medicare] voucher program or the privatization of Social Security.” A few moments later, he insisted: “These guys haven’t been big on Medicare from the beginning. And they’ve always been about Social Security as little as you can do. Look, folks, use your common sense. Who do you trust on this?”

    At the time, Democrats felt Biden had at least held his own, restoring the party’s momentum after Obama’s surprisingly listless performance eight days earlier in his first debate against Romney. And Democrats through the rest of the campaign railed against the Republican ticket as a threat to Social Security and Medicare.

    But on election day, those arguments did not translate into gains for Obama and Biden among seniors or the older working adults (aged 45-64) nearing retirement. As Hogan noted, the newly passed Affordable Care Act, which generated some of its funding through savings in Medicare, was extremely unpopular at the time among older voters. Obama and Biden not only lost seniors and the older working age adults, but actually ran slightly more poorly among both groups in 2012 than they did in 2008.

    In fact, no Democratic presidential nominee since Al Gore in 2000 has carried most seniors in a presidential campaign; Obama in 2008 was the only one since Gore to carry most of the older working age adults. Among older Whites, the Democratic deficit is even more pronounced: the Republican presidential nominee has carried around three-fifths of both White seniors and those nearing retirement in each of the past four elections. Biden in 2020 slightly improved on Hillary Clinton’s anemic 2016 performance with both groups, but still lost to Trump by 15 percentage points among White seniors and by 23 points among the Whites nearing retirement, according to the exit polls conducted by Edison Research for a consortium of media organizations including CNN. Biden performed especially poorly among older Whites without a college degree – an economically stressed group heavily reliant on the federal retirement programs.

    Estimates by Catalist, a Democratic targeting firm, and the Pew Research Center likewise found that Trump in both 2016 and 2020 beat his Democratic opponents among both seniors and the older working adults. Like the exit polls, the Catalist data show the Republican nominees carrying about three-fifths of White seniors and older working adults in each of the past three presidential elections.

    The story is similar in congressional contests. In House elections, the exit polls found Republicans winning all seniors and older working adults comfortably in the 2014 and 2022 midterm campaigns and narrowly carrying them even in 2018 when Democrats romped overall. In all three of those midterm congressional elections, Republicans carried about three-fifths of the near retirement White adults, while they also reached that elevated threshold among White seniors in both the 2014 and 2022 campaigns.

    Republicans have maintained these advantages with older voters despite polls showing that most Americans trust Democrats more than the GOP to protect Social Security and Medicare, and that most Americans, especially seniors, oppose the intermittently surfacing GOP proposals to partially privatize both programs.

    Politically, “Democrats have used Social Security and Medicare really a lot over the past two or three decades, maybe four decades,” said Jim Kessler, executive vice president for policy at Third Way, a centrist Democratic group. “The payoff has been a lot less than Democrats have generally thought it would be.”

    Could this time be different for Biden and the Democrats? Congressional Republicans have certainly provided plenty of evidence for his claim that they still hope to restructure the programs. The proposed 2023 budget by the Republican Study Committee, the members of which include about three-fourths of House Republicans, reprises the ideas of converting Medicare into a premium support system and establishing private investment accounts under Social Security, while also raising the retirement age for both programs and reducing Social Security benefits over time. And although Florida Sen. Rick Scott renounced the idea late last week, his “Rescue America” agenda did include a proposal to require Congress to reauthorize all federal programs, including Social Security and Medicare, every five years.

    These ideas have precipitated an unusual degree of open Republican dissension. Senate GOP Leader Mitch McConnell repeatedly, and unreservedly, denounced the Scott plan until the Florida senator backed off. Trump recently released a video in which he declared the GOP should not cut “a single penny” of Social Security or Medicare benefits – which put him directly at odds with the three-fourths of House Republicans in the Republican Study Committee. House Speaker Kevin McCarthy, bending more toward Trump’s position, seems unlikely to incorporate into the GOP budget plans the RSC’s most sweeping changes in Social Security and Medicare.

    Kessler believes Biden may succeed where other Democrats have failed at hurting the GOP with the issue, and he argued that the conspicuous Republican infighting demonstrates they share that concern. “We are watching a high-profile battle that I’ve never really seen before on these issues in the Republican Party,” Kessler said. “And part of it is clearly they think it’s a problem when they didn’t years ago. If they think it’s a problem, maybe it’s a problem.”

    Stuart Stevens, who served as Romney’s chief strategist in the 2012 campaign but has since become a fierce critic of the Trump-era GOP, also believes the party could face more risk over its entitlement agenda than it did back then. The reason is that he thinks the idea of sunsetting Social Security and Medicare every five years, even if Scott is trying to jettison it, may prove more immediately tangible and understandable to voters than Ryan’s complex ideas of partially privatizing both programs.

    “The question I always ask myself in campaigns is ‘are you talking about something the other side doesn’t want to talk about?’” Stevens said. “That’s probably a good sign that they are losing on the issue.”

    Whether Biden proves more effective than other recent Democrats at attracting older voters around Social Security and Medicare will likely pivot on whether seniors believe the GOP genuinely would cut the programs if given the power to do so, argued Robert Blendon, a professor emeritus at the Harvard School of Public Health, who specializes in public attitudes about the social safety net. “If the senior community actually believes that it’s being threatened it really would affect their votes,” he predicted. But, he added, “as long as they are not threatened, the other values of seniors on top issues more and more correspond with Republicans.”

    There’s no doubt about the second half of that equation. Polling has consistently found that older Whites, in particular, are more receptive than their younger counterparts to hardline Trump-era GOP messages around crime, immigration and the broader currents of racial and cultural change: for instance, about half of Whites older than 50 agree that discrimination against Whites is now as big a problem as bias against minorities, a far higher percentage than among younger Whites, according to a new national survey by the Public Religion Research Institute. Older Whites are also more likely than younger generations to lack a college degree or to identify as Christians, attributes that generally predict sympathy for GOP cultural and racial arguments.

    Through the 21st century, those cultural and racial attitudes among older White voters have consistently trumped any concerns they may hold about the Republican commitment to Social Security and Medicare. Despite Biden’s impassioned articulation of the case against the GOP, that didn’t change even in 2012 when Republicans placed on their national ticket a vice presidential nominee who directly embodied the GOP aspirations to reconfigure and retrench those programs.

    Even small changes in seniors’ preferences could have a big impact in closely balanced states with a large retiree population like Arizona and Pennsylvania. But the entrenched GOP advantage among older voters over the past two decades suggests Biden’s hopes in 2024 may pivot less on improving with the “gray” than maximizing his vote among the “brown”: the diverse, younger generations that recoil from the same Republican messages on culture and race that electrify so many older Whites.

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  • Biden administration releases data breaking down student loan relief applications by congressional district | CNN Politics

    Biden administration releases data breaking down student loan relief applications by congressional district | CNN Politics

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    CNN
     — 

    The Department of Education released a breakdown of federal student loan forgiveness applications by congressional district on Friday, providing a new window into the demographics of borrowers seeking relief across both Republican and Democratic-represented districts.

    The new data is being released as the fate of President Joe Biden’s debt relief plan remains in limbo, with the US Supreme Court set to soon hear cases challenging its legality later this month. The initiative would offer up to $20,000 of individual debt forgiveness to millions of low- and middle-income borrowers, but ongoing legal challenges have meant that no one has received relief – including millions of borrowers whose applications have already been approved.

    The White House says the plan is vital in order to provide targeted debt relief to certain federal student-loan borrowers affected by the Covid-19 pandemic. But many Republicans say that the relief will make inflation worse and argue it’s unfair to individuals who didn’t take out student loans or have already paid them off. They’ve also criticized the administration’s legal justification for issuing the relief through executive authority.

    The Department of Education received about 26 million applications for debt relief by the time a federal district court judge blocked the program in November. More than 16 million of those borrowers’ applications were fully approved and more than 40 million borrowers would qualify for the program, according to the administration.

    “Across the country, in every congressional district there is a strong desire for the Biden-Harris Administration’s one-time debt relief program,” a Department of Education official said about the new data. “In every single congressional district, at least half of eligible borrowers either applied or were deemed auto-eligible for debt relief, and that was only in the one month that the application was available before the program got blocked because of lawsuits.”

    In every congressional district, the official said, at least 30% of eligible borrowers were approved to have their debt discharged before the program was blocked. Some 81% of all applications for relief came from the bottom 80% of congressional districts when broken down by average income, the official added.

    A new Politico analysis of additional zip code data from the department obtained though a public records request also shows that borrowers living in lower-income areas applied for relief at a higher rate compared to those who live in wealthier neighborhoods, and most applications came from places where the per-capita income is under $35,000. Non-White majority zip codes accounted for more forgiveness applications per capita than majority-White zip codes.

    Friday’s data build on earlier numbers released by the Department of Education which showed a state-by-state breakdown of student loan forgiveness applications, which were published shortly after independent auditors questioned the estimated cost of the program.

    The the latest release coincides with the Supreme Court planning to hear two cases pertaining to Biden’s student loan forgiveness program later this month, including one from several Republican-led states.

    Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina say that the Department of Education did not have the legal authority to issue such a cancellation. They argue that it violates the separation of powers and that Biden is using the pandemic as a pretext to mask his true goal of fulfilling a campaign promise to erase student-loan debt.

    They put forward several theories that they say allow them to get into court to challenge a program they argue unlawfully invokes Covid “to assert power beyond anything Congress could have conceived.”

    Another case being heard by the high court this month was brought by two individual borrowers – Myra Brown and Alexander Taylor – who are not qualified for full debt relief forgiveness and who say they were denied an opportunity to comment on Education Secretary Miguel Cardona’s decision to provide targeted student loan debt relief to some.

    Earlier this month, 126 House Republicans – led by Education and the Workforce Committee Chairwoman Virginia Foxx of North Carolina and South Carolina Rep. Jeff Duncan – filed an amicus brief opposing the debt forgiveness effort.

    According to the White House data, in Foxx’s district, approximately 61% of borrowers, some 46,300 people, applied or were automatically eligible for relief. In Duncan’s district, about 59% of borrowers, 51,400 people, applied or were automatically eligible for relief.

    A number of members in Republican leadership, including Majority Leader Steve Scalise, Majority Whip Tom Emmer, Conference Chair Elise Stefanik and Policy Committee Chair Gary Palmer also signed onto the brief.

    House Speaker Kevin McCarthy did not sign onto the brief, but he has been critical of the president’s plan.

    McCarthy’s home state of California, the most populous state in the nation, has 2.3 million people who have applied or were automatically eligible for relief – the most out of any state. Approximately 60% of borrowers in the speaker’s district applied or were automatically eligible for relief, with 31,600 borrowers already fully approved for relief out of 49,800 who have applied or were automatically eligible.

