Today we’ll look into why Sen. Joe Manchin’s (D-W.Va.) call for a debt reduction deal is making some Republicans happy. Plus, we’ll examine the national plunge in home values and doubts about Twitter’s future.
🎤 But first: Find out why rappers Drake and 21 Savage are being sued by a major media company.
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, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter?
Manchin’s Social Security call stokes GOP optimism
Sen. Joe Manchin’s (D-W.Va.) comments signaling support for working across the aisle on entitlement programs like Social Security are getting a warm reception from some fiscal conservatives, despite skepticism about the chances of a bipartisan deal in the next Congress.
Discussing where he thinks both sides could find common ground in the next Congress, Manchin recently pointed to shoring up solvency for programs like Social Security and Medicare while pressing for action on tackling the nation’s climbing debt.
- Manchin’s comments are in stark contrast to recent Democratic attacks hammering GOP proposals for Social Security and Medicare in the final campaign stretch before Election Day. And it’s a shift that has drawn some early positive reaction from Republicans.
- As far as Democrats are concerned, House Majority Leader Steny Hoyer (D-Md.) said that the party would work with “anyone who wants to protect Social Security, Medicare, and other programs that help Americans and their families thrive,” but he cast doubt on chances of a bipartisan compromise.
The context: Social Security’s Old-Age and Survivors Insurance Trust Fund is on track to becoming insolvent in roughly 13 years, according to estimates. And Medicare could have about half the time until potentially reaching the same fate.
If both programs were to become insolvent, it doesn’t they would stop distributing benefits, but they also wouldn’t be able to pay for all of the promised benefits, explained Bob Moffit, senior research fellow in the Center for Health and Welfare Policy at the conservative Heritage Foundation.
Aris has the details here.
🏡 LEADING THE DAY
Homeowners lost $1.5T in equity since May: research
American homeowners lost more than $1 trillion in equity gained during the pandemic since May, according to a new report.
Mortgage software and analytics company Black Knight found that mortgage holders collectively lost $1.3 trillion in the second quarter of 2022 and $1.5 trillion since May.
- The average mortgage holder has lost about $30,000 since the May peak, but Black Knight’s analysis showed the average mortgage holder has more than $92,000 more equity than before the pandemic.
- Meanwhile, the number of homes underwater rose by 275,000 in the past four months.
“That is — by far — the largest quarterly decline on record by dollar value and the largest since 2009 on a percentage basis,” said Black Knight Data & Analytics President Ben Graboske.
Adam Barnes has more here.
💲 TWITTER TROUBLE
Chaos at Twitter brings up doubts about path forward
Elon Musk’s Twitter is engulfed in chaos amid widespread layoffs and an exodus of major advertisers.
- A little more than one week in as Twitter’s owner, Musk reported a “massive drop in revenue” due to companies pausing their advertising on the platform.
- Twitter is also struggling to roll out a new paid verification feature that has drawn ridicule from popular users.
- Musk tweeted that he had “no choice” but to lay off around half of Twitter’s staff because it was losing $4 million per day
Meanwhile, Twitter faces $1.2 billion in interest payments over the next 12 months, and the company only generated around $630 million in cash flow last year before advertisers left.
“The debt situation is definitely concerning as this was a fairly unorthodox investment to have taken on so much debt given the cash flow situation of the business even prior to the acquisition,” Harvard Business School professor Andy Wu said.
Karl and Rebecca Klar have more here.
🌐 ANTI-‘GREENWASHING‘
UN experts call for standards to prevent ‘greenwashing’ in climate pledges
A panel of experts from the United Nations is calling for standards that it says will separate legitimate climate commitments from public relations campaigns.
The group issued a report that it said aims to “draw a red line” around “greenwashing” — that is, making one’s record appear greener than it actually is. It said that these standards are necessary to weed out “low-quality” climate pledges.
- The report said that companies that claim to be on a path to “net-zero” emissions can’t also build or invest in new fossil fuel supplies, given that the fuels are the main driver of climate change.
- The report also said “net-zero” companies cannot credibly lobby to undermine ambitious government climate policies, either on their own or as part of trade associations.
Good to Know
The midterm elections, which are largely being fought over inflation, crime and other domestic issues, could have a huge impact on America’s role in the Russia-Ukraine war.
House Minority Leader Kevin McCarthy (R-Calif.), the likely Speaker in a GOP majority, has talked about how Ukraine would not get a “blank check” from the U.S. with Republicans in control of the House.
Other items we’re keeping an eye on:
- Tesla is recalling about 40,170 of its Model S and Model X vehicles over concerns they could lose power steering, according to a filing with the National Highway Traffic Safety Administration.
- As polls opened on Election Day, the Cybersecurity and Infrastructure Security Agency (CISA) said it had not identified any “specific or credible threats” that would disrupt the election system.
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.