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Fiscal watchdog argues against Biden student debt action

The Committee for a Responsible Federal Budget (CRFB) is pushing against further broad-based student debt relief as the Biden administration weighs taking action, arguing it could risk undermining a Democratic effort to reduce the deficit and fight inflation.

An analysis released by the fiscal watchdog on Tuesday looked at the fiscal costs that might take place if President Biden extended the current pause on federal student loan repayments through the end of the year, as well as previous plans considered by the Biden administration to provide $10,000 in cancellation for some borrowers.

Both actions, the analysis found, would cost roughly $250 billion over the next decade. 

“Combined, these policies would consume nearly ten years of deficit reduction from the Inflation Reduction Act,” the group also said, referring to the climate, tax and health care legislation that President Biden is signing into law.

Democrats are seeking to raise billions in revenue through tax provisions targeting wealthy tax cheats and big companies to reduce the deficit while also offsetting costs for investments in climate and healthcare.

Democrats have also touted the bill, which is projected to cut the country’s future deficits by north of $200 billion in the next ten years, as a means to fight inflation. However, experts have doubted the bill would have a major impact on rising costs.

In its analysis on Tuesday, the CRFB argued student debt cancellation would “wipe out the disinflationary benefits” of the bill, and “boost near-term inflation far more than” the economic package “will lower it.”

“We previously estimated that a one-year pause could add up to 20 basis points to the Personal Consumption Expenditure (PCE) inflation rate,” the budget watchdog also said. “Using a similar analytical method, $10,000 of debt cancellation could add 15 basis points up front and create additional inflationary pressure over time.”

The analysis adds to a heated national debate as to how Biden’s actions on student debt could affect inflation. 

Republicans have strongly opposed an extension to the current moratorium on student loan repayments, as well as Biden’s potential plans to provide $10,000 in debt cancellation for borrowers making under a certain income, calling the proposals “wildly inflationary.”

However, a number of experts have also downplayed the impact of such actions on inflation. 

Laura Beamer, lead researcher in higher education finance for the left-leaning Jain Family Institute, told The Hill in a previous interview that most debt holders will still be carrying large loans even with a $10,000 reduction. As a result, the program is unlikely to provide a huge stimulus to consumer spending. 

Any stimulus would depend on “people’s repayment patterns and how long the repayment term is,” which she added, for many, is “much longer than 10 years.”

The recent analysis comes as the White House is facing pressure over how it will move forward on federal student debt. 

Biden officials have indicated that another decision on student loans could come later this month.

Source: TEST FEED1

Clouds gather over the world economy

Troubles are coming to the world economy not as single spies but in battalions. In setting U.S. monetary policy, the Federal Reserve should take these troubles into account if it wishes to spare the U.S. economy an unnecessarily hard economic landing.

Among the more systemic of the world’s economic troubles are those emanating from China, the world’s second-largest economy and until recently the world’s primary economic growth engine. In response to Chinese President Xi Jinping’s zero-tolerance COVID-19 policy, major Chinese cities such as Shanghai and Beijing have been locked down. At times, that has involved as many as 350 million people unable to work normally.

As a result, the Chinese economy has screeched to an abrupt halt. In the year that ended in the second quarter of this year, China’s economy grew by barely 0.4 percent, which fell well short of the government’s 5.5 percent economic growth target.

Compounding China’s economic problems is the deepening crisis in its property sector. That sector accounts for almost 30 percent of the country’s economy and constitutes around 70 percent of household wealth. It is not only that after years of rapid expansion, some 30 highly leveraged Chinese property developers are now defaulting on their loan obligations. It is that house prices have now been declining for 11 consecutive months, the country has more than 65 million unoccupied housing units, and more than 1 million Chinese householders have declared a boycott on mortgage loan repayments.

