RE: The jobs extreme MAGA House Republicans’ are holding hostage in every state
From: Deputy Press Secretary and Senior Communications Adviser Andrew Bates
A new report from Moody’s Analytics shows how many jobs would be killed in every state if House Republicans follow through on their threat to single-handedly trigger the only debt default in American history.
That is, unless they are allowed to force a radical agenda that the American people reject into law.
That radical agenda includes the most draconian cuts to veterans services in American history, shipping the manufacturing jobs we are bringing back from overseas to China, firing thousands of Border Patrol agents, taking health care from millions, and laying off teachers across the country. Keep in mind that they still intend to follow those cuts with enormous, wasteful tax giveaways to billionaires and multinational corporations.
In Speaker McCarthy’s home state of California, even a short-term default would kill over 300,000 jobs. And that a prolonged default would kill nearly a million.
President Biden is in New York today, which would lose almost half a million jobs, calling on Republicans to stop their economic hostage-taking.
In addition to threatening to sabotage the American economy and subject countless innocent Americans to financial pain, House Republicans have manufactured a political and credibility crisis for themselves.
House Republicans are more and more isolated in their willingness to trigger a default. As President Biden mentioned last night, Senate Republican leader underlined that the United States cannot ever default.
Last night even Speaker McCarthy himself acknowledged, “A budget is different than a debt ceiling.”
That’s true and consistent with the Speaker’s voting record. He voted, without conditions and on a bipartisan basis, to avoid default for the entire Trump Administration AND for the majority of the Obama presidency.
House Republicans are effectively holding a gun to the head of millions of jobs, small businesses, and retirement savings, while simultaneously shouting at everyone else, ‘don’t pull this trigger.’ Meanwhile, all their constituents look on and see how much it would cost every state. No one’s making you do it. Put the gun down.
Job Loss in Prolonged Default Scenario (thousands, peak to trough)
This fact sheet from the White House outlines the top 15 highlights from two years of recovery under the American Rescue Plan:
Led to the Strongest Jobs Recovery on Record: When President Biden came into office, there was tremendous economic uncertainty. Unemployment was at 6.1% when the American Rescue Plan (ARP) passed. It was expected to average 5% in 2022. With the passage of ARP, unemployment averaged 3.6% in 2022 and fell to 3.4% at the beginning of 2023.
ARP Drove the Strongest 2-year job growth ever: Over 12 million jobs have been added since President Biden took office – the largest 2-year total in US history and more jobs in two years than in any previous administration’s full year term.
Powered the Fastest Recovery in the World: After the American Rescue Plan passed, the US recovered significantly faster than our G7 Peers – with 5.9% growth in 2021 – while our inflation is in the middle of the pack and slower than other countries that did significantly less to help their economies recover.
Powered the Most Equitable Recovery in Memory: In past recessions, persistent high long-term and youth unemployment as well as high foreclosures of evictions led to long term harms – “scarring” for millions of Americans and hard, long roads back for Black and Hispanic Americans.
President Biden’s Rescue Plan ensured that didn’t happen this time:
Historic drops in Black and Hispanic Unemployment: With the strong recovery powered by ARP, Black unemployment saw its largest 1-year drop since 1984 and is near record lows; Hispanic unemployment saw its fastest 1-year drop and reached its lowest annual rate ever in 2022. Asian American unemployment fell significantly as well – falling by more than half from its January 2021 rate.
Least scarring in any recovery in memory: The American Rescue Plan led to the fastest drop in long-term and youth unemployment ever, which both now stand at pre-pandemic levels. It kept foreclosures historically low and evictions 20% below historic averages even after the end of the CDC Eviction Moratorium.
Lowered Health Care Premiums by $800 for over 13 Million Americans: ARP lowered health care premiums – which were extended by the Inflation Reduction Act, increased eligibility to middle- income families and provided strong incentives for states to expand Medicaid through the Affordable Care Act. Result:
Saved over 13 million Americans an average of $800 a year on their health premiums.
Led to most Americans in history having health insurance
Provided health coverage to 3 million Americans who would have otherwise had no health insurance.
Provided an extra $1.5 billion in Medicaid funding to Missouri, Oklahoma, and South Dakota for Medicaid expansion coverage to over half a million people.
Gave states an easier pathway to extend Medicaid postpartum coverage for a full 12 months – ensuring access to critical care for over 438,000 women nationwide.
Largest Small Business Formation Boom in History Due ARP-Driven Strong Recovery and Small Business Investments: The Biden Administration:
Increased COVID Emergency Injury Disaster Loans to $2 million, while increasing anti-fraud controls
Reformed PPP to more equitably distribute funds to the smallest businesses.
Restaurant Revitalization Fund helped over 100,000 Restaurants, Bars, and Food Trucks stay open.
Shuttered Venues Program provided relief to 13,000 venues.
Invested a historic $10 Billion in the State Small Business Credit Initiative
This, and the strong recovery that ARP powered, led to:
A record 10.5 million new small business applications over the past 2 years
Hispanic entrepreneurs started small businesses at the highest rate in more than a decade in 2021 and 23 percent faster than pre-pandemic levels.
Asian American entrepreneurs started small businesses at the fastest rate in over a decade in 2021.
Led to Lowest Child Poverty Rate in American History: The American Rescue Plan and its expanded monthly Child Tax Credit led to:
Child Poverty nearly cut in half to lowest rate – 5.2% – ever.
Black child poverty cut by 52%, Hispanic child poverty cut by 43%, Native American child poverty cut by 51%, and dramatic drops in white and Asian child poverty — all to record lows.
~9 million children in rural areas benefited from the expanded credit.
5 million children in Veteran and Active-Duty families benefited from the expanded credit
Child Tax Credit payments were delivered reliably with the first ever monthly payment – on the 15th of each month with 90% using direct deposit.
Over 65 million children in 40 million working families received largest Child Tax Credit in history.
Historic Child Tax Credit Expansion already reached over 230,000 Puerto Rico families: Recent data shows that over 230,000 Puerto Rico households will get the expanded Child Tax Credit. 8X the number from the previous year.
Funded a Historic Vaccination Campaign: ARP provided $160 billion to support vaccination, therapeutics, testing and mitigation, PPE, and the broader COVID Response effort.
This led to:
Over 230 million Americans are fully vaccinated, up from 3.5 million when President Biden took office.
Helped Over 8 Million People Stay in Their Homes:
Emergency Rental Assistance – the first national eviction prevention policy in history – was main American Rescue Plan source of multi-month assistance to help over 8 million hard-pressed renters stay in their homes without sacrificing other basic needs.
Emergency Rental Assistance and Other ARP Housing Policies led Eviction Filings to remarkably stay 20% below historic averages in 1.5 years after end of the eviction moratorium.
Called the “the most important eviction prevention policy in American history” by Matthew Desmond, Pulitzer Prize Winner author of “Evicted” – and the “deepest investment the federal government has made in low-income renters since the nation launched its public housing system.”
HUD Emergency Housing Vouchers have already helped 47,500 households at risk of homelessness lease their own rental housing – these American Rescue Plan funded vouchers support those at risk of or experiencing homelessness or housing instability, and those fleeing domestic violence.
Helped Keep 200,000 Child Care Centers Open
American Rescue Plan Stabilization Assistance has reached 200,000 Child Care Providers – that employ 1 million child care workers – and have the capacity to serve more than 9 million children.
90% of programs reported that American Rescue Plan funds helped them stay open.
More than 8 in 10 licensed child care centers nationwide have received ARP assistance.
Benefited 30,000 rural child care programs – in most states, 97+% of rural counties received aid.
For First Time in History, Direct Relief to Every Town, City, County and State – No Matter How Big or Small, Urban or Rural So they Could Design their Own Recovery:
Before ARP, 70% of cities anticipated layoffs or major cuts in services and half of states were freezing or cutting jobs. Today, cities and states have funds to invest in major challenges – like public safety, housing, workforce, and rehiring, instead of making dramatic cuts.
ARP provided direct fiscal relief to every state & territory and 30,000 cities and towns – while previous plans reached only 154 local governments, or fewer, with direct flexible relief.
This has led to:
American Rescue Plan Led to Surge in State Revenue Growth – Powering Economic Resilience: Before ARP, state revenues were expected to grow just 3.7% in 2021, after falling in 2020. After ARP, state revenues grew by 16.6% in 2021 (record high growth) – and over 14% growth in 2022. As a result, state surpluses are powering resilience economy-wide.
Major investments in critical areas:
Over $25 billion to Jumpstart Universal Broadband Access – including Broadband Connections for 16 million students through the Emergency Connectivity Fund for schools and libraries to close the homework gap.
Over $10 billion from ARP’s State & Local Fund invested in over 3,000 workforce projects
Over $20 billion in State & Local funds invested in water infrastructure
Over $14 billion in State & Local Funds invested in housing – expanding supply, investing in homeless services, and providing 3.7 million additional households rent, mortgage, and utility relief.
One of the Largest Federal Investments in Preventing Crime, Reducing Violence, and Investing in Public Safety in History.
Over $10 billion committed to preventing crime and reducing violence, with investments by hundreds of state and local governments to avoid cuts to police budgets, hire more police officers for safe, effective, and accountable community policing, ensure first responders have the equipment they need to do their jobs, and expand evidence-based community violence intervention and prevention programs.
Toledo, Ohio used this funding to train a second cohort of new police recruits for the first time and plans for 100 new officers in the next few years; Mercer County invested in a county-wide radio system and improved its 911 system; Baltimore invested $50 million for its comprehensive violence prevention strategy, including community violence intervention programs.
That includes $1.2 billion Medicaid Mobile Crisis Intervention Services – the American Rescue Plan included $1.2 billion to fund mobile crisis intervention units staffed with mental health professionals & trained peers.
It also includes $1 billion Family Violence Prevention and Services Program to reduce domestic violence with immediate crisis intervention, health supports, and safety.
Funding School Districts Across the Nation to Reopen K-12 Schools, Support Academic Recovery, and Invest in Student Mental Health:
ARP provided critical relief to 16,000 school districts and other local education agencies to reopen safely, support academic recovery, and invest in student mental health.
Data from School District Plans show that schools are using these funds well:
Nearly 60% of funds are committed to investments like staffing, tutoring, after-school and summer learning, new textbooks and learning materials, and mental and physical health supports.
Another 23% is going to keep schools operating safely, including providing PPE and updating school facilities. This includes investments in lead abatement and nearly $10 billion for HVAC.