    Representatives for Foxx, Duncan, Scalise, Emmer, Stefanik, Palmer and McCarthy did not respond to CNN’s request for comment on the new data.

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  • Millions of children are at risk of losing Medicaid coverage starting in April | CNN Politics

    Millions of children are at risk of losing Medicaid coverage starting in April | CNN Politics

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    CNN
     — 

    The majority of American children now receive their health insurance through Medicaid and the Children’s Health Insurance Program, according to a new report published Wednesday by the Georgetown Center for Children and Families.

    But that could change starting this spring. As many as 6.7 million children are at risk of losing that coverage once states restart their reviews of recipients’ eligibility, according to Georgetown.

    Medicaid enrollment ballooned during the pandemic thanks to an early Covid-19 pandemic relief provision passed by Congress that barred states from involuntarily disenrolling beneficiaries in exchange for higher federal matching funds. But lawmakers voted late last year to end that continuous enrollment provision on April 1, freeing states to start winnowing ineligible recipients.

    More than 42 million children were covered by Medicaid and CHIP as of August, up 17.5% from February 2020, just before the pandemic started.

    Ten states plus the District of Columbia have more than 60% of their children insured through the public programs, according to Georgetown. New Mexico leads the nation with more than three-quarters of its kids covered by Medicaid and CHIP.

    By contrast, fewer than a quarter of children in Utah are enrolled in the programs.

    The number of children who gained Medicaid and CHIP coverage during the pandemic varied by state. Indiana had the largest surge, with a nearly 45% increase. Wyoming, North Dakota, Missouri and Georgia saw their child enrollment grow by roughly a third.

    On the flip side, Vermont experienced less than an 8% growth in child enrollment in Medicaid and CHIP.

    More than 83 million people, including more than 34 million children, were covered by Medicaid as of August. And another 4 million children were enrolled in Medicaid financed by CHIP. All will have their eligibility reviewed, and in some cases, the children will continue to qualify even if their parents do not.

    “If they’re getting the message that they’re losing their own coverage, a lot of times a parent understandably thinks that their child is also losing coverage,” said Joan Alker, executive director of the Georgetown Center for Children and Families.

    A total of roughly 15 million people could be dropped from Medicaid when the continuous enrollment requirement ends, according to an analysis the Department of Health and Human Services released in August. About 8.2 million folks would no longer qualify, but 6.8 million people would be terminated even though they are still eligible, the department estimated.

    When states reevaluate families’ eligibility, they need to look separately at adults and children, Alker said. Officials should work with pediatricians, schools, child care centers and others to explain the situation to parents and make sure the children retain coverage if they continue to qualify.

    Nearly three-quarters of the children projected to be dropped will remain eligible for Medicaid but will likely lose coverage because of administrative issues, such as their parents not submitting the necessary paperwork or procedural errors, according to Georgetown.

    Although states have 14 months to complete the unwinding process, some will look to do so more quickly.

    “My concern is that a large number of children could become uninsured in states that do not take their time and pay particular attention to the unique needs of children,” Alker said.

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  • Republican senator warns Congress must take action now to protect Medicare and Social Security | CNN Politics

    Republican senator warns Congress must take action now to protect Medicare and Social Security | CNN Politics

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    CNN
     — 

    Republican Sen. Mike Rounds of South Dakota offered Sunday a stark warning about the future of Social Security and Medicare if Congress fails to take action now.

    “In the next 11 years, we have to have a better plan in place than what we do today. Or we’re going to see – under existing circumstances – some reductions of as much as 24% in some sort of a benefit. So, let’s start talking now because it’s easier to fix it now that it would be five years or six years from now,” Rounds told CNN’s Jake Tapper on “State of the Union.”

    In recent days, President Joe Biden has made a forceful argument against Republicans by highlighting his support for Social Security and Medicare. The president has specifically seized on a proposal from GOP Sen. Rick Scott of Florida to sunset federal legislation – including Social Security and Medicare – every five years and require Congress to pass them again.

    Referencing his “spirited debate” with Republicans at the State of the Union, Biden called Scott’s proposal “outrageous” and vowed he would veto such a plan during a speech in Florida last week.

    “The very idea the senator from Florida wants to put Social Security and Medicare on the chopping block every five years I find to be somewhat outrageous. So outrageous that you might not even believe it,” he said, pulling out a pamphlet detailing Scott’s plan.

    Scott told CNN’s Kaitlan Collins last week that his proposal is intended to eliminate wasteful spending and help ensure the government can “figure out how to start living within our means.”

    “I want to make sure we balance our budget and preserve Medicare and Social Security, and I’ve been clear all along,” he said.

    Rounds also stressed Sunday that Republicans want to better manage Medicare and Social Security in order to improve the programs – not strip them from the American people.

    “We think that there are possibilities out there of long-term success without scaring people and without tearing apart the system and without reducing benefits. But it requires management. And it requires actually looking at and making things better,” he said.

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  • Fact check: Breaking down Biden’s exchanges with Republican senators over Social Security and Medicare | CNN Politics

    Fact check: Breaking down Biden’s exchanges with Republican senators over Social Security and Medicare | CNN Politics

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    Washington
    CNN
     — 

    President Joe Biden has gone on the attack over Social Security and Medicare.

    In speeches and tweets this week, Biden and his White House have singled out particular Republican senators – notably including Sen. Mike Lee of Utah, Sen. Rick Scott of Florida and Sen. Ron Johnson of Wisconsin – over proposals from those senators that could affect the retirement and health care programs.

    The Republican senators have responded forcefully, accusing Biden of deceiving the public about where they stand. Here is a fact-check of the exchanges.

    Biden and his White House targeted Lee on Wednesday over a video clip of Lee saying, “I’m here right now to tell you one thing that you probably have never heard from a politician. It will be my objective to phase out Social Security, to pull it up by the roots and get rid of it.” The clip has gone viral on Twitter this week; a second viral clip features Lee saying moments later, “Medicare and Medicaid are of the same sort and need to be pulled up.”

    The videos are authentic, though Biden didn’t tell his Wednesday speech audience in Wisconsin they are from more than 12 years ago – an event in 2010, when Lee was running for the Senate but before he was first elected. And as Lee noted in Wednesday tweets responding to Biden, Biden didn’t mention that Lee added at the same 2010 event that current Medicare beneficiaries should have their benefits “left untouched” and that “the next layer beneath them, those who will retire in the next few years, also probably have to be held harmless.”

    Still, while Biden could have included more context, he was accurate in saying Lee had called for Social Security to be phased out.

    And while Lee said in a tweeted statement on Wednesday that, during his 12 years as a senator, he has not called for “abolishing” Social Security, Medicare or Medicaid benefits, only for “solutions to improve those programs and move them toward solvency,” he has supported benefit cuts. For example, he has endorsed various proposals over the years to raise the Social Security retirement age.

    Since last year, Biden has criticized Scott over particular components of what Scott calls his “12 Point Plan to Rescue America.”

    In the State of the Union address on Tuesday and in speeches on Wednesday and Thursday, the president referred to a part of Scott’s plan that says, “All federal legislation sunsets in 5 years. If a law is worth keeping, Congress can pass it again.” Biden correctly asserted that “all federal legislation” would include Social Security and Medicare, which do not currently require congressional re-approval.

    Scott responded by accusing Biden of being dishonest and confused. Scott argued on Twitter on Wednesday that while his plan does say that “all” federal legislation should sunset in five years and become subject to a new vote by Congress, “This is clearly & obviously an idea aimed at dealing with ALL the crazy new laws our Congress has been passing of late.”

    But the plan itself doesn’t say that.

    The plan’s official text, which remains online on a dedicated website, says “all federal legislation,” period, should be sunset in five years – not all recent legislation, all crazy legislation or all legislation except for the laws that created Social Security and Medicare. When Senate Minority Leader Mitch McConnell rejected Scott’s plan last year, McConnell too said that the plan “sunsets Social Security and Medicare within five years.”

    Last year, Biden sometimes overstated the support for Scott’s sunset proposal among congressional Republicans, which appears very limited. Biden has been more precise in his speeches this week, attributing the proposal to Scott himself or accurately saying in the State of the Union that “some” Republicans – “I’m not saying it’s a majority” – support it.

    Biden may have created an inaccurate impression, however, by mentioning the sunset proposal during the section of the State of the Union in which he discussed the battle over the debt ceiling. There is no indication that House Republicans are pushing this proposal as part of the current debt ceiling negotiations with the Biden administration, and House Speaker Kevin McCarthy has, more generally, said cuts to Social Security and Medicare are “off the table” in these negotiations.

    Scott, in turn, has tossed a false claim into the debate with Biden this week by repeatedly accusing the president of having cut billions from Medicare in last year’s Inflation Reduction Act. The Inflation Reduction Act did not cut Medicare benefits; rather, it allowed the government and seniors to spend less money to buy prescription drugs – and, in fact, simultaneously made Medicare benefits more generous to seniors. The claim of a Medicare cut was repeatedly debunked last year, when Scott and a Republican campaign organization he chaired used it during the midterm elections.

    On Friday afternoon, the day after McConnell told a Kentucky radio station that Scott’s proposal will be a “challenge” for Scott’s own 2024 re-election campaign in a state with a large population of seniors, Scott announced he is introducing a new bill that would make it more difficult for Congress to make any cuts to Social Security and Medicare and that would send the Inflation Reduction Act’s $80 billion in Internal Revenue Service funding to Social Security and Medicare instead.

    This week and in numerous previous speeches, Biden has castigated Johnson for saying last year that Medicare and Social Security should be treated as discretionary spending, which Congress has to approve every year, rather than as permanent entitlements.

    Biden has accurately cited Johnson’s remarks this week. Here’s what Johnson told a Green Bay radio show in August: “We’ve got to turn everything into discretionary spending, so it’s all evaluated, so that we can fix problems or fix programs that are broken, that are going to be going bankrupt. Because, again, as long as things are on automatic pilot, we just continue to pile up debt.” When Johnson faced criticism for those remarks at the time, he stood by them and said that was his consistent longtime position.

    Johnson, however, claimed Wednesday that Biden was “lying” when the president discussed Johnson’s comments shortly after saying that some Republicans want to “cut” Social Security. Johnson has repeatedly said that his proposal to require annual approval for Social Security spending, and to “fix” and “save” Social Security in light of its poor fiscal shape at present, does not mean that he wants to put the programs on the “chopping block” or even to “cut” it.

    “The Democrats have been accusing me, since the first time I ran for office, of wanting to end Social Security, wanting to cut it, wanting to gut it, wanting to – I’ve never said that. I’ve always been consistent: I want to save it,” he said in a radio interview this week.

    It’s impossible to definitively fact-check this particular dispute without Johnson specifying how he wants to “fix” and “save” the program. His office did not respond to a CNN request for comment.

