Relief checks news summary | 30 May 2023
US FINANCE: LATEST UPDATES
Headlines | Tuesday, 30 May 2023
- House committees to begin turning Biden and McCarthy US debt ceiling deal into law
- 10 Jobs that could be at risk in the future due to AI
- The day the US could default on its debts, otherwise known as the 'X Date', extended from 1 June to 5 June
- US employment still going strong with fewer initial UI claims than expected, continuous UI claims drop
- The median selling price of homes sold in the US fell to $420,800 in April, the lowest level recorded in the last year.
- Experts remain divided over whether the Fed will announce another rate hike in June.
- The impact of a default could present greater challenges for some states over others.
- Can President Biden use the Fourteenth Amendment to increase the debt limit?
Read more from AS USA:
Like much of the agreement reached between the White House and Congressional Republicans over the debt ceiling, the terms related to student cancellation are much less significant than what GOP leaders are trying to tell their caucus.
Read more on the agreement in our full coverage.
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Each month, the Social Security Administration (SSA) sends Social Secuirty checks and makes payments for Supplemental Security Income (SSI), in addition to distributing disability and survivor benefits.
The SSA is preparing to send out June benefits, and certain beneficiaries will receive a double payment next month. Here’s who’s eligible, the amounts, payment dates, and why sometimes two payments are made.
Over the next ten years, the Bureau of Labor Statistics estimates that around 2.1 million jobs will be lost, with one of the main drivers being the growth of automation and artificial intelligence (AI). However alarming that statistic may be, the BLS also projects the economy to add 10.4 million jobs by 2031. Together this means that the US economy will see around eight million jobs created over the next decade.
When trying to identify the ten jobs more threatened by AI, we must consider if we are talking about the total number of jobs lost or the percent of jobs lost for a certain profession. This is where the distraction between AI and automation, as they relate to job erasure and creation.
Read more for what jobs are at risk in our full coverage.
Right-wingers vow to stop debt ceiling negotiations
Considering it has been thrashed out by two of the most senior politicians from both parties there should be broad bipartisan agreement to get the bill passed. Expect many votes against it from progressive Democrats and right-wing Republicans.
“It has historic reductions in spending, consequential reforms that will lift people out of poverty into the workforce, rein in government overreach - there are no new taxes, no new government programs,” boasted McCarthy.
But not everyone in his party is pleased.
Twitter's value is hurtling downward
It’s been seven months since Elon Musk took over Twitter after a long-drawn out, tumultuous negotiating period. There has been a lot of controversy since he positioned himself at the helm of the social media platform, including massive layoffs and a wave of right-wing dominance on the platform.
He closed the deal to acquire Twitter on Oct. 28, after paying his original officer price of $54.20 a share for a grand total of approximately $44 billion. Now it is worth a third of that.
Negotiations for the debt ceiling concluded over the weekend, potentially staving off a debt default and government shutdown. Measures include: keeping non-defence government spending flat, temporarily expand work requirements for certain adults receiving food stamps, and cut IRS funding amongst other agreements.
It “represents a compromise, which means not everyone gets what they want,” conceded President Biden.
Congress begins its motions on the debt ceiling vote
The agreement reached by lawmakers needs to be approved by both houses of Congress, needing a majority vote to get over the line. Wednesday is the first day legislators can vote on the proposals.
The House Rules Committee will hold a hearing at 3 p.m. on Tuesday which will decide the the rules and length of voting time, while senators “should prepare for potential Friday and weekend votes,” according to Senate Majority Leader Chuck Schumer.
Once the bill passes both the House and the Senate, it is sent to the President for approval. Joe Biden will sign the bill into law after he played a key role in negotiating it.
The economy of the United States could be facing a crisis very soon if the White House and Congress fail to agree on raising the debt ceiling.
The ceiling refers to the limit of money that the federal government can borrow. While the Biden administration seeks to increase funding, lawmakers- mostly Republicans- refuse to do so unless spending is cut. The last time the ceiling was raised was in December 2021, increasing the total budget to $31.4 trillion.
According to Treasury Secretary Janet Yellen, the federal government may no longer be able to meet its financial responsibilities as of June 1, and would therefore face a default. This would affect a broad range of payments from the military to civil servants, as well as those receiving Social Security.
The digitisation of banking has been a swift revolution in the US. It really took off during the covid-19 pandemic. Forbes reported back in March that 78% of Americans prefer to bank on an app or website rather than in person. Predictably, as this number has increased the amount of erroneous transation has too.
The easiest way to prevent errors in sending payments is by double-checking all payment details before confirming transactions.
If a wrong payment has already been sent,then take these measures to keep the money safe.
Tax season was over for most people a month ago, with many already getting back their returns. It’s a good time to think about next year since you can look at your 2022 return to help you plan for the next filing.
Here are some ways to save on your taxes next year.
Debt ceiling deal shifts focus to possibility of rate hike Fed
Markets responded favorably the announcement of a deal between President Biden and Speaker McCarthy to raise the US debt ceiling and avoid a default. While there could still be a bumpy week ahead as Congress rushes to complete the legislation to put it into law before the 5 June X Date, investors’ focus is shifting.
They will be watching for new US economic data reports due out this week, primarily the May 2023 Job Openings and Labor Turnover Survey (JOLTS) due out on Friday 2 June. According to a Reuters survey experts forecast 180,000 new jobs were added in May. That is less than the 253,000 the month before, but would still show strong growth in the US labor market.
