POLITICO NIGHTLY: Debt relief on the docket

 

View in browser   BY KATHERINE LONG Students relax on the front steps of Low Memorial Library on the Columbia University campus in New York. | Ted Shaffrey/AP Photo SEEKING FORGIVENESS — The Supreme Court is set to hear arguments Tuesday about the legality of President Joe Biden’s $400 billion student debt relief program. After its unveiling in August, the program that would provide up to $10,000 in loan forgiveness for most borrowers and $20,000 for Pell Grant recipients quickly generated a lawsuit from six Republican-led states , led by Nebraska and Missouri. While the administration justified the program’s implementation by pointing to the economic hardships brought on by the Covid-19 pandemic, Republican officials and conservative groups claimed it was an abuse of executive power. Nightly’s Katherine Long spoke with Michael Stratford , an education reporter for POLITICO Pro, on what this decision means for tens of millions of borrowers and the legal precedent it will set for federal student loan forgiveness. Can you give us a sense of the scale of this case? How many borrowers are affected? How much money is at stake? Most cases at the Supreme Court are necessarily high stakes, but we can put a pretty eye-catching dollar figure on this one: Roughly $400 billion of student debt relief is hanging in the balance for more than 40 million Americans. More than 25 million applications flooded into the Education Department last fall. Some 16 million were approved before the Biden administration was forced to shut down the program in response to court orders. What legal questions are at issue here? There are a few. The first is whether the six Republican-led states and two Texas student loan borrowers challenging the debt relief program are allowed to sue at all. How will they actually be harmed by debt relief? Missouri has been the focus of a lot of attention in that regard. The state claims it’ll be injured because it may get less money from the Missouri Higher Education Loan Authority , a state-created entity, which will have fewer loans to collect if Biden cancels them. If no party has standing, the case is over and Biden wins. (And many experts think that’s the administration’s best bet for survival.) Otherwise, the justices will turn to the merits of the case, which hinges on the interpretation of a 2003 law known as the HEROES Act. The law says that the secretary of education is allowed to “waive or modify” the normal rules related to federal student loans to prevent borrowers from being “placed in a worse position financially” because of a national emergency. Covid-19 is such an emergency, the administration contends. And it says that canceling debt for most borrowers will help avoid a surge of delinquencies and defaults when payments resume for the first time since the pandemic began. Do we have any indication of where the court stands on any of the questions or issues at stake in this case? That’s always a tough guessing-game to play. But what we know is that the conservative majority on this court has been hostile to Biden’s other pandemic-related emergency actions. It rejected Biden’s workplace Covid vaccine rule and his extension of the eviction moratorium . And, more broadly, the Republican appointees have been deeply skeptical of the administrative powers of federal agencies. They struck down an EPA climate policy last year with a blueprint for reining in other agency actions. One difference — and who knows if it will matter here — is that in all of those cases, the court was balancing a government action against strong business interests: landlords, employers, and other companies. Here we’re talking about the government doling out benefits to student loan borrowers. To be sure, conservatives and many taxpayers might be ideologically opposed to the Biden administration doing that. But there’s no major industry or business interest lining up outside the court to fight it. What happens if the court rules against debt relief? Politically, the Biden administration will blame, as it already has, Republican opponents of its plan for suing to block student debt relief to millions. Practically-speaking, the administration is going to have to make a range of decisions about how, if at all, it’s going to collect loan payments from millions of borrowers to whom it promised relief. Right now, the Biden administration is preparing to resume collecting monthly payments from most federal student loan borrowers in September (for the first time since March 2020). But that could change. What does the outcome of this case mean for Biden’s presidency? If the court halts the program, what are his other options for tackling student debt? The stakes are high not just for borrowers but for Biden as well. Many Democrats, including Biden himself, have suggested that mass student debt relief helped Democrats turn out voters last fall. And now that progressives convinced Biden to act on mass debt cancellation, it seems impossible to un-ring that bell. Expect Biden in the coming months to face pressure from within his own party to come up with a fallback plan to deliver on student debt relief. Progressives are eyeing using a separate legal authority in the Higher Education Act — known as compromise and settle — which is not tied to the pandemic national emergency. Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com . Or contact tonight’s author at klong@politico.com or on Twitter at @katherinealong .   JOIN POLITICO ON 3/1 TO DISCUSS AMERICAN PRIVACY LAWS: Americans have fewer privacy rights than Europeans, and companies continue to face a minefield of competing state and foreign legislation. There is strong bipartisan support for a federal privacy bill, but it has yet to materialize. Join POLITICO on 3/1 to discuss what it will take to get a federal privacy law on the books, potential designs for how this type of legislation could protect consumers and innovators, and more. REGISTER HERE .     