    White House deputy press secretary Andrew Bates noted in an email to reporters on Thursday that, though Johnson accused Biden this week of lying about his stance on Social Security, Johnson also said in interviews this week that Social Security is a “legal Ponzi scheme” and that “Social Security might be in a more stable position for younger workers” if the government had proceeded with Republican President George W. Bush’s controversial and eventually abandoned proposal in the mid-2000s to allow workers born after 1949 to divert a portion of their Social Security payroll taxes into private accounts in which they could buy into the stock market and make other investments.

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  • Rick Scott: From embattled health care executive to Biden’s top foil | CNN Politics

    Rick Scott: From embattled health care executive to Biden’s top foil | CNN Politics

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    CNN
     — 

    Florida Sen. Rick Scott has emerged as Joe Biden’s top Republican foil in the days since the president’s State of the Union address, with the White House seizing on a year-old Scott proposal that even GOP leaders recognized at the time as politically toxic.

    As a spending fight looms in Washington and Biden moves toward his 2024 reelection bid, the White House is attempting to make Scott the poster child for the president’s accusations that Republicans are seeking to cut entitlement programs, including Social Security and Medicare.

    Scott has responded by accusing Biden of lying, airing a misleading ad that alleges Biden cut Medicare and lambasting the president in a barrage of television interviews.

    Biden traveled Thursday to Florida – where Scott was a health care executive and two-term governor – on the latest leg of his post-State of the Union tour.

    The trip was designed in part to stoke a fight with Scott after Biden in his speech Tuesday night seized on the first-term senator’s proposal to sunset all federal programs – including Social Security and Medicare – every five years unless Congress extends those programs.

    Biden’s assertion that some Republicans are seeking to change entitlement programs was met with jeers from Republican lawmakers, who have said spending cuts should be part of any proposal to raise the debt ceiling.

    The president continued pressing that message Wednesday in Wisconsin, telling union workers, “A lot of Republicans, their dream is to cut Social Security and Medicare.” He waved a pamphlet with Scott’s proposal as he spoke.

    Ahead of Biden’s speech Thursday in Tampa, White House aides placed copies of Scott’s proposal on every seat.

    In an interview with CNN’s Kaitlan Collins on Thursday, Scott said Biden has misrepresented the proposal he put forward ahead of the 2022 midterm elections while serving as head of the National Republican Senatorial Committee, the campaign arm of the Senate GOP.

    “Nobody believes that I want to cut Medicare or Social Security. I’ve never said it,” Scott said.

    Scott said his proposal is intended to eliminate wasteful spending and help ensure the government can “figure out how to start living within our means.”

    “I want to make sure we balance our budget and preserve Medicare and Social Security, and I’ve been clear all along. So what I want to do is get rid of wasteful programs that we never review up here,” he said.

    But Scott’s proposal would sunset all federal legislation – including the two entitlement programs – every five years and require Congress to pass them again.

    Long before he was a US senator, Scott had first-hand experience dealing with America’s federal health care programs – and it became the source of much criticism as he entered the political arena.

    In the 1980s, Scott founded Columbia Hospital Corporation by purchasing a pair of distressed Texas hospitals. He later merged his company with Hospital Corporation of America to create Columbia/HCA, becoming the largest for-profit hospital chain at the time and gaining notoriety on Wall Street for what appeared like cost-cutting in an industry with ballooning expenses.

    In 1997, federal agents unveiled a sweeping investigation into Columbia/HCA that would roil the company for years. On the day the FBI swooped in to seize records from 35 of its hospitals across six states, Scott shrugged off the probe. “It’s not a fun day, but … government investigations are a matter of fact today in health care,” he said on CNN.

    The investigation would unearth what the US Department of Justice later called the “largest health care fraud case in U.S. history.” According to a press release, Columbia/HCA schemed to defraud Medicare, Medicaid and TRICARE, the military’s health care program, of hundreds of millions of dollars. The company pleaded guilty to criminal conduct, including charges related to fraudulent Medicare billing and paying kickbacks to doctors, and it ultimately agreed to pay $1.7 billion in fines, damages and penalties.

    Scott was pushed out as CEO amid the turmoil. He was never charged with a crime, though much of the alleged financial abuses took place during his watch. His time in the corporate world made Scott a wealthy individual, which he would lean on in 2010 when he decided to kickstart a political career by entering the race for Florida governor.

    Scott’s time at the helm of Columbia/HCA was the subject of negative ads from both Republicans and Democrats, but he fended them off with a self-funded campaign that flooded the airwaves with a jobs-focused message. He told the St. Petersburg Times that “mistakes were made” at his former company and that he had “learned hard lessons,” but he also said during a debate that he was “proud of the company I built.” Regardless of the controversy, the little-known Scott defeated a GOP favorite for his party’s nomination, and Floridians narrowly elected him governor that fall.

    During his eight years leading Florida, Scott fought off attempts to extend safety net benefits to Floridians. He frequently challenged the Obama administration over the Affordable Care Act and blocked expansion of Medicaid in Florida. In his first year as governor, he signed a bill to cut unemployment payments and tied benefits to the state’s unemployment rate.

    Democrats continued to make Scott’s time at Columbia/HCA an issue, to no avail. Scott eked out a reelection victory in 2014. He then narrowly unseated longtime Democratic Sen. Bill Nelson in 2018 after spending more than $70 million of his own money on his campaign.

    Marching to the beat of his own drum, Scott declined to be sworn in with his class in January 2019. Instead, he waited until his term as governor had ended and flew to Washington for a separate ceremony. For a time, it made him the country’s most junior senator, but he nevertheless soon found himself in party leadership.

    Scott and other Republicans are aggressively pushing back against Biden’s assertions that the GOP is seeking to cut spending on entitlement programs.

    However, Republican leaders have long recognized Scott’s proposal to sunset all federal programs after five years as rocky political terrain.

    The tense relationship between Scott and Senate Minority Leader Mitch McConnell burst into public view during the 2022 election cycle as Republicans sought to retake the Senate.

    Scott, as NRSC chairman, released a platform called “Rescue America,” which would have subjected all federally elected officials to a term limit of 12 years and closed the Department of Education, amid a slew of other initiatives. It would also have required millions of low-income and middle-class Americans to pay income taxes, which was later dropped in a revised version of the plan.

    And, in what Democrats immediately recognized as an opening to accuse Republicans of attempting to undercut popular programs, Scott’s plan proposed sunsetting all federal legislation in five years – unless Congress extended it.

    McConnell quickly disavowed Scott’s plan, seeking to make clear that the Florida senator did not speak for Senate Republicans.

    “Let me tell you what would not be a part of our agenda,” McConnell said at a news conference last March. “We will not have as part of our agenda a bill that raises taxes on half the American people, and sunsets Social Security and Medicare within five years.”

    Their frosty relationship did not improve as the 2022 election cycle continued, as the two battled over which candidates to support in primaries and in the general election, and Republicans ultimately fell short of winning a majority.

    After the election, Scott challenged McConnell for the top Senate Republican post but lost.

    The Florida senator said last week that he saw McConnell’s decision to remove him from the Senate Commerce Committee as retribution.

    “He didn’t like that I opposed him because I believe we have to have ideas – fight over ideas,” Scott said on “CNN This Morning.”

    When pressed Thursday by CNN’s Collins about why his proposal left open the opportunity for the government to cut funding for Social Security and Medicare, Scott repeatedly referenced a policy proposal from then-Sen. Biden in 1975 to sunset federal legislation periodically.

    Scott said Biden’s old proposal does less to protect entitlements for seniors than the senator’s plan from last year because “he proposed it year after year after year to reduce Medicare and Social Security. Year after year. I’ve never done that. I don’t believe in that.”

    Asked Thursday about the 1975 proposal mentioned by Scott, White House press secretary Karine Jean-Pierre said, “A bill from the 1970s is not part of the president’s agenda.”

    “The president ran on protecting Medicare and Social Security from cuts. And he reiterated that in the State of the Union,” she said.

    A new ad from Scott released this week in advance of the president’s visit to Florida says that “Joe Biden just cut $280 billion from Medicare” – a claim that was previously debunked when Scott and the NRSC made it in 2022.

    Biden’s Inflation Reduction Act is expected to reduce Medicare prescription drug spending by the federal government by $237 billion, according to the most recent Congressional Budget Office estimate, because the law allows the government to spend less money to buy drugs from pharmaceutical companies and not because it cuts benefits to seniors enrolled in Medicare. The law makes Medicare’s prescription drug program substantially more generous to seniors while also saving them money.

    Scott, in his interview with Collins, also defended his recent call for Biden to resign, labeling him “a complete failure.” He said his resignation calls did not specifically stem from Biden’s use of his proposal as an avenue to attack Republicans but expressed his displeasure with the president’s repeated references to his plan.

    “He lies about what I want to get done, and I don’t appreciate it,” Scott said.

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  • Biden intends to end Covid-19 and public health emergencies on May 11 | CNN Politics

    Biden intends to end Covid-19 and public health emergencies on May 11 | CNN Politics

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    CNN
     — 

    President Joe Biden intends to end the Covid-19 national and public health emergencies on May 11, the White House said Monday.

    The White House, in a statement of administration policy announcing opposition to two Republican measures to end the emergencies, said the national emergency and public health emergency authorities declared in response to the pandemic would each be extended one final time to May 11.

    “This wind down would align with the Administration’s previous commitments to give at least 60 days’ notice prior to termination of the (public health emergency),” the statement said.

    The statement added, “To be clear, continuation of these emergency declarations until May 11 does not impose any restriction at all on individual conduct with regard to COVID-19. They do not impose mask mandates or vaccine mandates. They do not restrict school or business operations. They do not require the use of any medicines or tests in response to cases of COVID-19.”

    The statement came in response to a pair of measures before the House that would end the public health emergency and the Covid-19 national emergency.

    The White House weighed in because House Democrats were concerned about voting against the Republican legislation to end the public health emergency that is coming to the floor this week without a plan from the Biden administration, a senior Democratic aide told CNN.

    “Democrats were concerned about the optics of voting against Republicans winding down the public health emergency, absent an understanding of whether and how we intended to do so from the White House,” the aide said. “As soon as we saw this bill, it obviously concerns the White House. So, it was important for them to weigh in.”

    The administration argues that the bills are unnecessary because it intends to end the emergencies anyway. The White House also noted the passage of the measures ahead of May 11 would have unintended consequences, such as disrupting the administration’s plans for ending certain policies that are authorized by the emergencies.

    The White House said it would extend the Covid-19 emergencies one final time in order to ensure an orderly wind-down of key authorities that states, health care providers and patients have relied on throughout the pandemic.

