The Pension Benefit Guaranty Corporation, under the direction of the Biden administration, has published the final rule implementing the American Rescue Plan Act of 2021’s Special Financial Assistance program.
Initially, the interim final rule applied a single rate of return included in the statute that is higher than could be expected for SFA funds given that they were required to be invested exclusively in safe, but low-return, investment-grade fixed-income products. The final rule uses two different rates of return for SFA and non-SFA assets, so that the interest rate for SFA assets is more realistic given the investment limitations on these funds.
Another change in the final rule allows up to 33% of SFA to be invested in return-seeking assets that are projected to allow plans to receive a higher rate of return on their investments than under the interim final rule, subject to certain protections. Namely, this portion of plans’ SFA funds generally must be invested in publicly traded assets on liquid markets to ensure responsible stewardship of federal funds. These return-seeking investments include equities, equity funds and bonds. The other 67% of SFA funds must be invested in investment-grade fixed-income products.
The third major change is meant to ensure plans can confidently restore both past and future benefits and enter 2051 with rising assets. PBGC designed the final rule to ensure that no “MPRA plan”—a group of fewer than 20 multiemployer plans that remained solvent by cutting benefits pursuant to the Multiemployer Pension Reform Act of 2014—was forced to choose between restoring its benefit payments to previous levels and remaining indefinitely solvent. Instead, the final rule ensures that all MPRA plans avoid this dilemma, supporting them with enough assistance so that these plans can both restore benefits and be projected to remain indefinitely solvent going into 2051.
According to PBGC leadership, these changes collectively ensure that all plans that receive SFA are projected to be solvent and pay full benefits through at least 2051.
The vast majority of U.S. hospitals are ignoring a new bipartisan federal law that requires the facilities to make their service prices available to the public, new research shows, and the Biden administration is facing growing criticism for not doing enough to enforce compliance with the landmark rule.
Now one state, Colorado, has taken matters into its own hands, passing an innovative law to bring its hospitals into compliance with the federal price transparency requirements — despite health care lobbyists’ efforts to sink the legislative effort.
Against the backdrop of limited federal enforcement, Colorado is leading the charge on creatively bringing hospitals into compliance, thanks to a new state law: House Bill 1285.
The law, recently signed by Gov. Jared Polis (D) and effective starting this August, has dual goals of accelerating the timeline on which hospital systems must meet the federal mandate, and curbing the crippling medical debt that plagues more than 100 million Americans.
The measure adds a state-level enforcement mechanism by requiring that hospitals be in compliance with the federal pricing transparency act in order to send Coloradans to collections for medical bills.
David Silverstein, founder and chairman of patient advocacy organization Broken Healthcare, wrote the bill and spearheaded the effort to get it across the finish line.
Days after Obama lamented Democrats’ 2010 electoral “shellacking,” his commission released a plan to slash Social Security benefits and raise the program’s eligibility age. Economist Paul Krugman noted at the time that the commission also suggested using newly gained revenue to finance “sharp reductions in both the top marginal tax rate and in the corporate tax rate.”
The plan ultimately did not receive the fourteen commission votes it needed to move forward, and a few years later in 2012, the House voted down a version of the proposal. That didn’t stop the Obama-Biden administration’s push: right after winning reelection — and after cementing much of the George W. Bush tax cuts — they tried to limit cost-of-living increases for Social Security, to the applause of Republican lawmakers.
Like Obama, Biden campaigned on a promise to protect Medicare and Social Security. But as we have reported, Biden is already affirming big Medicare premium increases and accelerating the privatization of that health care program. Biden also has not pushed to fulfill his promise to expand Social Security, even though there is new Democratic legislation that would do so.
And now with Graham’s comments, Republicans are banking on him becoming the old Joe Biden on Social Security if they win in November.
It’s not an insane political bet. After all, Biden for decades proposed cuts and freezes to Social Security and publicly boasted about it. Indeed, Biden spent most of his career depicting himself as an allegedly rare and courageous Democrat who was willing to push off his party’s base and tout austerity.
The pandemic is not done. The number of new infections — surely an undercount due to unreported home tests — again tops 75,000 per day. The number of hospitalizations has climbed 20 percent over the past two weeks. The Biden administration has warned there could be 100 million more Americans infected by early next year. Yet Congress seems unwilling to provide more money for basic responses such as tests and vaccines, even as it becomes increasingly clear that even mild cases can lead to dangerous long-term damage.
Yet there are positive developments to consider as well. Vaccinations and certainly boosters are not where they should be, but three out of four Americans have received at least a single dose and two-thirds are fully vaccinated. The Commonwealth Fund has estimated that, absent vaccines, an additional 2.3 million Americans would have died, and 17 million more would have been hospitalized. Public health measures such as masking have largely fallen out of favor, but they helped prevent a death toll that could have been even more terrible.
“A million is way too many people, but as a result of the work that has been done, through public health and vaccination, it’s a number that’s a lot lower than it might have been,” says David Fleming, a distinguished visiting fellow at the Trust for America’s Health. “If we did not do those things, we would not be looking at the 1 million death threshold, we’d be looking at the 3 million death threshold.”
