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500+ Experts Worldwide Call for Global Panel to Address ‘Inequality Emergency’
"Clear and proven steps can be taken to reduce it and build more equal societies and economies," wrote economists and other experts, "which are the fundamental foundation stone of a successful future for us all."
Nov 14, 2025
Emphasizing that economic inequality is "a policy choice," more than 500 economists and other experts on the global wealth gap are endorsing a call made earlier this month in the first-ever G20 report on inequality: The "inequality emergency" must be confronted by new international body inspired by the United Nations' panel on climate change.
The creation of an International Panel on Inequality (IPI) was a central recommendation of the landmark report set to be presented next week at the G20 Leaders Summit in Johannesburg, and renowned economists including 2024 Nobel economics laureate Daron Acemoglum, Thomas Piketty, Isabella Weber, Ha-Joon Chang, and Jason Hickel were among those who signed a letter Thursday urging the creation of the committee.
The inclusion of economists, climate scientists, epidemiologists, historians, and experts from a range of other disciplines "reflects a key fact," said the signatories. "High levels of economic inequality have a negative impact on every aspect of human life and progress, including our economies, our democracies, and the very survival of the planet."
"Just as the Intergovernmental Panel on Climate Change (IPCC) has played a vital role in providing neutral, science-based, and objective assessments of climate change, a new International Panel on Inequality would do the same for the inequality emergency," reads the letter, which was also signed by global economic leaders including former US Treasury Secretary and Federal Reserve Chair Janet Yellen and former World Bank top economists and leaders.
Since its inception nearly four decades ago, the IPCC has provided governments with the most up-to-date scientific information about planetary heating and its impacts. Its assessments have informed the creation of the United Nations Framework Convention on Climate Change; the 1997 Kyoto Protocol, which subjected wealthy countries to emissions targets for the first time; and the 2015 Paris Agreement, which has required countries to develop and implement plans to draw down planet-heating emissions.
An IPI, said the experts on Thursday, "would provide policymakers the best, most objective assessments on the scale of inequality, its causes and consequences, and consider potential solutions."
"We believe this is in the interests of policymakers from across the political spectrum, who see the importance of this issue and the need to base responses to it on data and evidence and sound analysis," reads the letter. "We know that scholars and experts across the world would readily contribute their time voluntarily—as thousands do for the IPCC—in support of such a necessary and vital international initiative. We are ready to assist in this process."
The letter followed the release of the G20 Extraordinary Committee of Independent Experts on Inequality's landmark report, which was presented to South African President Cyril Ramaphosa earlier this month ahead of the G20 Leaders Summit.
The Extraordinary Committee, which is led by Nobel Prize-winning economist Joseph Stiglitz and also includes inequality experts such as Winnie Byanyima of Uganda and Jayati Ghosh of India, warned that in the last quarter-century, the wealthiest 1% of people around the globe have captured more than 40% of all new wealth—$1.3 million on average—while the bottom 50% has seen its wealth grow by just 1%, or about $585, in constant US dollars.
One in four people around the globe—roughly 2.3 billion people—face moderate or severe food insecurity, meaning they regularly skip meals. The report found that the problem is getting significantly worse, with the number of food-insecure people rising by 335 million since 2019.
The report found that 80% of all countries—accounting for roughly 90% of the global population—have high levels of income inequality, making them seven times more likely than more equal countries to experience democratic decline.
“We are at a dangerous moment in human history," said Piketty, co-director of the World Inequality Lab and World Inequality Database. "Rampant inequality is dividing nations and communities, threatening our social fabric, human rights, and the very essence of democracy. A global effort to tackle inequality is needed—and rigorous analysis of its causes, drivers, and solutions is the first step."
"Governments need to live up to the G20 Summit’s promise of ‘solidarity, equality, sustainability’ and urgently establish an International Panel on Inequality," he added.
Countries with low levels of inequality included Norway, Sweden, Denmark, and Finland—places that also consistently rank high on global reports on happiness and that were found to have low levels of "health, social, and environmental problems," according to the report.
The countries with low levels of inequality have "generous universal transfers and social insurance, supplemented by targeted assistance," the report says.
“High inequality is the result of decades of a failed economics that has primarily benefited the richest in our societies," said Chang, research professor at the School of Oriental and African Studies at University of London. "Not only is there a lot of evidence showing that higher inequality produces more negative economic and social outcomes, there are quite a few examples of more egalitarian societies growing much faster than comparable but more unequal societies.”
The signatories of the letter emphasized that inequality "is not inevitable."