    A White House official pointed to a successful vaccination campaign and reductions in Covid cases, hospitalizations and deaths as a rationale for lifting the emergency declarations. The official said a final extension will allow for a smooth transition for health care providers and patients and noted that health care facilities have already begun preparing for that transition.

    The administration is actively reviewing flexible policies that were authorized under the public health emergency to determine which can remain in place after it is lifted on May 11.

    The aide told CNN that it will be up to every member to decide what is best for their district and how they will vote on the legislation this week. Declaring an end to the public health emergency will also end the border restriction known as Title 42, which will also likely set up a showdown on Capitol Hill.

    The public health emergency has enabled the government to provide many Americans with Covid-19 tests, treatments and vaccines at no charge, as well as offer enhanced social safety net benefits, to help the nation cope with the pandemic and minimize its impact.

    “People will have to start paying some money for things they didn’t have to pay for during the emergency,” said Jen Kates, senior vice president at the Kaiser Family Foundation. “That’s the main thing people will start to notice.”

    Most Americans covered by Medicare, Medicaid and private insurance plans have been able to obtain Covid-19 tests and vaccines at no cost during the pandemic. Those covered by Medicare and private insurance have been able to get up to eight at-home tests per month from retailers at no charge. Medicaid also picks up the cost of at-home tests, though coverage can vary by state.

    Those covered by Medicare and Medicaid have also had certain therapeutic treatments, such as monoclonal antibodies, fully covered.

    Once the emergency ends, Medicare beneficiaries generally will face out-of-pocket costs for at-home testing and all treatment. However, vaccines will continue to be covered at no cost, as will testing ordered by a health care provider.

    State Medicaid programs will have to continue covering Covid-19 tests ordered by a physician and vaccines at no charge. But enrollees may face out-of-pocket costs for treatments.

    Those with private insurance could face charges for lab tests, even if they are ordered by a provider. Vaccinations will continue to be free for those with private insurance who go to in-network providers, but going to an out-of-network providers could incur charges.

    Covid-19 vaccinations will be free for those with insurance even when the public health emergency ends because of various federal laws, including the Affordable Care Act and pandemic-era measures, the Inflation Reduction Act and a 2020 relief package.

    Americans with private insurance have not been charged for monoclonal antibody treatment since they were prepaid by the federal government, though patients may be charged for the office visit or administration of the treatment. But that is not tied to the public health emergency, and the free treatments will be available until the federal supply is exhausted. The government has already run out of some of the treatments so those with private insurance may already be picking up some of the cost.

    The uninsured had been able to access no-cost testing, treatments and vaccines through a different pandemic relief program. However, the federal funding ran out in the spring of 2022, making it more difficult for those without coverage to obtain free services.

    The federal government has been preparing to shift Covid-19 care to the commercial market since last year, in part because Congress has not authorized additional funding to purchase additional vaccines, treatments and tests.

    Pfizer and Moderna have already announced that the commercial prices of their Covid-19 vaccines will likely be between $82 and $130 per dose – about three to four times what the federal government has paid, according to Kaiser.

    The public health emergency has also meant additional funds for hospitals, which have been receiving a 20% increase in Medicare’s payment rate for treating Covid-19 patients.

    Also, Medicare Advantage plans have been required to bill enrollees affected by the emergency and receiving care at out-of-network facilities the same as if they were at in-network facilities.

    This will end once the public health emergency expires.

    But several of the most meaningful enhancements to public assistance programs are no longer tied to the public health emergency. Congress severed the connection in December as part of its fiscal year 2023 government funding package.

    Most notably, states will now be able to start processing Medicaid redeterminations and disenrolling residents who no longer qualify, starting April 1. They have 14 months to review the eligibility of their beneficiaries.

    As part of a Covid-19 relief package passed in March 2020, states were barred from kicking people off Medicaid during the public health emergency in exchange for additional federal matching funds. Medicaid enrollment has skyrocketed to a record 90 million people since then, and millions are expected to lose coverage once states began culling the rolls.

    A total of roughly 15 million people could be dropped from Medicaid when the continuous enrollment requirement ends, according to an analysis the Department of Health and Human Services released in August. About 8.2 million folks would no longer qualify, but 6.8 million people would be terminated even though they are still eligible, the department estimated.

    Many who are disenrolled from Medicaid, however could qualify for other coverage.

    Food stamp recipients had been receiving a boost during the public health emergency. Congress increased food stamp benefits to the maximum for their family size in a 2020 pandemic relief package.

    The Biden administration expanded the boost in the spring of 2021 so that households already receiving the maximum amount and those who received only a small monthly benefit get a supplement of at least $95 a month.

    This extra assistance will end as of March, though several states have already stopped providing it.

    Congress, however, extended one set of pandemic flexibilities as part of the government funding package.

    More Medicare enrollees are able to get care via telehealth during the public health emergency. The service is no longer limited just to those living in rural areas. They can conduct the telehealth visit at home, rather than having to travel to a health care facility. Plus, beneficiaries can use smartphones and receive a wider array of services via telehealth.

    These will now continue through 2024.

    This story has been updated with additional details.

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  • First on CNN: Biden administration to strengthen Obamacare contraceptive mandate in proposed rule | CNN Politics

    First on CNN: Biden administration to strengthen Obamacare contraceptive mandate in proposed rule | CNN Politics

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    CNN
     — 

    The Biden administration wants to make it easier for women to access birth control at no cost under the Affordable Care Act, reversing Trump-era rules that weakened the law’s contraceptive mandate for employer-provided health insurance plans.

    The proposed rule, unveiled Monday by the departments of Health and Human Services, Labor and Treasury, would remove an exemption to the mandate that allows employers to opt out for moral convictions. It would also create an independent pathway for individuals enrolled in plans offered by employers with religious exemptions to access contraceptive services through a willing provider without charge.

    The proposed rule would leave in place the existing religious exemption for employers with objections, as well as the optional accommodation for contraceptive coverage.

    The administration crafted the proposed rule keeping in mind the concerns of employers with religious objections and the contraceptive needs of their workers, a senior HHS official told CNN.

    “We had to really think through how to do this in the right way to satisfy both sides, but we think we found that way,” the official said, stressing that there should be no effect on religiously affiliated employers.

    Students at religiously affiliated colleges would have access to the expanded accommodation, just like workers in group health plans where the employer has claimed the exemption.

    Now that the proposed rule has been announced, the public will have the opportunity to comment during the next few months. Officials expect there to be many thousands of public comments, and it will be “many months” before the rule could be finalized.

    HHS expects the proposal would affect more than 100 employers and 125,000 workers, mainly through providing the proposed independent pathway for employees to receive no-cost contraception.

    Women using that pathway would obtain their birth control from a participating provider, who would be reimbursed by an insurer on the Affordable Care Act exchanges. The insurer, in turn, would receive a credit on the user fee it pays the government.

    “If this rule is finalized, individuals who have health plans that would otherwise be subject to the ACA preventive services requirements but have not covered contraceptive services because of a moral or religious objection, and for which the sponsoring employer or college or university has not elected the optional accommodation, would now have access,” Centers for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure said in a news release.

    How many people benefit, however, would depend on whether women and their health care providers know the independent pathway exists and whether providers and insurers are willing to set it up.

    “We’ll just have to see how widely that information is spread and in what way to providers and individuals,” said Laurie Sobel, associate director for Women’s Health Policy at the Kaiser Family Foundation, noting that the proposed rule would not require data collection to show the pathway’s takeup.

    But the Planned Parenthood Federation of America cheered the initiative.

    “Employers and universities should not be able to dictate personal health care decisions and impose their views on their employees or students,” said Alexis McGill Johnson, the group’s CEO. “The ACA mandates that health insurance plans cover all forms of birth control without out-of-pocket costs. Now, more than ever, we must protect this fundamental freedom.”

    The requirement to provide no-cost contraception is not in the Affordable Care Act itself. Instead, HHS under former President Barack Obama included it as one of the women’s preventive services that all private insurance plans must offer without charge.

    The mandate was controversial from the start, sparking lawsuits from religiously affiliated employers and closely held companies that said it violated their beliefs. Exemptions and accommodations have been available for such employers.

    The Trump administration, however, weakened the mandate. Under the rules issued in 2018, entities that have “sincerely held religious beliefs” against providing contraceptives are not required to do so. That provision also extends to organizations and small businesses that have objections “on the basis of moral conviction which is not based in any particular religious belief.”

    The rules also include an optional accommodation that lets objecting employers and private universities remove themselves from providing birth control coverage while still allowing their workers and dependents access to contraception. But the employer or university has to voluntarily elect the accommodation, which risks leaving many without access.

    The Trump administration changes were temporarily blocked after a Pennsylvania district court judge issued a nationwide injunction in 2019. But the following year, the Supreme Court ruled that the administration could expand exemptions for employers who have religious or moral objections to covering contraception.

    At the time, the National Women’s Law Center estimated that the ruling would impact about 64.3 million women in the United States with insurance coverage that included birth control and other preventive services without out-of-pocket costs.

    Employers are not required to notify HHS if they have a moral objection. The agency estimates about 18 employers have claimed that exemption and around 15 employees are affected.

    Still, if the rule is finalized, senior HHS officials say it is “plausible” there could be potential lawsuits brought by religiously affiliated employers – similar to what has been seen in the past.

    “There’s no new obligation on them to participate in any sort of process. This is simply an additional channel for employees in those employer health plans to receive access to contraceptive services,” another senior HHS official said.

    The contraceptive mandate has taken on increased importance now that the Supreme Court has overturned Roe v. Wade, allowing many states to impose severe restrictions on abortion access.

    The Biden administration in turn has focused on continuing access to birth control at no cost. The Health, Labor and Treasury department secretaries last year met with health insurers and issued guidance underscoring Obamacare’s contraceptive coverage requirements for private insurance under the Affordable Care Act.

    “Now more than ever, access to and coverage of birth control is critical as the Biden-Harris Administration works to help ensure women everywhere can get the contraception they need, when they need it, and – thanks to the ACA – with no out-of-pocket cost,” HHS Secretary Xavier Becerra said in a news release.

    This story has been updated with additional information.

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  • Federal student loan office has lots to do but no new money to do it | CNN Politics

    Federal student loan office has lots to do but no new money to do it | CNN Politics

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    CNN
     — 

    Big headaches for student loan borrowers could be on the horizon.

    Their monthly payments could restart as early as this summer after a three-year pause. And the federal office that oversees the student loan system is operating under the same budget as last year – which could complicate any efforts to make sure the repayment process goes smoothly, as well as the office’s plans to overhaul the system.

    When Congress passed the government’s annual budget in December, the Federal Student Aid office got about $800 million less than what the Biden administration had asked for. After granting steady increases in previous years, lawmakers left funding for the office’s operations flat at about $2 billion.