This has led to:
Going from 46% of schools that had safely opened to full-time in-person teaching to 100%: In January 2021, CDC data showed that just 46% of schools were open full-time in-person. Today, all schools are open.
A major increase in staffing and investments to address student mental health: Schools now employ 36% more school social workers, 11% more school counselors, and 28% more school nurses than pre-pandemic.
Major Investment in Workforce Training and Connecting Americans to Good Jobs:
Over $40 billion from the American Rescue Plan has gone to workforce training efforts, including over $10 billion from ARP’s State and Local Fund invested in over 3,000 workforce projects across the country, including pre-apprenticeships and other programs to prepare for new infrastructure, health care and care jobs.
$500 million Competitive Good Jobs Challenge Awards for 32 Workforce Training Partnerships across the country
$1 billion Competitive Build Back Better Regional Challenge – 21 Winners won between $25 million and $65 million to execute transformational projects and revitalize local industries. Projects include developing workforce training programs and connecting workers to jobs – and other transformational investments.
Historic Investment in Expanding and Supporting our Health Care Workforce, including:
$1.1 Billion investment in the Community Health Workforce, including increasing the mental health workforce
Well over $10 Billion of American Rescue Plan Home and Community Based Services (HCBS) funds being used for workforce efforts.
Rapid deployment of over 14,000 community outreach workers (through over 150 national and local organizations).
Establishment of the first-of-its-kind Public Health AmeriCorps to build and train the next generation of public health leaders, already serving 82 organizations across the country and supporting more than 3,000 AmeriCorps members.
Supporting the largest field strength in history (over 22,700 providers) for the National Health Service Corps, Nurse Corps, and Substance Use Disorder Treatment and Recovery programs, treating more than 23.6 million patients in underserved communities
Eighteen Million College Students Have Received Direct Financial Assistance from the Higher Education Emergency Relief Fundthat was expanded by ARP:
Colleges have reached an estimated 18 million students with direct financial aid from Higher Education Emergency Relief (HEERF) since the beginning of 2021 to help them stay in school and help cover basic needs during the pandemic, like food, housing, and child care.
Direct financial assistance for an estimated 6 million community college students.
80% of Pell Grant recipients received direct financial relief in 2021.
An estimated 450,000 students at Historically Black Colleges and Universities (HBCUs) received direct financial aid. Further, in 2021, 77 percent of HBCUs used HEERF funds to discharge unpaid student balances.
Nine in 10 institutions reported that HEERF funds enabled them to keep students enrolled who were at risk of dropping out due to pandemic-related factors.
Historic Investment in the Pension Security for up to 3 million Union workers & retirees: ARP’s Special Financial Assistance is the most significant investment in pension security for union workers and retirees in the past 50 years.
Over 200 multiemployer plans that were on pace to become insolvent in the nearterm will now have solvency ensured until at least 2051 solvent & paying full benefits thanks to ARP.
Preventing a wave of multi-employer insolvencies for 2-3 million workers who would have seen major cuts to their earned retirement benefits.
Pension Cuts Reversed for over 80,000 Workers and Retirees in 18 “MPRA” Multiemployer Plans that had taken cuts to avoid insolvency.
Most significant effort to protect the solvency of the multiemployer pension system in almost 50 years.
First-Ever Summer Nutrition Benefit for Students with Nationwide Reach– Extended Permanently:
ARP created the first-ever summer nutrition benefit with nationwide reach.
30 million young people: Reached the families of 30 million students.
Permanent: Congress extended this innovative program permanently in last year’s Omnibus bill, the first major new permanent food assistance program in nearly five decades.
The White House is piercing the secrecy, backroom plans of Congressional Republicans to yet again, repeal the Affordable Care Act (Obamacare) and slash Medicaid, under the guise of “balancing the budget”. Instead, the Republicans’ agenda would add $3 trillion to the national debt while leaving hundreds of millions living with the anxiety and insecurity of being without access to health care or destroyed by medical debt. The Republicans’ policy goes against the grain of Americans who overwhelmingly support Obamacare, which has delivered record numbers of Americans who have health insurance. Repealing the ACA would thrust millions into the life-and-death insecurity of not having health insurance at all or finding health insurance unaffordable, the 100 million people who have “pre-existing conditions” (now likely 200 million because of COVID), also being uninsurable by the for-profit insurance industry. Likewise, slashing Medicaid would not only leave millions, including millions of children, without health care, but result in more hospitals shutting down. This fact sheet from the White House is issued in advance of President Joe Biden’s remarks from Virginia Beach:–Karen Rubin/news-photos-features.com
Virtually every Republican budget or fiscal plan over the last decade has included repeal of the Affordable Care Act (ACA) and deep cuts to Medicaid. That would mean: higher health care costs for tens of millions of Americans; ending critical protections for people with pre-existing conditions; millions of people losing health coverage and care; and threats to health care for seniors and people with disabilities, including growing home care waiting lists and worse nursing home care.
The American people deserve to see congressional Republicans’ full and detailed budget plan, including what it cuts from the ACA and Medicaid, Social Security and Medicare, and other critical programs, and should have the chance to compare it with the President’s budget plan, which he will release March 9.
If Republicans are successful in repealing the Affordable Care Act and making deep cuts to Medicaid:
Millions of Americans Will Have Higher Health Care Costs
More than 100 million people with pre-existing health conditions could lose critical protections. Before the ACA, more than 100 million Americans with pre-existing health conditions could have been denied coverage or charged more if they tried to buy individual market health insurance. Republican repeal proposals either eliminate these protections outright or find otherways to gut them.
Up to 24 million people could lose protection against catastrophic medical bills. Before the ACA, insurance plans were not required to limit enrollees’ total costs, and almost one in five people with employer coverage had no limit on out-of-pocket costs, meaning they were exposed to tens of thousands of dollars in medical bills if they became seriously ill.
Tens of millions of people could be at risk of lifetime benefit caps. Prior to the ACA, 105 million Americans, mostly people with employer coverage, had a lifetime limit on their health insurance benefits, and every year up to 20,000 people hit that cap and saw their benefits exhausted just when they needed them most.
Millions of people could lose free preventive care. The ACA requires private health insurers to cover preventive services, like cancer screenings, cholesterol tests, annual check-ups, and contraceptive services, at no cost. Before these requirements were in place, millions of Americans with health insurance faced cost sharing – sometimes high costs – for these services, which is part of why the ACA resulted in increased use of critical preventive care.
Over $1,000 average increase in medical debt for millions covered through Medicaid expansion. Repealing the ACA, in particular the expansion of Medicaid to low-income adults, would reverse major gains in financial security. Within the first two years of the ACA’s expansion of Medicaid, medical debt sent to collection agencies dropped by $3.4 billion, and there were 50,000 fewer medical bankruptcies. Among people gaining coverage through expansion, medical debt fell by an average of over $1,000. Expansion states also saw significant drops in evictions compared to non-expansion states.
Tens of millions of people could see their prescription drug coverage scaled back. Prescription drug coverage is an optional benefit under Medicaid. If states faced large cuts to their federal Medicaid funding, millions of Medicaid enrollees could see their coverage scaled back or have a harder time getting their prescriptions because of extra red tape.
Millions of Americans Will Lose Their Health Insurance
40 million people’s health insurance coverage would be at risk. Over 16 million people have signed up for ACA marketplace coverage for 2023, over 22 million people are enrolled in Medicaid expansion coverage available due to the ACA, and another 1 million people have coverage through the ACA’s Basic Health Program. The total number of people with some form of ACA coverage has risen significantly since 2017, when the Congressional Budget Office estimated the House-passed repeal bill would grow the ranks of the uninsured by 23 million.
An additional 69 million people with Medicaid could lose critical services, or could even lose coverage altogether. Slashing federal funding for Medicaid would force states to make Medicaid eligibility changes that would make it harder to qualify for and enroll in Medicaid coverage. States would also likely consider capping or limiting enrollment, cut critical services, and cut payments rates, making it harder for people with Medicaid to access care.
Thousands more preventable deaths each year. The ACA Medicaid expansion is preventing thousands of premature deaths among older adults each year, research finds, likely because it improves access to care, including medications to control chronic conditions and preventive care such as cancer screenings. ACA marketplace coverage also prevents premature deaths.
Worse Care for Seniors and People With Disabilities
Over 7 million seniors and people with disabilities could receive worse home care, with ballooning wait lists for those still in need. The number of people on home care wait lists has dropped by 20 percent since 2018. This progress would likely be reversed under a block grant or per-capita cap because there would be fewer dollars available for home care services, an optional benefit in Medicaid. Faced with large federal funding cuts, states would almost certainly ration care. That would likely mean wait lists for home care in the 13 states and DC that don’t currently have them, and skyrocketing wait lists in 37 states that do.
Hundreds of thousands of nursing home residents would be at risk of lower quality of care. Over 60 percent of nursing home residents are covered by Medicaid. With large cuts in federal funding, states would be forced to cut nursing home rates to manage their costs, as many states have done during recessions. Research shows that when nursing homes are paid less, residents get worse care.
Millions of People Will Lose Access to Opioid Treatment and Mental Health Care
Millions of people could lose access to substance use treatment or mental health care. Across the country, the ACA, especially its expansion of Medicaid, has dramatically expanded access to opioid treatment and other substance use disorder care, including increases in medication assisted treatment prescriptions for opioid and other substance use treatment and improved access to mental health care.
34 million children at risk of losing guaranteed access to mental health care. Past Republican plans proposed ending Medicaid’s guarantee of comprehensive health coverage for children. This would jeopardize children’s access to mental health care at a critical point in efforts to address the burgeoning youth mental health crisis. It would also cause children to go without other services, like annual check-ups and speech and physical therapy. And Republican proposals could endanger schools’ ability to bill Medicaid for mental health care, speech therapy, or physical therapy for students.
Rural Hospitals Would Be Forced to Close
More of the over 500 rural hospitals at risk of closure could close. The ACA, especially its expansion of Medicaid, helped cut hospital uncompensated care by about $12 billion, helping hospitals, especially rural hospitals, stay afloat. Between 2010 and 2021, nearly three-fourths of rural hospital closures were in states that have not adopted Medicaid expansion, with research finding that expansion disproportionately improved rural hospital margins and helped avert rural hospital closures. If the ACA is repealed, and millions lose coverage, closures among at-risk hospitals could increase significantly.
