Here's what's in the $1.7 trillion federal omnibus spending law | CNN ...

Editor’s Note: This story originally ran December 20. It has been updated to reflect the current status of the legislation.

CNN —

President Joe Biden signed into law a $1.7 trillion yearlong federal government spending package on Thursday, after the House and Senate passed it last week.

The legislation includes $772.5 billion for nondefense discretionary programs and $858 billion in defense funding. That represents an increase in spending in both areas for fiscal year 2023.

The sweeping package includes roughly $45 billion in emergency assistance to Ukraine and NATO allies, an overhaul of the electoral vote-counting law, protections for pregnant workers, an enhancement to retirement savings rules and a TikTok ban on federal devices.

It also provides a boost in spending for disaster aid, college access, child care, mental health and food assistance, more support for the military and veterans and additional funds for the US Capitol Police. And the legislation contains several major Medicaid provisions, particularly one that could disenroll up to 19 million people from the nation’s health insurance program for low-income Americans.

However, the law, which runs more than 4,000 pages, left out several measures that some lawmakers had fought to include. An expansion of the child tax credit, as well as multiple other corporate and individual tax breaks, did not make it into the final bill. Neither did legislation to allow cannabis companies to bank their cash reserves – known as the Safe Banking Act – or a bill to help Afghan evacuees in the US gain lawful permanent residency. And the spending package did not include a White House request for roughly $10 billion in additional funding for Covid-19 response.

The spending law, which will keep the government operating through September, the end of the fiscal year, is the product of lengthy negotiations between top congressional Democrats and Republicans.

Congress originally passed a continuing resolution on September 30 to temporarily fund the government in fiscal year 2023, which began October 1.

Here’s what’s in the law:

More aid for Ukraine: The spending law provides roughly $45 billion to help support Ukraine’s efforts to defend itself against Russia’s attack.

About $9 billion of the funding will go to Ukraine’s military to pay for a variety of things including training, weapons, logistics support and salaries. Nearly $12 billion will be used to replenish US stocks of equipment sent to Ukraine through presidential drawdown authority.

Also, the law provides $13 billion for economic support to the Ukrainian government. Other funds address humanitarian and infrastructure needs, as well as support European Command operations.

Emergency disaster assistance: The law provides more than $38 billion in emergency funding to help Americans in the west and southeast affected by recent natural disasters, including tornadoes, hurricanes, flooding and wildfires. It will aid farmers, provide economic development assistance for communities, repair and reconstruct federal facilities and direct money to the Federal Emergency Management Agency’s Disaster Relief Fund, among other initiatives.

Overhaul of the electoral vote-counting law: A provision in the legislation aims at making it harder to overturn a certified presidential election, the first legislative response to the US Capitol insurrection and then-President Donald Trump’s campaign to stay in power despite his loss in 2020.

The changes overhaul the 1887 Electoral Count Act, which Trump tried to use to overturn the 2020 election.

The legislation clarifies the vice president’s role while overseeing the certification of the electoral result to be completely ceremonial. It also creates a set of stipulations designed to make it harder for there to be any confusion over the accurate slate of electors from each state.

Funding for January 6 attack prosecutions: The law provides $2.6 billion for US Attorneys, which includes funding efforts “to further support prosecutions related to the January 6 attack on the Capitol and domestic terrorism cases,” according to a fact sheet from the House Appropriations Committee.

The package also gives $11.3 billion to the Federal Bureau of Investigation, including for efforts to investigate extremist violence and domestic terrorism.

The funding measures are part of nearly $39 billion for the Justice Department.

Retirement savings enhancements: The law contains new retirement rules that could make it easier for Americans to accumulate retirement savings – and less costly to withdraw them. Among other things, the provisions will allow penalty-free withdrawals for some emergency expenses, let employers offer matching retirement contributions for a worker’s student loan payments and increase how much older workers may save in employer retirement plans.

TikTok ban from federal devices: The legislation bans TikTok, the Chinese-owned short-form video app, from federal government devices.

Some lawmakers have raised bipartisan concerns that China’s national security laws could force TikTok – or its parent, ByteDance – to hand over the personal data of its US users. Recently, a wave of states led by Republican governors have introduced state-level restrictions on the use of TikTok on government-owned devices.

Protections for pregnant workers: The law provides pregnant workers with workplace accommodations – such as additional bathroom breaks, stools or relief from heavy lifting duties – needed for healthy pregnancies. It will prevent them from being forced to take leave or losing their jobs, as well as bar employers from denying employment opportunities to women based on their need for reasonable accommodations due to childbirth or related medical conditions. Also, another provision in the package guarantees workplace accommodations – particularly time to pump – for more nursing workers.

Changes to Medicaid and other health care programs: The law phases out the requirement that prevented states from disenrolling Medicaid recipients as long as the national public health emergency was in effect in exchange for an enhanced federal match. This continuous coverage measure was enacted as part of a Covid-19 relief package passed in March 2020 and has led to a record 90 million Medicaid enrollees, many of whom may no longer meet the income requirements to qualify.

Under the law, states will be able to start evaluating Medicaid enrollees’ eligibility and terminating their coverage as of April 1. The redetermination process will take place over at least 12 months. Also, the enhanced federal Medicaid funding will phase down through December 31, 2023, though the states will have to meet certain conditions during that period.

Up to 19 million people could lose their Medicaid benefits, according to estimates, though many would be eligible for other coverage.

Also, under a provision in the law, Medicaid and the Children’s Health Insurance Program, known as CHIP, will offer 12 months of continuous coverage for children. This will allow the 40 million children on Medicaid and CHIP to have uninterrupted access to health care throughout the year.

In addition, the law makes permanent the option for states to offer 12 months of postpartum coverage for low-income mothers through Medicaid, rather than just 60 days. More than two dozen states, plus the District of Columbia, have implemented the measure, which was available on a temporary basis through the American Rescue Plan, according to the Kaiser Family Foundation. Another seven states are planning to implement the option.

Plus, the package provides more money for the National Institutes of Health, the Centers for Disease Control and Prevention and the Assistant Secretary for Preparedness and Response. The funds are intended to speed the development of new therapies, diagnostics and preventive measures, beef up public health activities and strengthen the nation’s biosecurity by accelerating development of medical countermeasures for pandemic threats and fortifying stockpiles and supply chains for drugs, masks and other supplies.

Increased support for the military and veterans: The package funds a 4.6% pay raise for troops and a 22.4% increase in support for Veteran Administration medical care, which provides health services for 7.3 million veterans.

It includes nearly $53 billion to address higher inflation and $2.7 billion – a 25% increase – to support critical services and housing assistance for veterans and their families.

The law also allocates $5 billion for the Cost of War Toxic Exposures Fund, which provides additional funding to implement the landmark PACT Act that expands eligibility for health care services and benefits to veterans with conditions related to toxic exposure during their service.

Beefing up nutrition assistance: The legislation establishes a permanent nationwide Summer EBT program, starting in the summer of 2024, according to Share Our Strength, an anti-hunger advocacy group. It will provide families whose children are eligible for free or reduced-price school meals with a $40 grocery benefit per child per month, indexed to inflation.

It also changes the rules governing summer meals programs in rural areas. Children will be able to take home or receive delivery of up to 10 days’ worth of meals, rather than have to consume the food at a specific site and time.

The law also helps families who have had their food stamp benefits stolen since October 1 through what’s known as “SNAP skimming.” It provides them with retroactive federal reimbursement of the funds, which criminals steal by attaching devices to point-of-sale machines or PIN pads to get card numbers and other information from electronic benefits transfer cards.

Higher maximum Pell grant awards: The law increases the maximum Pell grant award by $500 to $7,395 for the coming school year. This marks the largest boost since the 2009-2010 school year. About 7 million students, many from lower-income families, receive Pell grants every year to help them afford college.

Help to pay utility bills: The package provides $5 billion for the Low Income Home Energy Assistance Program. Combined with the $1 billion contained in the earlier continuing resolution, this is the largest regular appropriation for the program, according to the National Energy Assistance Directors Association. Home heating and cooling costs – and the applications for federal aid in paying the bills – have soared this year.

Additional funding for the US Capitol Police: The law provides an additional $132 million for the Capitol Police for a total of nearly $735 million. It will allow the department to hire up to 137 sworn officers and 123 support and civilian personnel, bringing the force to a projected level of 2,126 sworn officers and 567 civilians.

It also gives $2 million to provide off-campus security for lawmakers in response to evolving and growing threats.

More money for child care: The legislation provides $8 billion for the Child Care and Development Block Grant, a 30% increase in funding. The grant gives financial assistance to low-income families to afford child care.

Also, Head Start will receive nearly $12 billion, an 8.6% boost. The program helps young children from low-income families prepare for school.

More resources for children’s mental health and for substance abuse: The law provides more funds to increase access to mental health services for children and schools. It also will invest more money to address the opioid epidemic and substance use disorder.

Investments in homelessness prevention and affordable housing: The legislation provides $3.6 billion for homeless assistance grants, a 13% increase. It will serve more than 1 million people experiencing homelessness.

The package also funnels nearly $6.4 billion to the Community Development Block Grant formula program and related local economic and community development projects that benefit low- and moderate income areas and people, an increase of almost $1.6 billion.

Plus, it provides $1.5 billion for the HOME Investment Partnerships Program, which will lead to the construction of nearly 10,000 new rental and homebuyer units and maintain the record investment from the last fiscal year.