    Republican lawmakers touted how Congress provided no new funding to help implement President Joe Biden’s controversial student loan forgiveness plan – which is currently tied up in the courts. If the Supreme Court allows the forgiveness program to move forward, it would also be a huge lift for the Federal Student Aid office.

    “I think it’s particularly unfortunate for borrowers that the political fight over loan forgiveness has resulted in flat funding this year,” said Jonathan Fansmith, assistant vice president of government relations at the American Council on Education, an advocacy group for colleges and universities.

    “Wherever the cracks start to show, borrowers are going to be impacted,” Fansmith added.

    The Federal Student Aid office, which has about 1,400 employees and provides about $112 billion in grant, work-study and loan funds annually, has a lot on its plate.

    The office oversees the $1.6 trillion federal student loan portfolio but has also taken on additional work to revamp the federal student aid application form, known as the FAFSA, and to overhaul some federal student loan programs. Last week, it announced a plan to start making significant changes to its income-driven repayment program this year.

    “I think certainly a number of their priorities will either not get done on the timeline that they had originally hoped for, or not get done at all,” said Michele Shepard, senior director of college affordability at The Institute for College Access and Success, an advocacy group.

    But the Department of Education says it can still meet the timelines it has set.

    “The several hundred-million-dollar shortfall will of course have an impact on these important bipartisan priorities, but we will continue to do everything we can with the available resources to better serve students and protect taxpayer dollars,” the department said in a statement sent to CNN.

    Still, that means the Federal Student Aid office would be doing more work with less money. Here are some of the tasks it is expected to tackle this year:

    Federal student loan borrowers have not had to make any payments since March 2020, thanks to a pandemic-related pause that has been extended by both the Trump and Biden administrations several times.

    Most recently, Biden extended the pause after his student loan forgiveness program was halted by federal courts. The administration had told borrowers debt relief would be granted before payments restarted.

    The payment pause will now last until 60 days after litigation over Biden’s student loan forgiveness program is resolved. If the program has not been implemented and the litigation has not been resolved by June 30, payments will resume 60 days after that.

    Bringing roughly 44 million borrowers back into repayment at one time is an unprecedented task. Many people may be confused about how much they owe, when to pay and how. Missing payments can result in monetary fees.

    The government contracts with several outside organizations, such as MOHELA and Nelnet, to handle servicing the federal student loans. But it’s up to the Federal Student Aid office to communicate with the servicers about when payments restart and how.

    “To be kind, the quality of student loan servicing has not been stellar,” Fansmith said.

    “If you multiply all of these issues, even if small, by 44 million borrowers, it’s a massive national problem,” he added.

    In late February, the Supreme Court will hear arguments in two cases concerning Biden’s student loan forgiveness program, which could deliver up to $20,000 of debt relief for millions of low- and middle-income borrowers.

    A decision on whether the program is legal and can move forward is expected by June. Until then, it is on hold and no debt will be discharged under the program.

    Biden’s student loan forgiveness program has faced several legal challenges since the president announced it in August. The Department of Education had received about 26 million applications for debt relief by the time a federal district court judge struck down the program on November 10.

    The legal back-and-forth has created confusion for borrowers around the status of the program. Adding to the uncertainty, about 9 million people received an email from the Department of Education in the fall that mistakenly said their application for student loan forgiveness had been approved.

    The Biden administration has plans to overhaul some of its student loan repayment programs and the Federal Student Aid office is charged with rolling those out.

    In July, the Department of Education plans to implement permanent changes to the Public Service Loan Forgiveness program to make it easier for government and nonprofit workers to qualify for debt relief after making 10 years of payments. The program has long been plagued with loan servicing problems.

    Big changes to the department’s income-driven repayment plans are also in the works, aimed at reducing monthly debt burdens as well as the total amount borrowers pay over the lifetime of their loans.

    The new regulations are expected to cap payments at 5% of a borrower’s discretionary income, down from 10% that is offered under most current income-driven plans. As a result, single borrowers making less than $30,600 per year would not need to make any payments under the proposal, up from the current $24,000 threshold.

    The changes would also forgive remaining balances after 10 years of repayment, instead of 20 or 25 years, as well as cover the borrower’s unpaid monthly interest.

    The Department of Education said last week that it expects to start implementing some of these provisions later this year.

    Each year, as part of its normal work, the Federal Student Aid office processes millions of FAFSA applications from students. Generally, the form is released in October for the following academic year.

    Every college student needs to fill out the FAFSA in order to qualify for federal student loans, grants and work-study aid. But it has long been criticized as too long and complicated.

    Congress passed a law in 2021 that simplifies the FAFSA form, and the Federal Student Aid office has been working on implementing the changes – which financial aid experts hope will be done before October this year.

    The office was supposed to have had the changes already done, but the effective date was pushed back by a year.

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  • Big questions on student loan forgiveness loom in 2023 | CNN Politics

    Big questions on student loan forgiveness loom in 2023 | CNN Politics

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    Washington
    CNN
     — 

    Student loan borrowers are starting 2023 with a lot of uncertainty.

    The fate of President Joe Biden’s major student loan forgiveness program lies with the US Supreme Court, and it could be as late as summer before the justices rule on whether the policy can take effect.

    The pandemic-related pause on student loan payments remains in place. But a restart date is up in the air, dependent on when the Supreme Court rules on the forgiveness program.

    Meanwhile, significant changes are coming in July to the existing Public Service Loan Forgiveness program that aids government and nonprofit workers. And a new income-driven repayment plan that could lower payments for some federal student loan borrowers is in the works.

    The mired rollout of Biden’s forgiveness program has created confusion for borrowers. Here are some of the big questions surrounding student loans this year:

    In late February, the Supreme Court will hear arguments in two cases concerning Biden’s student loan forgiveness program, which could deliver up to $20,000 of debt relief for millions of low- and middle-income borrowers.

    A decision on whether the program is legal and can move forward is expected by June. Until then, it is on hold and no debt will be discharged under the program.

    Biden’s student loan forgiveness program has faced several legal challenges since the president announced the program in August. The Department of Education received about 26 million applications for debt relief by the time a federal district court judge struck down the program on November 10.

    Lawyers for the Biden administration say that Congress gave the secretary of education “expansive authority to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies,” like the Covid-19 pandemic, according to a memo from the Department of Justice.

    But litigants argue the Biden administration has overstepped its authority, and other recent Supreme Court decisions have ruled against aggressive executive agency actions. The justices curbed the Environmental Protection Agency’s authority to set certain climate change regulations last year, for example, as well as limited the federal government’s power to implement a pandemic-related eviction moratorium in 2021 and mandate Covid-19 vaccinations in 2022.

    For the third consecutive time, federal student loan borrowers begin a new year without having to make payments on their loans thanks to a pandemic-related pause.

    Payments were set to resume in January, but the Biden administration extended the pause after its student loan forgiveness program was halted by federal courts. Officials had told borrowers debt relief would be granted before payments restarted.

    The payment pause will now last until 60 days after litigation over Biden’s student loan forgiveness program is resolved. If the program has not been implemented and the litigation has not been resolved by June 30, payments will resume 60 days after that.

    Borrower balances have effectively been frozen since March 2020, with no payments required on most federal student loans. During this time, interest has stopped adding up and collections on defaulted debt have also been on hold.

    For some borrowers, the pause on payments delivers an even bigger benefit than Biden’s forgiveness program ever could.

    The yearslong pause cost the government $155 billion through the end of 2022, according to an estimate from the Committee for a Responsible Federal Budget.

    The Public Service Loan Forgiveness program allows certain government and nonprofit employees to seek federal student loan forgiveness after making 10 years of qualifying payments – but it has been plagued with implementation problems for years.

    A yearlong waiver that expanded eligibility for the PSLF program expired on October 31, but some of those temporary changes will be made permanent starting in July.

    Under the new rules, borrowers will be able to receive credit toward PSLF on payments that are made late, in installments or in a lump sum. Prior rules only counted a payment as eligible if it was made in full within 15 days of its due date.

    Also, time spent in certain periods of deferment or forbearance will count toward PSLF. These periods include deferments for cancer treatment, military service, economic hardship and time served in AmeriCorps and the National Guard.

    Starting in July, borrowers will receive some credit for past payments when they consolidate older loans into federal Direct Loans in order to qualify for the program. Borrowers previously lost all progress toward forgiveness when they consolidated. After July, they will receive a weighted average of existing qualifying payments toward PSLF.

    The new rules will also simplify the criteria to meet the requirement that a borrower be a full-time employee in a public sector job. The new standard will consider full-time employment at 30 hours a week. In particular, the change will help adjunct faculty at public colleges qualify for the program.

    The Biden administration has proposed a new income-driven repayment plan that is intended to make payments more manageable for borrowers, though it’s unclear when it could take effect.

    Several income-driven repayment plans already exist for federal student loan borrowers, but the new proposal could offer more favorable terms.

    The new rule is expected to cap payments at 5% of a borrower’s discretionary income, down from 10% that is offered in most current income-driven plans, as well as reduce the amount of income that is considered discretionary. It would also forgive remaining balances after 10 years of repayment, instead of 20 or 25 years, as well as cover the borrower’s unpaid monthly interest.

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  • New Year’s pay boost: These states are raising their minimum wage | CNN Business

    New Year’s pay boost: These states are raising their minimum wage | CNN Business

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    Minneapolis
    CNN
     — 

    The current period of high inflation that has significantly impacted the US economy will also influence a New Year’s tradition: The annual state minimum wage increases.

    By January 1, hourly minimum wages in 23 states will rise as part of previously scheduled efforts to reach $15 an hour or to account for cost-of-living changes. The increases account for more than $5 billion in pay boosts for an estimated 8.4 million workers, the Economic Policy Institute estimates.

    Additionally, nearly 30 cities and counties across the US will increase their minimum wage, according to the EPI, a left-leaning think tank.

    The larger-than-typical increases for a dozen states come after inflation hit a 40-year high this summer, leaving families struggling to keep up with the rising costs.

    “The fact that there’s high inflation really just underscores how necessary these minimum wage increases are for workers,” said Sebastian Martinez Hickey, a research assistant at the EPI. “Even before the pandemic, there was no county in the United States where you could affordably live as a single adult at $15 an hour.”

    The pandemic and the subsequent period of economic recovery has further revealed the growing chasm in America’s wealth gap. During the past two years, working conditions and low pay contributed to a swelling of labor movement activity and actions by many large corporations to raise their wage floor.

    The pandemic also led to a structural upheaval in the nation’s labor market, creating an imbalance of worker supply and demand that still persists. Employers have found themselves short of workers for most of the year, which has pushed up average annual hourly wages in the battle to recruit and retain staff. While some workers in competitive industries such as retail and dining have found their new salary outpaces inflation, most pay has been outpaced by rising prices.

