Business

(WASHINGTON) — President Joe Biden on Wednesday said that the federal government will pay down the national debt this quarter for the first time in six years.

His remarks on economic growth came ahead of the Federal Reserve announcing a hike in interest rates Wednesday afternoon in an attempt to manage soaring inflation.

“Bringing down the deficit is one way to ease inflationary pressures in an economy, where a consequence of a war and gas prices and oil, food, and it all — it’s just a different world right this moment because of Ukraine and Russia,” Biden said.

Inflation is a big political problem for him and fellow Democrats ahead of the midterm elections as Republicans try to capitalize on soaring energy prices.

“For all the talk the Republicans make about deficits, it didn’t happen a single quarter under my predecessor, not once,” Biden said. “The bottom line is the deficit went up every year under my predecessor, before the pandemic and during the pandemic, snd it’s gone down both years since I have been here. Period. There are the facts.”

Biden’s remarks from the White House come after the Treasury Department updated estimates this week to project that the U.S. deficit will fall by over $1.5 trillion this year, a revision from the $1.3 trillion projected in Biden’s budget.

He credited the American Rescue Plan for growing the economy, though that relief bill has also been criticized for contributing to current inflation problems.

“Looking ahead, I plan to reduce the deficit even more which will help reduce inflationary measures and lower the cost for everyone’s families,” Biden said, as he tries to revive a stalled legislative agenda in Congress.

A White House official said, “This deficit reduction is occurring because the robust economic recovery means earnings and incomes are higher, which is increasing revenue, and because the Administration is winding down emergency spending.”

“There is no reason why a billionaire should be paid a lower tax rate than a teacher or firefighter,” Biden said Wednesday. “That is a sharp contrast to what’s today’s Republican Party is offering.”

Raising a plan released by Florida GOP Sen. Rick Scott, Biden blasted what he called “this ultra-MAGA agenda,” which he said would raise costs for Americans families.

The budget deficit fell by more than $350 billion in Biden’s first year, according to the White House, but with inflation at a 40-year high, Republicans are hitting Biden on the economy as the 2022 midterm election cycle kicks off and Americans are still paying more at the pump.

In an effort to manage inflation, the Federal Reserve is expected to raise the short-term interest rate by a half-percentage point Wednesday — double the usual amount and the sharpest rate hike since 2000, meaning it will soon cost Americans more to buy big-ticket items like cars and homes.

The annual deficit has expanded to around $3 trillion due to the pandemic’s blow on the economy, with the gross national debt surpassing $30 trillion for the first time earlier this year. Former President Donald Trump’s massive tax cut in 2017 has added more than $1 trillion to the debt by some estimates — a point Biden hit head on.

ABC News’ Justin Gomez contributed to this report.

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(NEW YORK) — The Federal Reserve is expected to raise interest rates on Wednesday in an effort to help battle inflation.

The increase is expected to be half a percentage point.

So what does this latest hike mean for you? ABC News’ Rebecca Jarvis appeared on Good Morning America Wednesday to break down how the increase could impact markets and your bottom line:

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(NEW YORK) — This week, Skims, Kim Kardashian’s “solutions-oriented” brand of underwear, shapewear and loungewear, launched The Adaptive Collection for people with limited mobility.

The collection includes four pieces, all within the Fits Everybody wider range: an adaptive scoop bralette, thong, brief and boy short. Each piece comes in four different colors and sizes from XXS to 4X.

Moreover, these pieces all have added hook and eye closures “for added accessibility of dressing,” Skims explains on their website.

Stefanie Schaffer, 25, is one of the models featured in the Skims campaign for this collection. Schaffer lost both of her legs, sustained a spinal cord injury and paralysis, a traumatic brain injury, and suffered multiple broken bones and failing organs in a 2018 boating explosion, she says. She now has two prosthetic legs.

Since the accident, Shaffer says she has found new activities, like hand cycling and Nordic sit skiing, and has “been determined to make the most of what happened to me and live my best new life.”

She also recently signed a modeling contract which led her to “a dream” shoot with Skims, she says.