More support for the environment: The package provides an additional $576 million for the Environmental Protection Agency, bringing its funding up to $10.1 billion. It increases support for enforcement and compliance, as well as clean air, water and toxic chemical programs, after years of flat funding.

It also boosts funding for the National Park Service by 6.4%, restoring 500 of the 3,000 staff positions lost over the past decade. This is intended to help the agency handle substantial increases in visitation.

Plus, the legislation provides an additional 14% in funding for wildland firefighting.

What’s not in the law

Enhanced child tax credit: A coalition of Democratic lawmakers and consumer advocates pushed hard to extend at least one provision of the enhanced child tax credit, which was in effect last year thanks to the Democrats’ $1.9 trillion American Rescue Plan. Their priority was to make the credit more refundable so more of the lowest-income families can qualify. Nearly 19 million kids won’t receive the full $2,000 benefit this year because their parents earn too little, according to a Tax Policy Center estimate.

New cannabis banking rules: Lawmakers considered including a provision in the spending bill that would make it easier for licensed cannabis businesses to accept credit cards – but it was left out of the legislation. Known as the Safe Banking Act, which previously passed the House, the provision would prohibit federal regulators from taking punitive measures against banks for providing services to legitimate cannabis businesses.

Even though 47 states have legalized some form of marijuana, cannabis remains illegal on the federal level. That means financial institutions providing banking services to cannabis businesses are subject to criminal prosecution – leaving many legal growers and sellers locked out of the banking system.

Covid-19 response: Lawmakers did not include a White House request for an additional $10 billion in funding for Covid-19, which would have been aimed at continued access to and development of vaccines and therapeutics, among other things. Earlier in the year, the Biden administration unsuccessfully pushed for $22.5 billion in extra funds.

FBI headquarters: There was also no final resolution on where the new FBI headquarters will be located, a major point of contention as lawmakers from Maryland – namely House Majority Leader Steny Hoyer – pushed to bring the law enforcement agency into their state. In a deal worked through by Senate Majority Leader Chuck Schumer, the General Services Administration would be required to conduct “separate and detailed consultations” with Maryland and Virginia representatives about potential sites in each of the states, according to a Senate Democratic aide.

Afghan Adjustment Act: Also not included in the spending bill was the Afghan Adjustment Act, which would have helped Afghan allies who run the risk of deportation from the US. It would have given those evacuees a pathway to lawful permanent residency before their temporary status, known as humanitarian parole, expires in 2023. Many congressional Republicans raised concerns about vetting and other issues, but the legislation’s supporters, including former US military leaders, argued those worries have been addressed.

Legislation to extend and expand Special Immigrant Visas for Afghans who worked with the US during the war there and want to come to America is included in the spending bill.

Tami Luhby Katie Lobosco
Tami Luhby
Katie Lobosco

Pell Grant, NASA: Plan would use Pell Grant money to fund moonshot

The Trump administration wants money meant for low-income college students shifted to help cover the bill for a NASA moonshot by 2024.

Hold up, said outraged education advocates, who fear moving funds from Pell Grants to space exploration could ratchet up college costs and send a message that the president doesn't value helping poor students pay for school.

“Most of your readers would wonder: Do I want to make college more expensive to fund space travel to the moon and to Mars?” said Jon Fansmith, director of government and public affairs with the American Council on Education, a university association group.

The administration proposed a budget amendment this week that would transfer nearly $4 billion from a surplus in the Pell Grant program, which is meant to help low-income students pay for college.

More:Betsy DeVos calls for more charter schools even as they spark investigations across the country

The transfer wouldn’t affect students currently benefiting from Pell Grants, and the administration expects the program to have “sufficient discretionary funds until 2023,” according to language in the budget amendment.

The Pell Grant program is running a surplus of nearly $9 billion, according to The Associated Press. The transfer would need to be approved by Congress.

As part of the administration budget amendment, NASA would get $1.6 billion in addition to the $21 billion the administration proposed in its 2020 budget request for the year beginning in October. President Donald Trump said in a tweet the goal was to get America back to "Space in a BIG WAY!"

Pell Grants are awarded to undergraduates who wouldn’t be able to afford college otherwise. Unlike loans, the federal government doesn’t require the grants be paid back. The amount given varies on the level of a student’s need and the cost of the college or university, but the maximum for the upcoming school year is $6,195.

About one in three undergraduate students receive a Pell Grant, but the percentage of students benefiting from the award has fallen in recent years, according to data analyzed by the College Board. The maximum amount a student is eligible to receive has increased in recent years.

Many on Twitter expressed outrage over the idea of encroaching on the Pell Grant program and shared stories of how the money made it possible for them to obtain their education.

More:'The office was dark': Government shutdown delays financial aid for some college students

Democratic lawmakers criticized the plan, which casts doubt on the likelihood of the proposed amendment's adoption. Rep. Rosa DeLauro, D-Conn., head of the House appropriations subcommittee that oversees education, called the bill "dead on arrival."

"President Trump and his team should stop wasting their time on theatrics," she said in a statement. "Instead, I will continue to do my job governing and funding critical programs that help people in every stage of their life."

Sen. Kamala Harris, D-Calif., said many students forgo essentials to pay for college already.

Rep. Steve Cohen, D-Tenn., said on Twitter that he was for funding NASA but not at the expense of Pell Grants.

The plan is shortsighted, Fansmith said. About a decade ago during the recession, the number of students who took advantage of Pell Grants shot up as people returned to college rather than looking for work in a bad economy. That led to a strain on the program, which then affected the number of people who could take advantage of it.

The economy is doing well, Fansmith said, but drawing from the program could weaken its ability to handle an economic downturn.

Other advocates questioned diverting money intended for student aid to completely unrelated projects. Tamara Hiler, deputy director of education at the left-leaning think tank Third Way, said the administration could find other places in the budget to fund NASA.

More:Bad news for low-income college students in Trump 2017 budget

She said increasing tuition costs and inflation will probably drain the surplus.

"It's just more important that we keep that reserve intact as much as possible, given that we know more people are going to be going into higher education because we know that's what the job market is demanding," Hiler said.

A statement from the Ed Trust, a nonprofit advocacy group focused on low-income students and students of color, urged Congress to not only reject the president's proposal but also double the Pell Grant award and restore a measure that would automatically increase the award to match inflation.

Others are less sure the plan would spell disaster for low-income students. It would be hard to know whether the move would affect the funding of Pell Grants, said Jason Delisle, a fellow who studies higher education financing at the American Enterprise Institute, a conservative think tank.

“If the maximum grant is going up and the surplus is going down, maybe they aren’t really related," Delisle said. “Whatever bad thing people said is supposed to happen, where is it?"

Contributing: Ledyard King

Education coverage at USA TODAY is made possible in part by a grant from the Bill & Melinda Gates Foundation. The Gates Foundation does not provide editorial input.

What's in the Democrats' package on climate, health care and taxes ...

CNN —

The Democrats’ budget reconciliation package, which contains several landmark climate and health care provisions, was signed into law by President Joe Biden Tuesday.

The House passed the legislation, titled the Inflation Reduction Act, Friday after being approved by the Senate on August 7 on a party-line vote.

Still, the effort remains a mere shadow of the sweeping $3.5 trillion reconciliation package that the majority party initially floated last year.

After torpedoing the inclusion of any climate or tax provisions in mid-July, West Virginia Sen. Joe Manchin, a moderate Democrat, reversed course. The measures join a handful of important but narrow provisions to lower prescription drug prices and to extend enhanced Affordable Care Act subsidies for three years.

Gone are the creation of a universal pre-K program, an extension of the enhanced child tax credit, an expansion of Medicare benefits, the establishment of a federally funded paid family and sick leave program and many other provisions aimed at broadening the nation’s social safety net.

The deal is far smaller than the slimmed-down $1.75 trillion version the House passed in October. But Manchin, whose vote is crucial to pushing any legislation through the Senate via the reconciliation process, shot down the House bill in December. Only a simple majority of senators was needed to pass the bill via reconciliation.

Since then, Democratic leaders had been negotiating with Manchin to see what he’d be willing to support. The senator had repeatedly voiced concerns about the legislation’s potential impact on inflation, which has skyrocketed over the past year. Economists, however, disagree about the actual extent of the legislation’s effect on inflation.

The latest version of the package, which Biden signed into law Tuesday, is projected to reduce the deficit by more than $300 billion over a decade, according to the Congressional Budget Office.

Here’s what’s in the legislation:

Medicare drug price negotiation: The legislation will empower Medicare to negotiate prices of certain costly medications administered in doctors’ offices or purchased at the pharmacy. The Health and Human Services secretary will negotiate the prices of 10 drugs in 2026, and another 15 drugs in 2027 and again in 2028. The number is set to rise to 20 drugs a year for 2029 and beyond.

This controversial provision is far more limited than the one House Democratic leaders have backed in the past. But it will open the door to fulfilling a longstanding party goal of allowing Medicare to use its heft to lower drug costs.

Inflation cap: The legislation will also impose penalties on drug companies if they increase their prices faster than inflation, starting in 2023. However, the Senate parliamentarian ruled that the provision could only apply to Medicare, not the private insurance market as well, as the Democrats had wanted.

Limit on Medicare out-of-pocket drug costs: The law will redesign Medicare’s Part D drug plans so that seniors and people with disabilities won’t pay more than $2,000 a year for medications bought at the pharmacy, starting in 2025. Insurers and drugmakers will have to pick up more of the tab.

