Evelyn Reynolds

A federal benefit guaranteeing free school meals to millions more students has expired as food prices have risen. Many families are feeling the pinch.Like other parents, April Vazquez, a school nutrition specialist in Sioux Falls, S.D., is cutting coupons, buying in bulk and forgoing outings and restaurant meals. Still, a hot lunch in the school cafeteria for her three children is now a treat she has to carefully plan in her budget.The expiration of waivers that guaranteed free school meals for nearly 30 million students across the United States during the pandemic has meant that families like Ms. Vazquez’s who earn just over the income threshold no longer qualify for a federal program allowing children to eat at no cost.As pandemic-era assistance programs lapse and inflation reaches record highs, Ms. Vazquez is hardly alone. The number of students receiving free lunches decreased by about a third, to around 18.6 million in October, the latest month with available data. In comparison, about 20.3 million students ate free in October 2019, before the pandemic. That drop can be attributed to several factors, like being on the cusp of eligibility, lack of awareness that the program had ended by the start of the school year and fewer schools participating in the program overall.“It’s just making things a hell of a lot harder at the most difficult moment that I think American families have seen in a generation,” said Keri Rodrigues, co-founder and president of the National Parents Union network.For Ms. Vazquez, returning to a reality where she must pay full price for a school meal — about $3 or $4 for each child — is trying, and most days, her children bring a packed lunch. (Bagels, cream cheese and apples are typical; grapes and strawberries are rare because they are too expensive.)“It’s painful to know that my kids aren’t going to get free or reduced,” she said.The number of students receiving free lunches decreased by about a third, to about 18.6 million last October.Amber Ford for The New York TimesBefore the pandemic, Ms. Vazquez worked part-time as a special education assistant and her children teetered between qualifying for free or reduced-price meals year to year. But when she took a full-time job as a nutritionist in August 2021, her salary was just enough to bump her family above the income threshold for either benefit: about $42,000 annually for free meals for a family of five and $60,000 for reduced-price meals.“That was actually a worry when I applied for this position, because you don’t know what’s going to happen, am I going to get disqualified for this?” she said, adding that she ultimately took the job with a view toward long-term financial stability.Even as some parents have seen their wages increase and the criteria for free and reduced-price meals expand, those boons have done little to blunt the impact of rising food costs.From the 2019-20 school year to this school year, the income eligibility for free and reduced-price meals has increased by about 7.8 percent. Average hourly wage growth in that same period grew by 15.1 percent. Consumer prices, though, have risen by 15.4 percent, and food prices by 20.2 percent, surpassing wage growth.More on U.S. Schools and EducationChatGPT: OpenAI’s new chatbot is raising fears of students cheating on their homework. But its potential as an educational tool outweighs its risks, our columnist writes.Boosting Security: New federal data offers insight into the growing ways that schools have amped up security over the past five years, as gun incidents on school grounds have become more frequent.Teaching Climate Change: Many middle school science standards don’t explicitly mention climate change. But some educators are finding ways to integrate it into lessons. In Florida: The state will not allow a new Advanced Placement course on African American studies to be offered in its high schools, stating that the course is not “historically accurate.”In the Sioux Falls School District — where Ms. Vazquez works and where her children attend school — about 41 percent of children qualified for free or reduced-price lunch this school year, compared with about 49 percent before the pandemic, said its nutrition director, Gay Anderson. Some parents have remarked that they would be “better off missing half a week’s work to get that free meal,” she said.“The income eligibility guidelines are just not keeping pace with inflation, and families are barely making ends meet. So what we’re seeing is a lot of people are saying, ‘I can’t believe I don’t qualify as I always did.’ If they are making a dollar more, or whatever, that will do it,” Ms. Anderson said.At Wellington Exempted Village Schools in northeastern Ohio, Andrea Helton, the nutrition director, described denying the program to nearly 50 families in a school district of about 1,000 students. She recalled a single mother who lamented, “I missed the cutoff for reduced meals by $100 of gross income.”But Ms. Helton said, “There’s nothing I can do, and it’s heartbreaking.”Andrea Helton is the nutrition director at Wellington Exempted Village Schools in northeastern Ohio. Amber Ford for The New York TimesFamilies are also struggling to navigate a maze of new rules or, unaware that the program had ended, contending with having to pay for meals that had once been free.Megan, a mother of three school-aged children in Ms. Helton’s district who asked to be identified only by her first name because of privacy concerns, said that she had grown accustomed to the program. So when the school pressed her for money owed for unpaid lunches, “it was a shocker.”By the end of the fall semester, she had racked up $136 in debt.When Megan learned that holiday donations to the school district had wiped out that sum, “I just melted into a puddle because when you’re down to that last $100, the last thing you want to have to worry about is whether your kids are eating or not,” she said through tears.It is difficult to estimate how many students are now going hungry. But school officials and nutrition advocates point to proxy measurements — debt owed by families who cannot afford a school meal, for example, or the number of applications for free and reduced-price meals — as evidence of unmet need.In a survey released this month by the School Nutrition Association, 96.3 percent of school districts reported that meal debt had increased. Median debt rose to $5,164 per district through November, already higher than the $3,400 median reported for the entire school year in the group’s 2019 survey.The end of universal school meals has led fewer schools to participate in the program overall: 88 percent of public schools are operating a meal program this school year.Alyssa Schukar for The New York TimesAt school, Ms. Vazquez described witnessing children sitting in the cafeteria with packed lunches consisting of only a bag of chips or an apple. Others have inched toward the cash register with a lunch tray, a look of fear and recognition flashing across the “kid’s eyes when they see the computer, like, ‘Yeah, I know I’m negative, but I want to eat,’” she said.“You see other kids struggle and knowing, hey, I’m in the same boat,” she added. “I know exactly what you’re going through.”The end of universal school meals has led fewer schools to participate in the program overall: About 88 percent of public schools are operating a meal program this school year, compared with 94 percent in the previous school year, and 27.4 million children were eating a school lunch in October, compared with about 30 million in May, the last month of the school year with the program in place. That can create a vicious cycle in which lower participation translates to higher costs per meal, forcing schools to raise the price of a meal and squeezing out even more families, said Crystal FitzSimons of the Food Research and Action Center, which routinely talks to schools about their nutrition programs. Schools and families alike face other administrative and financial complications as school officials grapple with soaring wholesale costs and labor shortages, highlighting other challenges in increasing participation. Now officials must process paperwork to verify income eligibility, devote time and personnel for debt collection and plan ahead for expected revenue and reimbursement rates.At Prince William County Schools in Virginia, Adam T. Russo, the nutrition director, said his office has had to dedicate more resources for outreach and education to inform parents of the policy change. Already, he relies on a multilingual staff to serve the 90,000 students in his district, one of the most diverse in the state.Adam T. Russo relies on a multilingual staff to serve the 90,000 students in his district.Alyssa Schukar for The New York TimesFor many parents, he said, the process was new and potentially confusing given that universal free meals had been in place since some of their children had started school.“If your kid was in kindergarten, first grade, second grade, this is a completely foreign process to your family,” he said. “It’s been table stakes, and we’ve pulled the tablecloth out from under our families.”The application process, as well as the stigma associated with receiving a free or reduced-price lunch, can be prohibitive, advocates say. In 2019, even as some 29.6 million students were eligible for free or reduced-price meals, only 22 million received one, according to research. And about 20 percent of eligible households whose children did not receive either benefit reported food insecurity.