Relief checks news summary | 17 January 2023
Finance, inflation, social security: latest news
Headlines | Tuesday 17 January 2023
- Bitcoin sees rally going above $20,000 for first time since November
- The World Economic Forum in Davos kicked off to discuss the future of the world economy
- Treasury warns that US will reach debt ceiling limit on Thursday
- Inflation fell 0.1 percent in December, bringing annualised rate down to 6.5 percent.
- Many now look to the Federal Reserve to see how it will respond to faling inflation.
- BLS reports an average increase of 0.4 percent in real wages for all workers in December.
- IRS delays implementation of $600 reporting requirement for those whose business is paid through Venmo or PayPal.
- Markets respond positively to news of decreasing consumer prices
- The relationship between increasing interest rates and the Mega Millionsjackpot
- The more generous SNAP benefits provided to vulnerable families early in the pandemic will return to their previous amount in February 2023
House GOP rejects call for debt ceiling increase
We could be in for a months-long spell of squabbling in Congress after recently-installed House Speaker Kevin McCarthy confirmed that he will not allow a debt ceiling increase to be passed without some promises on spending cuts. The Republicans in the House of Representatives have railed against President Biden's large-scale spending packages and see this as a chance to reduce federal costs.
US closes in on debt ceiling limit
Treasury Secretary Janet Yellen is preparing a number of "extraordinary measures" in a bid to prevent the United States defaulting on its debt obligation when it reaches the debt ceiling later this week. The maximum amount of debt that the US government is able to accrue is limited by legislation, and Yellen estimates that the country will hit that upper threshold on Thursday.
Those measures can ensure that sufficient funds are available for the next few months, but the onus is now on Congress to agree to a debt ceiling increase before a catastrophic default.
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The past few years have been chaotic for the tax authority, with covid-19 interfering in a variety of ways. As a result of that disruption a huge backlog of unprocessed returns, many several years old, built up. In a bid to boost the agency’s capabilities President Biden included additional funding for the IRS in the Inflation Reduction Act passed last year.
Acting IRS Commissioner Doug O’Donnell said: “This filing season is the first to benefit the IRS and our nation’s tax system from multi-year funding in the Inflation Reduction Act.”
“With these new additional resources, taxpayers and tax professionals will see improvements in many areas of the agency this year,” he added.
The Walton family, owners of grocery store chain Walmart, were worth an estimated $224.5 billion in 2022, making them by far the wealthiest family on the planet. They are the United States’ largest private employer but they have also become known for offering low salaries to workers.
Over the years there have been countless campaigns and protests about their typical wages, and a number of major strikes in the past decade. In response to the backlash, the company claims to have boosted workers’ salaries significantly in recent years.
Here's how much Walmart workers typically make...
Senators attend Davos meeting on global issues
During an appearance on-stage at the World Economic Forum in Davos, Sens. Kyrsten Sinema and Joe Manchin reflected on their role in the Upper House, preventing any changes to the controversial filibuster rule.
WHen the issue was raised, Sen. Manchin said that he and Sen. Sinema were still of the belief that the filibuster should remain, and the pair high-fived.
“While some would say that there were reluctant folks working in Congress in the last two years,” Sen. Sinema added, “I would actually say that was the basis for the productivity for some incredible achievements that made a difference for the American people in the last two years.”
According to the Social Security Administration, the average monthly benefit for people receiving Social Security at age 65 in 2022 is around $2,484. According to the government, seniors over 65 receiving Social Security get an average yearly payout of $29,806. In 2023, seniors 65 and older may anticipate an annual payout of $30,708, or $2,559 per month.
Musk not the only person to fall from a high perch
The previous record for the most money lost by one person was $58.6 billion, set by Japanese tech investor Masayoshi Son in 2000, according to the Guinness report.
Son made his money during the dot-com bubble in 1999 and 2000, supposedly making $10 billion a week. However the same bubble turned into a crash when these startups ran out of investment and failed to turn a profit. The same Nasdaq market lost nearly 80% of its entire value by fall 2002, wiping out any investments people had made.
Elon Musk had quite a bruising 2022. While being monstered on Twitter daily, the South African-born billionaire lost the not inconsequential amount of $182 billion. While it wasn’t like he burned all that in cash, it still represents a lot of investing power that has disappeared.
In 2022, Tesla stock (TSLA) lost around 65% of its value as the company missed a number of growth targets and was forced to scale back production in China. Investors were also reportedly unhappy with Musk’s constant involvement in running Twitter as well as the billionaire selling billions of Tesla stock to finance the move, dropping its value.
Despite losing the huge amount of money Musk is still the second richest person on the planet after French billionaire Bernard Arnault.
Potential homebuyers—and most people—shudder at the phrase “recession.” The 2008 recession devastated the real estate business. Sales fell, houses were foreclosed, and the market collapsed.