Despite its deep-seated property sector problems, the Chinese government’s control over the country’s banking system makes a 2007 U.S.-style housing bust unlikely. Rather, what is more likely is that China will now experience a lost economic decade as Japan did before it. It will do so as its banking system props up its zombie property developers with large amounts of credit. That makes any early strong rebound of the Chinese economy unlikely.

Another dark cloud overhanging the world economy is Russian President Vladimir Putin’s threat to turn off Russian natural gas exports to major European countries like Germany and Italy. He would do so to pressure them to stop backing Ukraine in its war with Russia. Already Putin has cut Russian natural gas exports to 20 percent of their normal level to prevent Europe from building up inventories before the winter. This has to be of major concern considering that Russian gas imports provide almost 50 percent of Germany’s and Italy’s gas needs.

A recent International Monetary Fund (IMF) report estimated that a total Russian energy export shutdown could shave as much as 1.5 percentage points off German GDP in 2022 and 2.75 points in 2023. With the German economy already stagnating, if Putin carries through on his threat, the German economy could succumb to a deep economic recession. A German recession is the last thing Europe needs at a time when renewed Italian political instability is raising questions about Italy’s ability to service its public debt mountain.

Adding to the global economic gloom is strong capital repatriation from the emerging market economies in response to the Federal Reserve’s interest rate hikes. This is now likely to trigger a wave of debt defaults in the emerging market economies, which now carry record debt levels. Highlighting the likelihood of such a wave are the acute economic difficulties now being experienced in Argentina, Egypt, Pakistan, Russia, Sri Lanka and Ukraine.

For the United States, all of this likely means further downward inflationary pressure on the back of a strengthening dollar and a continued fall in international commodity prices. It likely also means a weakening of aggregate demand as a result of souring export markets and a reduction in risk appetite. These deflationary forces raise serious questions about whether the Federal Reserve is being overly aggressive in its quest to bring inflation under control and whether it is raising the risk of an unnecessarily hard economic landing.

Desmond Lachman is a senior fellow at the American Enterprise Institute. He was formerly a deputy director in the International Monetary Fund’s Policy Development and Review Department and the chief emerging market economic strategist at Salomon Smith Barney.

Source: TEST FEED1

Congress reviewing sexual misconduct allegations in Junior ROTC program

U.S. lawmakers have started a review into the military’s Junior Reserve Officers’ Training Corps (JROTC) program following reports last month alleging that dozens of teenage girls were abused by their instructors. 

In a letter sent on Monday to Defense Secretary Lloyd Austin and the service secretaries, the lawmakers asked for information on how the Pentagon conducts oversight of its JROTC programs to make sure leaders, instructors and administrators can’t abuse the cadets under their supervision.  

“Every incident of abuse or harassment committed by a JROTC instructor against a cadet is completely unacceptable and represents an abject betrayal of the trust and faith these young men and women placed in the U.S. Military, its culture, and its values,” wrote House Committee on Oversight and Reform Chairwoman Carolyn Maloney (D-N.Y), and Rep. Stephen Lynch (D-Mass.), chairman of the panel’s subcommittee on national security. 

The New York Times last month released a sprawling investigative report that found dozens of retired service members who became leaders in JROTC programs targeted and sexually abused or harassed underage girls. 

Over a five-year period, the Times found at least 33 such instructors who were criminally charged with sexual misconduct involving students, as well as numerous others who were accused of misconduct but never charged. 

But the JROTC programs — which for more than a century have provided American students with leadership training in about 3,500 high schools nationwide — have little oversight and minimal training for their instructors. 

What’s more, many states don’t require the instructors to have a college degree or teaching certificate, and schools are tasked with the burden of monitoring instructors and investigating complaints, according to the Times.  

“While all JROTC instructors are required to complete a DOD [Department of Defense] background investigation and be certified by state or local education authorities, we remain concerned that DOD and the military services lack an effective means to monitor the actions of JROTC instructors and ensure the safety and well-being of cadets,” the lawmakers wrote. “Without sufficient oversight mechanisms in place, inappropriate behavior may continue undetected.” 