WHAT'D I MISS? — Rep. Elissa Slotkin announces Senate run: Slotkin (D-Mich.) will run for the Senate seat being vacated by retiring Sen. Debbie Stabenow (D-Mich.). Slotkin is one of the first candidates to enter the race since Stabenow announced in January that she would not seek a fifth term, teeing up a high-stakes contest that could ultimately determine the balance of power in the Senate. — Yellen makes surprise trip to Ukraine: Treasury Secretary Janet Yellen made an unannounced trip to Kyiv today to emphasize the Biden administration’s continued support for Ukraine as the country prepares for Russia’s highly-anticipated spring offensive. “I bring to Kyiv a clear message from Biden and the American people: We will stand with Ukraine for as long as it takes,” Yellen said during a meeting with Ukrainian President Volodymyr Zelenskyy. — Kerry to stay on as Biden’s top climate diplomat: John Kerry will remain in his role as Biden’s special climate envoy at least through this year’s United Nations climate talks set for December in Dubai, ending speculation that the United States’ top climate change diplomat may soon depart. Kerry’s relationship with his Chinese counterpart, Xie Zhenhua, has been a rare bright spot between the United States and China. NIGHTLY ROAD TO 2024 DONOR DASH — Potential and declared 2024 Republican presidential hopefuls including former UN Ambassador Nikki Haley, former Vice President Mike Pence and Virginia Gov. Glenn Youngkin are making quiet trips to New York City to meet with donors and attempt to raise money , according to The New York Times ’ Maggie Haberman and Nicholas Fandos. The Times reports that Youngkin will be meeting with grocery store magnate John Catsimatidis, a billionaire who owns chains of grocery stores and who is influential within the right-wing Committee to Unleash Prosperity, which has previously backed former President Donald Trump. Catsimatidis, a Trump backer himself, said that this cycle he will likely sit down with any candidate who asks to see him. Youngkin’s trip suggests that he’s at least dipping his toe in the 2024 contest, getting a sense of the potential appetite among big donors for his candidacy. A former executive at the private equity firm the Carlyle Group, where he spent 25 years before resigning to run for Virginia governor in 2021, Youngkin still has strong ties with much of the GOP’s donor class, a potential advantage should he decide to jump into the race. SPLIT SCREEN — There’s not one, but two major cattle calls of 2024 Republican hopefuls this week, report POLITICO’s Natalie Allison and Alex Isenstadt . In Washington, D.C., Trump is headlining CPAC’s annual meeting. In Palm Beach, Florida Governor Ron DeSantis will be a main draw at the Club for Growth’s private retreat for large donors. The events are set to take place at the exact same time — Thursday through Saturday. There’s also little overlap between the speakers and attendees, another sign that the conservative ecosystem is engaged in a battle for the future of the party, with Trump as a main divide. Notably, Trump was not invited to the Club for Growth’s retreat, as the conservative organization looks to move beyond the former president. Other potential 2024 Republican hopefuls, including Haley, Sen. Tim Scott (R-S.C.) and New Hampshire Governor Chris Sununu will try to take advantage of the notable absence of Trump to speak with donors themselves.   DOWNLOAD THE POLITICO MOBILE APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. The sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don’t miss out on the app you can rely on for the news you need, reimagined. DOWNLOAD FOR iOS – DOWNLOAD FOR ANDROID .     AROUND THE WORLD Presidential candidate Bola Tinubu of the All Progressives Congress, accompanied by his wife, Oluremi Tinubu, speaks to the media after casting his vote in the presidential elections in Lagos, Nigeria. | Ben Curtis/AP Photo NIGERIA’S ELECTION — Early results from Saturday’s presidential race in Nigeria suggest that the ruling party’s Bola Tinubu, who served as governor of the country’s most populous state, has captured the lead in an election marred by technical delays and security concerns. Two days after the election in Africa’s largest democracy, only a handful of Nigeria’s 36 states have been called, according to the country’s primary election commission, and the timeline for announcing a winner remains unclear. The results that have already come in signal a firm lead for Tinubu, the ruling All Progressives Congress’s candidate. Tinubu has won at least five states and leads the popular tally. The 93 million Nigerians who registered to vote — a record — were hit with long delays, electronic glitches and intimidation tactics on Saturday. Local news outlets reported assaults from armed irregulars and instances of ballot-box snatching. With sporadic violence breaking out across the country, tensions remain especially high in parts of Lagos State, where Tinubu served as former governor. Politicians from all three parties represented on the presidential ballot voiced concerns over the slow pace at which results were being uploaded to the official Independent National Electoral Commission , which said ongoing delays are a result of “technical hitches.” International observers also criticized the country’s handling of the election. Representatives from the European Union warned in a statement that “INEC lacked efficient planning and transparency during critical stages of the electoral process, while on election day trust in INEC was seen to further reduce due to delayed polling processes.” Atiku Abubakar, from the Peoples Democratic Party, has the second-most votes as of this afternoon, according to the country’s electoral commission. Peter Obi, who joined the Nigerian Labour Party and is popular among young Nigerians , clinched a surprise victory in Lagos State, but continues to trail both his opponents. To win the presidential election, a candidate must obtain a simple majority and earn at least a quarter of the total votes cast in at least 24 states. If no candidate meets the threshold, a runoff is triggered within 21 days. NIGHTLY NUMBER $13 billion The amount of money that financial services giant Intercontinental Exchange agreed to pay for mortgage data company Black Knight, an acquisition that the Federal Trade Commission is now preparing to challenge as the Biden administration takes a harder stance on antitrust issues, according to three people with direct knowledge of the matter. The FTC believes the deal would give Intercontinental Exchange, which also owns the NYSE, too much power in the multi-trillion dollar U.S. mortgage market and is expected to file a case sometime in March. RADAR SWEEP LAB LEAK? — In a recently updated U.S. intelligence report, the Department of Energy assessed that the Covid-19 pandemic may have originated from a laboratory leak in China . Other federal agencies involved with virus research said the pandemic could have been caused by natural transmission between animals and humans. But the disagreements from the scientific community stand in stark contrast to conclusions being drawn as a result of the DOE’s quote that the lab leak is the “most likely” explanation for the pandemic. For instance, an intelligence report is intended not to simply determine fact from fiction, but to provide an assessment of likelihood and the strength of information. And counterintuitively, the conclusion can be drawn from very little or poor-quality evidence. Read Joseph Cox ’s report on what we still don’t know about the origins of the Covid-19 pandemic for VICE. PARTING IMAGE On this day in 1991: Kuwaitis wave flags to celebrate allied troops moving into the Kuwait capital following the hasty retreat of Iraqi forces, effectively ending the Gulf War. | Laurent Rebours/AP Photo Did someone forward this email to you?  Sign up here .   Follow us on Twitter Charlie Mahtesian @PoliticoCharlie Calder McHugh @calder_mchugh Katherine Long @katherinealong Ari Hawkins @_AriHawkins   FOLLOW US

