Relief checks, COLA 2023, mortgages, social security payments, housing market, disability | Summary news 31 December
Headlines: Saturday, 31 December 2022
- Personal Consumption Expenditures (PCE) figure fell to 5.5% in Nov as inflation eases
- Last Friday, Congress passed a $1.7 trillion spending bill to fund government through September
- Supreme Court to hear two challenges to student loan forgiveness plan in February
- Medicaid eligibility to be slashed in the New Year after pandemic-era expansion
- US inflation slowed to 7.1% in November
- Fed continues to raise interest rates as inflation starts to ease
- Minimum wage to rise in several US states in 2023
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Biden promises more progress on inflation
"In a world where inflation is rising at double digits in many major economies around the world, inflation is coming down in America."
"Make no mistake — prices are still too high. We have a lot more work to do. But things are getting better, headed in the right direction."
Time to tighten belts
According to Bloomberg, the probability of a downturn in 2023 climbed from 65% odds in November and is more than double what it was six months ago.
The former President / GAELEN MORSE / REUTERS
How Donald Trump avoided paying income tax
Details previously released by the panel showed Donald Trump paid no income tax in 2020, his final full year in office, despite millions of dollars in earnings from his sprawling business empire.
The records show Trump’s income and tax liability fluctuated dramatically from 2015 through 2020, during his first presidential bid and subsequent term in office. They show Trump and his wife Melania Trump claimed large deductions and losses and paid little or no income tax in several of those years. While the average American is paying their fair share to the system, it turns out, unsurprisingly, that the former president was doing everything possible to avoid paying his fair share.
Banks will be open on New Year’s Eve but because of the day New Year’s Day falls upon they won’t be open again until Tuesday 3 January.
IRS warns against impersonators
The IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information and reminds users to be aware of the telltale signs of a scam.
What a year it has been for Elon Musk. From picking a fight with Russian President Vladimir Putin and providing communication networks for Ukraine, to rocket launches with Space-X and then purchasing social media platform Twitter when it had appeared that he really didn’t want to. Then there’s the situation at his world famous car company Tesla, and the year has not ended well for them.
For the past three years travellers have largely had to stay at home due to the pandemic-era travel restrictions. The covid-19 testing requirements were only eased in June 2022, meaning that most people missed out on an international summer holiday this year too.
But that is expected to change in 2023 with a huge jet-setting surge. In the first week of December 62% of searches for 2023 flights were for international destination, with a Hopper report claiming that international travel is set “for a big comeback.”
This trend has been given the moniker ‘revenge travel’ and it could send flight prices soaring in 2023. But this high demand will likely see flight prices skyrocket in the New Year...
Consumer feel inflation in the price of eggs
Inflation has been felt right across the board throughout 2022 and grocery bills have been one of the most susceptible to price rises. One of the products that has risen most sharply is a household staple; eggs. According to official figures from the United States Bureau of Labor Statistics, the price of eggs has reached a record high in the country.
Currently, a dozen Grade A eggs are $3.60, when last year around the same time the price was $1.82. Large Midwestern eggs have fetched a price of $5.60, according to Egg Price Current; which means that prices are up about 49 percent compared to a year ago.
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The passing of Congress’ $1.7 trillion omnibus package provided the funding required to prevent a partial government shutdown over the holidays. That bill was required to keep federal programs running for 2023, but some major changes were included in the final package to ensure it passed.
Chief amongst those changes was a provision that will allow states to remove millions of people off Medicaid from April 2023. The Kaiser Family Foundation estimates that roughly 20% of current recipients could lose Medicaid coverage.
Here's who could miss out on the coverage in the new year...
What is in the $1.7tn spending bill?
President Biden has signed into law a $1.7 trillion omnibuc spending bill to avert a partial government shutdown. The massive package drew bipartisan support in Congress and will ensure that the government is able to continue with its work into the New Year.
Here's what the mammoth spending bill contains...