"Clear and proven steps can be taken to reduce it and build more equal societies and economies," they wrote, "which are the fundamental foundation stone of a successful future for us all."
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Treasury Chief Warns US Could Hit Debt Limit in Mid-January
Treasury Secretary Janet Yellen implored Congress to "protect the full faith and credit of the United States" or face imposition of "extraordinary measures."
Dec 27, 2024
U.S. Treasury Secretary Janet Yellen warned Congress on Friday that—absent imminent action to raise or suspend the nation's debt limit—her agency would likely have to take "extraordinary measures" as soon as January 14 to avert hitting the debt ceiling.
"As you know, the debt limit is the total amount of money that the United States government is authorized to borrow to meet its existing legal obligations, including Social Security and Medicare benefits, military salaries, interest on the national debt, tax refunds, and other payments," Yellen wrote in a letter sent to congressional leaders. "In June 2023, the Fiscal Responsibility Act of 2023 was enacted, suspending the debt limit through January 1, 2025."
DEBT LIMIT: New letter this afternoon from Treasury Secretary Janet Yellen projects debt limit will be reached a bit later than the earlier projection of Jan. 1; new limit to be reached between Jan 14-23 at which point Treasury will have to take extraordinary measures
[image or embed]
— Jane Norman (@janenorman.bsky.social) December 27, 2024 at 1:53 PM
Yellen continued:
On January 2, 2025, the new debt limit will be established at the amount of outstanding debt subject to the statutory limit at the end of the previous day. However, on January 2, the outstanding debt subject to the limit is projected to decrease by approximately $54 billion, mostly due to a scheduled redemption of nonmarketable securities held by a federal trust fund associated with Medicare payments. As a result, the debt is currently projected to temporarily decrease, and accordingly, Treasury does not expect that it will be necessary to start taking extraordinary measures on January 2 to prevent the United States from defaulting on its obligations. Treasury currently expects to reach the new limit between January 14 and January 23, at which time it will be necessary for Treasury to start taking extraordinary measures.
"I respectfully urge Congress to act to protect the full faith and credit of the United States," Yellen added.
Recent past extraordinary measures—which are invoked by the U.S. Treasury Department to prevent a binding debt limit—have included the declaration of a debt issuance suspension period, suspension of new investments, and suspension of reinvestment of certain securities.
Yellen's admonition comes less than one month before Republican President-elect Donald Trump takes office. Both Trump and Yellen have called for the elimination of the debt ceiling. The end-of-year spending bill signed into law last week by U.S. President Joe Biden did not include Trump's demand to raise or suspend the debt ceiling.
According to USDebtClock.org, the nation is currently more than $36.2 trillion in debt—or more than $107,000 for each of the country's more 346.3 million people.
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Biden Urged to 'Follow the Facts' as Study Shows LNG Emissions 33% Worse Than Coal
"The science is clearer than ever: LNG exports and natural gas-sourced hydrogen pose grave risks to our planet and will undermine President Biden's own climate goals," said one campaigner.
Sep 12, 2024
More than 125 climate, environmental, and health scientists and researchers on Thursday implored the Biden administration to "follow legitimate science and reject the expansion of fossil fuel programs," pointing to a new study showing liquefied natural gas has a 33% greater greenhouse gas footprint than coal.
"As U.S. scientists and researchers we are closely following efforts by the U.S. Department of Energy and the U.S. Department of Treasury to develop greenhouse gas analyses of liquefied natural gas (LNG) and hydrogen, and implore you to use the best available science when conducting this analysis," the scientists wrote in a letter to Energy Secretary Jennifer Granholm and Treasury Secretary Janet Yellen.
"The stakes could not be higher," the letter asserts. "The choices that you make relating to modeling assumptions for the heat-trapping potential of natural gas will determine if the federal government will make decisions based on climate science or wishful thinking."
The scientists continued:
The main constituent in natural gas is methane, a powerful climate-disrupting pollutant that traps more than 80 times more heat in the atmosphere than carbon dioxide over 20 years, the relevant timeframe in which we must act. We agree with President [Joe] Biden's declaration to world leaders that this is the decisive decade. As the climate crisis becomes more urgent, we are rapidly approaching planetary thresholds that, once breached, cannot be reversed.
The fossil fuel industry wants you to distort the scientific evidence and asserts, falsely, that decisions to expand natural gas production and consumption are consistent with U.S. and global climate goals. They are advocating for flawed modeling assumptions that would hide the true climate impact of gas. It is imperative that the Departments of Energy and Treasury reject these efforts.