The lawmakers also asked the Department of Defense to give the committee’s staff a briefing by the end of the month on how it conducts oversight of its JROTC programs and the instructors. 

“Students enrolled in JROTC programs reasonably trust that their instructors will protect them and ensure their well-being as any military officer is duty bound to do for the soldiers under his or her command,” the lawmakers wrote. “Tragically, far too many JROTC instructors appear to be abusing that trust.” 

Source: TEST FEED1

TikTok pushes back on House official’s warning about use

TikTok pushed back on claims that a top House official made last week about security concerns related to the social media platform. 

The company sent a letter to Chief Administrative Officer of the House Catherine Szpindor on Thursday, obtained by Politico. The company wrote that her “TikTok Cyber Advisory” contains inaccurate information and needs to be rescinded. The advisory warned lawmakers of security risks with the platform. 

When asked for confirmation, a spokesperson for TikTok said the letter Politico published “appears to be authentic.”

Szpindor’s office said in the memo that the office considers TikTok as a high risk due to a lack of transparency about how it protects user data, its requirement of “excessive permissions” for people to use the app and potential security risks associated with using it.

The office concluded that members of Congress should not download or use the app because of these security and privacy concerns. 

The memo said the app stores users’ data location, photos and other personally identifiable information in servers in China, but TikTok rejected that in its letter, saying it stores information in its own data centers in the United States and Singapore. 

Michael Beckerman, vice president and head of public policy in the Americas for TikTok, said in the letter that all the U.S. user traffic is being directed to Oracle Cloud Infrastructure and that the company expects to delete users’ personal information from the data centers and fully pivot to Oracle cloud servers in the U.S. 

He denied claims in the memo that the platform uses facial recognition technology or uses face and voice data to identify users. 

Beckerman said that TikTok does not automatically collect precise GPS location data, as the memo states. The letter states that the company does collect users’ approximate location based on their SIM card and IP address, which helps improve the user experience, comply with local laws and prevent fraud. 

He said TikTok does not collect information such as the SIM card’s serial number, active subscription information or integrated circuit card identification numbers. 

Beckerman said he wants to meet with Szpindor to discuss the information in TikTok’s letter. 

Szpindor’s memo came as an increasing number of lawmakers have begun using TikTok to convey messages and reach new demographics ahead of the November midterm elections. 

Almost every Democratic lawmaker voted for a provision in last year’s defense policy bill that prevented government employees from using TikTok on any government-issued device, but numerous caucus members have posted content on the platform.

Source: TEST FEED1

Fetterman in new ad blames Washington for economic 'mess'

Pennsylvania Senate candidate John Fetterman is blaming Washington, D.C., for the economy’s “mess” in a new ad released on Tuesday.

“The truth is that our economy is a mess because of Washington. The rich, powerful, the insiders and the lobbyists. They’re lying about me to take the heat off themselves. It’s Washington’s fault,” Fetterman, a Democrat, says in the 30-second ad, called “Washington to Blame.”

“They set the rules, weakened our supply chain and spiked inflation. But we can fix our economy,” he continues. “We must make more stuff in America, cut taxes for working families. Congress shouldn’t play in the stock market. And take on anyone that gets in the way. That’s what I believe in.”

The ad will be aired in the local Pennsylvania broadcast markets for Pittsburgh, Scranton and Johnstown in addition to cable markets statewide on Fox News.

Fetterman’s campaign told The Hill that it was spending in the high six-figures to run the ad.

The campaign noted that the ad was launched at the same time as the release of “John’s Plan to Hold Washington Accountable” — proposals to address corporate greed and inflation, among other issues. Some of his proposals include banning members of Congress from trading stocks and increasing production in the United States.

The new ad comes less than three months before the November midterms as Fetterman goes head-to-head with Republican challenger Mehmet Oz in a bid for retiring Sen. Pat Toomey’s (R-Pa) seat.