“From the moment that I was booked for the shoot, the entire Skims team was so professional, and so considerate, making sure they took all of our accessibility needs into consideration,” she adds. On set, “they made me feel beautiful and confident and worthy of being there.”

“A brand like Skims releasing an adaptive collection is so important!” Shaffer says, considering their influence on the industry. “So this was saying to us that being disabled doesn’t mean you have to compromise. You don’t have to miss out on shopping at your favorite brands because [Skims] can see that [you’re] valued and taken into consideration.”

Schaffer says her favorite pieces include the boy short and the briefs, and she adds that the hook and eye system on the sides of the underwear make them easy to take on and off.

People may not realize how tiring day-to-day tasks are for those with physical limitations, Schaffer says.

“Sometimes I’ll be exhausted just from getting clothes on for the day,” she notes. “So even just these basics of bras and underwear being easier, is like, such a relief. Serious props to Skims for this.”

In its launch email to customers, Skims says that this adaptive collection is “just the beginning,” and they “want to offer more solutions to more people.”

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(NEW YORK) — As home buyers face low inventory, many are eager to make a deal as soon as they can, which can put some are risk for scams.

Experts are warning that real estate wire fraud is on the rise, and if you aren’t careful, your money could be gone in the blink of an eye.

ABC News’ Rebecca Jarvis appeared on Good Morning America Tuesday to discuss what to look out for and how home buyers can protect themselves:

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(NEW YORK) — In 2021, more than 47 million Americans quit their jobs, according to the Bureau of Labor Statistics – the most resignations on record. As resignation rates remain high in early 2022, in what has been since deemed by some as “The Great Resignation,” many are wondering if there is a shift in the way Americans are viewing work.

Desmond Dickerson, the Director of Future of Work Marketing at Microsoft, describes himself as a futurist. He said that pandemic remote work was just a “kickstart” to The Great Resignation.

“If you’re leaving the job previously [before the pandemic], that means uprooting,” said Dickerson. “But now all that needs to happen is that you toss one laptop to the side and then bring in a new one… So that barrier to entry for transitioning to jobs has changed.”

The pandemic radically changed how Americans work. Many turned homes into offices and some frontline workers began risking their lives for a paycheck. After the federal government spent nearly $2 trillion in a COVID-19 relief package, the economic rebound from the pandemic accelerated.

Although some businesses are now booming, they are having to fight hard to keep employees.

In late 2020, Anthony Klotz, an associate professor of business at Texas A&M, said he saw The Great Resignation coming. During the pandemic, he says he noticed four signals: a backlog of resignations, widespread burnout, people reevaluating their relationship with work and, finally, the opportunity of remote work.

“Once the threat of the pandemic started to lift, it made sense to me that many of these individuals would enact their plans to quit their jobs… People reevaluating what work meant to them,” said Klotz. “It seemed like there was a big disconnect there between what employees, what workers wanted and what organizational leaders were hoping would happen coming out of the pandemic.”

Dickerson said that the shift in mentality is evident in new job postings.

“Throughout the pandemic, we’ve seen remote work go from the margins into the mainstream, and the data on LinkedIn is showing us that one in seven jobs that are being posted right now have a remote or hybrid work component,” said Dickerson. “In March of 2020, that number was 1 in 67.”

While some are able to work from home, frontline workers continued to work in-person during the pandemic in order to keep grocery stories, restaurants and hospitals running. Overall frontline work pays less than the remote jobs from home and many frontline workers became fed-up because they felt like they were being unfairly treated, said Klotz.

“It’s really interesting for the individuals who have in-person work that are not able to switch to remote work,” said Klotz. “I think those individuals felt especially unfairly treated by the pandemic because not only did they have to work in-person, but they also saw another half of the population who are working remotely.”

From 1980 to 2019, according to the Economic Policy Institute, there has been a continual increase in pay rates of high earners, graduates and professionals but low earners remained flat.

Nicholas Bloom, an Economics professor at Stanford University, said that the job market has now shifted and front line workers have more of a say.