The letter's signers cite a study published this month by Cornell University climate scientist Robert Howarth which—when properly accounting for LNG's full life cycle, including extraction, liquefaction, transportation, and end-source combustion—found that the fracked gas has a 33% greater greenhouse emissions impact than coal.
"An abundance of scientific evidence now shows that natural gas is at least as damaging to the climate as coal and may be worse due to inevitable leaks and disproves the claim that natural gas can serve as a 'bridge fuel' while renewable energy sources ramp up," the scientists wrote.
Jim Walsh, policy director at Food & Water Watch, said in a statement that "the science is clearer than ever: LNG exports and natural gas-sourced hydrogen pose grave risks to our planet and will undermine President Biden's own climate goals."
"This administration must ignore industry propaganda, follow legitimate science, and reject the expansion of fossil fuel programs like LNG exports and gas-sourced hydrogen," Walsh added.
Noting that "over 20 years, methane is a far more powerful climate villain than ever previously appreciated," Science & Environmental Health Network senior scientist Sandra Steingraber said that "methane is the Houdini of greenhouse gasses, escaping into the atmosphere from all parts of the natural gas system at a pace that far exceeds earlier estimates."
"Taken together, these findings mean that the stakes for the modeling assumptions chosen for estimating the climate impacts of LNG and hydrogen fuels could not be higher," Steingraber stressed. "It's imperative that our Departments of Energy and Treasury base their climate modeling assumptions on the abundance of scientific evidence and not the distorted claims and wishful thinking of the fossil fuel industry."
Despite campaign pledges to center climate action—including by banning new fossil fuel drilling on public lands—Biden oversaw the approval of more new permits for drilling on public land during his first two years in office than former President Donald Trump, the 2024 Republican nominee, did in 2017 and 2018.
The Biden administration has also held fossil fuel lease sales in the Gulf of Mexico and has approved the highly controversial Willow project and Mountain Valley Pipeline. Biden also increased liquefied natural gas production and export before pausing LNG exports earlier this year.
Despite the pause—which activists are calling on the Biden administration to make permanent—the president has also overseen what climate defenders have called a "staggering" LNG expansion, including Venture Global's Calcasieu Pass 2 export terminal in Cameron Parish, Louisiana and more than a dozen other projects that, if all completed, would make U.S. exported LNG emissions higher than the European Union's combined greenhouse gas footprint.
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'Grave Mistake': Yellen Under Fire for Opposing Global Billionaires Tax
"To reject the very idea of a global minimum tax on billionaires is to cede control of our economies and our democracies to oligarchs and plutocrats," warned one progressive critic over the U.S. Treasury Secretary's position.
May 21, 2024
U.S. Treasury Secretary Janet Yellen is being taken to task by progressive critics after coming out Monday in opposition to a proposed global tax on billionaires at an upcoming Group of 7 nations meeting where the measure is on the agenda.
Speaking to the Wall Street Journal, Yellen told the newspaper that while the Biden administration broadly supports more progressive taxation, in which those at the top of the income and wealth scale pay higher rates, the U.S. will not back a plan—put forth by Brazil and backed other G20 leaders earlier this year—that would set a minimum international rate for the planet's ultra-wealthy.
In her remarks, Yellen said the "notion of some common global arrangement for taxing billionaires with proceeds redistributed in some way—we're not supportive of a process to try to achieve that. That's something we can't sign on to."
The proposed 2% global tax on the assets of the world's billionaires, backers of the idea argue, would be a way to curb the international race to the bottom on taxation by hampering the ability of those with vast fortunes to move their money from bank to bank and nation to nation as a way to avoid paying their fair share into public coffers.
The EU Tax Observatory, which helped formulate and backs the proposal, estimates that the 2% levy on the billionaires would raise $250 billion in annual revenues.
Given President Joe Biden and Yellen's support for a global minimum corporate tax and recent political messaging on the need to compel corporations and the wealthiest to pay higher taxes domestically, Morris Pearl, chair of the advocacy group Patriotic Millionaires, said opposition to a global billionaire tax was confounding.
"We are mystified by Secretary Yellen's comment suggesting she has rejected the G20 proposal for a global minimum tax on billionaires," Pearl said. "Her comment is starkly at odds with President Biden's stated goal of compelling billionaires to pay their fair share; it is at odds with the growing consensus on taxing the ultra-wealthy; and it is at odds with her own history of being a champion of international cooperation on tax matters."
Successful implementation of a billionaires tax, reports the WSJ, "would allow countries to raise more in tax revenue to finance other priorities and use the tax code to reduce income inequality, which has widened sharply in recent decades."