    “The story is different because wages have been increasing at the low-end, much faster than inflation and much faster than in middle- or high-wage jobs,” said Michael Reich, economics professor at the University of California at Berkeley. “And that means that many workers, even in the $7.25 states, are already getting paid above the minimum wage.”

    In other words, he said, the minimum wage “has become less and less binding.”

    “Even though minimum wages might go up by 7%, in many states and cities, labor costs aren’t going to go up anywhere as much as they have in the past, because they already have gone up,” he said. “That also means that prices aren’t going to go up at [places like] restaurants.”

    The federal minimum wage of $7.25 per hour hasn’t budged since 2009, and 20 states have a minimum wage either equal to or below the federal level, making $7.25 their default baseline. The value of the federal minimum wage peaked in 1968 when it was $1.60, which would be worth about $13.46 in 2022, based on the Bureau of Labor Statistics’ inflation calculator.

    • Delaware: $10.50 to $11.75
    • Illinois: $12 to $13
    • Maryland: $12.50 to $13.25
    • Massachusetts: $14.25 to $15
    • Michigan: $9.87 to $10.10
    • Missouri: $11.15 to $12
    • Nebraska: $9 to $10.50
    • New Jersey: $13 to $14.13* (scheduled increase also includes inflation adjustment)
    • New Mexico: $11.50 to $12
    • New York: $13.20 to $14.20 (Upstate New York); $15 (in and around NYC)
    • Rhode Island: $12.25 to $13
    • Virginia: $11 to $12
    • Alaska: $10.34 to $10.85
    • Arizona: $12.80 to $13.85
    • California: $14.50 (firms with 25 or fewer employees) /$15 (firms with 26+ employees) to $15.50
    • Colorado: $12.56 to $13.65
    • Maine: $12.75 to $13.80
    • Minnesota: $8.42 to $8.63 (small employer); $10.33 to $10.59 (large employer)
    • Montana: $9.20 to $9.95
    • Ohio: $9.30 to $10.10
    • South Dakota: $9.95 to $10.80
    • Vermont: $12.55 to $13.18
    • Washington: $14.49 to $15.74
    • Connecticut (effective July 1): $14 to $15
    • Florida (September 2023): $11 to $12
    • Nevada (effective July 1): $9.50 to $10.25 (firms that offer benefits); $10.50 to $11.25 (no benefits offered)
    • Oregon: $13.50 (effective July 1, indexed annual increase to be based on the CPI)

    Sources: State websites, National Conference of State Legislatures, Economic Policy Institute

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  • Senior citizens will soon get that big hike in their Social Security benefits | CNN Politics

    Senior citizens will soon get that big hike in their Social Security benefits | CNN Politics

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    CNN
     — 

    Senior citizens and other Social Security recipients will start getting a heftier monthly benefit next month due to an 8.7% annual cost-of-living adjustment aimed at helping them cope with high inflation.

    The increase, the largest in more than 40 years, will boost retirees’ monthly payments by more than $140 to an estimated average of $1,827 for 2023.

    The adjustment is the highest that most current beneficiaries have ever seen because it is based on an inflation metric from August through October, which was also around 40-year highs. Inflation has cooled somewhat since then, though prices remain elevated.

    “I’m sure everyone is anxiously awaiting because prices are still high,” said Mary Johnson, a Social Security and Medicare policy analyst at The Senior Citizens League, an advocacy group. “Just shopping for food to feed people during the holidays is going to be a huge challenge.”

    Roughly 70 million people will receive the increase, which follows a 5.9% adjustment for 2022.

    Many senior citizens depend heavily on Social Security. Some 42% of elderly women and 37% of elderly men rely on the monthly payments for at least half their income, according to the Social Security Administration.

    Just when the beefed-up payment will arrive depends on recipients’ ages and birth dates. Those who received Social Security before May 1997 get their monthly benefit on the 3rd of each month. For more recent retirees, those whose birth dates are the 1st through the 10th of the month receive it on the second Wednesday, while those born on the 11th to 20th and the 21st to 31st of the month are paid the third and fourth Wednesdays, respectively.

    Even though recipients received a sizable adjustment for this year, inflation ate away at the boost.

    The increase fell short of actual inflation by an average of more than $42 – or 46% – every month or roughly $508 for the year, Johnson said.

    Many retirees have been forced to turn to their savings or public assistance. One-third of seniors reported signing up for food stamps or visiting a food pantry over the past 12 months, compared with 22% in 2020, according to recent surveys by The Senior Citizens League. Also, 17% have applied for assistance with heating costs, compared with 10% in 2020.

    This is not a new problem. Benefits have not kept up with the rising cost of living for years, even with the annual adjustments.

    As of March, inflation has caused Social Security payments to lose 40% of their buying power since 2000, according to a study released earlier this year by the league. Monthly benefits would have to increase by $540 to maintain the same level of buying power as in 2000.

    Senior citizens will also see their Medicare Part B premiums drop in 2023, the first time in more than a decade that the tab will be lower than the year before, the Centers for Medicare and Medicaid Services announced in the fall. It’s only the fourth time that premiums are declining since Medicare was created in 1965.

    The standard monthly premiums will be $164.90 in 2023, a decrease of $5.20 from 2022.

    The reduction comes after a large spike in 2022 premiums, which raised the standard monthly premium to $170.10, up from $148.50 in 2021. A key driver of the 2022 hike was a projected jump in spending due to a costly new drug for Alzheimer’s disease, Aduhelm. However, since then, Aduhelm’s manufacturer cut the price and the Centers for Medicare and Medicaid Services limited coverage of the drug.

    Also, spending was lower than projected on other Part B items and services, which resulted in much larger reserves in the Part B trust fund, allowing the agency to limit future premium increases.

    The big annual adjustment could end up hurting some seniors, Johnson said.

    For instance, the resulting increase in income could push them above the thresholds for certain government benefits, such as Medicare Extra Help, Medicaid, food stamps and rental assistance, leaving them eligible for less or no aid. Or they could have to pay more for their Medicare Part B premiums, which are adjusted for income.

    Also, they could have to start paying taxes – or owe higher levies – on their Social Security benefits if their income rises above a certain level.

    Further, the increase could leave Social Security’s finances on even shakier ground. The combined trust funds that pay benefits to retirees, survivors and the disabled will be depleted by 2035 and only able to distribute roughly three-quarters of promised payments unless Congress addresses the program’s long-term funding shortfall, according to the most recent Social Security trustees’ report.

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  • House investigation says FDA approval process of Alzheimer’s drug was ‘rife with irregularities’ | CNN

    House investigation says FDA approval process of Alzheimer’s drug was ‘rife with irregularities’ | CNN

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    CNN
     — 

    A congressional investigation found that the US Food and Drug Administration’s “atypical collaboration” to approve a high-priced Alzheimer’s drug was “rife with irregularities.”

    The report, released Thursday, was the result of an 18-month investigation by two House committees. It is sharply critical of Biogen, maker of the medication Aduhelm.

    The report says Biogen set an “unjustifiably high price” for Aduhelm to “make history” for the company, and thought of the drug as an “unprecedented financial opportunity.” Biogen priced Aduhelm at $56,000 per year, even though its actual effects on a broad patient population were unknown.

    More than 6.5 million people in the US live with Alzheimer’s, and that number is expected to grow to 13.8 million by 2060, according to the Alzheimer’s Association. The disease is the sixth leading cause of death in the United States. There is no cure, and effective treatments are extremely limited. Before Aduhelm’s approval in June 2021, the FDA had not approved a novel therapy for the condition since 2003.

    The investigation found that Biogen planned an aggressive marketing campaign to launch the drug, intending to spend more than $3.3 billion on sales and marketing between 2020 and 2024 – more than 2½ times what it spent to develop Aduhelm.

    Dementia, including Alzheimer’s, is one of the “costliest conditions to society,” according to the Alzheimer’s Association. In 2022 alone, Alzheimer’s and other dementias cost the US $321 billion, including $206 billion in Medicaid and Medicare payments, the association says.

    Aduhelm’s cost to patients and to Medicare would be significant, the new report says. It was one of the key factors behind a big increase in Medicare premiums in 2022, according to the Centers for Medicare and Medicaid Services.

    In anticipation of “pushback” from providers and payers, the report says, Biogen also prepared a narrative to sell the value of the drug.

    The Committee on Oversight and Reform and the Committee on Energy and Commerce found that the collaboration between the FDA and Biogen in the approval process of the drug “exceeded the norm in some respects.”

    Biogen had initially discontinued Aduhelm’s clinical trials in March 2019 after an independent committee found that it probably would not slow the cognitive and functional impairment – the decline in memory, language and judgment – that comes with Alzheimer’s. But in June 2019, the FDA and Biogen started a “working group” to see whether the effort could be saved.

    The investigation found that the FDA and Biogen engaged in at least 115 meetings, calls and substantive email discussions from July 2019 to July 2020, including 40 meetings to guide Aduhelm’s potential approval. There may have been even more meetings, but the committees say the FDA failed to follow its own documentation protocol.

    The agency then collaborated with Biogen to draft a document used to brief an independent advisory committee that met in November 2020. The trial results were mixed, with only one showing a small benefit to patients.

    At that meeting, none of the committee’s members voted to say that the studies presented strong evidence that the drug was effective at treating Alzheimer’s.

    The meeting was unusual, according to one former FDA adviser who had sat on the committee for several years. Dr. Aaron Kesselheim told CNN in 2021 that the relationship between the FDA and the company was out of the ordinary.

    “There was a strange dynamic compared to the other advisory committee meetings I’ve attended,” the professor at Harvard Medical School said. “Usually, there’s some distance between the FDA and the company, but on this one, the company and the FDA were fully in line with each other in support of the drug.”

    When the FDA approved the drug, Kesselheim and two other members of the advisory committee resigned in protest. He later labeled it “probably the worst drug approval decision in recent US history.”

    The FDA often follows the independent committee’s recommendations, but in this case, it changed course and used its accelerated approval pathway, which sets a different standard of proof that a treatment could work.

    The committee members said senior FDA leadership told them that the shift in how the drug would be approved came after an FDA expert council meeting in April 2021 provided “unfavorable feedback” for the traditional approval process, according to the new report.

    The FDA also approved the drug for “people with Alzheimer’s disease,” a far broader population than was studied in Biogen’s clinical trials.

    Internal documents from the company said that Biogen accepted this broader indication “despite internal reservations about the lack of evidence of clinical benefit for patients at disease stages outside of the clinical trials and an unknown safety profile,” the report says. Leaders expressed concern that the company could lose credibility, and it developed a communications strategy to deal with the “anticipated fallout,” the report says.