“For the first time, maybe in decades, [historically low earners] can say, ‘Look, I can quit my job easily, find another job and get a pay increase at the same time,” said Bloom. “And in fact, that’s why they’re quitting. People aren’t quitting, mainly because they’re dissatisfied with their current jobs, they’re generally quitting to get another job.”

Bloom said that the flexibility of finding a new job also applies to remote workers and employers are adding permanent remote work or hybrid options to hire and retain talent.

“Nobody I talk to is thinking of going back. I’m not aware of anyone who successfully got professionals back five days a week. I just don’t think it will happen,” said Bloom.

According to Microsoft’s Work Trend Index, 53% of people surveyed said that they are putting more focus on their own mental health and wellbeing.

Dickerson said remote work has allowed people to do so.

“Organizations and leaders need to be very intentional about how they’re building this new future of work,” said Dickerson.

Before the pandemic, it was assumed that remote work would lead to unproductive results, but since then critics have been proven wrong, according to Klotz. The tricky thing is that although people can still be productive from home, some companies can still argue the value of face-to-face interactions.

”We’re in a bit of a golden age of business experimentation,” said Klotz. “The exciting thing is that the nine-to-five work week is not going to be replaced by some other single type of work arrangement. What it’s being replaced by is an almost infinite number of work arrangements.”

As people begin to adjust to things like hybrid schedules – a mix between in-person and remote work – the pandemic has opened the door to a massive shift in how companies work with their people as individuals.

“I’m regularly cautioning companies to avoid making decisions just among senior executives,” said Bloom. “We see quite large variations in how much people want to work from home, by age, by gender, whether they have kids, by race, by commute, time, by disability status.”

Klotz said he believes that even before “The Great Resignation,” a conversation of work-life balance was already happening just below the surface.

“It gives us this opportunity to really question the fundamental way that we were working with employees in 2019 and say, ‘How do we fix this to hopefully lower these turnover rates back down to where they were maybe 10 years ago or so?’” said Klotz.

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(NEW YORK) — New Mexico is expanding a program that waives the cost of child care, an initiative that could make child care free for many families in the southwestern state.

The announcement from Gov. Michelle Lujan Grisham last Thursday said the state’s Early Childhood Education and Care Department estimates that over 30,000 more families will be able to take advantage of New Mexico’s Childcare Assistance Program starting this May, doubling the number of families who were already participating.

“Beginning May 1, 2022, all families enrolled in the state’s Childcare Assistance Program will no longer owe copays for child care services, making child care cost-free,” the announcement said.

The New Mexico Early Childhood Education and Care Department announcement notes that the expansion will run until June 30, 2023.

Families earning up to 400% of the federal poverty level, or $111,000 for a family of four, qualify to have their child care copayments waived. The U.S. Department of Health and Human Services determines poverty levels, and for 2022, the federal department set the poverty guideline in the District of Columbia and the 48 contiguous states as $27,750 for a family of four.

The cost of child care in the U.S. is a significant burden for American families.

New survey data from 2019 from the HHS’s Administration for Children and Families shows that many families spend anywhere between 10% to 20% of their household budget on child care, including early child education. Amid the pandemic, many women also stopped working to take care of their kids at home, leading to a slowdown of employees returning to the national workforce.

In New Mexico specifically, think tank Economic Policy Institute estimates that the average cost of child care is approximately $8,617 a year.

Child care workers are also in short supply, and along with the expansion of copay waivers for families, New Mexico will also provide stipends to students who are pursuing higher education in early education.

Eligible students can apply for $2,000 each semester to help pay for their schooling at a New Mexico college or university.

The state is also pledging $10 million in grants to child care establishments to build or expand child care centers in underserved communities.

New Mexicans who are interested in joining the Childcare Assistance Program can visit the state’s “Am I Eligible?” site for more information.

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(NEW YORK) — It’s not just regular gas prices that are higher. The rising cost for diesel fuel is having a ripple effect on truck drivers.

The price for a gallon of diesel is $5.32, and that cost could start to trickle down to consumer goods.