Pressley, alongside Senate Majority Leader Chuck Schumer (D-NY), and Senator Elizabeth Warren (D-MA) have repeatedly called on Biden to cancel $50,000 in student loan debt immediately via executive order on the premise that there is sufficient legal backing for the administration to do so.
The Fed researchers, using data from the New York Fed/Equifax Consumer Credit Panel, estimated the cost of two federal loan forgiveness proposals, one for $10,000 and another for $50,000. They found that limited forgiveness and placing income caps on who would be eligible would “distribute a larger share of benefits” to low-income borrowers while also reducing the cost of forgiveness.
Rep. Pressley has repeatedly stressed that women and people of color hold significant levels of student loan debt and that cancellation would represent a massively impactful form of relief given the disproportionate burden.
Tax cuts remain a powerful tool to entice people and firms, and the pandemic has triggered a new tax war. After the lockdowns, states and cities predicted unprecedented revenue drops. Instead, economies bounced back quickly from the pandemic, partly because of widespread adoption of remote work and extensive federal aid from the Trump and Biden administrations — hundreds of billions of dollars in unemployment benefits (which kept individuals spending money), business loans and funding for local governments to fight COVID-19.
The March 2021 Biden stimulus then provided local governments with an unprecedented $350 billion to bolster their budgets. The revenue gusher has produced state budget surpluses where experts had only recently predicted steep deficits.
Nearly a dozen states, mostly Republican-governed, have used the windfall to cut taxes. Idaho reduced its corporate and individual tax rates and shrank its income-tax brackets from seven to five, producing a $163 million tax cut for residents and businesses. The state also sent $220 million in rebates to everyone who filed tax returns in 2019.
Advocates for higher taxes often say that the levies don’t drive away wealthy individuals or businesses. When New Jersey raised taxes on the wealthy in November 2020, Democratic Gov. Phil Murphy said, “When people say folks are going to leave, there’s no research anywhere that suggests that happens.”
Yet New Jersey, with taxes on the wealthy and on businesses long ranking among the nation’s highest, ranked a dismal 42nd in economic growth over the five years preceding the pandemic, according to one study, and it has been an economic laggard for two decades. Voters in this overwhelmingly Democratic state showed their disapproval in giving incumbent Murphy an extremely narrow victory in his November reelection bid. Polls showed that most voters favored the Republican position on cutting taxes over Murphy’s.
Productivity gains in consumer electronics have not been able to exceed the erosion of the currency’s value.
Bills such as Build Back Better are just a piece of the reason — we have more coming. We have a huge demographic issue, and a huge Social Security and Medicare bill not yet paid. Shoveling out more money and writing more IOUs will not help matters.
The Federal Trade Commission said Monday that it is investigating the causes behind ongoing supply chain disruptions and how they are “causing serious and ongoing hardships for consumers and harming competition in the U.S. economy.”
The FTC said it is ordering Walmart, Amazon, Kroger, other large wholesalers and suppliers including Procter & Gamble Co., Tyson Foods and Kraft Heinz Co. “to turn over information to help study causes of empty shelves and sky-high prices.”
Orders also are being sent to C&S Wholesale Grocers, Inc., Associated Wholesale Grocers, Inc. and McLane Co, Inc.
Fifteen state financial officers sent a letter to U.S. banks last week noting $600 billion in assets they pledge to take elsewhere if the financial institutions embrace corporate wokeism and prohibit financing to the fossil fuel industry.
Led by West Virginia Republican Treasurer Riley Moore, the group promised “collective action” in the form of an “economic boycott.”
Signatories to the letter putting banks on notice include chief financial officers from Arizona, Arkansas, Idaho, Louisiana, Missouri, Nebraska, North Dakota, South Carolina, South Dakota, Utah, Wyoming, Alabama, Texas and Kentucky, in addition to West Virginia.
The Biden administration is trying to prohibit California from receiving billions of dollars in new federal aid because, the administration claims, the state’s 2013 Public Employee Pension Reform Act (PEPRA) denied workers the right to bargain for changes to their retirement benefits. The move could undermine state-worker pension reforms passed over the last decade.
In a letter to the state, the Department of Labor says that the 2013 pension-reform act “significantly interferes” with the collective bargaining rights of public employees, including transit workers. As a result, California risks losing some $12 billion in transportation money, most of it from the recently passed federal infrastructure bill. The administration is strong-arming the state and its municipalities to choose between tens of billions of dollars in savings for a deeply indebted pension system and grants from Washington. And its move raises serious questions about similar reforms enacted by other states that allow collective bargaining by public employees, including New York and New Jersey.
The Labor Department’s ruling, California governor Gavin Newsom said in a letter to Walsh, “deprives financially beleaguered California public transit agencies that serve essential workers and our most vulnerable residents of critical support, including American Rescue Plan Act funds that those agencies need to survive through the pandemic.” Newsom called the decision a “complete reversal” from a 2019 ruling by the Labor Department, which held that the state’s pension reforms did not represent a violation of federal law.