Floating the idea back in January, Brazil's Finance Minister Fernando Haddad said, "In a world where economic activities are increasingly transnational, we have to find new and creative ways to tax these activities [and] thus direct the revenues to common global endeavors such as ending hunger and poverty and fighting climate change."
According to Pearl:
Secretary Yellen's statement seems to stem from concerns that the revenue from such a tax would be"redistributed." However, the proposal would not institute a global tax that is then globally redistributed. The blueprint for this proposal is the OECD agreement for a global corporate minimum tax that she herself championed, which enables individual governments to determine how the taxes collected within their borders are spent.
If her concerns are simply about redistribution, she should clarify that ahead of her meetings later this week. But to reject the very idea of a global minimum tax on billionaires is to cede control of our economies and our democracies to oligarchs and plutocrats. In short, a wholesale surrender to the political influence of the ultra-rich would be a grave mistake.
Oxfam International calculated earlier this year that a 5% wealth tax targeting multimillionaires and billionaires in G20 countries could raise around $1.5 trillion a year in revenue globally. Such funds, the group said, would be "enough to end global hunger, help low- and middle-income countries adapt to climate change, and bring the world back on track to meeting the United Nations’ Sustainable Development Goals (SDG)—and still leave more than $546 billion to invest in inequality-busting public services and climate action in G20 countries."
Over the weekend, economist Gabriel Zucman, one the key architects behind the billionaires tax proposal put forward by Brazil, said "the super-rich will fight" such measures "tooth and nail," but "yes—we will have, one day, a coordinated minimum max on the super-rich. And perhaps sooner than you think!"
If he's correct, it doesn't look like Secretary Yellen or President Biden have received the memo.
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Summer Lee Says It's Time to End Era of 'Money for Wars But Not Food for the Poor'
"Now is the time to prioritize peace and the safety of all children and all people in the world," the Pennsylvania congresswoman asserted.
Oct 25, 2023
Citing the tremendous human and financial costs of the decadeslong U.S. global war against terrorism, Democratic Pennsylvania Congresswoman Summer Lee on Wednesday urged the Biden administration and congressional colleagues to eschew a "weapons-first approach" to international conflicts and instead "meet real human needs and move towards peace."
"Post 9/11, our federal government's decision to fund endless wars cost 4.5 million lives, including over 7,000 U.S. service members, and displaced tens of millions in a time of deep pain after 3,000 beloved American lives were brutally stolen by al-Qaeda on September 11th," Lee said in a statement.
"These endless wars cost U.S. taxpayers $8 trillion," she continued, enough to end worldwide hunger with "$135 billion to spare—enough to provide universal pre-K, provide universal family and medical leave, and eradicate student debt in the United States—had Washington made better decisions."
"Post 9/11, our federal government's decision to fund endless wars cost 4.5 million lives, including over 7,000 U.S. service members, and displaced tens of millions."
Lee's remarks followed President Joe Biden's request last week for $14.3 billion in new military aid to Israel—which already gets nearly $4 billion from the U.S. annually—and another $61.4 billion for Ukraine, which has received more than $75 billion from Washington since Russian troops invaded the country in February 2022.
U.S. military aid and support for Israel have come under fire by critics, some of whom have
described the Israeli assault on Gaza—which has killed more than 6,400 people, wounded over 17,000 others, destroyed at least 177,000 homes, and displaced 1.4 million Gazans—as "genocidal."
The congresswoman's comments also stood in stark contrast with U.S. Treasury Secretary Janet Yellen's assertion earlier this month that "America can certainly afford to stand with Israel and to support Israel's military needs, and we also can and must support Ukraine in its struggle against Russia."
Lee noted that U.S. leaders sometimes come to regret their support for wars.
"In 2007, 57 of the 77 senators who voted to authorize the war in Iraq said that they would not vote the same way with the benefit of hindsight," she said. "Now is the time for every one of us in Congress and the Biden administration to exercise that hindsight and use every point of leverage to push allies to do the same."
The congresswoman added that Americans "know that lining the pockets of weapons manufacturers won't help families struggling to afford housing, medicine, or grocery costs."
She continued:
They know defense contractors won't safeguard Medicare and Social Security or shield our communities against the climate crisis. Unlike the CEOs of Raytheon [now called RTX], Lockheed Martin, and Amazon—who we're simultaneously working to make pay their fair share in taxes—moms who can't afford childcare, young folks who can't pay off their debt, veterans who can't keep up with housing costs, and children who go to school hungry don't have million-dollar lobbying budgets. So it's up to us to stand up for their needs.