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RSN: Matt Taibbi | The Bailout Miscalculation That Could Crash the Economy

 

12 May 20

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Matt Taibbi | The Bailout Miscalculation That Could Crash the Economy

Matt Taibbi, Matt Taibbi's Substack
Taibbi writes: "When Donald Trump signed the $2 trillion CARES Act rescue on March 27, there was immediate praise across the political spectrum for section 4022, concerning homeowners in distress. Under the rule, anyone with a federally-backed mortgage could now receive instant relief."
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WHO Sees 'Potentially Positive Data' on COVID-19 Treatments
Emma Farge, Reuters
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Dr. Anthony Fauci and Donald Trump. (photo: Joshua Roberts/Reuters)

Fauci to Warn of 'Danger' if Country Opens Too Quickly in Key Senate Hearing
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The set of PBS NewsHour during the filming of a segment. (photo: Aaron Hostutler/Wikimedia Commons

Paul Street | A Late-Breaking Bulletin From PBS: "For Many Americans, Health Insurance Is Tied to a Job"
Paul Street, CounterPunch
Street writes: "I would like to nominate the 'Public' Broadcasting System's ('P'BS) 'NewsHour' and its economics reporter Paul Solomon for the 2020 Piss Down Our Backs and Tell Us Its Raining Prize in broadcast journalism."

 Last Thursday, “P”BS “NewsHour” viewers got to see the show’s longtime economics correspondent (Paul Solomon) give a chilling account of how newly unemployed people are disastrously losing their health insurance in the middle of a pandemic.

“Consequences of the unemployment driven by the novel coronavirus pandemic will reverberate through the U.S. economy for months, if not years,” “P:BS reported, adding this: “One result: as millions of Americans lose their jobs, they are also losing their health care coverage — and for many, there aren’t affordable insurance alternatives — and now they have neither.”  The story had a stark title: “For Many Americans, Health Insurance is Tied to a Job – and Now They Have Neither.”

The “NewsHour’s” report was accurate and unnerving, full of first-person accounts from workers laid off from their jobs and removed from health insurance by the 2020 coronavirus recession:

Paul Solman: Case in point, asthmatic Robert Laurence, whose low-paying gigs have never come with benefits.

