Relief checks news summary | 29 May 2023
US Finances: Latest Updates
Headlines | Monday, 29 May 2023
- Biden, McCarthy reach tentative US debt ceiling deal
- 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:
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.
The Social Security Administration continues to send monthly benefits to retired workers in 2023. The SSA is also responsible for sending Supplemental Security Income benefits, disability and survivor benefits. Here are the payments for the month of May.
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.
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.
The United States is on the brink of its first default. In recent months, the Republican leadership in the House of Representatives and the White House have been in negotiations to raise the debt ceiling limit. On Saturday evening President Biden and Speaker Kevin McCarthy reached a tentative deal which Congress must pass in order for it to be signed into law.
Lawmakers in Congress must move fast to get the legislation to Biden's desk before 5 June.
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.
Mitt Romney gives his blessing to the debt ceiling agreement, calls for passage
This deal is good for the country in that it prevents a default and subsequent financial meltdown, while also limiting spending. In addition, House leadership successfully fought for conservative priorities like work requirements for TANF and SNAP, and reduced permitting review timelines.
While I would have preferred to see an agreement that also addressed entitlements, this represents a good-faith bipartisan compromise, and I’m hopeful the House and Senate will pass it into law in the coming days.
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.
You have until July 17 to claim your 2019 tax refund
The IRS is reminding nearly 1.5 million people with unclaimed refunds for tax year 2019 that they face a July 17 deadline to submit their tax return.
The agency estimates almost $1.5 billion in refunds remain unclaimed because people haven't filed their 2019 tax returns yet. The average refund is $893 for the year, and the IRS has done a special state-by-state calculation to show how many people are potentially eligible for these refunds.
"The 2019 tax returns came due during the pandemic, and many people may have overlooked or forgotten about these refunds," said IRS Commissioner Danny Werfel. "We recommend taxpayers start soon to make sure they don't miss out."
Under the law, taxpayers usually have three years to file and claim their tax refunds. If they don't file within three years, the money becomes the property of the US Treasury.
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.
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.
Job growth data for May 2023 due out on Friday expected to show slowdown
The US Labor Department will release its May 2023 Job Openings and Labor Turnover Survey (JOLTS) on Friday. Economists are expecting to see slower job growth with an additional 195,000 new payrolls compared to 253,000 the month before. Likewise, wage increases are forecast to have slowed from 0.5% in April to 0.3% in May month over month with an annual rise of 4.4% the same as last month’s report.
Meanwhile, unemployment is predicted to tick up slightly to 3.5%. However, experts have been consistently underestimating the number of new jobs each month.
At any rate, those numbers are still stronger than policymakers at the Federal Reserve are most likely comfortable with. Wall Street is bracing for another interest rate hike when the Federal Open Market Committee (FOMC) meet in two weeks after hotter-than-expected GDP and Personal Consumer Expenditure data last week.
It’s springtime and that generally means the rush to go house hunting. This year, however, would-be homebuyers are entering a market where fewer homes are available than had been the norm prior to the covid-19 pandemic but slightly better than the past two years. Homebuyers also have to contend with higher mortgage rates on top of elevated home prices.
As prospective homeowners look for a new residence, they can look to these cities for a better deal.
Home buyers' pessimism about market hits new low
Only 21% of adults say it’s a good time to buy a house, according to a new Gallup poll, a record low since 1978 when the company began conducting its annual poll. It’s down nine percentage points from a year ago, and it's the second time the figure has dipped below 50%.
The latest results are from Gallup’s annual Economy and Personal Finance poll, conducted April 3-25, and comes at a time when elevated mortgage rates, high home prices and low inventory levels have slowed the housing market.
Center on Budget and Policy Priorities criticises debt ceiling plan
News that Congress is close to agreeing a deal to end the debt ceiling stand-off came as a relief to many, but there is still concern about the nature of the compromise that was struck. The Center on Budget and Policy Priorities has warned that the level of future spending cuts included in the provisions pose a real risk to very low-income older adults.
President Biden has struggled to improve his approval ratings in recent months and it does not look like this deal will do much to change that.
Congress has one week to pass debt ceiling increase or US will default
President Biden and Speaker McCarthy reached a deal on raising the debt ceiling which would keep the federal goverment funded for the next two years. In order to increase the amount that the nation can borrow, spending cuts and expanded work requirements for SNAP were agreed to.
"The agreement represents a compromise, which means not everyone gets what they want. That’s the responsibility of governing," said Biden.
Both leaders must now convince members of their parties to pass legislation to put what was agreed to into effect. Lawmakers in Congress have just one week to do so before the US hits the X Date, the day the federal government would not be able to pay all its bills and thus default. The date has been pushed back from 1 June to Monday 5 June.
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.
President Joe Biden and Republican House speaker Kevin McCarthy have tentatively agreed on a deal to raise the federal government’s $31.4 trillion debt ceiling. However, as McCarthy stated after the latest discussions had come to a conclusion, “there is still a lot of work to do”.
Economists have attempted to predict the consequences of a “catastrophic default”, the term used by President Biden on social media. What effect will the new debt ceiling deal have on the economy?
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.
Americans celebrate Memorial Day every year to honor and remember US military personnel who have sacrificed their lives in the line of duty.
The holiday is also considered by many to herald the start of summer, and the long weekend provides the perfect opportunity to make that first beach excursion.
Whether you decide to go on a road trip, hold a barbecue cookout with friends and family, or simply relax at home, it is likely that you will be needing some supplies. Here’s a list of stores that will be open.
Finance and economic news: welcome
President Biden and Speaker McCarthy have reached a deal on raising the debt ceiling clearing the first hurdle to avoid a first ever national default. Now they must convince lawmakers from 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 with some Republicans feeling the spending cuts aren’t big enough. As well some Democrats concerned expanded work requirements for benefits will lead to vulnerable parts of the population losing access to vital aid.