Inflation forces the IRS to change how much people contribute in retirement. We’ll also look at the battle between the Democrats and the Federal Reserve, and the number of Americans who have applied for student loan forgiveness.
But first, look at how lawmakers operate riding a wave Swifty fandom.
Welcome to On The MoneyYour overnight guide to everything that affects your bills, bank account, and bottom line. For The Hill, we’re Aris Folley, Sylvan Lane and Karl Evers-Hillstrom.
IRS raises 401(k) contribution levels due to inflation
The IRS on Friday raised 2023 contribution limits for tax-advantaged retirement accounts to adjust to higher inflation.
- Individuals will be able to contribute $22,500 to their 401(k), 403(b) and related retirement accounts, up from $20,500 this year.
- Those 50 and over can award $30,000, with an annual increase of $7,500.
- The IRS has also increased the contribution limit for Individual Retirement Accounts (IRAs) and Roth IRAs. Individuals will be able to put up $6,500 to these accounts in the next year, an increase of $500.
This week the IRS also announced a larger standard deduction and more generous tax brackets for the 2023 tax year. The cost-of-living adjustments come after consumer prices rose 8.2 percent over the past year, driven by rising food and rent costs.
Karl Details here.
🏛 Take a walk
I left for the Fed to raise interest rates
Progressive Democrats are tearing up the Federal Reserve over deep fears that the central bank could push the US into recession amid high inflation not seen in four decades.
Top liberal lawmakers are urging the Federal Reserve to stop raising interest rates and slowing the US economy, insisting it will do nothing to curb inflation while plunging millions into unemployment.
“I think they’re hurting the situation,” Senator Bernie Sanders (I-Vt.), chair of the Senate Budget Committee, said Sunday on NBC’s “Meet the Press,” referring to the Fed’s rate hike campaign. “.
Context: The Fed aims to slow inflation by raising interest rates and reducing the amount of money households and businesses have to spend.
- Less spending in the economy should force companies to lower their prices to compensate for slowing sales, but also push them to hire fewer employees and with lower wages.
- Federal Reserve officials hope they can raise interest rates enough to bring inflation down from an annual rate of more than 8 percent without seriously damaging the economy.
- But Federal Reserve Chairman Jerome Powell, first appointed by former President Trump, warned that inflation was too high to fall without “pain”, dashing hopes of a “soft landing” as Americans keep their jobs.
sylvan He has more here.
🎓 Apply now
Biden says nearly 22 million Americans have applied for student loan forgiveness
President Joe Biden announced Friday that nearly 22 million Americans have applied for his administration’s Student Loan Forgiveness Program.
- Millions have applied for relief every day since the beta app was launched on October 14.
- Biden said during his speech that “the vast majority are placing orders on their phones” for debt relief.
“It’s as easy to apply as signing up while you’re hanging out with your friends or at home and watching a movie,” Biden said, noting that the program could help 40 million Americans.
The Hill’s Lexi Lonas He has more here.
🦃 PRICEY TURKEY
Supply chain problems, inflation may drive up the cost of Thanksgiving turkeys
Thanksgiving turkey prices are likely to rise this year due to inflation, supply chain issues and bird flu outbreaks among the herds.
Inflation and economic instability are causing turkey prices to rise as farmers pay more for feed and labor, while supply shortages continue to weigh on the industry, according to the New York Times.
- The Department of Agriculture found that the average price of frozen turkeys has risen 73% since last year.
- On Wednesday, the wholesale price swelled to $1.85 a pound, compared to 90 cents a pound in 2019, according to price reporting agency Urner Barry.
Chloe Vollmar He has more here.
good to know
President Biden on Friday described Recent figures show the federal budget deficit is $1.4 trillion lower in fiscal 2022 than the previous year’s levels as Democrats work to fend off Republican attacks on the economy and inflation ahead of the midterm elections.
Biden boasted of the decline as “the largest one-year decline in American history” in comments to reporters.
Other items we monitor:
- Twitter posts Drops Friday, amid concerns prompted by Elon Musk’s possible takeover of the company and a federal investigation.
- Biden on Friday Hit Republicans who attacked his plan for student loan forgiveness, demanded some lawmakers such as Senator Ted Cruz (Texas) and Representative Marjorie Taylor Green (Georgia).
- Ye’s purchase of the right-wing social media app Parler may do little to reignite the faltering platform, but critics say the acquisition can far Strengthening the power of super-rich men to shape the online ecosystem based on their ideological views.