Free vaccines for seniors: Medicare enrollees will be able to get all vaccines at no cost. Right now, only certain vaccines, such as those for Covid-19, the flu and pneumonia, are free.

Altogether, the drug price provisions are expected to reduce the federal deficit by $288 billion over a decade, according to the CBO.

Cheaper insulin: Medicare beneficiaries will pay no more than $35 a month for insulin, starting next year.

Democrats had hoped to extend that provision to those covered by private insurance, but the parliamentarian decided that including the commercial market was not compliant with reconciliation rules. Democrats kept the broader provision in the package, but Republicans raised a point of order to force a vote that stripped the private insurance market from the measure.

Affordable Care Act subsidies: The legislation will also extend the enhanced federal premium subsidies for Obamacare coverage through 2025, a year later than lawmakers recently discussed. That way they won’t expire just after the 2024 presidential election.

The subsidies were expanded through this year as part of Democrats’ $1.9 trillion coronavirus relief package, known as the American Rescue Plan, which was enacted in March 2021. They have made health care coverage on the Obamacare exchanges more affordable, leading to a record enrollment of 14.5 million people this year.

Enrollees pay no more than 8.5% of their income toward coverage, down from nearly 10%. And lower-income policyholders receive subsidies that eliminate their premiums completely.

Also, those earning more than 400% of the federal poverty level have become eligible for help for the first time. Those with incomes between 400% and 600% of the poverty level would face a doubling of premiums without the federal subsidies, according to the Centers for Medicare and Medicaid Services, which administers the federal Obamacare marketplace.

Overall, the expanded assistance reduced premiums by 50%, or $67 per consumer per month, the agency said.

If the enhanced federal assistance were allowed to expire at the end of the year, nearly all of the 13 million subsidized enrollees would see their premiums rise for 2023, according to the Kaiser Family Foundation. More than 3 million people could become uninsured, an Urban Institute analysis found.

Democrats were hoping to avoid the negative publicity of such premium increases. If Congress didn’t act, consumers would learn in the fall just how much more they could have to pay. Open enrollment begins on November 1, a week ahead of Election Day.

Instead, CMS is projecting that even more people will flock to the Affordable Care Act exchanges now that the President has signed the bill.

“We’re really going to be able to build on our record enrollment and see an increase this year, this upcoming enrollment,” CMS Administrator Chiquita Brooks-LaSure told CNN. “The only reason why we’re having that conversation is because the subsidies have been extended.”

Extending the enhanced subsidies will cost $64 billion, according to the CBO.

Climate provisions: The deal is the biggest climate investment in US history. It will slash US greenhouse gas emissions 40% by 2030, Majority Leader Chuck Schumer’s office said.

The new agreement spans everything from electric vehicle tax credits to clean energy manufacturing to investments in environmental justice communities.

Extending tax credits for electric vehicles made it in, after previous opposition from Manchin. The tax credits will continue at their current levels, up to $4,000 for a used electric vehicle and $7,500 for a new one. However, the income threshold for eligibility is lowered – a key demand of Manchin’s.

The law also contains 10-year consumer tax credits to bring down the cost of heat pumps, rooftop solar, electric HVAC and water heaters. It includes $60 billion of funding for environmental justice communities and for the reduction of legacy pollution.

And it puts $60 billion towards domestic clean energy manufacturing and $30 billion for a production credit tax credit for wind, solar and battery storage.

The legislation provides $4 billion in additional drought funding – a key negotiation point for Sinema amid the multi-year drought in the Southwest.

The tax credits will be technology neutral – meaning they won’t favor renewables over fossil fuels outfitted with carbon-reducing measures. However, they are designed to reward those who reduce their emissions the most, according to Senate Finance Chairman Ron Wyden, a Democrat from Oregon.

The deal also includes major provisions like a methane program that will levy a fee on oil and gas producers that emit methane above a certain threshold. It also includes $27 billion for a so-called clean energy accelerator – essentially a green bank that will leverage public and private funding to expand more green projects.

Tax provisions: To boost revenue, the law imposes a 15% minimum tax on the income large corporations report to shareholders, known as book income, as opposed to the Internal Revenue Service. The measure, which will raise $258 billion over a decade, according to updated figures provided by Schumer, will apply to companies with profits over $1 billion.

Concerned about how this provision would affect businesses, particularly manufacturers, Arizona Sen. Kyrsten Sinema, a moderate Democrat, won changes to the package that will allow companies to write off investments faster, which will reduce their tax burden.

Sinema also nixed her party’s effort to tighten the carried interest loophole, which allows investment managers to treat much of their compensation as capital gains and pay a 20% long-term capital gains tax rate instead of income tax rates of up to 37%. The provision would have lengthened the amount of time investment managers’ profit interest must be held from three years to five years to take advantage of the lower tax rate. Addressing this loophole, which would have raised $14 billion over a decade, had been a longtime goal of congressional Democrats.

In its place, a 1% excise tax on companies’ stock buybacks was added, raising another $74 billion, according to Schumer’s office.

The package also calls for providing more funding to the IRS for tax enforcement, which is expected to raise $124 billion.

Democrats say families making less than $400,000 per year will not be affected, in line with a pledge by Biden. However, Republican lawmakers are seizing on a Joint Committee on Taxation report that shows that the measures will indirectly hit lower-income and middle-class Americans. Economists expect that employers will pass along a portion of the corporate tax to workers in the form of lower wages.

Also, there will be no new taxes on small businesses.

Manchin also threw cold water on one of Schumer’s priorities – addressing the $10,000 cap on state and local tax deductions, known as SALT, that was part of the GOP tax cut package in 2017 and affects many states in the Northeast and on the West Coast.

The deal also leaves out tax surcharges on wealthy individuals, which was part of the House bill last year.

Here’s what was left out

Universal pre-K and lower child care costs: The earlier version of the House bill would have provided free pre-K for 3- and 4-year-olds, expanding access to 6 million children a year. It would have also limited child care costs for families with children younger than age 6 to no more than 7% of income for those earning up to 250% of the state median income, expanding access to about 20 million children. Funding for these programs would have lasted for six years, costing an estimated $381.5 billion, according to the CBO.

Paid family and sick leave: Biden also called for a federally funded paid family and sick leave program for the millions of Americans who don’t already receive the benefit from their employer. The previous House bill included four weeks of paid family and sick leave, which would have cost $205.5 billion, according to the CBO.

Enhanced child tax credit: The beefed-up child tax credit – which provided $300 a month for each child under age 6 and $250 a month for each one ages 6 through 17 – would have been extended through 2022 for more than 35 million families under the House bill.

The previous enhancement, which was part of the coronavirus relief package, was only in place for 2021.

Heads of households earning up to $112,500 a year and joint filers making up to $150,000 annually would have qualified for the full enhanced credit. But, unlike in 2021, only these families would have received the funds in monthly installments this year. Eligible parents with higher incomes would have had to claim the credit on their tax return next year.

The credit would have been made permanently refundable so the lowest income families would continue to qualify.

This credit, along with the earned income tax credit, would have cost about $203 billion, according to the CBO.

Earned income tax credit: The expanded earned income tax credit, which was also part of the coronavirus relief package, would have been extended through 2022 as well, helping 17 million low-wage childless workers.

The previous House bill would have nearly tripled the maximum credit childless workers can receive, extended eligibility to more people, reduced the minimum age and eliminated the upper age limit. This credit, along with the enhanced child tax credit, would have cost about $203 billion, according to the CBO.

Home health care: Biden’s original plan called for permanently improving Medicaid coverage for home care services for seniors and people with disabilities, with the goal of reducing the more than 800,000 people on state Medicaid waiting lists.

The plan also aimed to improve the quality of caregiving jobs. The measure would have cost nearly $158 billion, according to the CBO.

Affordable housing: The legislation would have funneled $25 billion into the construction, rehabilitation or purchase of affordable homes for low-income people and for the creation and preservation of affordable rental housing. It would have provided $65 billion to address the capital needs backlog of public housing and would have bolstered rental assistance for hundreds of thousands of families.

The measure would have also invested in down payment assistance and in community-led redevelopment projects in under-resourced neighborhoods. And it would have provided $24 billion to fund housing vouchers and supportive services.

The effort would have cost about $148.1 billion, according to the CBO.

Lowering the cost of college: The earlier House bill would have increased the maximum Pell grant by $550 for more than 5 million students enrolled in public and private nonprofit colleges and expanded access to undocumented students brought to the US as children, a group also known as Dreamers.

It would have invested in historically Black colleges and universities and other institutions that serve underrepresented communities. And it would have increased funding for workforce development.

These provisions would have cost a total of $39.8 billion, according to the CBO’s estimate.

Biden initially also called for making tuition free for two years at community colleges, but that provision was dropped from the House bill.

Children’s nutrition: The previous House bill would have expanded free school meals to nearly 9 million children during the school year and provided the parents of 29 million kids a monthly $65 per child benefit to purchase food during the summer.

Congress recently passed a measure extending pandemic school meal waivers.

Medicaid coverage gap: Democrats had called for providing Affordable Care Act premium subsidies for low-income Americans in the 12 states that have not expanded Medicaid, which would have enabled them to buy Obamacare policies with no monthly premiums, through 2025.

Doing so would have cost about $57 billion, the CBO estimated.

And the bill would have required state Medicaid programs to provide 12 months of eligibility to women after they give birth. States currently must provide at least 60 days of coverage.