    The committees recommended that the FDA document all of its meetings with drug sponsors, establish a protocol for briefing documents and advisory committees, and update its guidance for how Alzheimer’s drugs are developed and reviewed.

    The committees also recommended that companies clearly communicate safety and efficacy concerns to the FDA and consider the value assessments made by outside experts when setting drug prices.

    “The American people rely on FDA for assurance on the safety and efficacy of the medications they take. The number of patients and families impacted by Alzheimer’s disease will continue to increase, and it is crucial that FDA and drug companies adhere to established procedures and conduct themselves with the transparency necessary to earn public trust,” the report says.

    The FDA said in a statement that its “decision to approve Aduhelm was based on our scientific evaluation of the data contained in the application, which is described in the approval materials.”

    The agency says it is reviewing the committees’ findings and recommendations and says its own review found that the interactions with Biogen were appropriate.

    “It is the agency’s job to frequently interact with companies in order to ensure that we have adequate information to inform our regulatory decision-making. We will continue to do so, as it is in the best interest of patients. That said, the agency has already started implementing changes consistent with the Committee’s recommendations.”

    Biogen said in a statement Thursday that it has been working “cooperatively” with the investigation.

    “Biogen has been committed to researching and developing treatments for Alzheimer’s disease for more than a decade. We have been focused relentlessly on innovation to address this global health challenge, and have adapted to both successes and setbacks,” it said. “Biogen stands by the integrity of the actions we have taken.”

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  • Here’s what’s in the $1.7 trillion federal spending bill | CNN Politics

    Here’s what’s in the $1.7 trillion federal spending bill | CNN Politics

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    CNN
     — 

    Senate leaders unveiled a $1.7 trillion year-long federal government funding bill early Tuesday morning.

    The legislation includes $772.5 billion for non-defense discretionary programs and $858 billion in defense funding, according to a bill summary from Democratic Sen. Patrick Leahy, chair of the Senate Committee on Appropriations.

    The sweeping package includes roughly $45 billion in emergency assistance to Ukraine and NATO allies, boosts in spending for disaster aid, college access, child care, mental health and food assistance, more support for the military and veterans and additional funds for the US Capitol Police, according to Leahy’s summary and one from Sen. Richard Shelby of Alabama, the top Republican on the Senate Appropriations Committee.

    However, the bill, which runs more than 4,000 pages, left out several measures that some lawmakers had fought to include. An expansion of the child tax credit, as well as multiple other corporate and individual tax breaks, did not make it into the final bill. Neither did legislation to allow cannabis companies to bank their cash reserves – known as the Safe Banking Act. Also, there was also no final resolution on where the new FBI headquarters will be located.

    The spending bill is the product of lengthy negotiations between top congressional Democrats and Republicans. Lawmakers reached a “bipartisan, bicameral framework” last week following a dispute between the two parties over how much money should be spent on non-defense domestic priorities. They worked through the weekend to craft the legislation.

    The Senate is expected to vote first to approve the deal this week and then send it to the House for approval before government funding runs out on December 23. The bill would keep the government operating through September, the end of the fiscal year.

    Congress originally passed a continuing resolution on September 30 to temporarily fund the government in fiscal year 2023, which began October 1.

    More aid for Ukraine: The spending bill would provide roughly $45 billion to help support Ukraine’s efforts to defend itself against Russia’s attack.

    About $9 billion of the funding would go to Ukraine’s military to pay for a variety of things including training, weapons, logistics support and salaries. Nearly $12 billion would be used to replenish US stocks of equipment sent to Ukraine through presidential drawdown authority.

    Also, it would provide $13 billion for economic support to the Ukrainian government.

    Other funds would address humanitarian and infrastructure needs, as well as support European Command operations.

    Emergency disaster assistance: The bill would appropriate more than $38 billion in emergency funding to help Americans in the west and southeast affected by recent natural disasters, including tornadoes, hurricanes, flooding and wildfires. It would aid farmers, provide economic development assistance for communities, repair and reconstruct federal facilities and direct money to the Federal Emergency Management Agency’s Disaster Relief Fund, among other initiatives.

    Overhaul of the electoral vote counting law: A provision in the legislation aims at making it harder to overturn a certified presidential election, in a direct response to the January 6 attack on the US Capitol.

    The changes would overhaul the 1887 Electoral Count Act, which then-President Donald Trump tried to use to overturn the 2020 election.

    The legislation would clarify the vice president’s role while overseeing the certification of the electoral result to be completely ceremonial. It also would create a set of stipulations designed to make it harder for there to be any confusion over the accurate slate of electors from each state.

    Higher maximum Pell grant awards: The bill would increase the maximum Pell grant award by $500 to $7,395 for the coming school year. This would be the largest boost since the 2009-2010 school year. About 7 million students, many from lower-income families, receive Pell grants every year to help them afford college.

    Increased support for the military and veterans: The package would fund a 4.6% pay raise for troops and a 22.4% increase in support for Veteran Administration medical care, which provides health services for 7.3 million veterans.

    It would include nearly $53 billion to address higher inflation and $2.7 billion – a 25% increase – to support critical services and housing assistance for veterans and their families.

    The bill also would allocate $5 billion for the Cost of War Toxic Exposures Fund, which provides additional funding to implement the landmark PACT Act that expands eligibility for health care services and benefits to veterans with conditions related to toxic exposure during their service.

    Beefing up nutrition assistance: The legislation would establish a permanent nationwide Summer EBT program, starting in the summer of 2024, according to Share Our Strength, an anti-hunger advocacy group. It would provide families whose children are eligible for free or reduced-price school meal with a $40 grocery benefit per child per month, indexed to inflation.

    It would also change the rules governing summer meals programs in rural areas. Children would be able to take home or receive delivery of up to 10 days worth of meals, rather than have to consume the food at a specific site and time.

    The bill would also help families who have had their food stamp benefits stolen since October 1 through what’s known as “SNAP skimming.” It would provide them with retroactive federal reimbursement of the funds, which criminals steal by attaching devices to point-of-sale machines or PIN pads to get card numbers and other information from electronic benefits transfer cards.

    More money for child care: The legislation would provide $8 billion for the Child Care and Development Block Grant, a 30% increase in funding. The grant gives financial assistance to low-income families to afford child care.

    Also, Head Start would receive nearly $12 billion, an 8.6% boost. The program helps young children from low-income families prepare for school.

    Help to pay utility bills: The bill would provide $5 billion for the Low Income Home Energy Assistance Program. Combined with the $1 billion contained in the earlier continuing resolution, this would be the largest regular appropriation for the program, according to the National Energy Assistance Directors Association. Home heating and cooling costs – and the applications for federal aid in paying the bills – have soared this year.

    Enhance retirement savings: The bill contains new retirement rules that could make it easier for Americans to accumulate retirement savings – and less costly to withdraw them. Among other things, the provisions would allow penalty-free withdrawals for some emergency expenses, let employers offer matching retirement contributions for a worker’s student loan payments and increase how much older workers may save in employer retirement plans.

    More support for the environment: The package would provide an additional $576 million for the Environmental Protection Agency, bringing its funding up to $10.1 billion. It would increase support for enforcement and compliance, as well as clean air, water and toxic chemical programs, after years of flat funding.

    It also would boost funding for the National Park Service by 6.4%, restoring 500 of the 3,000 staff positions lost over the past decade. This would be intended to help the agency handle substantial increases in visitation.

    Plus, the legislation would provide an additional 14% in funding for wildland firefighting.

    Additional funding for the US Capitol Police: The bill would provide an additional $132 million for the Capitol Police for a total of nearly $735 million. It would allow the department to hire up to 137 sworn officers and 123 support and civilian personnel, bringing the force to a projected level of 2,126 sworn officers and 567 civilians.

    It would also give $2 million to provide off-campus security for lawmakers in response to evolving and growing threats.

    Investments in homelessness prevention and affordable housing: The legislation would provide $3.6 billion for homeless assistance grants, a 13% increase. It would serve more than 1 million people experiencing homelessness.

    The package also would funnel nearly $6.4 billion to the Community Development Block Grant formula program and related local economic and community development projects that benefit low- and moderate income areas and people, an increase of almost $1.6 billion.

    Plus, it would provide $1.5 billion for the HOME Investment Partnerships Program, which would lead to the construction of nearly 10,000 new rental and homebuyer units and maintain the record investment from the last fiscal year.

    Increased health care funding: The package would provide more money for National Institutes of Health, the Centers for Disease Control and Prevention and the Assistant Secretary for Preparedness and Response. The funds are intended to speed the development of new therapies, diagnostics and preventive measures, beef up public health activities and strengthen the nation’s biosecurity by accelerating development of medical countermeasures for pandemic threats and fortifying stockpiles and supply chains for drugs, masks and other supplies.

    More resources for children’s mental health and for substance abuse: The bill would provide more funds to increase access to mental health services for children and schools. It also would invest more money to address the opioid epidemic and substance use disorder.

    Tiktok ban from federal devices: The legislation would ban TikTok, the Chinese-owned short-form video app, from federal government devices.

    Some lawmakers have raised bipartisan concerns that China’s national security laws could force TikTok – or its parent, ByteDance – to hand over the personal data of its US users. Recently, a wave of states led by Republican governors have introduced state-level restrictions on the use of TikTok on government-owned devices.

    Enhanced child tax credit: A coalition of Democratic lawmakers and consumer advocates pushed hard to extend at least one provision of the enhanced child tax credit, which was in effect last year thanks to the Democrats’ $1.9 trillion American Rescue Plan. Their priority was to make the credit more refundable so more of the lowest-income families can qualify. Nearly 19 million kids won’t receive the full $2,000 benefit this year because their parents earn too little, according to a Tax Policy Center estimate.

    New cannabis banking rules: Lawmakers considered including a provision in the spending bill that would make it easier for licensed cannabis businesses to accept credit cards – but it was left out of the legislation. Known as the Safe Banking Act, which previously passed the House, the provision would prohibit federal regulators from taking punitive measures against banks for providing services to legitimate cannabis businesses.

    Even though 47 states have legalized some form of marijuana, cannabis remains illegal on the federal level. That means financial institutions providing banking services to cannabis businesses are subject to criminal prosecution – leaving many legal growers and sellers locked out of the banking system.

    FBI headquarters: There was also no final resolution on where the new FBI headquarters will be located, a major point of contention as lawmakers from Maryland – namely House Majority Leader Steny Hoyer – pushed to bring the law enforcement agency into their state. In a deal worked through by Senate Majority Leader Chuck Schumer, the General Services Administration would be required to conduct “separate and detailed consultations” with Maryland and Virginia representatives about potential sites in each of the states, according to a Senate Democratic aide.