WATCH: Rebecca Jarvis reports on how the all-time high price at the pump could impact Americans across the country, from groceries to deliveries.

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(NEW YORK) — The U.S. economy shrank in the first three months of 2022, after years of growth, according to a new report.

Economists had expected consumer spending to accelerate in March, as rising wages prompted more American spending on services such as dining out and travel.

Watch the full report from ABC’s Good Morning America:

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(NEW YORK) — A federal judge in New York on Wednesday rejected Elon Musk’s request to terminate a settlement agreement with the Securities and Exchange Commission that he claimed was being abused to silence his speech.

The 2018 deal required Musk’s tweets to be pre-approved by Tesla’s board after Musk mused on Twitter about taking Tesla private. The SEC is investigating whether Musk violated that term in November 2021 when he asked his sizeable Twitter following if he should sell 10% of his Tesla stock.

Musk argued the SEC lacked the authority to continue its investigation and was only out to harass him.

In rejecting the motion, Judge Lewis Liman cited the SEC’s “broad power” to make sure securities laws are followed.

“The mere fact that SEC brought an action against Musk and a related action against Tesla for Musk’s tweets in August 2018 does not waive the SEC’s sovereign immunity with respect to an investigation the SEC launched in late 2021 regarding conduct that occurred in late 2021, after the 2018 case was settled,” the decision said.

“The judgment against Musk expressly stated that it was to settle ‘only the claims asserted against [Musk] in th[e] civil proceeding.’ It did not give Musk any broader immunity from other SEC investigations or proceedings—including related ones. It thus preserved the SEC’s authority to investigate Musk for additional securities violations or to ask for documents and records from him in connection with an investigation of others should the SEC receive information that suggested he or others violated the securities laws again.”

Musk’s attorney Alex Spiro argued the SEC had misused the settlement as a pretext to launch an “endless, boundless investigation” of Musk’s speech, but the judge also rejected that argument.

“Musk, by entering into the consent decree in 2018, agreed to the provision requiring the pre-approval of any such written communications that contain, or reasonably could contain, information material to Tesla or its shareholders. He cannot now complain that this provision violates his First Amendment rights. Musk’s argument that the SEC has used the consent decree to harass him and to launch investigations of his speech is likewise meritless,” Liman said.

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(NEW YORK) — Federal prosecutors in New York on Wednesday announced criminal charges against the founder of a private investment firm and its chief financial officer for alleged “manipulative trading” and “deceptive conduct” that led to a multibillion-dollar fraud.

Bill Hwang, the founder of Archegos Capital Management, and Patrick Halligan, the CFO, were charged with racketeering conspiracy, securities fraud and wire fraud.

According to the indictment, Hwang and Halligan “corrupted the operations and activities of the family office known as Archegos” and used it “as an instrument of market manipulation and fraud.” Family offices serve high-net-worth individuals and families.

Lawrence Lustberg, an attorney who represents Hwang, said he was “extremely disappointed” with the charges.

“We are extremely disappointed that the U.S. Attorney’s Office has seen fit to indict a case that has absolutely no factual or legal basis; a prosecution of this type, for open-market transactions, is unprecedented and threatens all investors,” Lustberg said in a statement. “As you will see when the facts unfold, Bill Hwang is entirely innocent of any wrongdoing; there is no evidence whatsoever that he committed any kind of crime, let alone the overblown allegations that pervade this indictment.”

Mary Mulligan, a lawyer for Halligan, said in a statement that her client is “innocent and will be exonerated.”

The consequences were far-reaching, prosecutors said. The stock prices of a number of companies were manipulated, employees’ savings were gambled and different banks were left with billions of dollars in losses. UBS alone lost $861 million, according to the indictment.

The criminal charges followed the spectacular implosion, in March 2021, of Archegos, which lost billions in mere days. Prosecutors said Hwang traded in a way that hid the true size of his positions from the rest of the investing public.

The alleged criminal conduct pumped Archegos’ portfolio – Hwang’s personal fortune – from $1.5 billion to $35 billion in one year, according to prosecutors.

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