Medicare hearing benefits: Hearing services would have been covered under Medicare, starting in 2023, under the earlier bill that passed the House.

Only 30% of seniors over age 70 who could benefit from hearing aids have ever used them, the White House said.

This measure would have cost $36.7 billion, according to the CBO.

Biden had initially also called for expanding Medicare to include vision and dental coverage.

Extending Medicare solvency: Senate Democrats said in early July that they had finalized a deal to extend the solvency of Medicare by a few years by closing a tax loophole. The proposal would have ensured that owners of certain “pass-through” businesses, who include business income on their personal tax returns, would pay the 3.8% net investment income tax. It would have applied to individuals who earn more than $400,000 annually and to joint filers who earn more than $500,000.

But that agreement was then also scuttled by Manchin.

Medicare’s hospital insurance trust fund will only be able to pay scheduled benefits until 2028, according to the most recent analysis by the program’s trustees.

This story and headline have been updated with additional developments.

$2.6B in Free College Money Went Unclaimed by 2018 Grads ...

Anna Helhoski

NerdWallet.com

High school graduates who didn’t complete a federal financial aid application missed their opportunity for part of $2.6 billion in free money for college, according to NerdWallet’s annual analysis of federal financial aid data.

The money went unclaimed by 661,000 members of the Class of 2018 who were eligible for a federal Pell Grant but didn’t complete the Free Application for Federal Student Aid, or FAFSA. The application is key to getting money for college including work-study, federal loans and aid from states and schools.

The average Pell Grant was $3,908 for the 2018-19 school year, NerdWallet found. The maximum allowable award for the year was $6,095.

Who gets a Pell Grant

Pell Grants are awarded to students from lower-income families. The amount awarded is based on the cost of attendance at a student’s school and information provided through the FAFSA, including a family’s financial need. Students can receive a Pell Grant for up to 12 semesters, or about six years, but they must submit an application each year to qualify.

The total Pell Grant money awarded to college students for 2018-19 was $27.5 billion, which was distributed to more than 7 million students.

Among 2018 graduates, more than half were eligible for a Pell Grant, according to federal financial aid data from the Florida College Access Network.

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More:Majority of parents saving for kid’s college have socked away less than $10,000

States where students compete for the funds

Tennessee and Louisiana tied for the lowest percentage (17 percent) of high school graduates who didn’t complete their FAFSA, according to NerdWallet’s analysis. Both states are taking steps to make sure even more students complete their FAFSA.

In Tennessee, the state higher education commission hosts “FAFSA Frenzy” events annually to improve the rate of completed applications, which are required for the state’s free community college program called Tennessee Promise.

Louisiana’s state office of student financial assistance hosts FAFSA completion and correction events, along with a competition among schools to encourage finishing the applications. The state also requires high school seniors to complete a financial aid application or sign a waiver to receive their diploma.

States where students miss out

But states’ completion efforts are often no match for other deeply rooted factors.

More than half of high school graduates in Utah (55 percent) and Alaska (52 percent) didn’t complete the application for 2018-19. Both states carry out completion awareness campaigns, but the unique makeup of their populations stymie broader efforts, officials say.

Many graduates in Utah are members of the Church of Jesus Christ of Latter-day Saints and serve two-year religious missions before applying for college or financial aid. About two-thirds of students in Utah are Mormon and about half go on missions, says David Buhler, commissioner of the Utah System of Higher Education.

The commission hosts over 100 FAFSA completion open houses statewide and promotes applying for financial aid before heading off to missions — to make the renewal process easier when they return — but it’s not having the impact officials had hoped.

“Their focus is on getting ready for a mission — young men in particular — and college is ‘something I’ll deal with later,’” Buhler says. “It’s against human nature expect a late teen to do something like this before they have to. But we do encourage it.”

In Alaska, Rebekah Matrosova, director of outreach and early awareness for the Alaska Commission on Postsecondary Education, says the data may be underreported due to the number of small, rural schools throughout the state.

However, Matrosova also says College Goal Alaska, the state’s FAFSA completion awareness initiative, tries to reach as many of those communities as possible.

“A lot of it comes down to awareness not being there, or the misconception that the FAFSA is only for certain people from certain backgrounds when it is something that everyone can benefit from,” Matrosova says.

Why students don’t apply

Among all high school graduates, 37 percent didn’t complete the FAFSA, according to NerdWallet’s analysis. Why?

The biggest misconception is families think they won’t get any financial aid, says student loan expert Kevin Fudge. In reality, all families qualify for federal student loans and most will qualify for some other kind of aid.

Parents also could be reluctant to share their financial information for privacy concerns, says Fudge, the director of consumer advocacy and ombudsman for American Student Assistance, a national nonprofit dedicated to helping students achieve education and career goals.

Other students may start the FAFSA, but don’t finish it or make a mistake that eliminates them from receiving aid. For example, in Alabama, students submitted 33,266 applications, but 30,379 were approved.

How to make sure you don’t miss out

To complete the FAFSA, go to the federal student aid website at Studentaid.ed.gov. In addition, this year the Federal Student Aid Office launched a new mobile app, myStudentAid, to encourage higher rates of completion. However, only new college students can use it for the 2019-20 school year.

More from NerdWallet:

Anna Helhoski is a writer at NerdWallet. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.

The article $2.6B in Free College Money Went Unclaimed by 2018 Grads originally appeared on NerdWallet.

NerdWallet is a USA TODAY content partner offering personal finance news and commentary. Its content is produced independently of USA TODAY.

Do I qualify for student loan forgiveness? What to know about ...

President Joe Biden confirmed Aug. 24 what many have anticipated for months – a plan to forgive or reduce student loan debt for millions of debt-saddled borrowers.

If you earn less than $125,000 annually, he said, you're eligible to receive cancellation of up to $10,000 in federal student loans. If you received a Pell Grant, you can get up to $20,000 forgiven.

If you're not eligible for any student debt forgiveness, your pause on repayments continues to be paused until year end. The Department of Education is also working on a proposal introducing a new repayment plan to ease the burden on borrowers.

Since the start of the pandemic in 2020, borrowers haven't had to pay a cent on their federal student loans. During this time, the pressure grew for the president to cancel the debt. It was one of the platforms Biden ran on for president in 2020.

Though the plan was welcomed by many, it still garnered criticism. Many had sought higher forgiveness amounts – $50,000 or even all amounts, no matter how large. The total outstanding balance for federally owned (including defaulted) student loans in December 2021 was $1.38 trillion, the New York Federal Reserve said in April.

BIDEN PLAN RECAP:$20K in student debt to be forgiven, extend payment pause

STUDENT LOANS:Why are some people angry about Biden loan program?

How do I apply?

The application will be available mid-October, officials said. Borrowers who provide an email address at studentaid.gov are to receive an email notification when the application is available. Applications can take four to six weeks to process. The pause on federal student loan repayments terminates Dec. 31.

Borrowers will have more than a year to apply once the application form is available.

Nearly 8 million borrowers may be automatically eligible to receive relief because relevant income data is already available to the Department of Education.

What’s Biden’s student loan forgiveness plan?

Individuals with an annual income of less than $125,000 (or under $250,000 for married couples or heads of households) are entitled to have up to $10,000 in federal student loans canceled. No private loans will be forgiven.

Those who received a Pell Grant in college will be eligible for up to $20,000 in debt cancellation.

For those who still have student debt, the repayment pause since March 2020 will be extended to the end of the year. Borrowers will resume payments in January.

BIDEN COLLEGE CAREER:Biden mentions own education in loan relief speech

LIFE OFF PAUSE:How the student loan payment pause changed people’s lives

What is a Pell Grant?

Federal funding that’s usually awarded only to students who display exceptional financial need and have not earned a bachelor's, graduate or professional degree. Sometimes, a student enrolled in a post-baccalaureate teacher certification program might receive a Pell Grant.

Unlike a loan, a Pell Grant does not have to be repaid, except under certain circumstances. Those include a change in enrollment status or if you received outside scholarships or grants that reduced your need for federal student aid.

PELL GRANTS:Who qualifies? What to know from Biden student loan plan

Are current students eligible for loan forgiveness?

Loans awarded to current students and graduates with undergraduate, graduate and Parent PLUS loans are eligible, so long as the loans were disbursed on or before June 30, 2022. Consolidated loans must contain only underlying loans disbursed on or before June 30, 2022 to qualify.

What's the cost of student loan forgiveness?

A one-time maximum debt forgiveness of $10,000 per borrower will cost the U.S. government around $300 billion for borrowers with incomes less than $125,000, according to analysis published on Tuesday by Junlei Chen and Kent Smetters at the Penn Wharton Budget Model, based at the University of Pennsylvania. This cost increases to $330 billion if the program continues over the standard 10-year budget window.

Before the announcement, the Government Accountability Office estimated that alone, the payment pause since the start of the pandemic cost the government $102 billion. That amount included suspending all payments due, interest accrual and involuntary collections for loans in default from March 13, 2020, to Aug. 31, 2022.

Who benefits most from the student debt forgiveness plan?

Mostly higher-income households. Between 69% and 73% of the debt forgiven accrues to households in the top 60% of the income distribution, Chen and Smetters said.

A New York Federal Reserve study in April, though, said that the income cap to the forgiveness "substantially reduces the cost of student loan forgiveness and increases the share of benefit going to borrowers who are more likely to struggle repaying their debts."

For example, an income cap of $75,000 for a $10,000 cancellation raises the share of forgiven loan dollars going to borrowers in low-income neighborhoods to 35% from 25% and the share going to lower credit score borrowers to 42% from 37%, it said.

