Justin Nelson’s letter, one of the thousands that arrived at the White House this month, said he was proud to vote for President Biden back in 2020. Now he had a request: Would the president please honor a campaign promise and use the enclosed pen to wipe out thousands of dollars he owes in student loans?
The letter-writing campaign — #PensForBiden — is the latest attempt to sway Mr. Biden on a high-stakes dilemma as the midterm elections approach and much of his domestic agenda remains stalled: What to do about the $1.6 trillion that more than 45 million people owe the government?
So far, Mr. Biden has extended the pandemic pause on student loan payments four times, most recently until Aug. 31. Payments have now been on hold for more than two years, over two presidential administrations.
But all that time poses problems. Many of the issues that have long bedeviled the loan system have only grown more complicated during the pause, and receiving bills again will infuriate and frustrate millions of people who feel trapped by a broken system and crushing debt.
progressive wing of his Democratic Party. He backed the idea on the campaign trail in 2020. “I’m going to make sure that everybody in this generation gets $10,000 knocked off of their student debt as we try to get out of this God-awful pandemic,” he told an audience in Miami.
Senate Democrats lack the votes to help make good on that promise, leaving executive action as the only possible pathway. But close allies say some influential members of Mr. Biden’s team have been reluctant for him to do it — some because they disagree with the idea of forgiveness and some because they don’t believe he has the authority.
“He’s got lawyers telling him he shouldn’t,” said Representative James E. Clyburn of South Carolina, the third-ranking House Democrat and a key supporter of Mr. Biden. But Mr. Clyburn, the most senior Black lawmaker in Congress, said presidential actions had brought sweeping changes before, including Abraham Lincoln’s Emancipation Proclamation and Harry Truman’s order banning segregation in the military.
“If executive orders can free slaves and integrate the armed services, it can eliminate debt,” Mr. Clyburn said.
analysis released by the Federal Reserve Bank of New York last week. A separate study by the bank found that surveyed borrowers reported a 16 percent chance of quickly missing a payment if the moratorium ended.
Mr. Nelson, a 32-year-old bank operations associate in Minneapolis, said the pause had freed up $120 a month for home repairs and other expenses.
recent Morning Consult poll found that more than 60 percent of registered voters were in favor of some level of student debt cancellation. But despite Mr. Biden’s campaign promise, his advisers have been divided, three people with knowledge of the discussions said.
Some view debt cancellation as relief for critical constituencies, said the people, who spoke on the condition of anonymity because they were not authorized to speak publicly. Others oppose it as bad policy or because they fear the economic effects of putting more money in consumers’ pockets when inflation is soaring.
But the pressure on Mr. Biden to act has only grown.
Senator Elizabeth Warren of Massachusetts, whose pledge to cancel up to $50,000 per borrower was a centerpiece of her 2020 presidential primary bid, and Senator Chuck Schumer of New York, the majority leader, led more than 90 congressional Democrats in sending Mr. Biden a letter last month asking him to “provide meaningful student debt cancellation.”
voting rights protections and Mr. Biden’s Build Back Better agenda, as reason for the president to take matters into his own hands.
The New Georgia Project, a group focusing on voter registration founded by the gubernatorial candidate Stacey Abrams, has cast debt relief as an action that would serve Mr. Biden’s pledge to put racial equity at the forefront of his presidency.
“Much of your administration’s legislative priorities have been stymied by obstructionist legislators,” the group wrote in a joint letter with the advocacy group the Debt Collective that was reviewed by The New York Times. “Student debt cancellation is a popular campaign promise that you, President Biden, have the executive power to deliver on your own.”
announcing the latest pause extension last month, Mr. Biden’s press secretary, Jen Psaki, said he “hasn’t ruled out” the idea.
But Mr. Biden’s power to act unilaterally remains an open legal question.
Last April, at Mr. Biden’s request, the Education Department’s acting general counsel wrote an analysis of the legality of canceling debt via executive action. The analysis has not been released; a version provided in response to public records requests was fully redacted.
Proponents of forgiveness say the education secretary has broad powers to modify or cancel debt, which both the Trump and Biden administrations have leaned on to carry out the payment freeze that started in March 2020.