House Republicans commit to radical ultra MAGA budget that takes health care from millions and increases costs:
Confirming President Biden’s warning that House Republicans are threatening to cause an unforced economic catastrophe unless they can make disastrous cuts that increase millions of American’s health care costs, the top House Republican on the Budget Committee now says outright that they are using a ultra MAGA plan to do just that.
House Budget Chairman Jodey Arrington says Republicans are modeling their budget off of a hard right proposal from former Trump OMB Director Russell Vought – a plan that calls for draconian cuts to the Affordable Care Act and Medicaid. This would deprive countless Americans of their health coverage, make the costs of health care skyrocket cross the board, cause a spike in the price of prescription drugs, and devastate rural hospitals.
What sacrifices does Vought’s budget ask of rich special interests? None. And House Republicans simultaneously back enormous tax giveaways to the wealthy that economists warn would aggravate inflation.
President Biden and the American people want to go in the opposite direction, building on the historic deficit reduction he has led by having the rich and big corporations pay their fair share and reduce the deficit by a further $2 trillion.
“In their own words, Congressional Republicans keep proving President’s Biden’s warnings to the middle class right,” said White House spokesperson Andrew Bates. “The House Republican leading their budget process now admits that the foundation of their approach will be a radical, ultra MAGA plan that takes health coverage away from millions of middle class families, causes health care and prescription drug costs to skyrocket, and devastates rural hospitals. And they’re threatening to intentionally plunge our economy into chaos and kill millions of jobs and businesses if they don’t get their way. Meanwhile, Republicans are pushing exorbitant tax welfare for rich special interests that would increase the deficit and worsen inflation. This is the definition of trying to force our economy to work from the top-down, when they should be joining with President Biden to keep rebuilding the American middle class.”
The Administration’s work to strengthen the Affordable Care Act along with new consumer protections lead to continued progress reducing the burden of medical debt.. This fact sheet is provided by the White House:
The Consumer Financial Protection Bureau (CFPB) released a new report that shows that the number of Americans with medical debt on their credit reports fell by 8.2 million from the first quarter of 2020 to the first quarter of 2022. Today’s report is consistent with a recent report from the Centers for Disease Control and Prevention (CDC) that found that the number of Americans who are part of families having trouble paying their medical bills declined by 5.5 million between 2020 and 2021. One driver of these declines is the significant increase in the number of insured Americans over this period, a result of the President’s strategy of protecting and strengthening the Affordable Care Act (ACA) and lowering health care costs. The decline also reflects continued actions by the CFPB to highlight problems with inaccurate reporting of debt in collections and put the industry on notice to correct their behavior.
The new data also underscore the importance of the Biden-Harris Administration’s government-wide initiative to reduce the burden of medical debt. Following the Vice President’s April 2022 announcement, medical debt was directly relieved for many low-income Americans. And, informed by research showing that medical debt is not a reliable predictor of financial health, federal agencies are working to eliminate the use of medical debt to assess creditworthiness for participation in government lending programs. Specifically:
The Department of Veterans Affairs (VA) implemented a streamlined process to make it easier and faster for lower-income veterans to get their VA medical debt forgiven. The new process – establishing simple criteria to qualify for debt relief and launching a new online debt relief portal – has already provided relief to over 10,000 veterans and saved them more than $10 million in copay debt.
Communities across the country – from Cook County, Illinois, to Toledo, Ohio, to New Orleans, Louisiana, to Pittsburgh, Pennsylvania – are using or have passed legislation to use about $16 million American Rescue Plan (ARP) funding to purchase medical debt from hospitals and other sources and forgive it, wiping out nearly $1.5 billion in medical debt, a ratio of nearly 100-to-1. Other localities and states have proposed to make similar purchases using ARP funding.
The Federal Housing Finance Agency (FHFA) validated and approved the use of VantageScore 4.0, along with FICO 10T, for the underwriting of mortgages by Fannie Mae and Freddie Mac. The addition of VantageScore 4.0, which excludes medical debt entirely, marks the first time that a credit score that excludes medical debt has been approved for mortgage underwriting of Enterprise loans.
The Small Business Administration (SBA) will take a number of steps to reduce the role of medical debt in the underwriting of loans for its 7(a) guaranteed loan program, including revising its lender Standard Operating Procedures to discourage consideration of medical debt and making technology investments in Lender Match to help borrowers find lenders that exclude medical debt in their credit decisions.
These reductions in medical debt will provide real benefits to many Americans. Reducing medical debt directly impacts household finances by improving credit scores and access to credit. And research shows that households that have their medical debt relieved see improvements in access to medical care, and in physical and mental health outcomes. Since medical debt is disproportionally held among low-income communities, reductions in the burden of medical debt helps advance financial and health equity.
The CFPB report also shows that medical debt still accounts for more than 50% of debt in collections tradelines, exceeding the number of debt in collections tradelines from all other sources combined, including credit cards, personal loans, utilities, and phone bills. Getting sick or taking care of loved ones should not mean financial hardship for American families. That is why the Administration has—and will continue—to take action to ease the burden of medical debt and protect consumers from predatory collection practices.
Supporting Veterans in Financial Hardship
In Spring 2022, VA committed to make it easier and faster for lower-income veterans to get their VA medical debt forgiven. Previously, veterans in financial hardship who needed medical debt relief for VA copayments had to fill out a complex, paper form and navigate complicated eligibility requirements. The application process was confusing, and time-consuming, and as a result, veterans may have been deterred from applying for much needed relief.
Since the spring 2022 announcement:
VA streamlined the application process, including establishing a simple, standardized criteria to qualify for debt relief and launching a new online debt relief portal to make it easier and faster to apply.
Since introducing the new criteria, VA has approved over 93% of debt relief requests, and 42% of relief requests are now submitted via the online portal.
To date, the new streamlined system has provided relief to over 10,000 veterans and saved them more than $10 million combined in unpayable copay debt.
Helping Communities Wipe Out Medical Debt
To help relieve the burden of medical debt on their residents as part of the recovery from the COVD-19 pandemic, communities across the country are using American Rescue Plan (ARP) funding to support efforts to buy and forgive medical debt. These communities work with partners to purchase medical debt portfolios from hospitals, health systems, and debt collection agencies and forgive the debt. Because medical debts are often available for purchase at pennies on the dollar, these efforts can translate into massive reductions in medical debt.
In the programs implemented to date, individuals qualify if they are residents of the given locality and have incomes below a certain threshold or have medical debt in excess of 5% of their annual household income. Individuals whose debt is cancelled are notified by mail and do not need to apply. Communities that have used ARP funds to forgive medical debt include:
Cook County, Illinois. In July 2022, Cook County announced the use of $12 million in ARP funds to purchase and forgive up to $1 billion in medical debt. The program has already wiped out the medical debts of 45,000 people worth $26 million.
Toledo and Lucas County, Ohio. In November 2022, the Toledo City Council and Lucas County approved a cumulative $1.6 million in ARP funds to buy out medical debt of certain residents. In total, the localities expected that this purchase will wipe out approximately $240 million in debt.
Pittsburgh, Pennsylvania. In January 2023, the Pittsburgh City Council approved a plan to use $1 million in ARP funds to eliminate up to an estimated $115 million medical debts for about 24,000 residents.
Taken together, these investments of about $16 million in ARP funding are expected to relieve up to nearly $1.5 billion in medical debt, a ratio of nearly 100-to-1, helping to mend household finances, improve mental health, and remove a barrier to accessing health care. Additional states and cities across the country are also considering using ARP funds to eliminate medical debt including most recently the state of Connecticut, where the governor proposed using $20 million in ARP funds to wipe out debts of about $2 billion.
Removing Medical Debt from Government Underwriting
Research shows that medical debt is not a reliable predictor of overall financial health – predominately reflecting inequities in health insurance coverage and the bad luck of a hospitalization or other medical event. A CFPB report found that including medical debt in credit scores understates consumers’ creditworthiness by 10 points, and including already paid medical debt understates consumers’ creditworthiness by as much as 22 points. This means that the use of medical debt in underwriting can cut off American’s access to credit without improving the accuracy and predictiveness of lending programs.
Informed by this research, the Biden-Harris Administration instructed all agencies to eliminate medical debt as a factor in underwriting of credit programs, whenever possible and consistent with law. Since then:
In October 2022, the Federal Housing Finance Agency (FHFA) validated and approved the use of VantageScore 4.0 and FICO 10T for the underwriting of mortgages by Fannie Mae and Freddie Mac. VantageScore 4.0 excludes medical debt entirely, and marks the first time that a credit score that excludes medical debt has been approved for mortgage underwriting of Enterprise loans. Moreover, the national credit reporting agencies announced several changes affecting the reporting of medical debt in collections – including that paid medical collection debt would no longer be included on consumer credit reports, an extension of timing for reporting of unpaid medical collection debt from six to twelve months, and a minimum $500 threshold for medical collection debt reporting – meaning that the role of medical debt in FICO 10T will also be reduced. The Enterprises’ automated underwriting systems do not consider medical debt in collections.
The Small Business Administration (SBA) will be taking a number of steps to reduce the role of medical debt in the underwriting of loans in the 7a guaranteed loan program. These steps include revising its Standard Operating Procedures to discourage lenders from considering medical debt and making technology investments in Lender Match to help borrowers find lenders that exclude medical debt from their credit decisions and empower such lenders to underwrite those loans via automated data compilation.
In February 2022, VA published a final rule under which it virtually ceased reporting medical debt, and other unfavorable debt, to the credit bureaus. This rule ensures that debt reported better reflects creditworthiness, while saving veterans from further financial struggles simply because they had to take on medical debt. VA is committed to mitigating the burden of medical debt in its Home Loan guarantee program and in the coming months will work with lenders and servicers to discuss how to best maximize the flexibility of their underwriting guidelines related to medical debt collections while monitoring investor reactions and access to capital for VA guaranteed loans
New Data on Medical Debt in Collections
The report from the CFPB documents trends in medical debt in collections that are listed on credit reports, with the data extending through the first quarter of 2022. Key findings include:
Between the first quarter of 2020 and the first quarter of 2022, the number of Americans with medical debt on their credit report fell by 8.2 million, a 17.9% reduction.
Medical debt in collections accounts for 57% of collections tradelines, exceeding the total number of collections tradelines from all other sources combined, including credit cards, personal loans, utilities, and phone bills.