Added to the Commerce Department’s better-than-expected GDP and PCE inflation numbers Wall Street has already begun to price in another rate hike by the Federal Reserve. According to the CME FedWatch Tool, future traders sent the probability of a 25-basis point hike soaring from just under 26% to over 64%.
The Biden government and Congress continue to be at an impasse regarding lifting the debt ceiling, and unless the situation is resolved, the US could default on its debt as early as June 1, which would spell disaster for the economy.
Economists have been making predictions about how a default or even a breach of the ceiling could affect the country. If the US ends up with a full-fledged default, it will have an impact on people who receive government funding, including those who are sent food aid and Social Security payments.
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Although the pandemic has reached manageable levels, inflation continues to be high and many families continue to have difficulties with putting food on the table. This has prompted some states to offer their help in the absence of a fourth federal stimulus check.
These states have chosen to provide their own form of financial assistance. Here are six states with aid projects for 2023.
With June just a few days away, here is some important news.
Every month, the Social Security Administration (SSA) issues millions of payments to beneficiaries of the Social Security Program, who are mostly retired workers and people who receive Supplemental Security Income (SSI).
In fact, the latter will see an increase in their monthly checks starting in June thanks to the complementary payment plan approved in 33 states across the nation.
Biden-McCarthy debt ceiling deal could be held up in House Rules Committee
While President Biden and Speaker McCarthy reached a deal on raising the debt ceiling on Saturday evening, the challenges to make it law are just beginning. The first showdown in the House will happen on Tuesday when the House Rules Committee meets.
Two members of the nine members of the Republican-controlled panel have said that they will oppose the agreement. The include Reps. Chip Roy of Texas and Ralph Norman of South Carolina.
Technically, with the help of the four Democrats on the panel, voting on legislation for the deal could move forward. However, McCarthy agreed when elected Speaker that nothing would pass the Rules Committee without at least 7 GOP votes.
So all eyes are on Rep. Thomas Massie of Kentucky who hasn’t voiced an opinion on the debt ceiling and spending deal. The committee meets at 3 pm ET on Tuesday.
President Biden says he is confident Congress will approve the debt ceiling agreement
Q: Mr. President, give us an update on the debt ceiling deal. Are you confident it’ll pass Congress?
THE PRESIDENT: Look, you know I never say I’m confident what the Congress is going to do. But I feel very good about it. I’ve spoken with a number of the members. I spoke to McConnell. I spoke to a whole bunch of people. And it feels good. We’ll see when the vote starts.
And, look, one of the things that I hear some of you guys saying is, “Why doesn’t Biden say what a good deal it is?” Why would Biden say what a good deal it is before the vote? You think that’s going to help me get it passed? No. That’s why you guys don’t bargain very well.
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After negotiations lasting several months, United States President Joe Biden has agreed a tentative deal with his Republican opponents to raise his government’s $31.4 milion debt ceiling and avert a default.
The Treasury had warned that the US would run out of money and be unable to meet its financial obligations by 5 June if no deal was reached.
The Federal Open Market Committee (FOMC) is due to meet 13 and 14 June to decide on its future policy regarding interest rates. Since March 2022, the US central bank has raised rates at each meeting ten consecutive times. Those increases have pushed the overnight bank funding rate from near zero to the range of 5.00% to 5.25%.
There had been hope after the last meeting in May that policymakers would hold off on any more rate hikes. However, new economic data last week showed that the US economy is powering forward and inflation is not abating as much as the Fed would like.
That has Wall Street preparing for another hike.
Last year, after inflation reached historical levels, several states across the US approved the sending of stimulus checks and tax refunds to their residents to provide economic relief in the face of high prices.
The number of states that are sending money is decreasing, but residents of some cities and counties in the United States may be eligible to participate in pilot guaranteed income programs that have been set up and that will issue payments of $500 or more each month.
Here's a look at programs providing those who are eligible with monthly payments as part of these initiatives.
There are options available for getting friends and family to help you pay off a loan with their money. Dangers of someone else paying off your debt include the usual legal wrangling but another factor to consider is its impact on personal relationships, as money often does.
Examples in which you may need help with your debt include student loans and mortgages.
Debt ceiling deal will restart student debt payments
To give borrowers some respite during a period of extreme economic insecurity, former President Trump imposed a pause on student loan debts. This meant that borrowers were temporarily freed from the requirement to make repayments and also that interest stopped accruing on the outstanding balance.
This had been continuously extended over his presidency and as well under Biden. While payments were scheduled to restart at the end of August, the deal will prevent Biden from implementing any additional extentions should the need arise.
Finance and economic news: welcome
US markets will be open for the first time, due to the Memorial Day holiday, since President Biden and Speaker McCarthy reached a deal on raising the debt ceiling. While the reaction to the agreement was welcomed initially by global investors trading was down in markets outside the US on Monday. However, spirits remain positive in the States.
The compromise was the first hurdle to avoid a first ever national default, but now party leaders must convince lawmakers in their respective parties in Congress to pass the necessary legislation before X Date set to fall on 5 June. With just one week to go, the next hurdle may be even more difficult as House committees work out the appropriation bills to put the plan into law.
Some Republicans feel the spending cuts aren’t big enough, while some Democrats concerned expanded work requirements for benefits will lead to vulnerable parts of the population losing access to vital aid.