That means recognizing that our country's security starts with funding humanitarian aid... and diplomacy, climate-resilient infrastructure, assistance to end food and housing insecurity, and [disarming] white supremacy that continues to threaten marginalized communities in districts like mine forever scarred by the trauma of hate-fueled mass shootings.
"Now is the time to recognize that the power of life and death, the power of war, the power of prosperity, and the pathway to peace and justice [come] through Congress," Lee stressed. "Now is the time to prioritize peace and the safety of all children and all people in the world."
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Democrats to Yellen: Unleash Billions in Life-Saving IMF Aid to Developing World
Sen. Elizabeth Warren said a push for $650 billion in Special Drawing Rights would "provide much-needed relief at no cost to the federal government."
Oct 06, 2023
Nearly 60 congressional lawmakers in the U.S. signed a letter this week calling on the Biden administration to help developing countries recover from debt, food insecurity, and the climate crisis by backing the International Monetary Fund in issuing a new allocation of a financial tool known as Special Drawing Rights.
Special Drawing Rights (SDRs) are an international reserve asset that the IMF created and can allocate to member countries. It isn't a currency itself, but rather allows recipients to lay claim to the use of the currencies of member countries, thereby increasing cash flow.
"As developing countries around the world continue to feel the combined effects of simultaneous crises, it is powerfully important that the Biden administration support a new allocation of IMF SDRs to provide much-needed relief at no cost to the federal government," Sen. Elizabeth Warren (D-Mass.) said in a statement on Thursday.
Warren led the letter along with Reps. Jesús "Chuy" García (D-Ill.), Donald Norcross (D-N.J.), Joyce Beatty (D-Ohio), and Pramila Jayapal (D-Wash.). In the letter, sent on Wednesday to President Joe Biden and Treasury Secretary Janet Yellen, the lawmakers pointed to the success of the last major allocation of SDRs—$650 billion worth in 2021 to help countries respond to and recover from the Covid-19 pandemic.
"This measure was by far the single most important action taken to support the economies of developing countries in the face of combined global health, debt, economic, and climate crises," the legislators wrote.
The aid represented by the SDRs was more than wealthy countries typically send to poorer ones during a year and did not add to the recipients' debt. Developing countries used the SDRs to, among other things, stabilize their own currencies; pay down debts to the IMF; and buy essentials like food, vaccines, and personal protective equipment. The allocation likely saved the lives of hundreds of thousands of people, the Bank for International Settlements found.
"SDRs are a readily available and effective tool in your economic policy toolbox—we urge you to use it."
The lawmakers who signed this week's letter are calling for another allocation as developing countries continue to contend with climate disasters, war, and the threat of new pandemics. The request comes as the IMF recently issued its worst five-year economic forecast in 30 years. The 59 signatories asked for at least another $650 billion—a strategic number because that is the most the IMF can sign off on without a vote from Congress, according to Axios.
"Leading your administration now to support a new issuance of at least $650 billion in SDRs is a simple, cost-free, and effective way of saving many export-related jobs—including manufacturing and union jobs—in the U.S., while saving many lives in developing countries and mitigating the effects of a global slowdown," the lawmakers said. "SDRs are a readily available and effective tool in your economic policy toolbox—we urge you to use it."
The legislators emphasized that the SDR allocation would benefit the U.S. because it would increase the market for national exports. The global downturn triggered by the emergence of Covid-19 between January 2020 and May 2021 cost the U.S. around 2.2. million export-related jobs, they noted.
"A new SDR issuance would create more than $200 billion worth of international reserves for developing countries not including China, helping to stabilize global economies and U.S. export markets and therefore preserve and create U.S. jobs that would otherwise be lost to a global recession," the letter states.
The lawmakers are adding their voices to a global call for more SDRs. The idea gained support at the Summit for a New Global Financing Pact in Paris in June, as Axios reported at the time. Globally, the Africa Union, a coalition of Caribbean nations, and Colombian President Gustavo Petro have all stated their support. Several labor, nonprofit, and religious groups also endorsed Wednesday's letter, including the AFL-CIO, the Center for Economic and Policy Research, and the NETWORK Lobby for Catholic Social Justice.
"The labor movement strongly supports the call for a new allocation of SDRs which represent a transformative measure needed to avoid future shocks and job loss related to climate; health; debt; and digitalization; among other challenges," AFL-CIO international director Catherine Feingold said in a statement.
The ball is now in Yellen's court, Axios observed, as she is the one who would tell the U.S. to vote to issue more SDRs at the IMF, and such a vote would likely be decisive. However, in October of 2022 she said that she did not think issuing more SDRs was appropriate because wealthy nations still had existing reserves they needed to channel to developing nations, as Reuters reported at the time. Since then, she has made no other statements on the matter, according to Axios.