Income caps also increase the share of loans forgiven that were delinquent before the pandemic to 60% from 34%.

LIFE'S NOT FAIR:Is student loan forgiveness fair to those without college degrees? Americans remain divided over costs

AVOIDING STUDENT DEBT:Middle class, minus debt: Apprenticeships, certificates offer low-cost option to college

How many Americans have student loans outstanding?

About 45 million Americans hold federal student loan debt, according to federal data. The loan forgiveness plan should provide relief to about 43 million borrowers and cancel the full remaining balance for nearly 45% of those borrowers.

The total outstanding balance for federally owned (including defaulted) student loans in December 2021 was $1.38 trillion, the New York Federal Reserve said in April.

Most (67%) student loan borrowers are under 40 years old, but 57% of all balances are owed by those under 40. That means those with larger balances are more likely to be older or to have taken out loans for graduate school, it said.

The White House estimates that its initiative will cancel the full remaining balance for roughly 20 million borrowers.

What’s the average outstanding student loan debt amount?

The average federal student loan debt balance is $37,667 while the total average balance (including private loan debt) may be as high as $40,274, according to Education Data Initiative, which collects data and statistics about the U.S. education system.

DISSECTING STUDENT LOANS:Free college or federal student loans? These alternatives could help solve student debt crisis

POLITICAL FORGIVENESS:'Forgiving' student loans isn't motivated by kindness. It's all about cold, hard politics.

Is student loan forgiveness taxable?

The debt relief isn’t counted as taxable income for federal income tax purposes, the White House says.

Would canceling student loan debt increase inflation?

Some prominent economists, including former Treasury Secretary Lawrence Summers and Jason Furman, who was chairman of President Barack Obama’s Council of Economic Advisors, have been vocal critics, saying student debt forgiveness would stoke 40-year high inflation and may be unfair.

“Student loan relief is not free,” Furman tweeted on Aug. 19. “Part of it would be paid for by the 87% of Americans who do not benefit but lose out from inflation. Part of it would be paid for by future spending cuts & tax increases—with uncertainty about who will bear those costs.”

The Committee for a Responsible Federal Budget estimates Biden’s plan “would more than undo the deflationary pressures from the Inflation Reduction Act and add 0.15 percentage points of additional inflation in the near-term,” noted Sarah Foster, Bankrate analyst.

The Federal Reserve has been on an aggressive rate-raising cycle to cool demand, but giving people spending money could stymie that effort.

And those economists aren't the only ones worried. Hit already by hefty inflation, 59% of Americans are concerned student loan forgiveness will make inflation worse, according to a CNBC survey, conducted online by Momentive among a national sample of 5,142 adults from Aug. 4 to 15.

EVERYDAY GETS EXPENSIVE:These everyday items saw the biggest price increases from inflation in July, CPI report shows

JOB WORRIES:With 80% of workers afraid of losing jobs during a recession, business owners trim costs

What is discretionary income?

The money you have left after paying taxes and necessary cost-of-living expenses. It's different from disposable income, which is simply the amount of money you have left after paying taxes.

Knowing what discretionary income is is important because many federal student loan repayment plans are income-driven and have payments that are based on your discretionary income.

DISCRETIONARY INCOME:What is it? Why it matters in student loan repayment.

If you qualify for student debt forgiveness, what should you do with any extra money?

“Student loan forgiveness will likely decrease your monthly payment or get rid of it entirely,” said Dan Casey of Bridgeriver Advisors in Bloomfield Hills, Mich.

Take that freed up money to pay off high-interest debt like credit cards, build up your emergency fund, or invest it in your retirement. Even though today looks brighter, the economy is still on shaky footing.

SHAKY GROUND:Are we in a recession? America's economy stinks no matter what you call it.

INFLATION HELP?:President Biden signs Inflation Reduction Act into law to address climate and health care

Does Congress need to approve Biden's loan forgiveness plan?

The White House says it is using the authority Congress granted the Department of Education to forgive the outstanding federal student loans.

Should I stop paying my student loans now?

The Biden administration has extended the Student Loan Payment Pause through Dec. 31, which allows borrowers to suspend their loan payments with a 0% interest rate. The White House has warned that this will be the final extension.

"It’s time for the payments to resume," Biden said Wednesday.

Borrowers who qualify for the payment pause and loan forgiveness should stop paying off loans if they owe less than the $10,000 cap (or $20,000 cap, for Pell Grant recipients) to take full advantage of the loan forgiveness program.

Others who earn more than $125,000 (or $250,000, for married couples) or have more than $10,000 in loans (or $20,000, for Pell Grant recipients) should be ready to start making loan payments again.

"We recommend to continue making payments for now if you can afford to because these payments go 100% toward principal until January," said Isabel Barrow, director of financial planning at Edelman Financial Engines. "While it’s impossible to know what will happen in the future, such as another forgiveness program, we would not recommend delaying or stopping loan payments in anticipation of future changes."

There is also subset of borrowers who did not have their loans paused. These borrowers should continue to make loan payments "to keep the loan in good standing," according to Ameriprise financial private wealth advisor Rebecca Hall.

Loans not eligible for the COVID-19 payment pause include:

Nondefaulted Federal Family Education Loan (FFEL) Program loans not held by the Department of Education

Defaulted and Nondefaulted federal Perkins loans not held by the Department of Education

Nondefaulted Health Education Assistance Loan (HEAL) loans

Private student loans

Which student loans do not qualify for forgiveness?

The Department of Education says the "vast majority" of borrowers with loans held by the department are eligible for forgiveness, including those in the following programs:

William D. Ford Federal Direct Loan Program

Federal Family Education Loan (FFEL) Program (if held by the Department of Education or commercial guaranty agencies or lenders)

Federal Perkins Loan Program (if held by the Department of Education)

Teacher Education Assistance for College Education and Higher Education (TEACH) Grant Program Grants do not qualify for forgiveness unless they have been converted to direct unsubsidized loans.

The Biden administration is working to determine whether borrowers with other Federal student loan programs will be eligible to receive loan discharges, according to an emailed statement from a Department of Education spokesperson.

"Over the next couple of months, the Department of Education will work with private lenders to ensure commercially-held federal student loan borrowers can also benefit from relief," the email reads. "In the meantime, borrowers with privately-held FFEL, Perkins, and HEAL loans consolidating into the Direct Loan program will be eligible for relief."

CAN'T AFFORD IT:Is college worth it? Americans say they value higher education, but it's too expensive for many

I paid off student loans recently. Am I eligible for a refund?

The federal government first announced the student loan payment pause on March 13, 2020. The U.S. Department of Education says borrowers who made payments during the pause – including auto-debit payments – can request a refund with their loan servicer.

Borrowers can look up their loan servicer on the agency’s website.

If you don’t qualify, should you start repaying in January?

“If you haven’t made a student loan payment since the pause began, it’s important to understand how much you’ll owe each month,” Daniel Milan, advisor at Cornerstone Financial Services, said.

Then, review the interest rates on your loans and start paying off the highest interest ones first, enrolling in autopay so you don’t miss any payments while you get back into the habit of paying regularly and consider refinancing if it lowers your payments.

“Moving multiple loans into one loan can also help you keep better track of how much you actually owe,” he said.

STOKING INFLATION?:How soaring inflation is complicating Biden's decision whether to forgive student loan debt

What’s ahead for future borrowers?

To “substantially” reduce future monthly payments for lower- and middle-income borrowers and protect more income from loan payments, the Department of Education is proposing a new income-driven repayment plan.

Here are some things being proposed:

Cutting the amount borrowers have to repay each month and curbing interest so a balance won't grow so long as borrowers make their required monthly payments.

Loan balance forgiveness after 10 years, instead of 20, under many income-driven repayment plans for borrowers with original loan balances of $12,000 or less. This will allow nearly all community college borrowers to be debt-free within 10 years, the White House said.

Starting next summer, the Department of Education can automatically pull borrower’s income information each year, avoiding the hassle of needing to recertify their income annually and make it easier for borrowers to stay enrolled.

Public servants will also have an easier time claiming credits for time of service to go toward debt relief under the Public Service Loan Forgiveness (PSLF) program. The Department of Education has already made some temporary changes toward that end. To apply for forgiveness or payments to count toward forgiveness under the temporary changes, visit the PSLF Help Tool.

A full list of proposed regulations will be published in the coming days on the Federal Register, and the public is invited to comment on the draft rule for 30 days.

TRUE COST OF COLLEGE:It's not just tuition and fees: College students are facing increasingly high rent prices, too

LIFE OFF PAUSE:How the student loan payment pause changed people’s lives

Would Parents PLUS loans be forgiven?

Parent PLUS loans are federal student loans issued directly to parents with dependents in school, meant to supplement school, state and other federal financial aid offered for a dependent undergraduate student enrolled at least half-time.

Parent PLUS loans held by the Department of Education are included in the cancellation policy, along with federal graduate and undergraduate loans.

What’s being done to keep the cost of college from spiraling?

The Department of Education will publish an annual watch list of programs with the worst debt levels in the country, so students registering for the next academic year can steer clear of programs with poor outcomes. It will also request plans from colleges with the most concerning debt outcomes on how they intend to lower debt levels.

Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.

Student loan debt: White House leaning toward canceling $10,000 ...

CNN —

White House officials have been weighing – and leaning toward – the cancellation of up to $10,000 in student loan debt per borrower tied to an income threshold, with an official announcement set for Wednesday, CNN has learned.