One driver of this decline in medical debt is the expansion of health insurance coverage during the Biden-Harris Administration. In the first quarter of 2022, the uninsured rate hit an all-time low of 8.0%, with 4.2 million people gaining coverage between 2020 and the first half of 2022. This milestone does not yet not capture the impact of the most recent increase in Marketplace enrollment, with a record 16.3 million Americans signing up on HealthCare.gov and the state-based Marketplaces during the 2023 Open Enrollment Period. This includes 3.6 million people who are new to the Marketplaces for 2023. Since President Biden took office, the number of people who have signed up for an affordable health care plan through HealthCare.gov has increased by nearly 50%. The Biden-Harris Administration continues to work to create a more fair and transparent health care system for consumers, including by protecting millions of consumers from surprise medical bills through its implementation of the No Surprises Act—preventing about 1 million surprise bills per month—and by advancing hospital price transparency so patients know the upfront price of hospital services.
The declines in medical debt also reflect continued actions by the CFPB to highlight problems with inaccurate reporting of debt in collections and put the industry on notice to correct their behavior.
The declines in medical debt on credit reports do not yet capture any effects of the Spring 2022 announcement where the three largest credit reporting agencies—Equifax, Experian, and Transunion—stated that they will no longer include certain forms of medical debt on credit reports, including all debts under $500, starting in 2023. While not shown in these data, CFPB estimates these changes will likely result in further reductions in medical debt appearing on credit reports.
The decline in medical debt in collection represents one part of a broader decrease in the financial burden from medical bills during the Biden-Harris Administration. The CFPB report focuses on medical debt reported to credit bureaus, and does not capture medical debt that is placed on credit cards (including hospital credit cards) or paid for with personal loans or hospital payment plans. However, a CDC report released last month showed that between 2020 and 2021, the number of people in families having problems paying medical bills declined by 5.5 million people, indicating that American families are indeed experiencing across-the-board relief.
These findings represent real progress in providing breathing room for American families. At the same time, too many Americans still face crushing burdens from medical debt. The Biden-Harris Administration will continue to fight to ensure that Americans who are sick or are caring for sick loved ones are not hit with a double whammy of illness and medical debt. This includes continuing to help Americans sign up for health insurance; calling on Congress to make permanent the lower premiums for people buying ACA coverage and to close the Medicaid coverage gap; and continuing to reduce the burden of medical debt via sweeping actions by government agencies.
Further evidence that President Joe Biden’s economic plan – essentially building the economy from the bottom up and the middle out, and creating longterm, sustainable, stable growth – is working. Despite the manufactured hysteria over inflation and impending recession, the data shows otherwise – in terms of record 12 million jobs created, lowest unemployment in 50 years, real increase in wages.
Biden is also able to show progress in slowing inflation – which has been much more crippling throughout the world – and has been able to demonstrate that while his economic policies will address the national debt (a record reduction in the budget deficit), Republicans’ agenda would worsen the national debt (largely caused by the Trump/GOP tax plan that reduced taxes on the wealthiest individuals and corporations, and which added $7.4 trillion, or 25% of the national debt, in the four-year term). The Republican plan would actually add $3 trillion MORE to the national debt.
President Biden, commenting on the January CPI Report, said:
“Inflation in America is continuing to come down, which is good news for families and businesses across the country. Today’s data confirm that annual inflation has fallen for seven straight months. Inflation for food at the grocery store came down again last month. Gas prices are down about $1.60 from their peak last year. And real wages for working Americans are up over the last seven months, delivering welcome breathing room for American families. We are seeing this progress even as unemployment remains at its lowest level since 1969 and job growth remains resilient.”
“There is still more work to do as we make this transition to more steady, stable growth, and there could be setbacks along the way. That is why my unwavering focus is on continuing to lower costs for families, rebuild our supply chains, and invest in America. Right now, because of the Inflation Reduction Act we passed last year, we are lowering prescription drug costs, health care costs, and home energy costs for tens of millions of Americans all while lowering our deficits. My administration is eliminating junk fees which make it harder for American families to make ends meet at the end of the month. And we are creating manufacturing jobs all across the country, which will lower costs and rebuild our supply chains.”
“Unfortunately, many of my Republican friends in Congress seem intent on taking us in the opposite direction. They have proposed repealing the Inflation Reduction Act, which would make inflation worse, shower billions of dollars on Big Pharma, and increase the deficit. They are threatening to raise costs for seniors by threatening to cut Medicare and Social Security, and other critical programs that American seniors and families count on. And some are threatening to default on the full faith and credit of the U.S., which would raise costs and create economic chaos. I will stand firmly against any effort to make inflation worse and increase costs for families. Today’s data reinforces that we have made historic progress and are on the right track, and now we need to finish the job. “
The Congressional Republican Agenda to Increase the Debt by Over $3 Trillion
CongressionalRepublicanleaders insist that the national debt is among our nation’s greatest challenges, and reducing it is among their highest priorities. In fact, they claim that reducing the debt is so urgent it warrants endangering the entire U.S. economy through debt limit brinksmanship. But their legislative agenda to date points in a very different direction—with proposals that would increase the debt by over $3 trillion.
The first bill passed by the new Republican House majority increased the debt by $114 billion by allowing wealthy people and corporations to continue to cheat on their taxes.
Congressional Republicans proposed repealing—and are even running ads attacking—reforms President Biden signed to lower prescription drug costs. Repealing these policies would increase the amount of money Medicare pays Big Pharma, raise costs for seniors, and add $159 billion to the debt.
House Republicans have advocated and proposed repealing tax increases on large corporations that President Biden has signed into law, adding $296 billion to the debt.
Grover Norquist, President of Americans for Tax Reform, exposed the political logic of Congressional Republicans’ fiscal hypocrisy. He told Republicans their focus should be “not the deficit” after all: it’s to shift public discussion to cutting spending, paving the way for more tax cuts for the wealthy.
That trickle-down economic theory has never worked. President Trump and President Bush’s tax cuts addedtrillions to the debt and failed to deliver their promised benefits for the economy or American workers. And taking revenues—and even savings from cutting corporate subsidies—off the table means Congressional Republicans consistently propose deep cuts to programs seniors and middle-class and working families count on.
That’s why the American people deserve to see Congressional Republicans’ full and detailed budget plan and compare it with the President’s Budget plan to invest in America, bring down costs for families, protect and strengthen Social Security and Medicare, and reduce the deficit, which he will release March 9.
Congressional Republicans’ Commitment to Debt Increases
The fiscal consequences of the debt increases Congressional Republicans have put at the top of their agenda are stark. After a decade, these policies, if enacted, would add over $3 trillion to the debt (accounting for debt service costs), increasing debt as a share of the economy by almost 10 percentage points. Congressional Republicans’ debt increases include:
The Tax Cheats Protection Act: House Republicans’ first bill in the new Congress would add $114 billion to the Federal debt by repealing President Biden’s legislation that cracks down on wealthy tax cheats. While working people pay 99% of taxes on their income from wages and salaries, the top 1% hides about 20% of their income from tax, including by funneling it through offshore accounts and tax havens that do not report earnings. President Biden passed a law to make our tax system fairer by cracking down on wealthy tax cheats, while protecting middle-class taxpayers and small businesses and improving taxpayer service. But 221 House Republicans voted to enable tax fraud by wealthy Americans and large corporations.
Increase Spending With a Handout to Big Pharma: House Republicans have introduced a bill to repeal the entire Inflation Reduction Act (IRA), including the reforms President Biden signed into law to lower prescription drug costs. Congressional Republicans and Big Pharma have launched a concertedattack on the IRA’s prescription drug reforms, advocating to increase both Federal spending and seniors’ costs to increase Big Pharma’s profits. Thanks to the new prescription drug law, Medicare will finally be able to negotiate drug prices, and drug companies will pay rebates to Medicare if they try to hike their prices faster than the rate of inflation. Congressional Republicans want to repeal these policies, giving a $159 billion handout to Big Pharma, raising costs for seniors, and driving up the Federal debt.
Enrich Multi-Billion Dollar Corporations: In 2020, 55 of the largest, most profitable corporations paid $0 in taxes. The President signed into law legislation to level the playing field for companies and small businesses that are already paying their fair share in taxes. Under his corporate minimum tax, the largest, most profitable corporations—those with over $1 billion in profits—have to pay a 15% minimum tax on the profits they report to their shareholders. But House Republicans—through their Inflation Reduction Act repeal bill and other statements—have made clear that they want to enrich large corporations that don’t pay their fair share. That would add $222 billion to the debt.
Increase the Tax Subsidy for Stock Buybacks: President Biden signed into law a surcharge on corporate stock buybacks, which reduces the differential tax treatment between buybacks and dividends and encourages businesses to invest in their growth and productivity as opposed to paying out corporate executives or funneling tax-preferred profits to foreign shareholders. The President in his State of the Union address proposed quadrupling the stock buybacks tax to 4% to address the continued tax advantage for buybacks and encourage long-term investment over giveaways to executives. House Republicans instead want to repeal the stock buybacks tax and let corporations continue to funnel tax-preferred profits to shareholders instead of investing in productivity and the broader economy. That would add $74 billion to the Federal debt.
Extend President Trump’s Unpaid-for Tax Giveaway to the Wealthy and Large Corporations: President Trump and Congressional Republicans deliberately sunset portions of their tax giveaway to the wealthy and large corporations. They did this to conceal how much their plan added to the debt as well as how large the tax breaks were for multi-millionaires and large corporations. Now, House RepublicanLeadership has made clear that extending President Trump’s tax giveaway to the wealthy and large corporations is one of their top priorities. An analysis by the Tax Policy Center found that doing so would mean an average tax cut of $175,000 for the top 0.1%—Americans making more than $4 million per year. That average tax cut is more than 2.5 times a typical family’s annual income. Meanwhile, extending the expiring Trump tax cuts would add $2.7 trillion to the Federal debt over 10 years.
The President supports a fiscally responsible approach to continuing current tax policies for people making less than $400,000 per year, and opposes any tax increase for this group. Meanwhile, Congressional Republicans—including the more than three quarters of them who are signatories to Grover Norquist’s tax pledge—have made clear they will oppose paying for middle-class tax cuts by raising taxes on the wealthy and large corporations.
Even Without a Budget, Congressional Republicans Are Already Showing Who Will Pay the Price
The proposals Congressional Republicans have put forward show that, even as they commit to massive tax cuts for the wealthy and large corporations, they are more than ready to raise taxes on middle-class and working families. The House Republican IRA repeal bill would cut premium tax credits that are helping an estimated 14.5 million people pay for health insurance. And the House Budget Committee last week doubled down on eliminating Affordable Care Act premium tax credits for middle-income people with high health insurance premiums: a tax increase of $7,600 per year for a typical 62-year old earning $55,000.