Robert Laurence: I was a trash collector. I was — they call them brand ambassadors. I worked at a call center.

Paul Solman: Health insurance is a luxury simply he can’t afford.

Robert Laurence: You kind of have a choice. You know, do I pay my car payment or do I get my inhaler?

Paul Solman: But aren’t you worried, even though you’re obviously quite young, there’s a pandemic out there, something really bad could happen to you, and you have no coverage?

Robert Laurence: I’m very worried about it. It’s just that I don’t have the money to really buy into that system. And, hopefully, I can get a better position. But, you know, the future is kind of looking bleak.

Paul Solman: And the economics of COVID-19 could make things bleak for years to come.

Anne Case (“NewsHour”-approved policy expert): It’s possible that many, many, many people will get tens of thousands of dollars’ worth of medical bills that they cannot pay.

Paul Solman: Frank Johnson hopes he isn’t one of them. So what happens if you get sick?

Frank Johnson: I’m just praying that I don’t get sick. And just hopefully, you know, not, nothing happens and nobody around me gets infected.

Thanks, “P”BS. Gee, who knew?

Anyone with two or three functioning gray cells, that’s who. The problem with the segment was its bizarre and frankly insulting tone of having discovered something that has long been identified as a serious problem with American capitalism – something activists, intellectuals, and citizens have been trying to correct for many years. Solomon framed his report as if it was some kind of a mystery that the United States absurdly and disastrously ties its extremely expensive for-profit health insurance system to employment….As if that was some kind of late breaking news bulletin…. As if this wasn’t a problem that numerous experts, activists, and ordinary citizens have been raising for many years. …As if Bernie Sanders didn’t run for president (with many millions of supporters) on Medicare for All in the last two presidential primary races (2016 and 2020)…..As if much of the industrialized world doesn’t grant people universal health coverage as an elementary human right.

As if the corporate-sponsored “P”BS NewsHour and “public” broadcasting system aren’t key part of the dominant state-capitalist ideological and communications that has worked to marginalize and treat as “extremist” and “radical” common-sense and humanistic calls to make health coverage a human right in the U.S.

As if we are all clueless morons about here in “public” television viewing land.

But kudos to Paul Solomon for discovering that America’s absurdly expensive health insurance system is tied to employment with terrible consequences in the middle of an economic meltdown and pandemic. What a heroic muckraker!

I have a suggestion for a follow-up story by Solomon.  I think he should pick up on a tip I got from reading Karl Marx’s 1867 book Capital.  If Marx was right, capitalist employers hire workers in order to make a profit from them and throw workers into the ranks of the unemployed (what Marx called “the reserve army of labor”) when capitalists no longer find it profitable to keep them on.  I think Solomon will find that a fruitful line of inquiry.

In the meantime, the “NewsHour’s” late-breaking bulletin about how US health insurance is dangerously tied to employment does seem to be born-out by the numbers.  According to a new report from the corporate-funded Robert Wood Johnson Foundation (RWJF) and the Urban Institute (UI), the tsunami of layoffs sparked by COVID-19 means that 43 million Americans could lose their health insurance in coming weeks and months. And 7 million of those newly jobless will be unable to afford new insurance as the recession continues and perhaps deepens.

Prior to the pandemic, RWJF and UI find, 160 million Americans, approximately half the population, got their medical insurance through their jobs.

Senior RWJF policy adviser Katherine Hempstead says that “The status quo is incredibly inefficient, it’s incredibly unfair, it’s tied to employment for no real reason. “This problem exposes a lot of the inadequacies in our system.”

Gee, who knew?  Now it’s time for the RWJF and UI to join Solomon in working on Marx’s tip – the one about how capitalists hire workers to exploit them and see workers as expendable once the profit in employing them goes away.

There is a story there, I’m sure.

 
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This Script Sends Junk Data to Ohio's Website for Snitching on Workers
Janus Rose, VICE
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Afghanistan: Gunmen Storm Kabul Maternity Hospital
Al Jazeera
Excerpt: "Afghan forces have evacuated dozens and ended the siege at a maternity hospital in Kabul, killing the three gunmen behind the deadly attack on the government-run hospital in the capital, the interior ministry spokesman said."
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Tyson Foods employees in Springdale, Arkansas. For some critical observers, the crisis in America's huge industrial meat production sector came as no real surprise. (photo: Gregory Smith/Corbis/Getty Images)

Meat-Free Future? Coronavirus Exposes America's Fragile Food System
Amanda Holpuch, Guardian UK
Holpuch writes: "Americans are nearing a future where the nation's beloved steak dinners, cheeseburgers and barbecue are under threat, if the world's second largest meat processor is to be believed."
READ MORE

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