According to multiple sources familiar with the discussions, the plan is designed to offer the forgiveness to individuals who earn less than $125,000 per year. It is not clear that a final decision on the details of the announcement has been made, and there could always be 11th-hour changes.

A source familiar with the plans confirmed to CNN that the announcement will be made on Wednesday.

In addition to that baseline of student loan debt forgiveness for individuals who fall under a certain income level, administration officials have also recently discussed the possibility of additional forgiveness for specific subsets of the population, according to sources familiar with internal discussions in the administration.

White House officials have also been leaning toward a final short-term extension of the freeze on federal loan repayments that has been in place since 2020. The freeze is scheduled to expire on August 31, and the administration has for months signaled it is preparing for the pandemic-era action to end.

Payments have not been required on most federal student loans since March 2020, when the Covid-19 pandemic hit the US, greatly affecting the economy. Biden has extended the pause four times, most recently in April, arguing that it was necessary to allow federal student loan borrowers to get back on their feet.

Video Ad Feedback Have student debt? Hear some expert tips on how to manage it 03:00 - Source: CNN Business

A final short-term extension, should Biden select that path, would likely push the restart of payments until after the election. Detailing its expiration in concrete terms, however, would also provide Biden with something to point to that would ostensibly counter at least some of the increased economic demand created by any corresponding debt forgiveness.

In recent days, White House officials have been in communication with lawmakers to discuss their thinking on student loan debt forgiveness, ahead of the current pause on payments expiring. And Biden on Tuesday spoke on the phone with three Democratic lawmakers who have been pushing him to cancel as much as $50,000 in debt per borrower – including Sens. Elizabeth Warren of Massachusetts and Raphael Warnock of Georgia, sources told CNN – to discuss the outstanding details in advance of his expected announcement.

The President also spoke with Senate Majority Leader Chuck Schumer, with the New York Democrat using the conversation to make a final push to cancel as much student loan debt as possible, according to a Democrat familiar with the call. Schumer has pressed for two years for large scale loan forgiveness and has spoken repeatedly with White House officials in an effort to advance the idea in an administration that has been split about its merits, both politically and economically.

The White House has suggested in the past that Biden was considering canceling $10,000 per borrower but excluding those who earn more than $125,000 a year.

Administration officials in recent days have also discussed the possibility of offering additional forgiveness to certain people.

One of the ideas discussed, per sources familiar with deliberations within the administration, has been supplemental debt forgiveness for Pell Grant recipients. However, the fact that the idea has been discussed does not mean that the White House will ultimately decide to go this route, and it is not clear that a final decision on the details of the administration’s forthcoming announcement has been made.

Additional debt forgiveness on top of the $10,000 amount could potentially be significant, depending on the maximum size of the supplemental cancellation. Pell Grants are offered to students that demonstrate “exceptional financial need,” according to the Department of Education. Extending extra forgiveness for Pell Grant recipients would mark an attempt to identify a subset of the population who might most benefit from student loan debt cancellation.

“The President will have more to say on this before August 31. As a reminder, no one with a federally held loan has had to pay a single dime in student loans since President Biden took office, and this Administration has already cancelled about $32 billion in debt for more than 1.6 million Americans – more than any Administration in history,” a White House official said when asked for comment.

Setting an income cap, which has been the subject of intense debate both inside and outside the administration, was also crafted as a buffer against criticism that the forgiveness would benefit those with the means to manage their debt payments.

Education Secretary Miguel Cardona said Sunday that Americans can expect a decision from the administration on student loans in the “next week or so.” With less than two weeks to go, Americans have been left guessing for weeks whether Biden will extend the current moratorium or, perhaps, forgive some of their debt.

“We’ve been talking daily about this, and I can tell you the American people will hear within the next week or so from the President and the Department of Education on what we’re going to be doing around that,” Cardona told NBC’s Chuck Todd on “Meet the Press.”

Video Ad Feedback Why the US has a student loan debt crisis 02:22 - Source: CNN

He did not elaborate on the details, saying he would not get ahead of the announcement.

Some Democratic lawmakers and advocates have been urging Biden to broadly cancel up to $50,000 in student loan debt per borrower, but the President has consistently pushed back on canceling that much.

Biden has canceled more student loan debt than any other president, with his administration authorizing the cancellation of nearly $32 billion in loans largely for borrowers who were defrauded by their for-profit colleges and for permanently disabled borrowers.

Marc Goldwein, the senior vice president and senior policy director for the Committee for a Responsible Federal Budget – a nonpartisan group that tracks federal spending – argued against the plan in an interview with CNN’s Poppy Harlow on “Newsroom” Tuesday morning.

He believes that canceling $10,000 of debt for each borrower will likely increase inflation, undermine the stated goal of Democrats’ Inflation Reduction Act and will not significantly decrease the racial wealth gap.

“The Inflation Reduction Act saves maybe $300 billion dollars in the first 10 years. If we cancel $10,000 of debt and just extend the pause a few months, we’re going to be at about that much in terms of new cost,” he said. “All the deficit reduction will be wiped out. At the same time, we’re probably going to do more to increase inflation from debt cancellation than any inflation reduction from the Inflation Reduction Act.”

This story has been updated with additional reporting.

Mj Lee Phil Mattingly
Mj Lee
Phil Mattingly

'College Behind Bars' explores restoring Pell Grants to inmates

PHILADELPHIA – Stacks of books are organized meticulously by genre amid the chaos of a maximum security prison. A makeshift desk made from cardboard is placed over a sink in a cramped cell. A chalkboard is filled with Chinese symbols in a room filled with eager students in green jumpsuits. Late night studying.

This isn’t the picture most Americans have of prison.

More often than not, violence, isolation and anger are what come to mind. But these scenes from a PBS documentary airing this month show viewers a different kind of prison life – the rigorous pursuit of higher education.

“College Behind Bars" follows students in the Bard Prison Initiative, a privately funded college program that began in 2001 in New York state prisons. For now, the roughly 300 students taking classes free of charge at the elite college are the exception. Most incarcerated individuals cannot afford a college education – and all are banned from applying for federal grants.

It wasn’t always this way. For decades, college prison programs flourished across the country. After the passage of the 1994 Crime Bill, Pell Grants were banned for those who are incarcerated.

For the first time in more than two decades, a push to lift this ban is sparking bipartisan support. Last month, Congress introduced bills that would reinstate Pell Grant eligibility for those incarcerated as part of wider college affordability legislation.

For formerly incarcerated individuals, educational experts and advocates, it’s about time. They argue that post-secondary education behind bars will lower the likelihood that an individual returns to prison and that it will benefit society as whole.

“Ninety-five percent of people who are in prison will get out,” Ken Burns, executive producer of the PBS film, told USA TODAY. “Do you want them as responsible, taxpaying citizens or people who have used their time in prison to hone their criminal skills?”

'College Behind Bars'

Incarcerated at 17, Jule Hall spent more than 20 years in prison and is one of the main figures in the PBS documentary, which airs Monday and Tuesday.

The film trails Hall, a 2011 Bard Prison Initiative graduate who earned a bachelor's degree in German studies, as he navigates the parole process, is released from prison and enters the workforce.

Hall works at the Ford Foundation analyzing the impact of social justice grants – an experience he describes as "another Bard" because of the experts and cutting-edge ideas.

"What BPI has achieved is exceptional, but I think it's only a small part of what can be done if we get serious about this," Hall said. "I want people to walk away from this film understanding that there are many more people who want to be involved in programs like this that are incarcerated, but they don't have the access or the possibility of doing so."

Access to education is at the heart of filmmaker Lynn Novick and producer Sarah Botstein's vision. When the two screened one of their films at a BPI class at Eastern Correctional Facility in New York, the engaging conversation they had with the inmates encouraged them to expose the program to more people.

"After that one experience in the classroom, we walked out and just felt like, 'Oh my gosh, this is something everybody needs to know is happening,' " Novick said.

BPI students are felons serving long sentences for serious crimes. Botstein said the filmmakers challenge viewers to rethink their views of felons by not immediately revealing the BPI students' crimes, unlike most other films and books on the subject of college in prison.

In the program, the inmates memorize the opening section of "Moby Dick," participate in classroom discussion on the ethics of stem cells and vigorously weigh the benefits of NATO as part of a viral debate team. To earn their bachelor's degree, students must write a lengthy research paper that is comparable to graduate-level coursework.

This high standard of education – BPI is taught at the same level as Bard College, the liberal arts school in New York – is crucial to Hall's hope of Pell Grant expansion.

"We need to be careful to make sure that the level of quality that we received with our education is kept intact," Hall said. "When you provide education that's high quality, it's not just a benefit for the individual, but it's a benefit for society."

Shawnta Montgomery, another BPI alum, works as a peer recovery coach at the Fortune Society, a New York City nonprofit group focused on integrating formerly incarcerated individuals back into society. She said the film is meant to challenge the public's perception of who deserves access to education.

"Should people in prison get this education?" Montgomery said. "Look what it does for people, look at the doors that are open, look at recidivism rates – you see the transformation."

Numbers show benefits of college in prison

Education experts argue the benefit of expanding college prison programs is both personal and fiscal. Incarcerated individuals see their lives turned around by education, and the economy receives a boost from more productive citizens and reduced recidivism rates.

Lifting the ban on Pell Grants for those in prison may save more than $365 million, according to a study this year by the Vera Institute of Justice and the Georgetown Center on Poverty and Inequality.