In addition, some Congressional Republicans continue to push a national retail sales tax bill that would repeal most existing taxes and impose a new 30% sales tax on American families. The legislation would increase debt by trillions—and cut taxes for a couple making a million dollars a year by more than $200,000—and at the same time would raise taxes by at least $7,000 for a retired couple with $60,000 in Social Security income and at least $6,000 for a single mom making $38,000, a recent analysis found.
The bottom line is: having committed to over $3 trillion in debt increases and also insisted they are committed to reducing the debt, Congressional Republicans owe the American public a complete and transparent accounting of who will foot the bill. Will it be middle-class and working families, seniors, students, or all of the above?
House Republican agenda amounts to a death panel for Medicare and Social Security:
The contrast in agendas for America between President Joe Biden and the Democrats and the Congressional Republicans could not be more stark.
While President Biden, in his State of the Union address, described his plans for building on the historic job creation he has achieved, making more progress against inflation, reducing the deficit by making the wealthy and big corporations pay their fair share, and protecting Medicare and Social Security benefits from cuts, in contrast, House Republicans opened the week by announcing the latest in a long succession of attempts to undermine Medicare and Social Security.
Bloomberg reports that as part of a ransom demand for not triggering a financial meltdown, top House Republicans want an agreement that both earned benefits programs are put on track for cuts.
As The Washington Post reported in late January, House Republicans have continuously pressed for slashing Medicare and Social Security benefits in exchange for not actively harming the American economy with the first debt default in our history.
Republicans have also introduced legislation to repeal the Inflation Reduction Act, which would be one of the biggest Medicare benefit cuts in history, depriving seniors of lower insulin costs, the $2,000 cap on out of pocket expenses for prescription drugs, and Medicare’s new ability to negotiate lower drug costs.
Today’s news is even more confirmation that House Republicans are taking direct aim at programs that are critical to the middle class, even as they vote for tax giveaways to the rich that would manage to increase taxes on working families while raising the deficit at the same time, the White House stated.
“With the President poised to announce new plans to keep making our economy works from the bottom up and the middle out – not the top down – House Republicans are dead-set on the opposite,” said White House spokesperson Andrew Bates. “They’re opening the week unveiling their latest in a long line of ultimatums about how they’ll act to kill jobs, businesses, and retirement accounts if they can’t cut Medicare and Social Security benefits. Meanwhile, they’re voting to worsen the deficit with tax welfare for the rich and big corporations. Think about that: they’re targeting the Medicare and Social Security benefits that middle class families pay in to earn their whole lives, then turning around and giving tax handouts to big corporations. The American people want more jobs and lower costs, not a death panel for Medicare and Social Security.”
“While President Biden shows the American people his plan to build on the unprecedented deficit reduction his leadership has already delivered, by having the richest taxpayers and big corporations pay their fair share and lowering prescription drug prices, House Republicans’ only plan is to make the deficit skyrocket by over $3 trillion with unaffordable tax giveaways to wealthy special interests,” stated White House spokesperson Andrew Bates. “They’ve even proposed raiding Medicare so that the ultra-rich can enjoy new tax welfare. Meanwhile, House Republicans are threatening to actively throw our economy into a tailspin with a default – which they have a non-negotiable, Constitutional duty to prevent – unless they can further cut Social Security, Medicare and Medicaid. It’s utterly backwards. The President is delivering on his commitment to build an economy that grows from the bottom up and the middle out – not from the top down. The House GOP seems determined to pull the American economy in the opposite direction, increasing taxes on working families while giving $3 trillion in new handouts for the rich.”
The chart below is based on the record:
10-Year Deficit Increase
Republican House-passed bill to make it easier for billionaires to cheat on their taxes
Deficit increases from Republican proposals to date
Over $3 trillion
Congressional Republicans keep calling for earned benefits on the one hand, but more tax giveaways for the rich on the other
After President Biden put Republicans on the defensive over their long-public intentions to slash Medicare and Social Security benefits, a continuing list of congressional Republicans ranging from Ron Johnson last week to Senator Mike Rounds yesterday, keep proving his point.
Whether it’s a large number of House Republicans and Rick Scott pushing to repeal the Inflation Reduction Act in what would be one of the worst Medicare benefit cuts of all time, or the Republican Study Committee proposing benefit cuts and the privatization of Social Security of last year, the receipts are undeniable. Formonths, congressional Republicans have indicated they would even use the threat of a catastrophic default to cut Medicare and Social Security benefits.
Republicans in Congress justify these intentions under the guise of fiscal responsibility. However, at the same time, they are advocating for enormous tax giveaways to rich special interests that, combined, would add over $3 trillion to the debt. Those two positions are irreconcilable.
The first vote the Republican-controlled House took was to help wealthy individuals and multinational corporations worsen inflation by cheating on their taxes. They broadly support renewing the Trump tax giveaways for the rich. And in addition to being a Medicare benefit cut, repealing the Inflation Reduction Act would at the same time be more tax welfare for the rich and a giant windfall for Big Pharma. And that’s just the tip of the iceberg.
“It’s irreconcilable to support Medicare and Social Security benefit cuts in the name of supposed ‘fiscal responsibility,’ while at the same time adding $3 trillion to the national debt with a seemingly endless gravy train for rich special interests,” said White House spokesperson Andrew Bates. “Prioritizing tax giveaways for the wealthy and specific handouts for Big Pharma over the Medicare and Social Security benefits that middle class families pay to earn throughout their lives is a recipe for making our economy work from the top-down. The last thing that Americans who’ve felt invisible want is cuts to lifeline programs in exchange for permanent trickle-down economics.”
It is truly shocking to hear “poll” results where the majority of people think President Biden has done nothing, that the economy is weak, that no new jobs have been created. Beyond absurd – you have to wonder about who was polled, how the polling was done, or what rock these people have been under, or if they are permanently wired to Fox Fake News. This preview of the State of the Union Address providing a Fact Sheet on the Biden Administration’s economic record, comes from the White House:
President Biden has long believed that we must build the economy from the bottom up and middle out, not the top down. As the President says, when the middle class does well, the poor have a ladder up and the wealthy still do very well. He believes the best way to grow the economy, create good-paying jobs, and lower costs for families is by promoting workers, investing in America and its people, making the economy more competitive, and reforming the tax code to reward work and not wealth. Our progress over the last two years shows that his economic strategy is working.
The state of the economy is strong. In his State of the Union address, President Biden will highlight the historic progress we have made to bring the economy back from the pandemic and create more jobs in a two-year period than under any other president on record. He will discuss progress lowering costs and providing more breathing room for families, including cutting prescription drug costs, health insurance premiums, and energy bills, while driving the uninsured rate to historic lows. He will outline the manufacturing boom across the country—in infrastructure, semi-conductors, and clean energy—that is strengthening parts of the country left behind and creating good jobs, including for workers without college degrees.
And, he will emphasize that his economic strategy has been a fiscally responsible one. President Biden’s predecessor passed a nearly $2 trillion unpaid for tax cut with benefits skewed to the wealthy and large corporations, and the deficit went up every single year under his watch. Under President Biden, the deficit has fallen by $1.7 trillion, and his reforms to take on Big Pharma, lower prescription drug costs, and make the wealthy and large corporations pay their fair share will reduce the deficit by hundreds of billions more.
President Biden knows that the work to build an economy from the bottom up and middle out is far from done. He will say that we need to build on this work to continue growing our economy and lowering costs. He will discuss the work to come to implement his historic investment agenda in a way that benefits all Americans. And, the President will preview the budget he will send to Congress on March 9, which will build on the historic economic progress of the past two years by continuing to invest in America and its people, continuing to lower costs for families—from child care to housing to college to health care—protecting and strengthening Social Security and Medicare, and reducing the deficit through additional reforms to ensure the wealthy and largest corporations pay their fair share.
Historic Progress to Create Jobs, Promote Workers, and Transition to Steady and Stable Growth
When President Biden took office, the economy was in crisis, millions were out of work, and Main Streets were shuttered. In two years, the President has overseen a historic economy recovery and laid the foundation for steady and stable growth in the years to come.
A historic, equitable economic recovery. President Biden’s economic strategy led to a historic recovery with tangible benefits for workers and families. Since President Biden took office, the economy has created more than 12 million jobs—including more than 800,000 manufacturing jobs—and the unemployment rate is at a 54-year low, including near record lows for Black workers. The unemployment rate for Hispanic workers hit a record low last year. The past two years were also the best two years for new small business applications on record. None of this progress was pre-ordained. Before President Biden signed his Rescue Plan into law, experts predicted it would take far longer to create this many jobs. And few—if any—experts predicted it would be possible to get the unemployment rate down to a level last seen in 1969. In fact, before the Rescue Plan passed, the Congressional Budget Office projected the unemployment rate in the first quarter of 2023 would be 4.8%, rather than its current level of 3.4%.
More breathing room and economic security for families. This historic jobs recovery, along with Biden-Harris Administration policies designed to help workers and families, has left families more economically secure than before the pandemic. Compared to pre-pandemic levels, households are now less likely to be delinquent on their credit card bills and mortgages, and more likely to have health insurance. They are facing fewer evictions and foreclosures than there were before the pandemic, and bankruptcy rates are lower as well. This economic security is giving families peace of mind and breathing room that they didn’t have before the pandemic. Child poverty also fell to a historic low in 2021, and the President will call on Congress to continue these gains through the expanded Child Tax Credit, even as he has taken action to lift nearly 1 million children out of poverty by modernizing nutrition benefits.
Progress on transitioning to steady, stable growth with lower inflation. In the wake of unprecedented economic disruption from a historic pandemic, inflation has been a challenge all over the globe. Last spring, President Biden set the goal of transitioning our economy to lower inflation, while maintaining a resilient job market for American workers. Now, annual inflation has fallen for six months straight, driven in large part by a roughly $1.50 decline in gas prices compared to last summer. Over the second half of 2022, three-month core inflation fell from nearly 8% at an annualized rate to 3% at an annualized rate—at the same time that the unemployment remained at or near 50-year lows. As a result of the progress on inflation and the resilience of the job market, wages adjusted for inflation are higher than they were seven months ago. While there is more work to do to bring inflation down and lower costs for families—and there may be setbacks along the way—the past six months have marked significant progress toward the President’s goal of bringing down inflation without giving up the economic progress we’ve made.