"The world wants the IMF to do this again," Mark Weisbrot of the Center for Economic and Policy Research told Axios in June. "It's only the U.S. Treasury Department that is holding it up."
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US Treasury Department Says Unions Are Critical to Reversing 'Stark Increase in Inequality'
"The evidence presented in Treasury's report challenges the view that worker empowerment holds back economic prosperity," a department economist wrote.
Aug 29, 2023
A report released Monday by the U.S. Treasury Department argues that labor unions are critical to combating income inequality, which has risen dramatically in recent decades as union membership has declined and real wages have largely stagnated.
The report estimates that unions boost the wages of their members by between 10% and 15%, an impact that spreads to the broader economy as nonunion workplaces compete for employees.
"Unions also improve fringe benefits and workplace procedures such as retirement plans, workplace grievance policies, and predictable scheduling," the report notes. "These workplace improvements contribute substantially to middle-class financial stability and worker well-being. For example, one study has estimated that the average worker values their ability to avoid short-notice schedule changes at up to 20% of their wages."
In a summary of the report's findings, Treasury Department economist Laura Feiveson wrote that "increased unionization has the potential to contribute to the reversal of the stark increase in inequality seen over the last half-century."
"All in all, the evidence presented in Treasury's report challenges the view that worker empowerment holds back economic prosperity," wrote Feiveson. "In addition to their effect on the economy through more equality, unions can have a positive effect on productivity through employee engagement and union voice effects, providing a roadmap for the type of union campaigns that could lead to additional growth."
The Treasury Department report was released less than a week after UPS Teamsters
ratified a five-year contract that includes substantial wage increases, a deal secured after the union threatened a nationwide strike.
The United Auto Workers (UAW) union is also looking to win a major pay increase for General Motors, Ford, and Stellantis employees. Last week, 97% of UAW members who participated in the vote opted to authorize a strike if contract talks with the three automakers fail.
Meanwhile, Hollywood writers and actors are still on strike, and others across the country—including nurses, hotel workers, and city employees—have walked off the job in recent weeks to demand better pay, benefits, and conditions.
The wave of strikes followed significant labor victories in 2022, a year in which Starbucks employees organized hundreds of locations across the U.S.—victories that contributed to an increase in the total number of U.S. workers in unions last year.
The union membership rate, however, fell from 10.3% in 2021 to a record-low 10.1% in 2022 as nonunion jobs grew at a faster rate than union jobs.
In a Monday speech outlining her department's findings, Treasury Secretary Janet Yellen said that unions are "critically important to workers' well-being."
"Unionization also has spillover effects," Yellen added. "Competition means workers at nonunionized firms may see increased wages too. Heightened workplace safety norms can pull up whole industries. Benefits also spill over to workers' families and communities."
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Watchdog Slams Biden DOJ's Push to Preserve Debt Ceiling as Another Crisis Looms
"Why is the Biden administration trying to rob itself of a clear opportunity to protect American workers and the economy from being roiled by MAGA saboteurs?" asked the head of the Revolving Door Project.
Aug 10, 2023
A government watchdog on Thursday called out the Biden administration for attempting to kill a lawsuit filed in May by a union representing about 75,000 workers across U.S. agencies that challenges the federal debt ceiling law.
"Why is the Biden administration trying to rob itself of a clear opportunity to protect American workers and the economy from being roiled by MAGA saboteurs?" asked Jeff Hauser, executive director of the Revolving Door Project.
A federal judge canceled plans to hear arguments for the National Association of Government Employees (NAGE) case when President Joe Biden and congressional Republicans who were holding the economy hostage announced a negotiated deal to suspend the nation's borrowing limit until 2025—signed into law in early June as the Fiscal Responsibility Act (FRA).
Biden then ordered his aides to create a working group intended to prevent similar crises in the future. As the White House said last month, "Now that the latest debt ceiling crisis is behind us, it is necessary to explore all legal and policy options to prevent Congress from ever again holding hostage the full faith and credit of the United States."
Now, as Government Executive reported earlier this week, even though "federal employees are still facing the prospect of delayed paychecks when the debt ceiling is reinstated in 2025," the U.S. Department of Justice "asked Judge Richard Stearns of the U.S. District Court for the District of Massachusetts to dismiss the case, suggesting the FRA has made the case moot and NAGE members lack standing because their claims are 'wholly speculative.'"
"After calling for just such a case to be brought, the Biden administration now fights it, demonstrating a truly remarkable willingness to shoot itself in the foot."