If you’re smart, purchasing a property during a recession may save you money! In addition, If you’re considering purchasing a property, you may have a different worry than other consumers: how long each upswing and recession will endure and how severe it will become. Is buying during a recession risky?
DOJ puts makers and users of tenant-screening software on notice
The Department of Justice put the makers of tenant-screening software and the landlords who use the algorithms on notice. The software must comply with the Fair Housing Act which prohibits discrimination on the basis of race, disability, religion, or national origin. The tenant-screening software assigns a score to people seeking to rent that landlords use to select potential tenants.
However, due to the software often encountering obstacles such as mistaken identity, especially for people of color with common last names the algorithms could be contributing to historically persistent housing discrimination.
“Housing providers and tenant screening companies that use algorithms and data to screen tenants are not absolved from liability when their practices disproportionately deny people of color access to fair housing opportunities,” read a statement from Kristen Clarke, leader of the civil rights division at DOJ.
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According to the Bureau of Labor Statistics’ summary of the Consumer Price Index (CPI), the year-on-year inflation rate was 6.5 percent at the end of December last year, representing a drop compared to November when this indicator was 7.1%.
Even as inflation has fallen, several states will continue to send inflation relief checks, sometimes referred to as stimulus checks, or tax refunds in January 2023 and beyond, which were approved last year to provide relief from high prices.
Assistance for veterans to avoid eviction
Rents soared over the past year increasing on average 8.3% nationally. Not to mention that utilities have been rising as well with electricity and gas jumping over 14% and 19% in the 12-months through December respectively.
This has placed a major financial burden on many households. While prices increases are beginning to slow, even fall in some cases, many are still struggling. To help veterans avoid eviction, get help paying housing expenses or utilities, staff at Veterans Affairs are available to offer assistance.
They urge anyone who knows a veteran experiencing difficulties to contact the Veteran Affairs’ National Call Center for Homeless Veterans at 1-877-4AID VET or (877) 424-3838. Calls are answered 24 hours a day, 7 days a week.
When seeking out a job, either for the first time or looking for a change, it can help to know what the employees of a company think about their workplace. To help job seekers in that endeavor Glassdoor has released its 15th annual Employees’ Choice Awards, listing the 100 best companies to work for.
Important dates for tax season 2023
13 January: IRS Free File opens
17 January: Due date for tax year 2022 fourth quarter estimated tax payment.
23 January: IRS begins 2023 tax season and starts accepting and processing individual 2022 tax returns.
27 January: Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people – including the option to use prior-year income to qualify.
18 April: National due date to file a 2022 tax return or request an extension and pay tax owed due to the Emancipation Day holiday in Washington, D.C.*
16 October: Due date to file for those requesting an extension on their 2022 tax returns.
*Italics marks the ending of main tax filing season
Taxpayers can begin using Free File for 2022 tax declarations
While the official start of the 2023 tax season doesn't kick off until 23 January, those that qualify to use IRS Free File, roughly 70% do, can get started now. Americans have until 18 April to submit their 2022 tax declaration or file for an extension. But all tax due will still need to be paid by Tax Day.
Falling asset prices could help explain increase in labor force participation
The covid-19 pandemic caused great disruptions across the economy. One of the acute problems that arose was the record number of people who left the work force leading to significant labor shortages. While fear of contracting the disease was a driving force for older workers, increased asset prices during 2020-2021 also gave that group of workers the ability to stay out of the labor market.
However, the past year has seen asset values take a beating which may partially explain an increase in older Americans returning to the work force. Other factors that could be encouraging their return include the reduced perceived danger from the virus and more attractive working arrangements due to the tight labor market.
We all know that receiving and cashing a check when you have a bank account is very easy. Simply walk into the bank and the money will be deposited into your account.
However, it’s a bit more difficult for people who do not have a bank account. It is estimated that 4.5% of US households do not have a checking or savings account according to the Federal Deposit Insurance Corporation’s survey. This equates to 5.9 million people.
Fortunately there are options available for those without a bank account to cash checks, though it may come at a cost. It is worth researching in your locality which is the cheapest option.
Oliver Povey takes a look.
Debt ceiling: what's it all about?
Across this week we're going to be discussing aspects related to the US debt ceiling so, in case you're not au fait with the term, here's a little summary.
The debt ceiling is a legislative limit on the amount of national debt that the United States government is authorized to borrow. It is, effectively, intended to ensure that the government does not spend more than it can afford, but it has been a source of political controversy in recent years as lawmakers debate whether or not to raise the limit.
The debt ceiling does not limit the amount of money the government can spend, but rather the amount it can borrow to finance that spending. The United States Congress has the power to raise or lower the debt ceiling, and it has been raised many times in the past.
You could say it's like a credit card limit for the government. Just like you have a limit on how much money you can borrow on your credit card, the government also has a limit on how much money it can borrow. Sometimes they raise it because the government needs to borrow more money to pay for things like schools, roads, and the military. It has caused some problems in the past when Congress doesn't agree -- yeah, that happens quite a bit -- on whether or not to raise it.
