On The Money — Supreme Court grabs new challenge to student loan plan

  • Oops!
    Something went wrong.
    Please try again later.

Borrowers who are waiting to find out if their student loans will be forgiven have another court case to track. We’ll also look at Sam Bankman-Fried allegedly ducking a subpoena and a race to strike a spending deal.

But first, tweets are about to get much longer.

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane and Aris Folley. Someone forward you this newsletter? Sign up here or in the box below.

Thank you for signing up!

Subscribe to more newsletters here

The latest in politics and policy. Direct to your inbox. Sign up for the On The Money newsletter

Court takes on another clash over student debt relief

The Supreme Court on Monday agreed to hear a second legal clash over President Biden’s ambitious student debt relief plan that is currently blocked by lower courts.

The two cases involve an effort by the Biden administration to reinstate a loan forgiveness program that would give federal borrowers making less than $125,000 a year up to $10,000 debt relief.

Arguments in the cases could be heard as early as February. It was not immediately clear if the disputes would be consolidated or handled separately.

The breakdown: The case added Monday stems from a legal challenge brought by individual borrowers who argued the debt-relief program’s enactment was procedurally improper.

  • A Texas-based federal judge last month invalidated the program and a New Orleans-based federal appeals court let that ruling stand, prompting the administration’s appeal to the Supreme Court. 

  • Separately, a St. Louis-based appeals court halted the loan relief program in response to a challenge by six conservative-led states.

The Hill’s John Kruzel has more here.

LEADING THE DAY

Senators say Bankman-Fried is refusing subpoena to testify about FTX collapse

Lawyers for FTX founder and former CEO Sam Bankman-Fried have refused to accept a subpoena for the disgraced cryptocurrency magnate to appear before the Senate Banking Committee, the Democratic and Republican leaders of the panel said Monday.

In a statement, Senate Banking Committee Chairman Sherrod Brown (D-Ohio) and ranking Republican Sen. Pat Toomey (Pa.) blasted Bankman-Fried for “an unprecedented abdication of accountability” after rejecting several requests to testify at hearings about the collapse of FTX.

“Given that Bankman-Fried’s counsel has stated they are unwilling to accept service of a subpoena, we will continue to work to have him appear before the Committee. He owes the American people an explanation,” they continued.

The background:

  • While Bankman-Fried is set to testify virtually before the House Financial Services Committee on Tuesday, he has refused to commit to appearing before the Senate Banking panel.  

  • The Banking Committee is set to hold its own hearing on the FTX collapse Thursday, but Bankman-Fried suggested during a Monday livestream on Twitter that he was too busy to appear.

“We have offered Sam Bankman-Fried two different dates for providing testimony before the Senate Banking, Housing, and Urban Affairs Committee, and are willing to accommodate virtual testimony. He has declined in an unprecedented abdication of accountability,” the senators said.

Sylvan breaks it down here.

SHUTDOWN CRUNCH

Schumer says Senate likely headed for short-term funding bill to stave off shutdown

Senate Majority Leader Charles Schumer (D-N.Y.) on Monday said the Senate will likely vote on a short-term funding bill to stave off a government shutdown and buy time for spending talks.

Schumer said on the Senate floor that “members should be prepared to take quick action” on a one-week continuing resolution, which would freeze government funding levels temporarily as negotiators struggle to hash out a larger bipartisan deal on spending.

  • Lawmakers have until Friday to pass funding legislation to prevent a shutdown. And negotiators on both sides of the aisle are hopeful Congress will be able to approve a larger government funding omnibus for fiscal 2023, which began in October, before Christmas. 

  • Democratic negotiators were expected to release new funding plans as early as Monday after bipartisan spending talks appeared to stall last week. But those plans were scrapped over the weekend after an aide said negotiators made progress in discussions.

Aris has the details here.

RECESSION RISK

Yellen predicts ‘much lower inflation’ by end of 2023, sees risk of recession

Treasury Secretary Janet Yellen said on Sunday predicted a significant reduction in inflation by the end of 2023, while also noting the continued risk of a recession.

“I believe by the end of next year you will see much lower inflation if there’s not … an unanticipated shock,” Yellen told Norah O’Donnell during an interview that aired Sunday on CBS’s “60 Minutes.”

  • Yellen also said there was risk of an economic recession, though she noted how the country currently has a “healthy banking system” and a “healthy business and household sector.” 

  • Her remarks come after the Producer Price Index (PPI), which measures the costs of products before they hit shelves, rose 7.4 percent last month, a
    0.3 percent rise from the previous month.

The Hill’s ​​Olafimihan Oshin digs into this here.

Good to Know

The Federal Reserve is hoping to slow its interest rate hikes and give Americans some relief from rising mortgage and car payments. A crucial inflation report could make or break those plans.

Other items we’re keeping an eye on:

  • A bipartisan group of House lawmakers who recently returned from Kyiv are putting support behind Ukrainian government requests for the U.S. to provide more air defense systems, munitions, drones and military training to the war-torn country. 

  • Searches for a Speaker alternative to House Republican Leader Kevin McCarthy (Calif.) are slowly building momentum as he faces opposition that threatens to sink his bid.

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.

For the latest news, weather, sports, and streaming video, head to The Hill.