Legal challenges would be likely, although who would have standing is unclear. A Virginia Law Review article this month argued that the answer might be no one: States, for example, have little say in the operation of a federal loan system.
scathing criticism from government auditors and watchdogs, with even basic functions sometimes breaking down.
Some problems are being addressed. The Biden administration has wiped out $17 billion in debt for 725,000 borrowers by expanding and streamlining forgiveness programs for public servants and those who were defrauded by their schools, among others. Last week, it offered millions of borrowers added credit toward forgiveness because of previous payment-counting problems.
But there’s much still to do. The Education Department was deluged by applicants after it expanded eligibility for millions of public servants. And settlement talks in a class-action suit by nearly 200,000 borrowers who say they were defrauded by their schools recently broke down, setting up a trial this summer.
will be restored to good standing.
Canceling debt could make addressing all this easier, advocates say. Forgiving $10,000 per borrower would wipe out the debts of 10 million or more people, according to different analyses, which would free up resources to deal with structural flaws, proponents argue.
“We’ve known for years that the system is broken,” said Sarah Sattelmeyer, a higher-education project director at New America, a think tank. “Having an opportunity, during this timeout, to start fixing some of those major issues feels like a place where the Education Department should be focusing its attention.”
Voters like Ashleigh A. Mosley will be watching. Ms. Mosley, 21, a political science major at Albany State University in Georgia, said she had been swayed to vote for Mr. Biden because of his support for debt cancellation.
Ms. Mosley, who also attended Alabama A&M University, has already borrowed $52,000 and expects her balance to grow to $100,000 by the time she graduates. The debt already hangs over her head.
“I don’t think I’m going to even have enough money to start a family or buy a house because of the loans,” she said. “It’s just not designed for us to win.”
Mr. Musk has objected when politicians have tried to characterize his views as in sync with their own, insisting that he would rather leave politics to others, despite ample evidence on Twitter to the contrary. When Mr. Abbott last year defended a strict anti-abortion law that made the procedure virtually illegal in Texas by citing Mr. Musk’s support — “Elon consistently tells me that he likes the social policies in the state of Texas,” the governor said — Mr. Musk pushed back.
“In general, I believe government should rarely impose its will upon the people, and, when doing so, should aspire to maximize their cumulative happiness,” he responded on Twitter. “That said, I would prefer to stay out of politics.”
If that’s the case, he often can’t seem to help himself. He heckles political figures who have taken a position he disagrees with or who have seemingly slighted him. Mr. Musk’s response to Senator Elizabeth Warren after she said that he should pay more in income taxes was, “Please don’t call the manager on me, Senator Karen.”
After one of Mr. Musk’s Twitter fans pointed out that President Biden had not congratulated SpaceX for the successful completion of a private spaceflight last fall, Mr. Musk hit back with a jab reminiscent of Mr. Trump’s derisive nickname “Sleepy Joe.”
“He’s still sleeping,” he replied. Several days later, he criticized the Biden administration as “not the friendliest” and accused it of being controlled by labor unions. These comments came just a few weeks after his insistence that he preferred to stay out of politics.
Few issues have raised his ire as much as the coronavirus restrictions, which impeded Tesla’s manufacturing operations in California and nudged him closer to his decision last year to move the company’s headquarters to Texas. That move, however, was very much symbolic since Tesla still has its main manufacturing plant in the San Francisco Bay Area suburb of Fremont, Calif., and a large office in Palo Alto.
Over the course of the pandemic, Mr. Musk’s outbursts flared dramatically as he lashed out at state and local governments over stay-at-home orders. He initially defied local regulations that shut down his Tesla factory in Fremont. He described the lockdowns as “forcibly imprisoning people in their homes” and posted a libertarian-tinged rallying cry to Twitter: “FREE AMERICA NOW.” He threatened to sue Alameda County for the shutdowns before relenting.
That’s because Fed officials were actively rescuing a broad swath of markets in 2020: In March and April, they slashed rates to zero, bought mortgage-tied and government bonds in mass quantities, and rolled out rescue programs for corporate and municipal debt. Continuing to trade in affected securities for their own portfolios throughout the year could have given them room to profit from their privileged knowledge. At a minimum, it created an appearance problem, one that Mr. Powell himself has acknowledged.
