Overnight Finance

On The Money: White House reviewing if Biden can cancel student loan debt | Senate signals broad support for more targeted relief checks | Romney proposes monthly payments for families with children

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Happy Thursday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL—White House reviewing whether Biden can take action to cancel student loan debt: The White House is mulling whether President Biden can take unilateral action to cancel federal student loan debt, press secretary Jen Psaki said Thursday, as progressives push the administration to provide relief amid the coronavirus pandemic.

“The President continues to support the cancelling of student debt to bring relief to students and families,” Psaki tweeted. “Our team is reviewing whether there are any steps he can take through executive action and he would welcome the opportunity to sign a bill sent to him by Congress.”

Why it matters: Psaki’s statement is the first indication that Biden may be willing to forgive student loan debt through executive action, something he’s declined to support before and doubted he would be able to do legally.

Biden had previously called for $10,000 of student debt forgiveness per borrower through an act of Congress, not executive action, and Psaki reiterated the president’s position hours before her tweet opening the door to unilateral forgiveness.

The progressive push for forgiveness: The White House comment came hours after a group of Democratic lawmakers led by Senate Majority Leader Charles Schumer (N.Y.) and Sen. Elizabeth Warren (Mass.) reintroduced a measure calling on Biden to forgive up to $50,000 in federally held student debt per borrower.

  • The resolution from Schumer, Warren and Democratic Reps. Ayanna Pressley (Mass.), Ilhan Omar (Minn.), Alma Adams (N.C.) and Mondaire Jones (N.Y.) is not legally binding, but would serve as a formal congressional endorsement of a popular but polarizing progressive proposal.
  • The resolution calls on Biden to instruct the Education secretary to use provisions of the Higher Education Act and forgive up to $50,000 in debt per borrower. It also asks Biden to order the IRS to waive taxes on the canceled loans, since forgiven debt is typically treated as taxable income in the U.S.

“We are not going to let up until we accomplish it, until $50,000 of debt is forgiven for every student in the country,” Schumer said during a Thursday press conference. “Let’s get it done.”

I’ve got more here.

LEADING THE DAY

Senate signals broad support for more targeted coronavirus relief checks: The Senate signaled broad bipartisan support on Thursday for the next round of coronavirus stimulus checks to be more targeted.

The chamber voted 99-1 on an amendment from Sens. Joe Manchin (D-W.Va.) and Susan Collins (R-Maine) related to “targeting” the checks and making sure that “upper-income taxpayers are not eligible.”

  • The vote is non-binding and the budget resolution to which senators attached the proposal doesn’t get signed into law. 
  • But the margin signals overwhelming support in the Senate for tightening the phase-out structure of the next round of checks as Congress crafts the COVID-19 relief bill that Democrats want to pass by mid-March.

The Hill’s Jordain Carney breaks it down here.

Romney proposes monthly payments for families with children: Sen. Mitt Romney (R-Utah) on Thursday unveiled a proposal to provide monthly payments to families with children.

The proposal comes as many Democrats have similarly expressed interest in providing payments to families with children on a monthly basis.

Breaking down the plan: Under Romney’s proposal, the existing child tax credit would be replaced with monthly payments of $350 for children ages 5 and under and $250 for children ages 6 to 17. Families would be capped at monthly payments of $1,250.

  • All children with Social Security numbers would be eligible for the payments, and parents would also be eligible to apply to start getting the benefit four months before a child’s due date.
  • The payment amounts phase out for single tax filers with income above $200,000 and married couples with income above $400,000 — the same income phaseout thresholds for the current child tax credit. 
  • The Social Security Administration would administer the monthly payments, and people would reconcile any overpayments or underpayments with the IRS when they filed their tax returns.

The Hill’s Naomi Jagoda walks us through the plan here.

GOOD TO KNOW

  • President Biden on Thursday formally withdrew Judy Shelton’s nomination to the Federal Reserve Board, closing the book on her quest to join the central bank.
  • The S&P 500 closed at a record high of 3,872 on Thursday, up 42 points, or 1.1 percent, as markets seized on positive economic data.
  • Initial jobless claims in the last full week of January fell to a seasonally adjusted 779,000, a drop of 33,000 from the previous week, but still a historically high level demonstrating persistent troubles in the job market.
  • One in three Americans who relocated during the coronavirus pandemic said they did so due to related financial issues, according to polling from Pew Research Center released Thursday.

ODDS AND ENDS

  • Hershey Co. will be raising the price of its chocolate in 2021 during the holiday season, the company’s CEO said Thursday. 
  • Former President Trump’s banker at Deutsche Bank lost her job in December after an internal probe revealed that she did not properly disclose business that she did with a client.
Tags Alma Adams Ayanna Pressley Charles Schumer Donald Trump Elizabeth Warren Ilhan Omar Jen Psaki Joe Manchin Mitt Romney Susan Collins
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