A Fox News poll released in late July showed Fetterman holding an 11-point lead over Oz. The Senate race is rated as a “toss up” by the nonpartisan Cook Political Report. 

Updated: 2:07 p.m.

Source: TEST FEED1

Angelina Jolie shines spotlight on Afghan women on anniversary of US withdrawal

Angelina Jolie is urging the world not to “back away from Afghanistan,” saying everyone should be “outraged” by the mistreatment of women there by the Taliban.

In a Monday essay in Time, the “Maleficent” actor said a sense of progress “has been overturned with unimaginable speed” since the United States’s military withdrawal a year ago from the country. Monday marked a year since the Taliban’s takeover of Kabul and the collapse of the Afghan government following the chaotic U.S. withdrawal.

“Women are again being beaten in the streets or taken from their homes at night and tortured, and the country’s jails are filling up with female political prisoners. There are reports of girls being kidnapped into forced marriage with Taliban leaders,” Jolie, 47, wrote.

A report released earlier this month by the U.S. Special Inspector General for Afghanistan Reconstruction found that the Taliban continue to hinder girls and women from receiving an education and have placed additional restrictions on their freedoms.

“Peace built on the oppression of women is no peace at all, but a society constantly at war with itself,” said Jolie, a special envoy for the United Nations Refugee Agency, UNHCR. “It is the height of futility — if not cowardice — for authorities in any country to incarcerate and torture women whose only crime is to have contributed to the success and health and stability and education of their own people.”

“For America and other countries we allied with, the worst possible step would be to back away from Afghanistan because we are exhausted by the last two decades and ashamed of our failure,” the Academy Award winner said. “But we should remember why we were involved in Afghanistan in the first place: None of those factors have gone away.”

“We were right to be outraged by the mistreatment of women in Afghanistan in the 1990s, and we should still be outraged today,” the mom of six wrote.

Saying that the U.S. has “walked steadily back from its promises to Afghan women” in recent years, Jolie appealed to leaders to “make no further diplomatic concessions at the expense of women and instead should be looking for ways to support them.”

Jolie said she dreams of visiting Afghanistan with her daughters and seeing the women there “free to determine your own future.”

Noting the “many dark moments” in Afghanistan’s history, Jolie said, “This does not end here.”

“I’m sure,” she wrote, “that this isn’t the final chapter.”

Source: TEST FEED1

DeSantis edges out Trump among Florida voters in head-to-head matchup: survey

Florida Gov. Ron DeSantis (R) led former President Trump by a slight margin in a hypothetical 2024 primary contest in Florida, according to a new poll.

The University of North Florida’s Public Opinion Research Lab found that DeSantis received the support of 47 percent of respondents who were registered Republicans, compared to 45 percent support for Trump and 7 percent who said they would vote for someone else.

But as speculation swirls over whether the two GOP figures will mount White House bids, fewer than one in ten respondents — 8 percent — said they think DeSantis and Trump are enemies. 

Forty-seven percent described their personal relationship as acquaintances, and 42 percent described the duo as friends.

“DeSantis and Trump are the two most popular Republican names being discussed for 2024, and DeSantis is edging him out in their home state,” said Michael Binder, the pollster’s faculty director. 

“People are split on whether Trump and DeSantis are friends or merely acquaintances, I guess we’ll really find out after the midterms and the 2024 race starts to heat up,” he added.

DeSantis’ national profile has continued to grow as the 2024 presidential election approaches.

He has leaned into the culture wars as he weighs a bid, hoping to win over the Republican Party’s conservative base as the party waits to see if Trump will mount a campaign.

DeSantis is hitting the campaign trail this month for several of Trump’s endorsed candidates in battleground states like Arizona, New Mexico, Ohio and Pennsylvania.

But before the 2024 primaries begin, DeSantis faces a re-election campaign to the governorship in Florida. 

The poll found that DeSantis remained favored to win a second term. Half of registered voters indicated support for DeSantis in November whether he faces Nikki Fried or Charlie Crist, the two leading contenders in the state’s upcoming Democratic primary.