Manufacturing Boom Across the Country and Historic Investments in Infrastructure
Even before the pandemic, the middle class was hollowed out. Manufacturing jobs moved overseas and factories closed down. The President believes that the United States can lead the world in manufacturing again. His economic plan has done just that—generate a manufacturing boom across the country and build an economy where no one is left behind. The President’s economic plan is stimulating new factories and manufacturing lines and creating good-paying jobs that don’t require a four-year degree. His plan includes the most significant upgrade to our nation’s infrastructure in generations—an investment larger than FDR’s investment Rural Electrification and Eisenhower’s efforts to build the Interstate Highway system. It includes the most significant clean energy plan ever, transitioning the clean energy economy and lowering households’ energy costs. And, it includes the most substantial investment in science, innovation, and industrial strategy in over 50 years.
In just the two years since President Biden took office, we have spurred more than $700 billion in announced private investment in manufacturing, utilities, and energy from more than 200 companies in all 50 states. Much of this investment is driven by the semiconductor, energy, electric vehicles and batteries, and other cutting-edge sectors.
Ensuring President Biden’s agenda creates a future made in America. Building on the historic investment agenda the President has signed into law, President Biden is ensuring that our historic infrastructure investments use materials made in America. For decades, Buy America laws focused on iron and steel and only covered certain federally funded infrastructure projects. This giant loophole meant projects could be built with other materials sourced from anywhere in the world. The Biden-Harris Administration is working to close this loophole and implement new standards, once and for all, so materials for roads and bridges, airports, transit, rail, water, high-speed internet, and clean energy infrastructure are made in America and support American jobs.
The President will announce in the State of the Union that he is issuing proposed guidance to ensure construction materials from copper and aluminum to fiber optic cable, lumber, and drywall, are made in America. Once finalized, these standards will apply to virtually all infrastructure spending supported by Federal financial assistance—not simply roads and bridges, but also buildings, water infrastructure and high-speed internet, providing consistency for companies and state and local governments to apply the standards and a strong federal government-wide demand signal.
These steps complement the Administration’s implementation of the most robust updates in nearly 70 years to the Buy American Act for federal procurement. Those updates are helping to ensure that taxpayers’ dollars support American manufacturing, boost resiliency in critical industries, and create good-paying jobs right here at home. The Buy American rule increased the percentage value of component parts manufactured in the US from 55% to 60% this past fall as the first step toward increasing that value to 75%.
Lowering Health Care Costs for Families
The President knows what it’s like to stare at the ceiling, worried about paying for prescriptions or health care. He believes that every American has a right to the peace of mind that comes with knowing they have access to affordable, quality health care. President Biden passed legislation to lower health care and prescription drug costs for American families, giving families more breathing room. Tomorrow, he will discuss the historic progress we have made on lowering health care costs under his watch, including steps to strengthen Medicare, Medicaid, and the Affordable Care Act (ACA), and steps we must take to build on that progress and give more families the peace of mind of affordable prescriptions and health care.
$800 lower health care premiums. A record-setting 16.3 million people signed up for ACA coverage this year, and the national uninsured rate hit an all-time low last year. That’s thanks in large part to President Biden and Democrats in Congress’ work to lower premiums for ACA coverage by an average of $800 per person per year—along with President Biden’s actions to quadruple consumer assistance, increase outreach, and close the “family glitch” loophole that blocked many children and spouses from affordable coverage. Tomorrow, the President will call on Congress to make these savings for American families permanent, so we can continue our work to make health care a right, not a privilege.
60 million Medicare beneficiaries will be protected from skyrocketing drug costs. President Biden took on Big Pharma—and won. Thanks to the new prescription drug law, Medicare will be able to negotiate drug prices and cap out-of-pocket pharmacy costs at $2,000 per year under Part D, and drug companies will pay rebates to Medicare if they try to hike their prices faster than the rate of inflation. For the last six weeks, seniors across the country have been benefiting from key drug pricing protections that are putting money back in their pockets:
$35 price cap on insulin in Medicare. Starting this year, Medicare beneficiaries will pay no more than $35 per month per insulin prescription. 1.5 million people would have each saved, on average, $500 per year had this law been in effect in 2020. The President will call on Congress to extend this commonsense, life-saving protection to all Americans, not just people with Medicare.
$0 vaccines through Medicare. More adult vaccines are now available without any co-pays under Medicare Part D thanks to the new prescription drug law. This includes the shingles vaccine, which used to cost seniors as much as $200.
1 million surprise medical bills are prevented every month. Before President Biden took office, millions of people received surprise bills for out-of-network care, costing them hundreds or thousands of dollars. The Administration is protecting millions of consumers from surprise medical bills through the implementation of the No Surprises Act, which has already protected 10 million Americans from unfair, undeserved out-of-network charges.
$3,000 in savings on hearing aids. In October 2022, over-the-counter hearing aids hit the shelves following a rule from the Food and Drug Administration. Now, millions of Americans can buy hearing aids for low to moderate hearing loss without a prescription or exam. This is anticipated to save Americans as much as $3,000 per pair, providing more breathing room for the estimated 30 million Americans with mild-to-moderate hearing loss.
39 states and the District of Columbia have expanded Medicaid coverage. Missouri, Oklahoma, and South Dakota are the most recent states to expand Medicaid to hundreds of thousands of low-income adults previously locked out of Medicaid coverage. The Administration remains committed to closing the coverage gap in the remaining 11 states, and the President will call on Congress to finish the job. In addition, the Administration also worked with over half the states and DC to extend Medicaid postpartum coverage for millions of women.
As President Biden said at last year’s State of the Union, “capitalism without competition isn’t capitalism. It’s exploitation—and it drives up prices.” Over the past year, the Administration has been delivering for the American people to lower prices, protect workers, and increase competition across the economy. In this year’s State of the Union, the President will highlight progress we need to continue to make to promote competition and protect consumers.
Cracking down on junk fees. The Consumer Financial Protection Bureau (CFPB) is lowering or eliminating the banking and credit card “junk” fees that too many Americans pay. The CFPB announced a proposal that will slash excessive credit card late fees to $8 from approximately $30, which combined with other measures could save consumers up to $9 billion a year in late fees. Last year, the CFPB also targeted overdraft and bounced check fees—making changes that will cut fees by over $1 billion a year. The Department of Transportation (DOT) also proposed a rule that would require airlines and online search sites to disclose up front any fees to choose seats including to sit next to one’s child, for baggage, and for changes or cancellations. It also published a dashboard of airline policies when flights are delayed or cancelled due to issues under the airlines’ control, leading 9 airlines to change policies to guarantee coverage of hotels and 10 airlines to guarantee coverage of meals.
The President will re-state his call on Congress to pass a Junk Fees Prevention Act to ban resort and family seating fees, eliminate unnecessary early termination fees for internet and phone services, and crack down on excessive fees and other practices that drive up ticket prices. DOT will also launch a family seating dashboard to raise awareness about airline policies and undertake a rulemaking to ban these fees.
Addressing non-compete agreements. Roughly 30 million Americans, including many low-wage workers, are covered by non-compete agreements that can stifle wage growth for American workers by making it more difficult for workers to leave for higher-paying jobs. The Federal Trade Commission released a proposed rule in January 2023 to ban non-compete clauses, which it estimates will increases wages by $300 billion annually.
Lowering ocean shipping costs. Ocean carriers increased their rates by as much as 1,000% during the pandemic. Last June, Congress passed the Ocean Shipping Reform Act heeding the President’s call in the 2022 State of the Union. This legislation will cut costs for shippers, and in turn American families, and ensure fairer treatment for exports from our farmers and ranchers.
Lowering meat prices. The Administration has taken a number of steps to increase competition in the meat and poultry markets. The Department of Agriculture (USDA) has also issued proposed regulations under the Packers & Stockyards Act to increase competition and market integrity and to prevent abuse of farmers in the poultry growing system. USDA is also using $1 billion to expand independent meat processing capacity, so the market isn’t dominated by just a few big players.
Helping consumers get the right to repair. The President believes that consumers shouldn’t be restricted by big manufacturers from repairing their own equipment—whether it’s a tractor or a smartphone. After President Biden expressed strong support for the right to repair in his Competition Executive Order, Microsoft conducted a study on the issue and made its Surface devices more easily repairable and Apple announced self-service repair for certain devices.
Improving safety and accountability in nursing homes. As the President directed in last year’s State of the Union, CMS has taken action to strengthen oversight of the worst performing nursing homes, prevent abuse and Medicare fraud, and improve families’ ability to comparison shop across nursing homes. In the coming days and months, CMS will announce new actions to increase safety and accountability at nursing homes.
Reducing the Deficit by Ensuring the Wealthy and Large Corporations Pay their Fair Share
In the last two years, the Administration cut the deficit by more than $1.7 trillion—the largest deficit reduction in American history. The President believes we need to continue that progress—and reward work, not wealth.
Since coming to office, the President has signed legislation to make the wealthy and large corporations pay their fair share and provide tax cuts for working families, while reducing the deficit. Under his plan, no one making under $400,000 per year will pay more in taxes.
Billionaire Minimum Tax. President Biden is a capitalist and believes that anyone should be able to become a millionaire or a billionaire. He also believes that it is wrong for America to have a tax code that results in America’s wealthiest households paying a lower tax rate than working families. In a typical year, billionaires pay an average tax rate of just 8%. In the State of the Union, he’ll call on Congress to pass his billionaire minimum tax. This minimum tax would make sure that the wealthiest Americans no longer pay a tax rate lower than teachers and firefighters.
Surcharge on corporate stock buybacks. Stock buybacks enable corporations to funnel tax-advantaged payouts to wealthy and foreign investors, instead of paying dividends that shareholders are required to pay taxes on. In addition, a number of experts have argued that CEOs—who are compensated mostly in stock—use buybacks to enrich themselves to the detriment of the long-term growth of the company. Last year, oil and gas companies made record profits and invested very little in domestic production and to keep gas prices down—instead they bought their own stock, giving all that profit to their CEOs and shareholders. President Biden signed into law a surcharge on corporate stock buyback, which reduces the differential tax treatment between buybacks and dividends and encourages businesses to invest in their growth and productivity as opposed to paying out corporate executives or funneling tax-preferred profits to foreign shareholders. In the State of the Union, the President will call for quadrupling the tax on corporate stock buybacks.
