Happy Tuesday! Or maybe a not-so-happy Tuesday if you’re traveling today. The Federal Aviation Administration says today is the busiest travel day of Thanksgiving week, with more than 48,000 flights expected. Check out this cool map showing the busiest paths. Also unhappy today: Anyone rooting for Argentina in the World Cup, after Lionel Messi and Co. suffered a stunning 2-1 loss to Saudi Arabia.
We wish you all a happy Thanksgiving and will be back in your inboxes next week.
Biden Extends Pause on Student Loan Payments. Here's How Much It Will Cost
The Biden administration said Tuesday that it is extending the pause on student loan repayments in the face of legal challenges that have frozen implementation of the president’s plan to forgive up to $20,000 in debt for millions of borrowers.
The pause in federal student loan payments was first enacted at the start of the coronavirus pandemic and has been extended multiple times, with payments most recently sent to resume at the start of 2023. Under the latest extension, payments will be set to resume 60 days after litigation surrounding the debt forgiveness plan is resolved or, if the lawsuits haven’t been resolved by June 30, payments will start again 60 days after that.
Republican officials in six states have sought to block the Biden debt forgiveness plan, arguing that it exceeds presidential authority. The Department of Education said that more that 26 million people have provided the information needed to be considered for debt relief, and 16 million borrowers have been approved. But court orders are blocking the administration from discharging student loan debt and accepting additional applications while the legal challenge plays out. The Biden administration has asked the Supreme Court to reverse the federal appeals court ruling last week that halted the debt relief plan.
“It isn’t fair to ask tens of millions of borrowers who are eligible for relief to resume their student debt payments while the courts consider the lawsuit,” Biden said in a video posted to Twitter, adding that he is “completely confident” his debt forgiveness plan is legal.
The cost of another extension: Budget hawks had urged the administration not to extend the pause on repayments again. The Committee for a Responsible Federal Budget says that every month the payment pause is extended costs the federal government more than $5 billion, mostly due to lost interest collection. That means that another extension until 60 days past June 30, 2023, would cost $40 billion and would raise the total cost of the pause to $195 billion.
Column of the Day: The Time to Raise the Debt Limit Is Now
Washington Post columnist Catherine Rampell adds her voice to the slew of analysts and pundits urging Congress to raise the debt limit now to avoid the threat of a potentially catastrophic default later — but she adds that lawmakers might have less time than think to act.
“Lawmakers have assumed their deadline to act was the third quarter of 2023, at the earliest,” she writes. “But the projection for when we would hit the ceiling, calculated by the Bipartisan Policy Center, was released this past June. There have since been several major economic and policy developments that might move up the drop-dead deadline.”
The combination of higher interest rates, the prospect of recession and the Biden administration’s extension of a pause on student loan repayments could all speed the day that the Treasury hits its borrowing limit. So as lawmakers in both parties downplay the chances of addressing the debt ceiling before next year, Rampell says they should feel a greater sense of urgency: “the clock on this time bomb is ticking — and speeding up.”
Number of the Day: 5
Rep. Ralph Norman (R-SC), a member of the House Freedom Caucus, told Politico Tuesday that he is a hard “no” on Republican Leader Kevin McCarthy’s bid to be speaker. Norman is the fifth GOP member to come out against McCarthy, who now faces a challenging path to win the gavel given his party’s narrow House majority. Norman reportedly pointed to fiscal concerns in explaining why he’ll oppose McCarthy: “During a conference meeting last week during the nomination of the speaker, Norman said he asked McCarthy if he agreed to the Republican Study Committee’s seven-year plan for addressing the budget. And according to Norman, McCarthy replied ‘no.’ For him, that was it, he said.”
Thousands of Millionaires Claimed Unemployment Benefits During the Pandemic: IRS
Nearly 30 million people collected unemployment benefits in 2020 as businesses shut down across the country due to the pandemic. About 19,000 of those people reported incomes of $1 million or more for the year, according to new data released by the IRS and analyzed by Politico’s Brian Faler.
The total includes more than 4,000 people who earned between $5 million and $10 million, and 229 people who earned more than $10 million. The high earners received benefits worth $13,900 each on average.
Tax experts told Faler that even people with very high incomes lost their jobs in the early stages of the Covid-19 pandemic, including some who may have been part of a couple filing jointly in which one partner lost their job but the other did not. “Tens of millions of workers were thrown out of their jobs in 2020 and it was a really wide range of people — it included people who had been making really good incomes,” said Amy M. Traub of the National Employment Law Project.
In addition, unemployment benefits were made available at historically unprecedented levels. “People were told they should file for unemployment and they did, and the states generally made it pretty easy,” former tax official Mark Mazur told Politico. “You’d think the millionaires who had that opportunity would be among the most well-advised people.”
The bottom line: The vast majority of unemployment aid went to people earning less than $100,000 per year. The benefits paid to those earning $1 million or more totaled $264 million in 2020 — less than 1% of the $405 billion paid out overall.
Quote of the Day: Fauci’s Farewell
“I did not imagine and I don’t think any of my colleagues imagined that we would see a three-year saga of suffering and death and a million Americans losing their lives. … My final message — may be the final message I give you from this podium — is that, please for your own safety, for that of your family, get your updated COVID-19 shot as soon as you're eligible, to protect yourself, your family and your community.”
— Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases and chief White House medical advisor, giving his final press briefing Tuesday ahead of his retirement next month. “I’ll let other people judge the value or not of my accomplishments, but I would like people to remember about what I’ve done, is that every day for all of those years I’ve given it everything that I have and I’ve never left anything on the field,” Fauci said.
- McConnell Fight With GOP Opponent Shifts to New Battleground: Spending Package – The Hill
- A Rail Strike Looms and Impact on US Economy Could Be Broad – Associated Press
- President of Largest Rail Union Predicts Congressional Intervention After ‘No’ Vote – Politico
- The White House Girds for Combat – Politico
- McCarthy Calls on DHS Secretary Mayorkas to Resign, Threatens Impeachment Inquiry – The Hill
- How to Spend $1 Trillion? Mitch Landrieu Wants a Say – New York Times
- Goldman Sees 10-Year Treasury Yield of 4% or More Through 2024 – Bloomberg
- Unemployment Assistance to Millionaires Soared During Pandemic – Politico
- With Thousands of Hungry Troops, DOD Urges Limited Income Hikes – Roll Call
- Student Loan Borrowers Lose Faith in Biden’s Forgiveness Plan – Bloomberg
- White House Kicking Off Six-Week Covid-19 Booster Push – CNN
- Fauci Bids Farewell With a Final Plea: Get Vaccinated – Politico
Views and Analysis
- The Debt-Ceiling Time Bomb Is Ticking Faster Than Congress Realizes – Catherine Rampell, Washington Post
- Hospital Billing Is a Crime Against American Patients – Robert Kuttner, American Prospect
- Why Is It So Hard to Build in America? Blame Red Tape – Bloomberg Opinion Editors
- A Different Kind of Kitchen-Table Economics – Paul Krugman, New York Times
- Economic Necessity Will Ultimately Force Immigration Reform – Eduardo Porter, Bloomberg
- It’s Now Clear That QE Was a Colossal Policy Mistake – Allison Schrager, Bloomberg
- How One Man Quietly Stitched the American Safety Net Over Four Decades – Dylan Matthews, Vox
- Year-End Borrowing Could Worsen Deficits and Inflation – Committee for a Responsible Federal Budget