The poll found Fried, Florida’s commissioner of agriculture, received 43 percent support against DeSantis, with 5 percent saying they would vote for someone else. In a hypothetical matchup between DeSantis and Rep. Charlie Crist, Crist received 42 percent support while 6 percent said they would vote for someone else.

“But both potential match-ups are much closer than they were when we polled registered voters in February, when DeSantis was up by over 20 percentage points,” said Binder. “It is important to keep in mind that these are registered voters, and Republicans are generally more likely to turn out in November.”

Likely Democratic primary voters were more likely to support Fried in the Aug. 23 contest to face DeSantis, according to the poll.

Fried received 47 percent of support among respondents who said they would definitively vote or had already voted in the Democratic primary, compared to 43 percent support for Crist. Two other candidates in the race both polled in the single digits, while 6 percent said they didn’t know or declined to answer.

“Fried seems to have reversed the eight-point lead that Crist had when we asked registered Democrats about vote choice in February,” said Binder. “It’s possible that the overturning of Roe v. Wade changed the make-up of this race and has particularly energized women that are almost 20 points more likely to vote for her.”

The poll was conducted between Aug. 8 and Aug. 12 through a weighted sample of 1,624 registered voters using an online survey platform. The margin of error for questions asked to all respondents is 3.4 percentage points.

Source: TEST FEED1

The Republican tax attack betrays fiscal responsibility

Although the Republican Party has historically deplored taxes,  its most recent attacks on the Inflation Reduction Act of 2022 — which increases IRS funding by nearly $80 billion over a 10-year period — reach new depths of falsity, hypocrisy and potential danger to the nation’s financial stability.  

Republicans allege that the IRS will deploy the additional funding to audit a larger proportion of lower- and middle-income taxpayers, which they claim would violate President Biden’s pledge not to increase taxes for taxpayers earning less than $400,000 in annual income. They claim that taxpayers will now live in greater fear of being audited, and of possibly having to pay taxes that they don’t even owe because they lack the resources to defend themselves. 

But the Republicans’ crystal ball is clouded and cracked. First, a significant amount of the additional funds is dedicated to modernizing the IRS’s antiquated technology systems and enhancing customer service, both of which are in vast need of improvement. Second, the current commissioner of the IRS has explicitly vowed not to target lower- and middle-income taxpayers, an oath that Congress can and should take seriously and oversee. Third, although Republicans portray themselves as the party of law and order, and strongly opposed the Defund the Police proposals advanced by some Democrats, they now appear willing to turn a completely blind eye to tax scofflaws. 

In fact, the Republicans’ repugnance towards tax compliance ignores several important realities. One is, because the nation’s voluntary compliance rate hovers in the low 80 percent range, approximately $400 billion in taxes go uncollected each year. Such uncollected taxes represent an additional financial burden upon those taxpayers who are compliant in fulfilling their civic duties. Another is that if the IRS conducts more audits, numerous empirical studies indicate that taxpayers are more likely to be forthcoming in their reporting practices. 

The Wall Street Journal’s recent editorial, “The IRS Is About to Go Beast Mode,” epitomizes Republican concerns that the agency is poised to wreak havoc upon average taxpayers. However, over the past 20 years, Republican presidents and Republican-dominated Congresses have uniformly tried to do everything possible to subvert the agency, whose workforce has now been decimated and whose number of audits borders on nonexistent. At best, what the proposed funding will thus do is restore the IRS’s ability to function competently.  

Regarding fiscal responsibility, the Republican party has traditionally prided itself on being the party of choice. However, at least as evidenced by its most recent foray into the tax arena, namely, the Tax Cuts and Jobs Act of 2017, it was projected to produce a gaping deficit hole of $1.5 trillion. Say what you may about the Democratic Party, but by contrast, the Congressional Budget Office projects that the proposed legislation will reduce the deficit by approximately $100 billion. With the nation’s overall debt currently hovering at around $31 trillion, this legislation makes a meaningful contribution toward fiscal responsibility. 