Hauser said that "the Justice Department's notion that the federal employees' claims of injury are 'wholly speculative, as they depend on a future chain of events that may never occur,' is absurd: The crisis is scheduled to recur precisely on January 1, 2025, as it has recurred repeatedly this century."
"In the meantime, uncertainty continues to trouble hundreds of thousands of federal workers, who have no guarantee of how their jobs, salaries, and pensions will be affected," he noted. "Indeed, the stance that [Attorney General] Merrick Garland's Justice Department is advancing creates an unfortunately sound case against workers considering taking a job in what has become an unstable federal government."
During the drawn-out fight earlier this year, as Republicans in Congress signaled their willingness to force the first-ever U.S. default despite warnings of a resulting economic catastrophe, Biden even suggested that while he wasn't planning to invoke the 14th Amendment—which states that the validity of the nation's public debt "shall not be questioned"—to end the current crisis, he would be open to challenging the debt ceiling law in the future.
"Rather than use the existing case as a means to that end, however, the administration is seeking to have it dismissed. The Justice Department declined to weigh in further on the merits of the case, reducing its argument only to the union's lack of standing," Government Executive explained, noting that a hearing on the motion to dismiss the case is set for August 29.
Hauser said that "after calling for just such a case to be brought, the Biden administration now fights it, demonstrating a truly remarkable willingness to shoot itself in the foot."
"The administration has every authority to take a different tack in this lawsuit and make space for the constitutionality of the debt limit to be worked out in the famously slow-moving U.S. legal system before the clock runs out on preventing the next crisis," he stressed.
The NAGE complaint names as defendants Biden and Treasury Secretary Janet Yellen in their official capacities.
Biden is seeking reelection next year and is expected to face the Republican nominee; former President Donald Trump is currently leading a crowded field of GOP candidates in spite of his legal issues, including the recent indictment related to his efforts to overturn his 2020 loss, which led to the January 6, 2021 attack on the U.S. Capitol.
Even if Biden wins in 2024 and Democrats keep control of the Senate and regain a majority in the House of Representatives, they may lack the votes needed to extend the suspension or raise the debt ceiling in early 2025. Democratic lawmakers notably declined to take action on the borrowing limit after the last midterm elections, despite warnings that Republicans would use their House takeover this year to hold the economy hostage to extract concessions.
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Warren to Regulators: Enough With Mergers Making 'Too-Big-to-Fail' Banks Even Bigger
"The recent bank crisis underscores the urgency of strengthening the merger review process and reversing the dangerous trend of bank consolidation."
Jun 27, 2023
In the wake of three recent bank failures, U.S. Sen. Elizabeth Warren on Tuesday urged financial regulators to promote competition rather than further consolidation in the industry and improve merger guidelines.
The Massachusetts Democrat's call for action came in a letter to Assistant Attorney General Jonathan Kanter, Federal Deposit Investment Corporation (FDIC) Chairman Gruenberg, Acting Comptroller of the Currency Michael Hsu, Federal Reserve Vice Chair for Supervision Michael Barr, and Treasury Secretary Janet Yellen.
"Earlier this year, a series of fatal errors—poor risk management by bank executives, corporate greed, deregulation, and the lack of sufficient federal supervision—led to the implosion of Silicon Valley Bank, which was shortly followed by the collapses of Signature Bank, and First Republic," she wrote. "Unfortunately, Secretary Yellen and Acting Comptroller Hsu have recently indicated that they appear to be taking the wrong lessons from these bank failures, suggesting that they would like to see more bank consolidation."
"The number of commercial banks in the U.S. has fallen by 70% over the past two decades, and the trend is accelerating."
The letter references reporting from Politico's "Morning Money" (MM) earlier this month. As the outlet detailed:
A top lobbyist for big U.S. banks is hearing more openness from government officials on the topic of mergers for midsize lenders in the wake of banking stress earlier this year. But the industry wants more than just talk.
"There's been something of a sea change in Washington over the last two months," Bank Policy Institute CEO Greg Baer told MM in an interview this week. "I do think, at the highest level, and at the highest levels, there is a recognition that midsize banks need to be allowed to merge and be acquired potentially by larger banks."
"The problem, though, is that's easy to say," he added. "But you have to convince banks that in fact, you mean what you say."
Warren argued to Yellen and the letter's other recipients that "while your agencies are working to update the guidelines under which you evaluate bank mergers, which were last published in 1995, the recent bank crisis underscores the urgency of strengthening the merger review process and reversing the dangerous trend of bank consolidation."