Mr. Kaplan resigned in September, citing the scandal; Mr. Rosengren resigned simultaneously, citing health issues. Mr. Clarida’s term ends at the close of this month, which it was scheduled to do before news of the scandal broke.
Mr. Clarida’s trades, which Bloomberg reported earlier, also raised eyebrows among lawmakers, including Senator Elizabeth Warren of Massachusetts, who has demanded a Securities and Exchange Commission investigation into Fed officials’ 2020 trading. But many ethics experts had seen the transaction as more benign, if poorly timed, because it happened in a broad-based index and the Fed had said it was part of a planned and longer-term investment strategy.
The new disclosure casts doubt on that explanation, given that Mr. Clarida sold out of stocks just days before moving back into them.
“It’s peculiar,” said Norman Eisen, an ethics official in the Obama White House who said he probably would not have approved such a trade. “It’s fair to ask — in what respect does this constitute a rebalancing?”
It is unclear whether Mr. Clarida benefited financially from the trade, but it was most likely a lucrative move. By selling the stock fund as its value began to plummet and buying it back days later when the price per share was lower, Mr. Clarida would have ended up holding more shares, assuming he reinvested all of the money that he had withdrawn. The financial disclosures put both transactions in a range of $1 million to $5 million.
The sale-and-purchase move would have made money within a few days, as stock markets and the fund in question increased in value after Mr. Powell’s announcement. The investment would have then lost money as stocks sank again amid the deepening pandemic crisis.
WASHINGTON — Lawmakers have unleashed more than $5 trillion in relief aid over the past year to help businesses and individuals through the pandemic downturn. But the scale of that effort is placing serious strain on a patchwork oversight network created to ferret out waste and fraud.
The Biden administration has taken steps to improve accountability and oversight safeguards spurned by the Trump administration, including more detailed and frequent reporting requirements for those receiving funds. But policing the money has been complicated by long-running turf battles; the lack of a centralized, fully functional system to track how funds are being spent; and the speed with which the government has tried to disburse aid.
The scope of oversight is vast, with the Biden administration policing the tail end of the relief money disbursed by the Trump administration last year in addition to the $1.9 trillion rescue package that Democrats approved in March. Much of that money is beginning to flow out the door, including $21.6 billion in rental assistance funds, $350 billion to state and local governments, $29 billion for restaurants and a $16 billion grant fund for live-event businesses like theaters and music clubs.
The funds are supposed to be tracked by a hodgepodge of overseers, including congressional panels, inspectors general and the White House budget office. But the system has been plagued by disagreements and, until recently, disarray.
released a scathing report accusing other Treasury officials of blocking him from conducting more extensive investigations.
Mr. Miller was selected to oversee relief programs managed by the Treasury Department, but the agency’s officials believed his role was to track only a $500 billion pot of money for the Federal Reserve’s emergency lending programs and funds for airlines and companies that are critical to national security. Mr. Miller said that Treasury officials were initially cooperative during the Trump administration, but that after the transition to the new administration started, his access to information dried up.
After Mr. Miller’s requests for program data were denied, he appealed to the Justice Department’s Office of Legal Counsel, which ruled against him last month. His team of 42 people has been left with little to do.
Economic Injury Disaster Loans. But federal oversight experts and watchdog groups say the exact scale of problems in the $2 trillion bipartisan stimulus relief bill in March 2020 is virtually impossible to determine because of insufficient oversight and accountability reporting.
Mr. Miller has been pursuing cases of business owners double dipping from various pots of relief money, such as airlines taking small-business loans and also receiving payroll support funds. The Small Business Administration’s inspector general said last year that the agency “lowered the guardrails” and that 15,000 economic disaster loans totaling $450 million were fraudulent.
The Government Accountability Office also placed the small-business lending programs on its “high risk” watch list in March, warning that a lack of information about the recipients of aid and inadequate safeguards could lead to many more problems than have been reported. The report identified “deficiencies within all components of internal control” in the Small Business Administration’s oversight and concluded that officials “must show stronger program integrity controls and better management.”
proposal to revamp many, but not all, of its procedures.
Oversight veterans and some lawmakers say they want to see a more cohesive approach and more transparency from the Biden administration.