Since the modern debt ceiling was first established in 1917, Congress has raised the limit more than 100 times. The frequency of increases has varied over time, with some periods seeing multiple increases in a single year and others going several years without any change.
A government shutdown or defaults on debt payments are what we all want to avoid.
Get used to high inflation, says UBS CEO at Davos
Ralph Hamers, the CEO of finance giant UBS has been speaking at Davos and says he believe that the era of higher inflation than we've been used to in the past "is here to stay."
Is it really a 'Fair' Tax Act?
While US Representative Andrew Clyde promotes the simplicity of the Fair Tax Act, saying that it will be 'eliminating the need for the IRS and establishing a fair system for all Americans,' not everyone agrees.
Joey Palimeno calls it a 'handout to the wealthy' that would 'cripple the middle and working class.'
'Talk about making inflation worse,' he continues, 'this bill would increase the cost of everything we buy, the wealthy would do great.
Employer-sponsored retirement plans like 401(k)s and pensions are becoming more common. Successful savers may utilize either method to maximize employer contributions and other retirement advantages as they prepare for retirement. So what are the distinctions between these two pension programs?
Inflation Reduction Act hailed at Davos
The Inflation Reduction Act has received mixed reviews from some in the European Union. While the commitment to transition to clean energy is welcomed, there are fears that it will put European companies at a disadvantage. The Prime Minister of Spain has called on the continent to look into similar legislation for the trading bloc.
When it comes to creating energy security through clean sources, not since the Paris Accord has there been such an important climate agreement according to the head of the International Energy Agency Fatih Birol.
Can I apply for SNAP if I am a recipient of Supplemental Security Income (SSI)? What does the Social Security Administration say? We explain…
Borrowers looking to get a better interest rate and manage monthly payments may consider consolidating their loans, but it depends on your credit score.
What will be discussed at WEF in Davos
After two years of pandemic-related disruption, Davos returns with its usual format of a week-long winter summit. This year’s World Economic Forum Annual Meeting will run from Monday 16 to Friday 20 January.
A statement on the organisation’s website explains: “The world today is at a critical inflection point. The sheer number of ongoing crises calls for bold collective action.”
“It will provide a platform to engage in constructive, forward-looking dialogues and help find solutions through public-private cooperation.”
Cryptocurrency markets have started the year on the front foot after plunging during 2022. The price of Bitcoin, the most widely-used digital token, has risen by around 26% since the turn of the year and hit $21,000 for the first time since 7 November.
This rise could be a sign that confidence is returning to the market after a tumultuous year beset with interest rate hikes and cryptocurrency scandals.
Where will Bitcoin prices go in 2023?
What next for the world's most popular cryptocurrency? On the basis of recent years' experiences, it's really anyone's guess.
In the first 18 months of the pandemic the cryptocurrency world exploded into the mainstream with a flood of new investors pouring money into the markets. But after extraordinary gains, taking Bitcoin up to $64,000 in late 2021, the comedown has been swift.
BTC lost around a two-thirds of its value in 2022 and rocked confidence in crypto more boradly. But, with the US looking like it's finally emerging from a spell of sustained high inflation, there are hopes that Bitcoin could bounce back this year.
We need to learn. We need to reform some internal aspects of our industrial policies such as state aid, reducing bureaucracy and trying to send a message for the industry worldwide that’s it’s Europe, and of course Spain, that is a good place to locate.
Spanish PM at Davos says Europe must study Biden's Inflation Reduction Act
Spanish Prime Minister Pedro Sanchez told CNBC Monday that the European Union has something to learn from Washington and its new policies to fight inflation. Despite a mixed review from the continental bloc, Sanchez has come out publicly in support of the bill. Spain has some of the lowest inflation in the EU27 at 5.8%.
The legislation, which was approved by lawmakers in August and includes a record $369 billion in spending on climate and energy policies, has received a mixed response from the 27 EU nations.
The World Economic Forum (WEF) is an annual gathering in Davos, Switzerland, attended by corporate and political elites, where pressing topics affecting the global economy are discussed. Issues of politics, economy, society and the environment are all included in this category. But does the shindig of movers and shakers in the Alps have any realy power?
Countries pumped companies with money as the pandemic spread, aiming to keep their values from plummeting. Interest rates were nearly zero for much of 2020 and 2021helped inflate asset prices, the sort of thing billionaires have in abundance. These actions combined allowed the world’s richest to vastly increase their wealth at a time where many didn’t know if their job would still be there when they could stop isolating. In one example, the wealth of UK billionaires grew by 20% in the last two years as well as the number increasing from 147 in 2020 to 177 today.
Good morning and welcome to AS USA
Confidence is building that inflation is coming down and that the Federal Reserve will further slow the pace of interest rate hikes. Markets have reacted positively and Bitcoin, after a year of its value plummeting, is seeing a rebound. Follow along with the latest financial news and information on what is being done to help Americans cope with inflation.