The study projected large benefits to reinstating Pell Grant access to incarcerated individuals, finding that inmates leaving prison will get jobs, contribute to the economy and will be less likely to go back to prison.

Nationally, about 68% of inmates released from state prisons were rearrested within three years of release, according to a Justice Department study. In New York, where BPI operates, 42.6% of state prisoners released in 2012 returned to prison in the following three years, the state reported.

For BPI's more than 550 graduates, the recidivism rate is 2.5%, the institute said. It's not just BPI: A RAND study in 2013 found that inmates who took part in educational programs were 43% less likely to return to prison compared with those who did not participate.

“It's not that often that you see such a clear narrative of this policy change," said Casey Goldvale, who co-wrote the study. “It will impact thousands of people's lives, millions over time, and it also makes fiscal sense. It's the best of all worlds.”

When the Pell Grant program started, it didn't matter whether an individual was in prison – everybody had access until the 1994 Crime Bill, said Cara Brumfield, who co-wrote the study. When that access was revoked, nobody in prison could afford the college prison programs, and they dried up.

Lawmakers argued at the time that Pell Grants, a form of federal student aid for high-need college students, should not be spent on convicts.

Unlike other forms of student aid, Pell Grants are not loans and do not need to be repaid. For the 2019-20 award year, the maximum Pell Grant amount is $6,195.

"This isn't about giving people in prison something new," Brumfield said. "This is about restoring access to something that already existed and that was successful when the Pell program first started. This is about undoing a mistake.”

Before the ban on Pell Grants in 1994, there were more than 300 college programs in prisons, said Tiffany Jones, director of higher education policy at the Education Trust. In 2005, more than a decade after the ban, there were just 12.

Jones hopes change will come as policymakers realize tough-on-crime policies that exclude incarcerated individuals from opportunities don't work.

“We are here because of the compelling stories of those that have been impacted and the fact that their stories of transformations and impacts aren't exceptions, they are the norm,” Jones said. “There is this opportunity to convert compassion and concern into action. This is one of the very few issues where Republicans and Democrats are agreeing that action is necessary.”

Goldvale said the study found many at the local and state level are intrigued by the expansion of Pell Grants to prisons.

Asnuntuck Community College in northern Connecticut, for example, is feeling the effects of expanding Pell Grants to prisoners. The school admitted 320 incarcerated students in its fall 2016 class after receiving funding from President Barack Obama's Second Chance Pell program, said Jennifer Anilowski, the college's interim director of admissions.

Many students earn certificates in manufacturing that are in high demand in the state, leading graduates to find work and immediately contribute to the economy. The funding continues under the Trump administration – and Asnuntuck officials said they are happy to continue as long as the federal government allows them to.

'You don't know what you did for me':Released from prison by Obama, now on the dean's list

'It empowered me to realize I wasn't a stupid kid'

Aaron Kinzel, a University of Michigan-Dearborn criminology lecturer, knows firsthand the significance of college education in prison.

As a child, Kinzel said, he was violent and constantly exposed to illegal activities. Nearly killed by his stepfather, he turned to crime, and by 18, he was in prison after shooting at a police officer during a traffic stop.

While incarcerated, Kinzel cobbled together college courses as part of a Maine state program. One psychology class changed his outlook on life.

"That was the first time in my life that I really was empowered and felt kind of proud of myself," Kinzel said. “For the longest time, I really didn't understand the value of education. It empowered me to realize I wasn't a stupid kid."

Kinzel brings his students to prisons to humanize the criminal justice system. When it comes to education behind bars, Kinzel said the debate boils down to a simple question.

"If I have someone coming home on parole, who do you want living next to you?" Kinzel said. "Do you want the guy that got education inside and is likely to get a job? Or do you want the guy that comes home with no job?"

Opinion: The government can't run on short-term spending bills ...

Editor’s Note: Mark Wolfe is an energy economist and serves as the executive director of the National Energy Assistance Directors’ Association (NEADA), representing the state directors of the Low Income Home Energy Assistance Program. He specializes in energy and housing affordability and related finance issues. The opinions expressed in this commentary are his own.

President Biden has been in office for more than a year, and Congress still cannot agree on a full-year funding plan. Lawmakers have instead approved a series of short-term funding bills to keep the government operating, the most recent of which was passed late last week. It will keep the government running through March 11, 2022.

Short-term spending bills are passed when Congress cannot agree on a full-year plan. While they can include additional expenditures to address immediate congressional concerns, they typically keep spending at the previous year’s level and do not include additional funding for programs to address changing needs. In other words, there are usually no funding adjustments to help children, for instance, who have suffered during the pandemic and have increased needs for mental health services. The same goes for school districts that are educating disadvantaged children who have fallen behind on their education, and for families who are struggling to pay their home energy bills.

The House and Senate full-year spending bills, meanwhile, would significantly increase funding for a broad range of essential services that meet the needs of struggling families, workers, people with disabilities, the elderly, immigrants and students attending college. For example, both the House and Senate spending bills would provide a $400 increase in the maximum Pell Grant, an essential program that helps low- and moderate-income students pay for college. They would also provide substantial increases in funding for school districts serving impoverished families.

These proposed increases in funding are long overdue. A recent study by the Coalition on Human Needs found that of 192 federal programs that help low-income families, 126 of them had less funding in 2021 than they received in 2010. The numbers are grim: Job training funding for adults has been cut by 18%, children’s mental health cut by 15.7% and maternal and child health cut by 11.9%.

The House and Senate funding bills would also reverse years of spending cuts to key federal agencies that provide essential services to the country as a whole. Since 2010, federal funding for the IRS has been reduced by 20%, Environmental Protection Agency by 27% and Social Security Administration by 13%. As a result, the operations of these agencies have been reduced and service delivery has suffered. For example, IRS audits have dropped by 58% and agency staff were only able to answer about one-third of taxpayer calls in 2019. This is not a way to run the country.

The biggest stumbling block to enacting a full-year spending bill is that the Senate Republicans are insisting on a higher level of spending for defense programs and a lower level of spending for domestic programs, compared to what the House has proposed. If the price for Republican support to pass the funding bills is an increase in defense, it should not come at the expense of programs that strengthen low-income families.

Congress already failed to pass the extension of the enhanced child tax credit, which significantly strengthened low-income families by providing them with higher payments that were paid on a monthly basis to help cover everyday expenses. Lawmakers must not fail these families a second time.

Disadvantaged and vulnerable families have struggled through the pandemic to send their children to school, heat their homes and access essential services. Congress should pass a full-year spending bill to strengthen the programs that provide essential support. It’s the right and fair thing to do.

Opinion Mark Wolfe For Cnn Business Perspectives

How an indecisive Joe Biden finally made his mind up on student ...

CNN —

It was early May and Rep. Pramila Jayapal was feeling optimistic.

The chairwoman of the Congressional Progressive Caucus felt almost certain that a major announcement from the White House was imminent.

“Something is coming, and something is coming soon,” the Washington Democrat mused to CNN at the time. “I feel pretty good that something is going to come within weeks.”

Jayapal was referring to a long-awaited student loan debt cancellation decision from President Joe Biden – and she wasn’t alone. The President had said the previous week that he was “taking a hard look” at debt forgiveness, teasing an answer was coming in several weeks.

With graduation season just around the corner, the moment felt especially ripe: Some in Washington speculated about the fourth weekend of the month, when Biden was slated to give two back-to-back commencement speeches at the US Naval Academy and the University of Delaware. White House officials briefly considered unveiling their plan then.

But graduation season came and went with no announcement.

In fact, he would wait until the next school year had already started in some parts of the country to announce from the White House his decision to forgive up to $20,000 in student loan debt for tens of millions of Americans.

Even for a famously indecisive President, the question of whether to use executive powers to forgive student loan debt appeared particularly long and drawn-out. Interviews with nearly a dozen people familiar with internal deliberations revealed a myriad of factors fueled the delay, none more than Biden’s concerns over inflation and his insistence that the forgiveness plan would not be seen as a handout to the wealthy.

‘Tortured’

Asked to describe the process, one Democrat who spoke to the White House repeatedly about the issue responded with a one-word text message: “Tortured.”

Complicating matters as Biden settled into his first term in office was a myriad of national crises and international events that took up his energy and time – from the escalating war in Ukraine to the rising gas and consumer goods prices fueling economic pessimism.

At various points of the year, administration officials simply felt that “it was so much easier to just continue to delay,” one Washington Democrat said. They added bluntly: “There was sh-t going on.”

But outside distractions accounted for only part of the delay.

Biden agonized over legal concerns, moral hang-ups and persistent questions about the plan’s fairness and its potential to exacerbate inflation – the biggest political liability for his party heading into the fall.

As he mulled over each of these concerns with advisers and lawmakers, the President made clear that he was looking to feel convinced that – on both the policy and political front – there was undeniable merit to taking action, sources said.

The decision he ultimately unveiled this week – canceling up to $10,000 in debt for people earning less than $125,000 and up to $20,000 for those who also received Pell grants – was both more than some Democrats expected and less than many had called for.

Biden also announced a final extension of a moratorium on student loan repayments, providing more certainty to borrowers wondering whether those payments would resume next week.

Inside the White House, there was broad recognition the decision wasn’t likely to completely satisfy the spectrum of Democrats who have been loudly lobbying for debt relief. Some Democrats facing tough reelection battles this November distanced themselves from the move.