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  • ‘This is a war’: Californians seek affordable housing alternatives | CNN Business

    ‘This is a war’: Californians seek affordable housing alternatives | CNN Business

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    Los Angeles
    CNN
     — 

    At 26, Ixchel Hernandez has become the defender and protector of her family’s modest apartment. In the two decades they’ve lived in their Los Angeles home, the family of four has successfully fought against multiple attempts aimed at pricing and, ultimately, forcing them out.

    “We are human beings with the right to live in our home, and that’s just frankly what every person… in every home and [in] every building should know … they have the right to have their own space, to have their home,” Hernandez said.

    But, across the country, affordable housing is becoming increasingly rare to find. The lack of housing inventory coupled with inflation and zoning inequalities have priced out most families, especially those who start with little-to-no capital of their own.

    Ixchel’s parents moved to the United States from Mexico in hopes of giving her and her brother opportunities and a safe environment. Her father, Jose Hernandez, never wanted to give the family’s various landlords a reason to evict them over the years, and he dreamed of owning his own home one day.

    “Thank God we never failed to pay our rent,” he said. But in order to keep up with rising rents, both parents worked and even opened up their home to another family for a brief time. Ixchel remembers six people crammed into their one-bedroom apartment.

    “It shouldn’t have to be that way where you’re kind of fighting for space or you’re going to have to move so far out of LA to be able to have a home,” she said.

    To purchase a house in more than 75% of the nation’s most populous cities, an average family needs to spend at least 30% of their annual income on housing. In cities like Miami, New York and Los Angeles, that number surges to more than 80% of an average family’s annual income.

    Home ownership for the Hernandez family, and so many others, has felt like a fading American dream. That is until they discovered a Civil Rights era approach that helps promote home ownership, particularly among minority groups, who are disproportionately impacted by the affordable housing crisis. It’s called a Community Land Trust, or CLT.

    The Hernandez family at their home.

    “We’re operated by residents who actually live in our building… [as well as] folks from the communities that we’re serving,” said Kasey Ventura of the Beverly-Vermont Community Land Trust. “My interest in this work, outside of just preserving housing and affordable housing, is preserving culture in a community.”

    A CLT is essentially a nonprofit organization that buys the land on which a building sits, thereby allowing a community’s residents to collectively manage it. Some residents eventually choose to form a co-op with their neighbors and take ownership of their buildings, renting the land.

    The Hernandez family and their neighbors embraced the concept. This year they joined the Beverly-Vermont CLT, one of at least five in Los Angeles and more than 200 nationwide. The process requires neighbors to meet regularly over several months before ultimately unanimously agreeing on various terms so as to finalize the trust. Ixchel now sits on the board of her building’s management; it’s in the final stages of ownership transfer to the co-op.

    “What’s important is that we’re now owners!” said Ixchel’s mother, Guadalupe Santiago. “But it’s also important to remember it was not easy,” her father cautioned.

    “It may not seem like a lot to a lot of folks that have money or come from money,” Ixchel said. “[But] we are just as much trying to build that generational wealth.”

    According to 2019 figures, the United States was roughly 3.8 million homes short of what was needed to house families. That is more than double the number from a decade earlier. California has the largest housing deficit of any other state, requiring an estimated million more homes to meet housing demands.

    “We don’t necessarily view housing as a need that everybody should have. And that’s key… in this work,” said Kasey Ventura, who helps run the Beverly-Vermont Community Land Trust in Los Angeles.

    While CLTs are a solution, Ventura admits there are — and should be — other affordable housing options to adequately address the crisis.

    In Southern California, there is growing demand for construction and rental of ADUs, or Accessory Dwelling Units. Also called “carriage homes,” the converted garages or newly built smaller structures sit adjacent to existing homes and are on the same property. The mostly studio or one-bedroom apartments provide a more affordable option to many who prefer to live or work in areas that might otherwise be too expensive.

    Others have advocated for utilizing unoccupied homes. There are dozens of vacant houses, in some cases, sitting just a few blocks from several homeless encampments lining many Los Angeles sidewalks. However, efforts to transform them into affordable housing in some neighborhoods have proven controversial among existing homeowners.

    Another route undertaken by some companies is Employer-Assisted Housing. Although they have only finished a portion of what they initially pledged, in recent years corporations like Google, Meta and Apple have promised to spend billions of dollars on some 40,000 new homes in California. The initiative began in order to combat soaring home prices in the Bay Area, while also recruiting and retaining talent who needed more affordable housing options, along with a shorter commute to the office.

    “Just to be able to be like, ‘Okay, I’m gonna wake up, take a walk down the street and come to work.’ I mean that’s awesome!” said Matthew Johnson, an employee of Factory_OS in Vallejo, California, which already plans to provide workforce housing options to its workers in the coming years. However, unlike other companies, Factory_OS employees will build their own homes.

    In a space once used to build US Navy submarines during World War II, Larry Pace now operates Factory_OS outside San Francisco. He co-founded the company with Rick Holliday to address the worsening housing shortage.

    Matthew Johnson working at Factory_OS.

    “That we’ve repurposed a building that was once for instruments of war, [so as] to [now] create affordable and supportive housing…. I don’t know how much cooler that can be,” said Pace.

    Factory_OS puts homebuilding onto an assembly line and produces fully finished modular units within two weeks. From insulation and drywall to flooring, fixtures and paint, all of it is prefabricated within the confines of the factory before it’s trucked to a site for assembly.

    “We’ve created an IKEA for the manufacturing of homes,” said Pace. “Then we put the pieces together.”

    When hoisted by a crane and stacked like sophisticated Legos, the modular units combine to make entire apartment buildings. Pace maintains there are massive cost-savings and huge efficiencies in moving homebuilding into a factory setting compared with on-site construction.

    “We’re building houses for the people who need them, for the people who have been struggling to be able to support their families or pay rent or pay bills,” said Johnson, as he placed support beams for a roof of one of the units.

    The 38-year-old Factory_OS employee and father of five was once homeless, and he said he often thinks about the families who will one day live under the roof he’s assembling. w

    “Every morning I wake up, I’m grateful… that I come home from work and there are my kids waiting for me,” said Johnson.

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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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  • Biden administration moves ahead with Medicare drug price negotiations amid industry lawsuits | CNN Politics

    Biden administration moves ahead with Medicare drug price negotiations amid industry lawsuits | CNN Politics

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    CNN
     — 

    Undeterred by a growing number of lawsuits, the Biden administration on Friday released revised guidance for Medicare’s new drug price negotiation program.

    The latest guidance outlines how the Centers for Medicare and Medicaid Services will negotiate with drugmakers to reach agreement on a maximum fair price for a selected medicine, the agency said. It was informed by public input on the initial guidance the agency released in March, which explained how it will select the drugs and how the negotiations will be conducted.

    The program, which was authorized by the Inflation Reduction Act that congressional Democrats passed last year, has prompted a fierce backlash from the pharmaceutical industry. Two drug manufacturers and two industry groups have filed lawsuits, arguing the measure is unconstitutional.

    But the administration is not backing down from implementing its historic new power. It intends to keep its timeline of announcing the first 10 drugs that will be selected for negotiation by September 1. CMS and the drugmakers will negotiate during 2023 and 2024. The prices will be effective starting in 2026.

    “The Biden-Harris Administration isn’t letting anything get in our way of delivering lower drug costs for Americans,” Secretary of Health and Human Services Xavier Becerra said in a statement. “Pharmaceutical companies have made record profits for decades. Now they’re lining up to block this Administration’s work to negotiate for better drug prices for our families. We won’t be deterred.”

    The initial set of drugs will be chosen from the top 50 Part D drugs that are eligible for negotiation that have the highest total expenditures in Medicare. CMS will consider multiple factors when developing its initial offer, including the drugs’ clinical benefits, the price of alternatives, research and development costs and patent protection, among others.

    If drugmakers don’t comply with the process, they will have to pay an excise tax of up to 95% of the medications’ US sales or pull all their drugs from the Medicare and Medicaid markets. The pharmaceutical industry contends that the true penalty can be as high as 1,900% of sales.

    CMS said it received more than 7,500 comments on its initial guidance from patient groups, drug companies, pharmacies and others.

    The changes it is making are aimed at improving transparency while keeping confidentiality in mind, as well as fostering “an effective negotiation process,” the agency said.

    They include revising the confidentiality process to state that CMS will release information about the negotiations when it publishes the explanations of the prices. Also, drug companies may publicly discuss the negotiations – the prior secrecy requirement had been a point of contention among manufacturers that was mentioned in the lawsuits. And they won’t be required to destroy data relating to the negotiations.

    In addition, CMS will hold patient-focused listening sessions to provide drug companies and the public more opportunities to engage with the agency. The sessions – which will give patients, caregivers and others the chance to share input on how a medication addresses unmet needs, how it impacts specific populations and what therapeutic alternatives exist – will be held in the fall for the first round of drugs.

    Merck, Bristol Myers Squibb, the Pharmaceutical Research and Manufacturers of America, known as PhRMA, and the US Chamber of Commerce have all recently filed lawsuits in federal courts across the US. They each argue the program is unconstitutional in various ways.

    The challengers also say that the negotiation provision will harm innovation and patients’ access to new drugs.

    Among the arguments are that the program violates the Fifth Amendment’s “takings” clause because it allows Medicare to obtain manufacturers’ patented drugs, which are private property, without paying fair market value under the threat of serious penalties.

    Plus, the negotiations process violates the First Amendment, the challengers say, because it coerces manufacturers into saying that they agree to the price that the government has dictated and that it’s fair.

    Another argument is that the process violates the Eighth Amendment by levying an excessive fine if drugmakers refuse to negotiate and continue selling their products to the Medicare market.

    Merck expects its diabetes drug Januvia to be among the drugs named in September and its blockbuster cancer treatment Keytruda and diabetes drug Janumet to be subject to negotiation in the future. Bristol Myers Squibb believes its blood thinning medication, Eliquis, will be subject to negotiations this year, and its cancer medication, Opdivo, will be selected in a subsequent round.

    The changes in the revised guidance did not allay the complaints of the pharmaceutical industry. PhRMA said that transparency remains “severely limited,” patients’ views are not being taken into account and Medicare beneficiaries could have less access to drugs.

    “The very few substantive changes to the final guidance demonstrate CMS saw this as a box checking exercise, not an opportunity to mitigate the negative impacts this price setting policy will have on patients or the broader health care sector,” PhRMA said in a statement.

    “The approach CMS took in this final guidance confirms what we claimed in our lawsuit – Congress’ unconstitutional shortcuts taken in the law have given the administration far too much flexibility to set prices at their whim without any oversight or accountability to anyone,” the group continued.

    The Biden administration will “vigorously defend” the drug price negotiation program, said CMS Administrator Chiquita Brooks-LaSure.

    “We feel the law is on our side,” she said in a call with reporters Friday.

    This story has been updated with additional information.

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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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    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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