Although the Inflation Reduction Act of 2022 will not transform the IRS into an agency universally beloved, it will hopefully make tax compliance and enforcement more equitable. Securing the nation’s sound fiscal footing fairly is surely worthy of bipartisan support.

Jay A. Soled is director of the Master of Accountancy in Taxation at Rutgers University. 

Source: TEST FEED1

Democrats, Republicans equally angry ahead of midterms: poll

Close to equal proportions of Democrats and Republicans say the word “angry” describes their feelings about the November midterms for Congress “somewhat” or “very” well, according to a new poll.

A Morning Consult State of the Parties survey found that 42 percent of Democrats and 41 percent of Republicans surveyed said the word “angry” described their feelings about the midterms “somewhat” or “very well.” 

In comparison, when respondents from both parties were polled on the same question in 2018, 49 percent of Democrats and 28 percent of Republicans said they felt angry.

In the latest poll, 61 percent of Democrats and 49 percent of Republicans said the word “worried” described their feelings about the midterms “somewhat” or “very” well, while 41 percent of Democrats and 50 percent of Republicans said they were confident.

Twenty-eight percent of Democrats and 27 percent of Republicans said they felt indifferent.

The polling comes less than three months before the Nov. 8 midterm elections. Democrats are expected to face several headwinds, including President Biden’s lagging approval ratings and inflation, which recent data has shown has started to cool off but is still at decades-high levels.

But Democrats have also seen a slew of developments that could help them ahead of Election Day, including an impressive July jobs report, high fundraising hauls from a number of Democratic Senate candidates and the recent passage of the Inflation Reduction Act. 

Democrats are also hoping that the Supreme Court’s decision to overturn Roe v. Wade will fuel a surge of voters to head to the polls. Some abortion rights advocates and Democrats are optimistic that that might be the case after Kansas voters became the first ones to weigh in on the issue following the high court’s decision and defeated a ballot measure that would have given the state legislature more authority to regulate access to the procedure.

The Morning Consult poll was conducted on Aug. 3 and Aug. 4 with 697 Republicans and 806 Democrats surveyed. The margin of error is plus or minus 4 percentage points. 

Source: TEST FEED1

Vindman on the ground in Ukraine: 'I think that I can help'

Retired Army Lt. Col. Alexander Vindman said on Twitter Tuesday that he had traveled to Ukraine to help the country in its war with Russia.

“I’m in Ukraine in a war zone because I think I can help,” wrote Vindman, who fled Soviet-era Ukraine when he was three years old with his family. 

He said he is spending his time “meeting with senior military and political leadership” so he can learn more about the war and inform the public and other leaders of how it might end.

“This war is the most important geopolitical event of the last 20 & maybe the next 20 years. It’s largely out of the consciousness of the U.S. public & that’s dangerous. Our politicians should know that we still care about what happens in Ukraine. I’m doing media to remind us,” Vindman said in the thread. 

Vindman served during the Trump administration as the director of European affairs on the National Security Council until February 2020. 

In 2019, he testified to Congress regarding a phone call former President Trump had with Ukrainian President Volodymyr Zelensky. In the call, Trump linked military aid for Ukraine to an investigation of then Democratic presidential candidate Joe Biden and his son, Hunter Biden. 

The testimony helped lead to Trump’s first impeachment and gave Vindman national recognition which he has used to target Republicans who he had said are too supportive of Russian President Vladimir Putin. 

“Ukraine needs help. I am trying to get the repair, sustainment, and training for western equipment moved into Ukraine. Having it in Poland and Romania is not good enough. This country is too big and it takes too long to move things. There are plenty of ways to mitigate risks,” Vindman concluded in his thread. 

Ukraine has received billions of dollars in aid from the U.S., including humanitarian and military support.

Source: TEST FEED1