"I have long been concerned with bank concentration and your agencies' failures to curb the proliferation of banks that are 'too big to fail,'" the senator acknowledged, noting that none of the federal banking agencies have formally denied a bank merger application in over 15 years, and the U.S. Department of Justice has not challenged one in more than 35 years.
"Meanwhile, the number of commercial banks in the U.S. has fallen by 70% over the past two decades, and the trend is accelerating with $77 billion in bank mergers and acquisitions in 2021 alone—the 'highest yearly deal volume since the 2008 financial crisis,'" she continued. Such consolidation not only harms consumers and small businesses but also heightens "systemic risk in the financial system, reducing the number of smaller banks and creating even more too-big-to-fail banks."
After highlighting President Joe Biden's 2021 executive order directing financial regulators and the attorney general to review and strengthen bank merger oversight, the senator asserted that allowing additional industry consolidation "would be a dereliction of your responsibilities" as well as a betrayal of the White House's "commitment to promoting competition in the economy."
"Shoring up our banking system will require stronger regulation and more vigorous oversight of big banks to keep them from failing in the first place," Warren contended, "and stronger merger guidelines and rules that significantly check consolidation and limit the size and number of too-big-to-fail banks that put taxpayers at risk."
One of the senator's proposed solutions is the Bank Merger Review Modernization Act, which would limit consolidation in the sector with various policies, including a requirement that mergers are in the public interest.
Her new letter concludes with a series of questions about ongoing work to update bank merger review guidelines—including when those guidelines will be released. She requested responses by July 10.
Warren has recently pressed financial regulators not only via letters but also at congressional hearings—including in May, when she grilled Hsu about the sale of First Republic to JPMorgan Chase, which made the nation's biggest bank even bigger. During that event, the senator declared that "the single biggest threat to the U.S. banking system is concentration."
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Yellen Says US Will Run Out of Money to Pay Bills on June 5 Absent Debt Limit Deal
The treasury secretary's warning came as a Biden administration official said the president won't invoke the 14th Amendment in order to avoid a first-ever U.S. default.
May 26, 2023
U.S. Treasury Secretary Janet Yellen on Friday warned Congress that the United States government will run out of money to pay its bills on June 5 if lawmakers don't reach an agreement to raise the nation's debt ceiling.
"Based on the most recent available data, we now estimate that Treasury will have insufficient resources to satisfy the government's obligations if Congress has not raised or suspended the debt limit by June 5," Yellen wrote in a letter to House Speaker Kevin McCarthy (R-Calif.).
"We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States," Yellen noted. "In fact, we have already seen Treasury's borrowing costs increase substantially for securities maturing in early June."
Earlier this month, Yellen said that the so-called "X-date"—the day on which the first-ever U.S. default will occur—could come as early as June 1.
"If Congress fails to increase the debt limit, it would cause severe hardship to American families, harm our global leadership position, and raise questions about our ability to defend our national security interests," she stressed in Friday's letter.
As The New York Times notes:
Ms. Yellen's letter comes as the White House and House Republicans have been racing to agree on a deal that would lift the nation's $31.4 trillion borrowing cap and prevent the United States from defaulting on its debt. The Treasury Department hit the debt limit on January 19 and has since been employing accounting maneuvers to ensure the United States can continue paying its bills on time...
On Friday, she detailed that the federal government is due to make more than $130 billion in scheduled payments during the first two days of June—including payments to veterans and Social Security and Medicare recipients—leaving the Treasury Department with "an extremely low level of resources"...
While negotiators have been in round-the-clock talks, no deal has been announced. Still, the contours of an agreement between the White House and Republicans are taking shape. That deal would raise the debt limit for two years while imposing strict caps on discretionary spending not related to the military or veterans for the same period.
Biden administration officials and congressional Democrats have accused Republicans of "hostage-taking" during the debt limit standoff, an allegation embraced by Rep. Matt Gaetz (R-Fla.) earlier this week.
Scores of Democratic lawmakers and progressive advocates have called on President Joe Biden to exercise his constitutional authority and invoke the 14th Amendment—which states in part that "the validity of the public debt of the United States... shall not be questioned."
However, Deputy Treasury Secretary Wally Adeyemo said Friday that Biden will not invoke the 14th Amendment.
"The 14th Amendment can't solve our challenges," Adeyemo asserted on CNN. "Now, ultimately, the only thing that can do that is Congress doing what it's done 78 other times, raising the debt limit."
"We don't have a Plan B that allows us to meet the commitments that we've made to our creditors, to our seniors, to our veterans, to the American people," Adeyemo added ominously.
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