“It is just staggering how little oversight there is,” said Neil M. Barofsky, who was the special inspector general for the Troubled Asset Relief Program from 2008 to 2011. “Not because of the fault of the people who are there, but because of the failure to empower them and give them the opportunity to do their jobs.”
Senator Elizabeth Warren, Democrat of Massachusetts, said she had pushed hard for more oversight last year because she believed that Trump administration officials had conflicts of interest. Despite improvements, she said, the Biden administration could be doing more.
“I kept pushing for more oversight — we got some of it, but not all of what we need,” Ms. Warren said. “We are talking hundreds of billions here.”
She added: “The Biden administration is definitely doing better, but there’s no substitute for transparency and oversight — and we can always do better.”
programs intended to speed $25 billion for emergency housing relief passed last year.
Watchdog groups are wary that speed could sacrifice accountability.
Under Mr. Trump, the Office of Management and Budget, which is responsible for setting policy in federal agencies, refused to comply with all the reporting requirements in the 2020 stimulus that called for it to collect and release data about businesses that borrowed money under the small-business lending programs.
To some observers, Mr. Biden’s budget office has not moved quickly enough to reverse the Trump-era policy. Instead, Mr. Sterling’s team is working on a complex set of benchmarks — tailored to individual programs included in the $1.9 trillion relief bill — which will be released one by one in the coming months.
stymied by disagreements about a program to prop up struggling state and local governments.
Its legally mandated report to Congress was delayed for weeks, and a member of the panel, Bharat Ramamurti, accused his Republican colleagues of stalling the group’s work. Mr. Ramamurti has since left to work for the Biden administration, and the five-person panel now has three commissioners and no chair. Its latest report was only 19 pages.
Business lobbyists and conservative think tanks are not big fans of President Biden’s proposed tax increases on the wealthy.
The Tax Foundation has said that Biden wants to raise the capital gains tax to “highs not seen since the 1920s.” Suzanne Clark of the U.S. Chamber of Commerce called the same plan “outrageous.” Jay Timmons of the National Association of Manufacturers called the proposed increase in the corporate tax rate “archaic.” And Brendan Bechtel, the chief executive of the construction company that bears his family name, said that “it doesn’t feel fair.”
All of this rhetoric has obscured a basic fact about Biden’s tax plan: It would not actually raise tax rates on the rich to high levels, historically speaking.
If all of Biden’s proposed tax increases passed — on the corporate tax, as well as on investment taxes and income taxes for top earners — the total federal tax rate on the wealthy would remain significantly lower than it was in the 1940s, ’50s and ’60s. It would also remain somewhat lower than during the mid-1990s, based on an analysis that Gabriel Zucman of the University of California, Berkeley, did for The Morning.
just how far taxes on the wealthy have fallen over the past 70 years. In the decades just after World War II, many corporations paid about half of their profits in federal taxes. (Shareholders, who are disproportionately affluent, effectively pay those taxes). Today, corporate taxes are only about one-fourth as large, as a share of G.D.P., as they were in the 1950s and ’60s.
The declines are not all ancient history, either. For most of the past quarter-century, taxes on the affluent have continued falling, including the rates on corporate profits, personal income, stock dividends, stock holdings and inheritances. Barack Obama reversed some of the declines, but only some. “The net effect over the past 25 years of federal income tax policy has been to reduce the overall revenue collected from top earners,” Owen Zidar, a Princeton University economist, told me.
Whether you like Biden’s plan or dislike it, it is not radical. For that reason, it is highly unlikely to have the harmful effects on economic growth that its critics are claiming. Remember: In the 1990s, the last time tax rates were as high as the ones Biden has proposed, the economy boomed. It also grew rapidly after World War II, when tax rates were higher yet.
History suggests that tax rates on the wealthy are not the main determinant of economic growth (and, if anything, higher taxes on the rich can sometimes lift growth). The main effect of Biden’s tax plan probably won’t be on the level of G.D.P. It will instead be on the relative tax burden that wealthy people pay. When they criticize the plan as unfair, archaic and outrageous, they are really saying that they enjoy paying low tax rates.
admit up to 62,500 refugees in the next six months, reversing his decision to keep a lower limit set by Donald Trump.
The E.P.A. plans to limit a class of climate-warming chemicals used in air-conditioning and refrigeration.