Corporate minimum tax. In 2020, 55 of the largest corporations that were profitable paid $0 in federal income tax. To end that unfairness in the tax code, President Biden signed into law a 15 percent minimum tax on the profits that large corporations—those with over $1 billion in profits—report to shareholders. This book minimum tax means that it will be harder for companies that say they’re earning a billion in profits to pay tax rates in the single digits on those profits. It also levels the playing field for companies—including small businesses—that are already paying their fair share.
Legislation to crack down on tax cheats and create a fairer tax system.Working people pay 99% of the taxes they owe on their income from wages and salaries, while the top 1 percent hides about 20% of their income from tax, including by funneling it through offshore accounts in tax havens that don’t report earnings. The President signed legislation into law that will crack down on wealthy people and large corporations that cheat on their taxes, while improving customer service for taxpayers. The legislation will not increase audit rates for families or small businesses making under $400,000 per year.
Think about why Republicans would have as their singular policy to destroy the United States economy – threaten, even actually refuse to raise the debt ceiling which will destroy the nation’s “full faith and credit”, unleash higher interest rates (cost), inflict untold pain and suffering on working people and derail the American Dream for countless millions, while coddling the richest 1% by going after the IRS and law enforcement. It’s not just to secure campaign funding and show their obeisance to their masters: they think that if they destroy the economy, unleash suffering, and, if more than two decades of history are the example, that the masses will blame Joe Biden and the Democrats (after all, they control the White house and Senate), so they will win the 2024 elections.
Republicans used fraud to win the midterms and take over the House, pretending they cared about inflation and crime, when in just these first days of their rule, their first acts have been to further erode civil rights, especially women’s reproductive rights, raise costs, worsen the national debt, harm public safety. After all, you don’t hear any Republican crow about how gas prices have fallen to pre-Putin levels and inflation rates have fallen to lowest level since March 2020, meanwhile, Speaker McCarthy put insurrectionists including Marjorie Taylor Greene on the Homeland Security Committee and fraudster George Santos on the Small Business Committee and Space, Science, and Technology, and kicked Adam Schiff off Intelligence And so much worse is to come. Just how destructive is the Republican economic agenda? If the debt ceiling is not raised and the nation’s credit rating falls, interest rates will rise, the cost of everything will go up, people will lose jobs, houses, and there will be less tax revenue flowing into the government, more money flowing out, and the national debt will only get worse. The White House issued this memo:–Karen Rubin/news-photos-features.com
House Republican MAGA Economic Plan: Raise Taxes and Increase Costs for the Middle Class, Protect Rich Tax Cheats, and Cut Social Security & Medicare
House Republicans had a busy first week in the majority. Under President Biden’s leadership and economic plan, we just finished the best two years of job growth on record, inflation has been coming down for six straight months, gas prices are down around $1.70 from their summer peak, and President Biden’s plan to lower prescription drug costs and energy costs is going into effect.
House Republicans have a very different economic plan: make inflation worse, protect rich tax cheats, increase the deficit, raise taxes on middle-class families, and cut Social Security and Medicare. In their first week, they wasted no time in moving forward on these priorities:
Increasing Gas Prices: The new House Republican majority has proposed and will soon consider a bill that would raise gas prices and deprive Americans of relief at the pump when supply is most needed by restricting the ability to release from the Strategic Petroleum Reserve. After global oil prices skyrocketed because of Putin’s invasion, the President successfully used the Strategic Petroleum Reserve in 2022 to expand supply that helped lower gas prices for families here at home – while laying the groundwork to refill at a profit to taxpayers in the future. But House Republicans want to tie Presidents’ hands and hamstring one of the best supply tools we have to protect Americans from disruptions that spike gas prices.
Protecting Rich Tax Cheats:: Working people pay 99% of the taxes they owe, while the top 1 percent hides about 20% of their income from tax, including by funneling it through offshore accounts in tax havens that don’t report earnings. The President and Congressional Democrats passed legislation to make the wealthy and big corporations pay their fair share, including by preventing them from cheating on the taxes they already owe.
For their very first bill, House Republicans voted last week to repeal that provision and let some super-wealthy people pay less in taxes than many hard-working Americans – including through outright tax fraud.
In addition to protecting rich tax cheats, the bill adds to the deficit. According to the nonpartisan Congressional Budget Office, it increases the deficit by nearly $115 billion by enabling wealthy tax cheats to engage in additional tax fraud and avoidance. And for ordinary middle-class people who follow the law, it would mean longer waits for tax refunds. Lose-lose for working families.
Raising Taxes on the Middle-Class and Cutting Taxes on the Richest Americans with a New National Sales Tax: According to public reporting, Speaker McCarthy has agreed to bring to the floor a bill that would repeal most existing taxes and impose a new 23% national sales tax on American families. The bill would cover almost all goods and services purchases – from groceries and gas to food and medicine.
Non-partisanexperts across the ideologicalspectrum agree this proposal would raise taxes for middle-class Americans and slash them for the wealthy, while President George W. Bush’s Treasury Department analyzed a similar proposal and found it would raise taxes by thousands of dollars each year for typical middle-class families; the burden would likely be especially great for seniors and families with children. Meanwhile, people earning millions of dollars a year would see tax cuts of $100,000 or more.
Cutting Social Security and Medicare: President Biden has made clear that Congress must deal with the debt limit and they must do so without conditions. But Congressional Republicans continue to threaten to hold the nation’s full faith and credit hostage to their demands for Social Security, Medicare, and Medicaid cuts, and cuts to the part of the budget that funds scientific and medical research, education, consumer protection, and other basic services – even as business leaders, economists, and other experts continue to warn about the costs of their brinksmanship for the U.S. economy.
Meanwhile, militant Republicans like Rep. Andy Biggs are calling for the U.S. to default on its debt obligations (spending that has already been approved by Congress and spent), by refusing to raise the debt ceiling. But rather than cut spending, it would mean chaos, collapse, and catastrophe for the U.S. and a windfall for China, and at the same time RAISE costs and the national debt because interest rates would skyrocket, 6 million would lose their jobs, requiring more unemployment and social services.
Rep. Andy Biggs says outright, “We cannot raise the debt ceiling. Democrats have carelessly spent our taxpayer money and devalued our currency. They’ve made their bed, so they must lie in it.”
This is a stunning and unacceptable position that would lead to economic chaos, collapse, and catastrophe. And in so doing it would give our competitors, like China, an historic leg up in overtaking the American economy.
In line with every major outlet, CNN warned yesterday that failing to lift the debt ceiling would “tank the financial markets, suspend Social Security payments to senior citizens, hurt the economy and cause other chaos.”
Leading congressional Republicans have themselves admitted in the past that default would trigger an economic collapse, killing millions of jobs and decimating 401k plans. That’s why they voted to raise the debt ceiling without brinkmanship 3 times during the Trump Administration – with strong bipartisan support from their Democratic colleagues.
But hardline MAGA Republicans are now advocating for this outcome. This is despite President Biden having achieved unprecedented deficit reduction and despite House Republicans’ supports for tax giveaways to the rich that put trillions on the nation’s credit card.
Other congressional Republicans intend to use the debt limit to force an economic meltdown unless they can cut Medicare and Social Security, directly against the will of a bipartisan majority of the country.
“Rep. Biggs is dead wrong to actively support the ruin of millions of American livelihoods, 401k plans, and small businesses, all in the name of scorched earth partisanship,” said White House spokesperson Andrew Bates. “Default would needlessly plunge the country into economic chaos, collapse, and catastrophe while giving our competitors like China an historic boost against us. That’s why congressional Republicans – with strong bipartisan support from Democrats – avoided default 3 times under Donald Trump, without conditions or playing chicken with our credit rating. This president and the American people will not stand for unprecedented economic vandalism. Full stop.”
Be reminded: Trump added $7.4 TRILLION to the national debt in just 4 years – that 25% (one-fourth) of the total debt of nearly 250 years. Much of that was before pandemic, largely caused by the $2 trillion giveaway to the wealthiest and to the biggest corporations. 50 corporations, with a combined $50 billion in profit paid zero tax. It’s estimated that the wealthiest hide 20 percent of their taxable wealth.
Americans say they are really, really upset about higher gas prices, despite the fact the prices have come down consistently since the peak in the summer ($1.20) and are just about 30c higher per gallon, and that the price rise is largely due to Putin’s genocidal invasion of Ukraine, and but that inflation will affect how they vote. But what is also clear is that American-based oil companies have basically indulged in price-gouging, war-profiteering – as evidenced by record profits during the third quarter. We’re talking Exxon’s highest quarterly profits in its 152-year history. The oil companies have pocketed $100 billion in just 200 days, two and three times the quarterly profit of a year ago, setting historic records. Think about that.
“Their profits are a windfall of war,” President Biden declared, “the windfall from the brutal conflict that’s ravaging Ukraine and hurting tens of millions of people around the globe. You know, at a time of war, any company receiving historic windfall profits like this has a responsibility to act beyond their narrow self-interest of its executives and shareholders…if they don’t, they’re going to pay a higher tax on their excess profits and face other restrictions. ..It’s time for these companies to stop war profiteering, meet their responsibilities to this country, and give the American people a break and still do very well.”
And here’s my question: the oil companies are using billions of that profit to buy back their stock, rather than reinvest or do something productive with all that cash. Why don’t they instead be the ones developing, installing and owning clean, renewable energy technologies – be part of the solution to carbon-emissions-caused global warming and climate change, rather than the cause. They could be developing battery-storage technologies, EV charging infrastructure, cheaper and better solar panels and wind turbines. Instead, they spend their untold billions to lobby lawmakers to challenge climate action and propagandize climate change denial.
Here’s another issue: they are deliberately keeping gas prices high because they know it may hurt Democrats’ control of Congress, and stop, even reverse Biden’s progress on climate action and a transition to clean, renewable energy.
Here are the facts, provided by the White House, and President Biden’s remarks – Karen Rubin/news-photos-features.com
Oil companies are posting record profits. Over the last two quarters alone, ExxonMobil, Chevron, Shell, BP, ConocoPhillips, and TotalEnergy earned over $100 billion in profits. That is more than they earned all of last year, and more thantwo-and-a-half times what they earned in the same quarters of 2021.
Oil companies are overcharging American families at the pump.Today, profit margins at five of the largest oil companies are higher than their pre-pandemic levels.Refining margins per gallon of gasoline are about 50 cents over historical levels – nearly double what is typical. Diesel profit margins are even larger at about $1.90 above historical levels – more than six times what is typical.