“This was never going to be a total win for us,” one Democrat involved in the discussions said. “Drawing out the process the way Biden has gives an opening for anyone to come in and fill.”

But after months of internal deliberations and delayed decisions, Biden and his top aides recognized they could no longer put off one of the persistent unresolved matters looming over his presidency.

Video Ad Feedback Biden forgave $10K in student debt. People flooded TikTok with their reactions 02:08 - Source: CNN

‘Bury it’

From the opening weeks of the administration, it was clear there was no easy path on the issue for Biden. White House officials settled on a tried-and-true Washington strategy: Bump the issue from the President’s already-full plate in the opening months of the administration. They requested an extensive legal review by the Justice and Education Departments – and said little more beyond that.

One administration official, who was supportive of the idea of canceling debt, said it was viewed by some as a review that may never actually end.

“Bury it,” the official said of how skeptical officials viewed the White House approach to the issue. “They were wrong in the end. But there were definitely moments when it felt that way.”

Those who had spoken to Biden about the issue had their own reasons for skepticism. Unlike many in his party, Biden simply hadn’t embraced the idea that the White House had the authority.

Even if it did, two people familiar with the matter said, Biden regularly raised concerns of fairness in discussions about the issue, wary it would benefit primarily borrowers with the means to pay their debt – or those who predominantly attended top academic institutions. And what about those who chose not to go to college at all?

In April, Biden announced another extension of the pandemic-era freeze on federal student loan repayments – something officials had signaled was unlikely after the prior extension. Even then, officials had no clear read on where Biden would land.

By then, the administration’s reviews had been conducted – and completed, officials said. Biden’s policy and legal teams, while far from unanimous on the merits of the idea, were prepared with potential options.

Political peril

Three weeks after Biden’s decision to extend the repayment freeze, the politics of the contentious policy and legal debate over forgiving student loans was laid bare in the Oval Office.

Biden’s advisers have taken a position of dismissing public polling, but inside the West Wing there is a constant stream of internal numbers that factor into strategy and decision making. Some outside polling punctures the Oval Office as well, none more so than a poll of young voters conducted by one of Biden’s 2020 campaign hands.

The survey, conducted by Harvard’s Institute of Politics, showed just 41% of young Americans approved of Biden’s job performance. It marked an 18-point drop from the year prior. Biden delved into the details of the poll himself – with the very people who put it together – in a White House meeting with Harvard students and their faculty adviser.

A few weeks later, John Della Volpe, the director of polling at Harvard’s IOP who became a trusted voice inside Biden’s inner circle, would advocate for student loan action with an unambiguous message.

“Beyond the essential economic bottom line, this action will begin to materially rebuild the fractured relationship between the leader of the Democrats and a voting bloc that was integral to his party’s most recent successes,” Della Volpe wrote in a New York Times essay.

The politics laid out in the Harvard poll and others during the spring was not a singular driving force for the decision, officials say, but they acknowledge it resonated among some of Biden’s senior advisers, including White House chief of staff Ron Klain.

It resonated with Biden as well. A decision to move forward wasn’t just about the policy itself; it was also about delivering on a campaign promise and delivering action – two issues highlighted as critical in the Harvard polling.

But turning Biden’s openness to move forward into final policy was hardly a straight line.

Video Ad Feedback 'Give me an f-ing break': Commentators debate Biden's student debt forgiveness plan 01:53 - Source: CNN

Democratic push

Intensive lobbying from fellow Democrats, including in the hours before he made a final announcement, contributed to Biden taking his time to land on a final decision – even as that delay left millions of borrowers in a state of anxious uncertainty.

When members of the Congressional Progressive Caucus visited Biden at the White House in late March, the President pondered aloud about one of his biggest fixations – ensuring that wealthy families wouldn’t benefit from loan cancelation. Some lawmakers in the room pointed out that setting an income cap likely wouldn’t make a major difference, since high earners were far less likely to take out loans to attend school to begin with.

He and top White House officials were also on the receiving end of pitches from top senators, including Sen. Elizabeth Warren, who had faced off against Biden in the 2020 Democratic primary and had famously made student loan debt cancelation a major pillar of her campaign.

The Massachusetts Democrat – who liked to drop a statistic about debt held by graduates from the University of Delaware – had begun lobbying Biden and his top aides on the issue as soon as the general election kicked into gear. The senator had dozens of phone calls with senior White House staff on the scope of potential debt forgiveness, as well as several direct conversations with Biden himself, according to sources familiar with those conversations.

Senate Majority Leader Chuck Schumer was also among the handful of top Democrats who lobbied Biden for much of his term to cancel student debt.

The push even continued after the deadly massacre at a Buffalo supermarket, when Biden traveled to the city in May to meet the families of victims of the mass shooting. On Air Force One and on the way back to Washington on May 17, Schumer made the argument to Biden directly that canceling student loan debt was the “right thing to do economically and morally,” the source said.

Warren, too, recently seized on rare face time with the President onboard Air Force One. Traveling with him to Somerset, Massachusetts, in July ahead of Biden’s major speech on climate change, the senator again pressed him on the urgency of the issue.

In recent months, Warren had begun pushing the White House to consider additional student loan cancelation on top of the baseline forgiveness that the administration was leaning toward for people making less than $125,000 per year, with the hope of raising the total amount of forgiveness that the lowest income Americans would be eligible for.

Vice President Kamala Harris routinely made the case for widespread student debt cancelation, a source familiar with discussions, told CNN, including directly to the President himself.

“It wasn’t a secret that she was an advocate for debt cancellation,” the source said.

In the final announcement the White House released, forgiveness for Pell grant recipients mirrored a part of then-Sen. Harris’ 2019 student debt forgiveness plan — which included $20,000 in relief for Pell grant recipients who started small businesses in disadvantaged communities.

Jayapal, who said she had been in touch with White House officials in the days leading up to Biden’s announcement, said she sensed that that final number – $20,000 in maximum loan forgiveness for Pell grant recipients – was “in flux, until the very end.”

“I think it’s been a journey for the President, let’s put it that way,” said Jayapal, who called Biden’s announcement this week a “huge victory.”

“There are some things that are easier and some things that are harder, and I get the sense that maybe this was something that was a little bit harder. But I think he settled somewhere that he felt comfortable with.”

Mj Lee Kevin Liptak Phil Mattingly
Mj Lee
Kevin Liptak
Phil Mattingly

Opinion: Build Back Better isn't a path to socialism. It's an investment ...

Editor’s Note: Jim Himes represents Connecticut’s 4th District in the United States House of Representatives where he is serving his seventh term. He serves as the chair of the Select Committee on Economic Disparity and Fairness in Growth and the National Security, International Development and Monetary Policy Subcommittee of the House Financial Services Committee. The opinions expressed in this commentary are his own.

For far too many American children, the race is over before it really begins. Arbitrary factors like zip code, race and gender are determining whether those children prosper or are consigned to poverty. About half of children born into poverty in the US will spend at least half their childhoods poor. And they are much more likely to experience poverty in early adulthood as well. That’s not how we understand the American Dream, and it’s an eminently solvable problem.

There is ample evidence that high-quality education at an early age helps break the cycle of poverty and meaningfully expands social and economic mobility. That’s one of the reasons why House Democrats included billions in federal funding for universal preschool in the Build Back Better Act.

Unfortunately, the historic legislative package is stalled since Senator Joe Manchin said he wouldn’t vote for it. But if we’re ever to address the embarrassing lack of investment in our nation’s children, Congress must convince Manchin to support the bill.

The fact is that the child care and development elements of the Build Back Better Act actually represent the economic foresight and fiscal responsibility that will help expand our economy, lift children out of poverty, and address economic disparity nationwide. Nobel prize-winning economist James Heckman has conclusively shown that early comprehensive child care improves health and social outcomes, on top of strengthening the economy. Early childhood education helps children secure their own economic futures and delivers significant economic benefits to their families as well.

Programs like universal preschool make it possible for more parents to join the workforce and contribute to local economies. Research from the National Women’s Law Center demonstrates that this could be a gamechanger for lower-income women with less than a college degree, especially for Black and Latina women, who often start from a more precarious economic position.

Beyond the moral imperatives for supporting America’s children, there’s also a significant return on investment. While vulnerable families are the main beneficiaries in the short term, every dollar invested in early childhood programs can yield anywhere from $4 to $9 in return to the US economy, according to Harvard University’s Center on the Developing Child. These returns benefit local communities because of reduced crime and increased tax revenues that come with more children participating in early childhood programs and getting jobs when they become adults.

Many congressional Republicans have been relentless in their efforts to paint Build Back Better as a “pathway to socialism.” Still, there are some Republican-led states in the South that are joining states like California and New York to expand early childhood education. Alabama increased its preschool funding by $6 million and Florida followed suit with an additional $10 million in its fiscal year 2020-2021 budget.

Those who seek only to visit a defeat on President Joe Biden or who fail to see the ethical and economic value in the Build Back Better Act are standing in the way of a valuable opportunity to uplift our country’s most vulnerable populations, strengthen our economy and invest in America’s future workforce. Congress can’t give up on getting the bill passed, as there is still hope. Shortly after vowing to vote against it, Manchin and President Biden had a cordial phone call where the two discussed reengaging this year.

The American economic exceptionalism we enjoy today is the reward of generations of wise investment in people through things like public education and Pell grants that help low-income students get a college education. At this moment of truly global competition, it is our turn to show such foresight.

Opinion Jim Himes For Cnn Business Perspectives