Richard Cordray, an ally of Senator Elizabeth Warren, will oversee federal student aid, putting him at the center of Democratic disagreements over forgiving debt.
Representative Liz Cheney, the No. 3 House Republican, accused Trump of “poisoning our democratic system” by making false claims of voter fraud.
The country’s increasing diversity isn’t doing as much to help Democrats as liberals hope, Nate Cohn explains.
Business and Media
Bill and Melinda Gates are divorcing, raising questions about the future of their philanthropic foundation.
Verizon will sell Yahoo and AOL to the private equity firm Apollo for $5 billion, about half the amount it paid to buy the companies.
Pandemic disruptions have led to shortages of — and price increases for — lumber, cleaning products, microchips and other commodities.
The Los Angeles Times announced its next top editor: Kevin Merida, previously of ESPN and The Washington Post.
Other Big Stories
When the World Trade Organization meets this week, should it waive Covid vaccine patents to increase access for poorer countries?
Yes: Biden should support a waiver to save lives, Walden Bello writes in The Times. Doing so would also guard against the emergence of deadlier variants, Michelle Goldberg notes.
No: Vaccines are hard to make, so waivers alone won’t lift supply, the Center for Global Development’s Rachel Silverman and others argue. And companies have shown they will work voluntarily to increase doses, Andrei Iancu writes in Stat.
A Times classic: Can you guess whether these neighborhoods voted for Biden or for Trump?
Lives Lived: He was born Joseph Jacques Ahearn, but his mother thought Jacques d’Amboise would be better suited to the ballet world. After he became a dancer, d’Amboise found stardom in New York and Hollywood. He died at 86.
ARTS AND IDEAS
the critic Jesse Green writes in The Times.
The album, “All the Girls,” also featuring the soprano Sally Wilfert, came out two days after Luker’s death in December. Green calls it beautiful and funny. (It includes this song, which is worth watching.)
Tonight, Luker’s colleagues and friends will tell stories and sing songs from her career at a fund-raising concert you can stream. — Claire Moses, Morning writer
WASHINGTON — President Biden, faced with surging Covid-19 crises in India and South America, is under intensifying pressure from the international community and his party’s left flank to commit to increasing the vaccine supply by loosening patent and intellectual property protections on coronavirus vaccines.
Pharmaceutical and biotech companies, also feeling pressure, sought on Monday to head off such a move, which could cut into future profits and jeopardize their business model. Pfizer and Moderna, two major vaccine makers, each announced steps to increase the supply of vaccine around the world.
The issue is coming to a head as the World Trade Organization’s General Council, one of its highest decision-making bodies, meets Wednesday and Thursday. India and South Africa are pressing for the body to waive an international intellectual property agreement that protects pharmaceutical trade secrets. The United States, Britain and the European Union so far have blocked the plan.
Inside the White House, health advisers to the president admit they are divided. Some say that Mr. Biden has a moral imperative to act, and that it is bad politics for the president to side with pharmaceutical executives. Others say spilling closely guarded but highly complex trade secrets into the open would do nothing to expand the global supply of vaccines.
promised the liberal health activist Ady Barkan, who has amyotrophic lateral sclerosis, or A.L.S., that he would “absolutely positively” commit to sharing technology and access to a coronavirus vaccine if the United States developed one first. Activists plan to remind Mr. Biden of that promise during a rally scheduled for Wednesday on the National Mall.
proposal by India and South Africa would exempt World Trade Organization member countries from enforcing some patents, trade secrets or pharmaceutical monopolies under the body’s agreement on trade-related intellectual property rights, known as TRIPS. The idea would be to allow drug companies in other countries to make or import cheap generic copies.
Proponents say the waiver would free innovators in other countries to pursue their own coronavirus vaccines, without fear of patent infringement lawsuits. They also note that the proposed waiver goes beyond vaccines, and would encompass intellectual property for therapeutics and medical supplies as well.
“Many people are saying, ‘Won’t they need the secret recipe?’ That’s not necessarily the case,” said Tahir Amin, a founder of the Initiative for Medicines, Access & Knowledge, a nonprofit dedicated to eliminating health inequities. “There are companies that feel they can go it alone, provided they don’t have to look over their shoulder and feel like they are going to take someone’s intellectual property.”