Oil companies are padding shareholder pockets rather than increasing production. ExxonMobil, Chevron, Shell, BP, ConocoPhillips, and TotalEnergy are spending more money buying back their own shares than investing in raising their productive capacity. Over the last six months, these companies reported spending over $50 billion to buy back their own shares and pay out dividends. That’s about the same amount that these companies returned to shareholders all of last year. In Q2 and Q3 of 2022, the ratio of capital expenditures to earnings of the six large oil companies was only 35%, compared to over 130% during the same quarters from 2017 to 2019 pre-pandemic.
President Biden remarked on the record oil profits on October 31. Here’s a transcript:
Putin’s invasion of Ukraine in March set gas prices soaring literally around the world — not just here, but around the world.
And because of the action we’ve taken since then, gas prices have actually come down — going into the Strategic Petroleum Reserve — here at home, in America. They’re down more than $1.20 since their peak this summer. And they’ve been falling for the best of — best part of the last three weeks.
In June, the average price — not the most common price, but the average price — nationwide was — was over $5 a gallon. Today, the average price for a gallon of gas is $3.76. That’s adding up to real savings for American families — the difference between those prices. And this difference makes a difference.
In a difficult time, Americans across the country have stepped up to do the right thing. But not everyone has stepped up. The oil industry has not met its commitment to invest in America and support the American people.
One by one, major oil companies have reported record profits, not just a fair return for hard work. Every company is entitled to that: a fair return for the work they do or innovation they generate. But I mean profits so high it’s hard to believe.
Now, the second quarter of the profits were really high. But the third quarter — last week, Shell announced that it made $9.5 billion in profits for the third quarter — $9.5 billion. That’s almost twice as much as it made in the third quarter of last year. I think that’s something. You think that’s incredible? I thought, “My — that’s as good as — as high as it’s going to get.”
Then along came Exxon. Exxon’s profits for the third quarter were at $18.7 billion. One quarter: $18.7 billion — nearly triple what Exxon made last year and the most in its 152-year history. It’s never made that much profit.
In the last six months, six of the largest oil companies have made more than $100 billion — $100 billion. And we had a little discussion about this, the three of us and others. One hundred billion in profits in two — less than 200 days…
Here’s why it matters: If these companies were making average profits they’ve been making by refining oil over the last 20 years instead of the outrageous profits they’re making today and if they passed the rest on to the consumers, the price of gas would come down around an additional 50 cents.
If they’re investing their profits at historic rates in their U.S. operations, then America would be producing more oil today and prices would be down even further. But rather than increasing their investments in America or giving American consumers a break, their excess profits are going back to their shareholders and to buying back their stock, so the executive pay is going to skyrocket.
Give me a break. Enough is enough. Look, I’m a capitalist. You’ve heard me say this before: I have no problem with corporations turning a fair profit or getting the return on their investment and innovation. But this isn’t remotely what’s happening.
Oil companies’ record profits today are not because they’re doing something new or innovative. Their profits are a windfall of war — the windfall from the brutal conflict that’s ravaging Ukraine and hurting tens of millions of people around the globe. You know, at a time of war, any company receiving historic windfall profits like this has a responsibility to act beyond their narrow self-interest of its executives and shareholders.
I think they have a responsibility to act in the interest of their consumers, their community, and their country; to invest in America by increasing production and refining capacity. Because they — they don’t want to do that. They — they have the opportunity to do that — lowering prices for consumers at the pump.
You know, if they don’t, they’re going to pay a higher tax on their excess profits and face other restrictions. My team will work with Congress to look at these options that are available to us and others. It’s time for these companies to stop war profiteering, meet their responsibilities to this country, and give the American people a break and still do very well.
The American people are going to judge who’s standing with them and who is only looking out for their own bottom line. I know where I stand.
It is worth noting that Republicans have staked their takeover of Congress and state houses on inflation, especially in gas prices, but while offering no actual solutions, have actively obstructed efforts to mitigate the pain of higher costs to American families, for example, blocking efforts to address price gouging and the fact that energy companies have pocketed RECORD profits. Much of the pressure on prices is out of Biden’s control, since prices are set on a global market, and Saudi Arabia , in conjunction with OPEC, has decided to throw its support to Russia by reducing oil output in order to put further upward pressure on prices. Here is a White House Fact Sheet on new actions President Biden is taking to strengthen US energy security, encourage production and bring down costs:
President Biden is committed to doing everything in his power to respond to Putin’s Price Hike at the pump, and he is delivering. Gas prices fell at the fastest rate in over a decade this summer, with average prices down by about $1.15 per gallon since their peak in June – and just about 30 cents above levels on February 24, when the war in Ukraine began. In fact, gas prices have fallen 15 out of the last 18 weeks. According to an industry analyst, the most common price across the country today is $3.39.
President Biden is directing his Administration to take additional action to strengthen energy security, address the supply crunch, and lower costs.
First, the Department of Energy (DOE) is issuing a Notice of Sale tomorrow morning for 15 million barrels from the Strategic Petroleum Reserve (SPR) to be delivered in December. This sale will complete the historic, 180-million-barrel drawdown the President announced in the spring, which has helped to stabilize crude oil markets and reduce prices at the pump. The President is also calling on DOE to be ready to move forward with additional significant SPR sales this winter if needed due to Russian or other actions disrupting global markets.
Second, the President is announcing that the Administration intends to repurchase crude oil for the SPR when prices are at or below about $67-$72 per barrel, adding to global demand when prices are around that range. As part of its commitment to ensure replenishment of the SPR, the DOE is finalizing a rule that will allow it to enter fixed price contracts through a competitive bid process for product delivered at a future date. This repurchase approach will protect taxpayers and help create certainty around future demand for crude oil. That will encourage firms to invest in production right now, helping to improve U.S. energy security and bring down energy prices that have been driven up by Putin’s war in Ukraine.
Third, the President is calling on companies to pass through lower energy costs to consumers right away. The profit that energy refining companies are now capturing on every gallon of gasoline is about double what it typically is at this time of year, and the retailer margin over the refinery price is more than 40 percent above the typical level. These outsized industry profit margins – adding more than $0.60 to the average price of a gallon of gas – have kept pump prices higher than they should be. Keeping prices high even as input costs fall is unacceptable, and the President will call on companies to pass their savings through to consumers – now.
Continuing to Use the SPR to Advance U.S. Energy Security
In March, following Putin’s further invasion of Ukraine, the President authorized the largest-ever release from the SPR and secured historic coordination with allies and partners to release crude oil from their reserves as well. Treasury Department economists estimate that these releases, along with coordinated releases from international partners, have reduced gas prices by as much as about $0.40 per gallon, compared to what they otherwise would have been. Average U.S. gas prices have declined by more than a dollar per gallon from their peak earlier this year.
Global crude oil supply flows remain a challenge, due in large part to the ongoing instability caused by Russia’s actions in Ukraine. To help stabilize markets and shore up supply in the face of these challenges, DOE will sell 15 million barrels from the SPR for delivery in December, issuing the Notice of Sale for these barrels in the morning. The sale, which completes the 180 million barrels the President authorized in the spring, will add about 500K barrels per day of supply onto the market in December, providing continued supply certainty and some price relief.
The U.S. SPR remains the largest strategic reserve in the world with about 400 million barrels remaining, which is greater than the amount of any SPR release in U.S. history. Even as DOE executes on the plan to refill the SPR to previous levels in coming years, the SPR remains more than ready to respond to energy security needs today.
The President is prepared to authorize significant additional sales in coming months if conditions require. DOE will be prepared to act quickly to inject additional supply into the market if needed, and the Administration will not hesitate to use this tool, or the others at its disposal, to shore up the global supply of energy, support domestic inventory levels, and bring prices down for Americans.
Using SPR Repurchases to Encourage Increases in Near-Term Production
The Administration is committed to replenishing the SPR, which is an important national security asset, so it can continue to serve its purpose well into the future. And, it is committed to doing so in a way that protects taxpayer interests, avoids putting upward pressure on prices in the near term, and encourages more production right now by providing certainty about repurchases in the future.
U.S. oil production is almost 12 million barrels per day. By the end of this year, it will be up by about one million barrels per day compared to when President Biden took office, and it is on track to reach a new annual high in 2023. However, a number of industry participants have suggested that, even with today’s high prices, they are concerned about investing in production when prices could fall in the future.
The Administration is announcing its intent to use SPR repurchases to add to global crude oil demand at times when the price of West Texas Intermediate (WTI) crude oil is at or below about $67 to $72 per barrel. This will protect taxpayer interests because the SPR will be repurchasing at a lower price than recent sales, potentially allowing it to repurchase more oil than it released with sale proceeds. It will also help address producer concerns about uncertain demand in future years, encouraging immediate investment.
DOE has finalized a first-of-its-kind rule that enables it to enter into fixed-price contracts with suppliers, through a competitive bid process, to repurchase oil for future delivery windows. This new authority will shore up demand for oil when supply is less uncertain and prices are anticipated to be lower. For example, if the market were to price barrels for delivery in mid-2024 at $70, the new rule allows DOE to enter into a contract now for mid-2024 delivery of oil at, around or lower than that price. DOE plans to use this authority to enter into contracts to repurchase oil for the SPR, targeting a price of about $67 to $72 per barrel or lower, with initial repurchases being delivered in 2024 or 2025. In addition, DOE is prepared to undertake additional SPR repurchases at times when the price of oil for current delivery drops to about $67 to $72 per barrel or lower, supplementing its future fixed-price contracts as appropriate.
This approach is a win for taxpayers – refilling the SPR at a lower price compared to the barrels sold. And it is a win for energy security – giving producers who enter into the contracts more certainty of continued oil demand to inform investment decisions today, thereby spurring needed increases in production at a time when Putin’s war continues to disrupt global energy markets.
Today, the White House released state fact sheets highlighting how the Inflation Reduction Act tackles the climate crisis in states across the country and how families and communities can benefit from a clean energy future. The fact sheet outlines how families can save on their utility bills, get tax credits for electric vehicles and energy-saving appliances, and access the economic opportunities of the clean energy future.
President Biden and Congressional Democrats beat back special interests to pass this historic legislation, delivering the most significant action in U.S. history to tackle the climate crisis and strengthen U.S. energy security. By signing the Inflation Reduction Act, President Biden is delivering on his promise to lower energy costs, create good-paying jobs, and deliver a clean, secure, and healthy future for families across America.