On The Money — Biden weighs student debt cancellation
President Biden is considering expunging $10,000 of student debt per borrower. We’ll also look at today’s epic stock market selloff, Democrats’ doubts about reviving Build Back Better measures and oil giants’ huge first-quarter profits.
But first, read up on why Florida’s plan to strip Disney’s special status could backfire.
Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.
Biden eyes long-awaited student debt relief
President Biden plans to move forward with student loan debt forgiveness, with two sources telling The Hill he is considering action to expunge at least $10,000 per borrower.
The debt forgiveness would be through executive action and follows the president asking the Education Department to look into his authority to act unilaterally on student loans a year ago, the results of which have not been publicly announced.
“But the door has been open to possibly larger,” a source told The Hill. “Lots of options on the table. They are doing a lot of listening right now.”
- Biden campaigned on forgiving at least $10,000 in federal student loans per person, while others in his party have pressed for $50,000 per borrower or to cancel all student debt.
- The president earlier this week said he is “taking a hard look” at forgiving some student debt, adding that he is not considering the $50,000 debt reduction.
- Earlier this month, the Biden administration extended the pandemic moratorium on federal student loan payments and interest accrual through August.
The background: There’s no timeline set yet on when Biden might act, but it appears increasingly likely that the White House will take action to expunge student debt. Majority Whip James Clyburn (D-S.C.), a key Biden ally, said Friday that he supports the $10,000 number as “a good first step.”
The Hill’s Hanna Trudo, Amie Parnes and Alex Gangitano have more here.
DON’T LOOK AT YOUR 401(K)
Dow plunges 900 points, Nasdaq suffers worst month since 2008
Stocks took steep losses Friday, closing a brutal month with a deep selloff driven largely by falling shares of technology companies.
- The Dow Jones Industrial Average closed with a loss of more than 930 points, a decline of 2.8 percent, on the final trading day of April. The Dow ended April down more than 6 percent from the start of the month and nearly 10 percent from the beginning of 2022.
- The tech-heavy Nasdaq composite took much heavier losses, dropping 4.2 percent on the day and more than 14 percent since the start of April — its worst monthly loss since 2008. The composite is also in what investors consider a bear market after dropping more than 20 percent from a record high set last year.
- The S&P 500 closed with a loss of 3.6 percent and was down roughly 10 percent from the start of the month.
What’s going on? Stocks have fallen steadily through most of the year as a combination of high inflation, economic blowback from the war in Ukraine, stubborn pandemic-related supply challenges and the Federal Reserve’s ongoing interest rate hikes rattled investors. Major technology companies, which powered much of the past year’s sharp rise in the stock market, have been among the biggest losers in the current selloff.
Sylvan breaks it down here.
Read more: Fed’s inflation gauge rose 6.6 percent annually in March
Manchin’s moves leave Democrats doubting their agenda will pass
Sen. Joe Manchin’s (D-W.Va.) latest moves are fueling new doubts that he’ll agree to any sort of legislative package on President Biden’s agenda, deepening Democratic worries about what they’ll be able to deliver to voters by Election Day.
Several Democratic senators say they are growing dispirited about the prospect of Manchin ever giving the greenlight to moving a budget reconciliation package, which would prevent Republicans from blocking Biden’s legislative agenda with a Senate filibuster.
Asked about how much confidence there is in Manchin coming on board with a reconciliation bill, one Democratic senator who requested anonymity to comment on the shrinking chances said there’s “less every day.”
The Hill’s Alexander Bolton tells us why here.
Exxon, Chevron post massive Q1 profits amid soaring gas prices
Energy giants Chevron Corp. and Exxon Mobil Corp. on Friday posted huge profits bolstered by sky-high gas prices and told investors that they plan to keep oil production mostly flat.
Chevron raked in $6.3 billion in the first quarter, quadrupling its profit from the same period last year, while Exxon brought in $5.5 billion, more than double last year’s first-quarter haul.
The oil and gas companies are among the biggest beneficiaries of high gas prices, which rose 44 percent in the U.S. over the last 12 months, according to AAA.
- Despite calls from the Biden administration to increase oil production to bring consumer prices down, Chevron and Exxon executives on Friday said that they would keep production relatively flat.
- Exxon instead announced plans to triple its stock repurchases to $30 billion through 2023, while Chevron said it would repurchase a record $10 billion of stock by the end of the year.
Karl has more here.
Read more: Progressives seize on quarterly oil profits to call for windfall tax
ON TAP NEXT WEEK
- The Federal Reserve’s Federal Open Market Committee (FOMC) begins its two-day monetary policy meeting.
- The Senate Judiciary Committee holds a hearing on credit and debit card swipe fees at 10 a.m.
- The FOMC concludes its monetary policy meeting at 2 p.m. and is expected to announce a 0.5 percentage point rate hike, followed by a press conference with Fed Chair Jerome Powell at 2:30 p.m.
- The Senate Banking Committee holds a hearing on student loan servicers at 10 a.m.
- The Senate Budget Committee holds a hearing “Should Taxpayer Dollars Go to Companies that Violate Labor Laws?” at 10 a.m.
Good to Know
Following two chaotic tax filing seasons resulting in tens of millions of unprocessed returns, the IRS is being urged to develop more free online tax filing tools instead of doubling down on a decades-old program that prevented the agency from competing with private tax preparers.
Since 2002, the IRS has been bound by a noncompete clause in an agreement with Free File Inc., a group of private tax preparation companies that until recently included industry giants H&R Block and Intuit, maker of the popular software TurboTax.
Here’s what else have our eye on:
- Secretary of Energy Jennifer Granholm said she is “optimistic” that Congress will be able to pass aspects of the Biden administration’s Build Back Better program, specifically tax credits for installing clean energy infrastructure, before November’s midterm elections.
That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you Monday.
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