The pharmaceutical industry counters that rolling back intellectual property protections would not help ramp up vaccine production. It says that other issues are serving as barriers to getting shots into arms around the world, including access to raw materials and on-the-ground distribution challenges.
And just as important as having the rights to make a vaccine is having the technical know-how, which would have to be supplied by vaccine developers like Pfizer-BioNTech and Moderna — a process known as technology transfer.
on LinkedIn that his company would immediately donate more than $70 million worth of medicines to India and is also trying to fast-track the vaccine approval process in India. The company also posted on Twitter promising “the largest humanitarian relief effort in our company’s history to help the people of India.”
Moderna, which developed its vaccine with funding from American taxpayers, has already said it would not “enforce our Covid-19 related patents against those making vaccines intended to combat the pandemic.” But activists have been calling not just for the waiver, but for companies to share expertise in setting up and running vaccine factories — and for Mr. Biden to lean on them to do it.
issued an open letter calling on Mr. Biden to support the proposed waiver.
On Capitol Hill, 10 senators including Bernie Sanders, independent of Vermont, and Elizabeth Warren, Democrat of Massachusetts, urged Mr. Biden to “prioritize people over pharmaceutical company profits” and reverse the Trump administration’s opposition to the waiver. More than 100 House Democrats have signed a similar letter.
a handful of governments, including those of Brazil and Thailand, bypassed patents held by the developers of antiviral drugs for H.I.V./AIDS in an effort to clear the way for lower-cost versions of the treatments.
H.I.V. drugs, however, involve a much simpler manufacturing process than the coronavirus vaccines, especially those using messenger RNA technology, which has never before been used in an approved product.
In a Twitter thread, Mr. Amin offered another example: In the 1980s, Merck and GlaxoSmithKline had developed recombinant hepatitis B vaccines and held a monopoly with more than 90 patents covering manufacturing processes. The World Health Organization recommended vaccination for children, but it was expensive — $23 a dose — and most Indian families could not afford it.
The founder of Shantha Biotechnics, an Indian manufacturer, was told that “even if you can afford to buy the technology your scientists cannot understand recombinant technology in the least,” Mr. Amin wrote.
But Shantha, he added, went on “to produce India’s first home-grown recombinant product at $1 a dose.” That enabled UNICEF to run a mass vaccination campaign.
Richard Cordray, a close ally of Senator Elizabeth Warren who served as the first director of the federal Consumer Financial Protection Bureau during the Obama years, has been selected as the new head of federal student aid in the Biden administration, a post that will put him at the center of the swirling debate over forgiving student debt.
The issue is a tricky one for President Biden. Though he has endorsed canceling up to $10,000 per borrower through legislation, Mr. Biden has been pressured by some Democrats to forgive much more, and to sign an executive order making it happen if Congress fails to act.
But with his new position within the federal Education Department, the primary lender for higher education, Mr. Cordray might be able to relieve the president of that burden by canceling student debt administratively. Democratic leaders are pushing for up to $50,000 in debt relief.
Mr. Cordray is a former Ohio attorney general who worked alongside Ms. Warren on financial issues before her election to the Senate. He headed the consumer protection bureau from 2012 to 2017, leaving in the first year of the Trump administration to make a failed bid for governor of Ohio.
a five-time “Jeopardy!” champion, has also been a vocal critic of for-profit colleges. “I hate how these hollowed-out businesses and subpar colleges are cheating consumers, employees and whole communities,” he wrote in a guest essay in The Plain Dealer, Ohio’s largest newspaper.
the agency sued Navient, one of the Education Department’s largest student loan servicers, for errors and omissions that Mr. Cordray said improperly added billions of dollars to borrowers’ tabs.
The lawsuit is ongoing, and six state attorneys general have filed similar cases. The lawsuits describe routine mistakes and lapses in oversight that over time added up to systematic failures, eerily similar to the mortgage servicing industry’s bungling of borrower accounts and property foreclosures during the 2008 recession.
extensive errors and obstacles in the department’s Public Service Loan Forgiveness program, which is intended to forgive the debts of teachers, military members, nonprofit workers and others in public-service careers.
The agency is also grappling with claims from hundreds of thousands of borrowers seeking relief through a program intended to eliminate the debts of people who were defrauded by schools that broke consumer protection laws.