On The Money – Biden weighs student debt cancellation

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President Biden plans to write off $10,000 in student debt per borrower. We’ll also look at today’s epic sell-off in the stock market, Democrats’ doubts about reviving Build Back Better measures, and oil giants’ huge first-quarter profits.

But first, read why Florida’s plan to scrap Disney’s special status could backfire.

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Biden eyes long-awaited student debt relief

President Biden plans to move forward with student loan debt forgiveness, with two sources telling The Hill that he plans to take steps to write off at least $10,000 per borrower.

Debt cancellation would be through executive action and follows the president asking the Department of Education to review his authority to act unilaterally on student loans a year ago, the results of which have yet to be heard. have not been publicly announced.

“But the door has been opened to maybe bigger,” a source told The Hill. “Lots of options on the table. They’re listening a lot right now.

  • Biden has campaigned to forgive at least $10,000 in federal student loans per person, while other members of his party have called for $50,000 per borrower or to cancel all student debt.
  • Earlier this week, the president said he was “seriously considering” canceling some student debt, adding he was 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 set timeline yet for when Biden might act, but it looks increasingly likely the White House will take action to wipe out student debt. Majority Whip James Clyburn (DS.C.), a key Biden ally, said Friday he backs the $10,000 figure as “a good first step.”

Hanna Trudo, Amie Parnes and Alex Gangitano from The Hill have more here.

DON’T LOOK AT YOUR 401(K)

Dow plunges 900 points, Nasdaq suffers worst month since 2008

Stocks suffered steep losses on Friday, ending a brutal month with a sell-off largely due to falling shares of technology companies.

  • The Dow Jones Industrial Average closed with a loss of more than 930 points, down 2.8%, on the last trading day of April. The Dow Jones ended April down more than 6% since the start of the month and almost 10% since the start of 2022.
  • The tech-heavy Nasdaq composite suffered much heavier losses, falling 4.2% on the day and more than 14% since early April – its worst monthly loss since 2008. The composite is also in what investors see it as a bear market after falling more than 20% from last year’s record high.
  • The S&P 500 closed with a loss of 3.6% and down about 10% since the start of the month.

What is happening? Stocks have fallen steadily for most of the year, the combination of high inflation, the economic backlash from the war in Ukraine, stubborn pandemic-related supply issues and continued interest rate hikes from the Federal Reserve rattled investors. Big tech companies, which fueled much of the stock market’s surge last year, were among the biggest losers in the current sell-off.

Sylvan breaks it down here.

Read more: The Fed’s inflation gauge rose 6.6% annually in March

JOE-MENTUM STALLING

Manchin’s decisions leave Democrats doubting their agenda will pass

Sen. Joe Manchin’s (DW.Va.) latest moves stoke new doubts about his acceptance of any sort of legislative package on President Biden’s agenda, deepening Democrats’ worries about what they will be able to deliver to voters by election day.

Several Democratic senators say they are growing increasingly dispirited by the prospect of Manchin ever greenlighting the proposal for a fiscal reconciliation package, which would prevent Republicans from stalling Biden’s legislative agenda with a filibuster in the Senate.

Asked about the level of confidence in Manchin’s adherence to a reconciliation bill, a Democratic senator who requested anonymity to comment on the dwindling odds said there are “fewer every day.”

Alexander Bolton from The Hill explains why here.

PUMPING BENEFITS

Exxon and Chevron Post Massive First Quarter Profits Amid Soaring Gas Prices

Energy giants Chevron Corp. and Exxon Mobil Corp. posted huge profits on Friday buoyed by sky-high gas prices and told investors they expect to keep oil production virtually 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 the first quarter of last year.

Oil and gas companies are among the biggest beneficiaries of high gas prices, which have risen 44% in the United States over the past 12 months, according to AAA.

  • Despite calls from the Biden administration to increase oil production to lower consumer prices, Chevron and Exxon executives said Friday they would keep production relatively stable.
  • Exxon instead announced plans to triple its stock buybacks to $30 billion through 2023, while Chevron said it would repurchase a record $10 billion of stock by the end of the year. ‘year.

Karl has more here.

Read more: Progressives seize quarterly oil profits to demand windfall tax

IN SERVICE NEXT WEEK

Tuesday

  • The Federal Open Market Committee (FOMC) of the Federal Reserve begins its two-day monetary policy meeting.

Wednesday

  • The Senate Judiciary Committee hold a hearing on 10 a.m. credit and debit card swipe fees
  • The FOMC concludes its monetary policy meeting at 2 p.m. and is expected to announce a rate hike of 0.5 percentage points, followed by a press conference with Fed Chairman Jerome Powell at 2:30 p.m.

Thusday

  • The Senate Banking Committee hold a hearing on student loan officers at 10 a.m.
  • The Senate Budget Committee hold a hearing “Should taxpayers’ money go to companies that violate labor laws? ” at 10 o’clock

Good to know

After two chaotic tax filing seasons resulting in tens of millions of unprocessed returns, the IRS is urged to develop more free online tax filing tools instead of doubling down on a decades-old program that prevented the agency to compete with private tax preparers.

Since 2002, the IRS has been bound by a non-compete 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 TurboTax software.

Here’s what else we’ve got our eyes on:

  • Energy Secretary Jennifer Granholm said she’s “optimistic” that Congress will be able to pass aspects of the Biden administration’s Build Back Better agenda, particularly tax credits for the installation of clean energy infrastructure, ahead of the midterm elections in November.

That’s all for today. Thanks for reading and check out The Hill’s Finances page for the latest news and coverage. We’ll see you on Monday.

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John A. Bogar