A St Louis Court of Appeals ruled that the government could not distribute the support until the states’ legal challenge had been heard. However the White House is arguing that this would leave borrowers in a state of limbo for an unacceptable amount of time.
In the administration’s filing to the Supreme Court, Solicitor General Elizabeth Prelogar wrote: “The Eighth Circuit’s erroneous injunction leaves millions of economically vulnerable borrowers in limbo," demanding a swift resolution.
The Supreme Court has scheduled hearings to begin in early 2023, so how long could it be until the support arrives?
Social Security offices closed for New Year's
With New Year's Day falling on a Sunday this year, the federal holiday marking the start of the year has been shifted one day forward, to Monday 2 January. This means that Social Security offices, like that of many federal agencies, will be closed on Monday. Bear this in mind if you have any burning questions related to the upcoming COLA increase for benefits payments.
The most well known change to the 401k retirement plan at this stage is the increase of the contribtution limits.
The IRS will increase the contribution limit by $2,000 to $22,500 for 2023. Workers who are saving for retirement with 401(k), 403(b), most 457 plans, and the Thrift Savings Plan can contribute up to $22,500 to those plans in 2023.
However, it isn’t just the contributions limits that are increasing. We take a look at the other changes in store for 2023...
What does the COLA figure for 2023 mean for me?
From January onwards Social Security recipients will get a significant boost to their monthly payments, thanks to the bumper cost of living adjustment (COLA) announced for 2023. Every year the Social Security Administration (SSA) imposes an increase on the payments to ensure that the monthly suuport remains roughly in line with inflation.
After huge price rises across 2022, the COLA increase for 2023 will be a whopping 8.7%. Here's what that means for recipients...
Debate has raged for years on what is to be done about the minimum wage in the US. It has not changed since 2009 and sits at $7.25 an hour, an unliveable amount for Americans in an era of abnormally high inflation. According to the Economic Policy Institute (EPI), workers on the federal minimum wage have as much purchasing power as someone in the 1950s
President Biden had campaigned on a $15 minimum wage in 2020 but no movement has been made on the issue at a federal level. Here's the states where that could be on offer in 2023...
Anti-inflation effort hurt markets
Inflation has been the defining economic trend of 2022 and, as we reach the year's end, there is clear evidence that the measures introduced to tackle it are having broader consequences. Price rises have hurt Americans throughout the year and the Federal Reserve has implemented interest rate hikes to curb growth. However this is having a clear impact on the markets, which have fallen by nearly 20% across 2022.
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The Social Security Administration in the United States released the biggest cost-of-living increase in more than four decades. With a rate of 8.7% announced for 2023, this historic COLA will significantly increase the maximum Social Security payout.
Here's what that could mean for your monthly payments...
Inflation remains a major concern going in 2023
Recent polls show continued pessimism over America’s future, with about two-thirds of voters saying the country is headed in the wrong direction amid anxiety about the economy, despite recent signs inflation has peaked.
More than two-thirds of Americans (70%) said the country is not on the right track, according to a State Policy Network/Morning Consult poll. More than half (55%) said their state was also headed in the wrong direction.
Buttigieg takes aim at Southwestern Airlines
SouthWest Airlines has canceled thousands of flights as its operation collapsed in the wake of the Winter Storm Elliot. Things went into a tailspin after two of its major hubs were buried under snow snarling traffic in and out. The chain reaction has left travelers that had booked flights with the carrier stranded across the nation and lost baggage piling up.
While airlines are not required to compensate ticket holders for expenses incurred when a flight is canceled Soutwest has said that it "will honor reasonable requests for reimbursement for meals, hotel, and alternate transportation."
Transportation Secretary Pete Buttigieg is planning on holding the carrier to written commitments that it and other airlines made this summer after another bout of travel chaos developed as Americans began to travel again in mass but airlines and airports had trouble handling the surge in demand.
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We'll have all the latest news and information from the United States as the COLA increase for 2023 is set to go into effect next month. Here's everything you need to know...