“The effort it takes to make sure these resources actually hit those kids, for what that costs, it’s a hell of a lot easier to just say, listen, food is free,” Ms. Rodrigues said.The universal free school meal program pushed the federal cost of school nutrition programs from $18.7 billion in the 2019 fiscal year to $28.7 billion in the 2022 fiscal year, according to data from the Agriculture Department, which administers the program. The department does not have an official estimate of the cost of permanently enacting the policy, a spokeswoman said.Such an initiative has drawn widespread support, with polls showing 74 percent of voters and 90 percent of parents favoring the idea, but federal enactment seems unlikely. Republican lawmakers in Congress oppose permanently extending the policy, arguing that free meals should serve only the neediest and that pandemic-era policies must eventually end.Still, some states — and some parents — have been spurred to take action. For Amber Stewart, a mother of five in Duluth, Minn., the program was lifesaving.Before the pandemic, when the family owed money for meals, her daughter would receive a cold cheese sandwich and a carton of milk, signaling to classmates she could not afford the hot meal. Stern letters demanded repayment and warned of consequences.“Then the pandemic rolled around and everybody was eligible for the free meals, and they delivered it or you could go pick it up,” said Ms. Stewart, who asked to be identified by her maiden name. “It was amazing.”Intent on seeing the program enacted permanently, Ms. Stewart is now lobbying the Minnesota legislature to adopt universal free schools meals statewide, a policy that the governor recently endorsed. Under the new income guidelines, Ms. Stewart’s children now qualify for reduced-price meals. And because of a state law that covers the fees normally owed by families in that category, they are not charged the 35 or 50 cents for breakfast or lunch.That has been crucial, she said, because even after weekly trips to the food bank, she does not have nearly enough to get by.“Our money is really tight,” she said. “With the cost of groceries and everything, we’re barely making it.” More

Two decades of tax cuts, recession responses and bipartisan spending fueled more borrowing — contributing $25 trillion to the total and setting the stage for another federal showdown.WASHINGTON — America’s debt is now six times what it was at the start of the 21st century. It is the largest it has been, compared with the size of the U.S. economy, since World War II, and it’s projected to grow an average of about $1.3 trillion a year for the next decade.The United States hit its $31.4 trillion legal limit on borrowing this past week, putting Washington on the brink of another fiscal showdown. Republicans are refusing to raise that limit unless President Biden agrees to steep spending cuts, echoing a partisan standoff that has played out multiple times in the last two decades.But America’s ballooning debt is the result of choices made by both Republicans and Democrats. Since 2000, politicians from both parties have made a habit of borrowing money to finance wars, tax cuts, expanded federal spending, care for baby boomers and emergency measures to help the nation endure two debilitating recessions.“There have been bipartisan tax cuts and bipartisan spending increases” driving that growth, said Maya MacGuineas, president of the Committee for a Responsible Federal Budget and perhaps the pre-eminent deficit hawk in Washington. “It’s not the simple story of Republicans cut taxes and Democrats grow spending. Actually, they all like to do all of it.”Few economists believe the level of debt is an economic crisis at the moment, though some believe the federal government has become so large that it is taking the place of private businesses, hurting growth in the process. But economists in Washington and on Wall Street are warning that failing to raise the debt limit before the government begins shirking its bills — as early as June — could prove catastrophic.Despite all the fighting, lawmakers have taken few steps to reduce the federal budget deficit they have produced. It has been nearly a quarter-century since the last time the government spent less than it received in taxes.Because spending programs today are so politically popular, and because retiring baby boomers are driving up the cost of programs like Social Security and Medicare every year, budget experts say it is unrealistic to expect the books to balance again for another decade or more.The White House estimates that borrowed money will be necessary to cover about one-fifth of a $6 trillion federal budget this fiscal year — a budget that includes military spending, the national parks, safety net programs and everything else the government provides.In just two decades, America has added $25 trillion in debt. How it got itself into this fiscal position has its roots in a political miscalculation at the end of the Cold War.President Lyndon B. Johnson signing Medicare into law in 1965. In part because of the popularity and rising costs of programs like Medicare, federal deficits are expected to continue for at least a decade.Associated PressIn the 1990s, America reaped a so-called peace dividend. It reduced spending on the military, believing it would never have to invest as much in national security as it had when the Soviet Union was a threat. At the same time, a dot-com boom delivered the highest federal tax receipts, as a share of the economy, in several decades.Understand the U.S. Debt CeilingCard 1 of 5What is the debt ceiling? More

Christopher Waller, a Federal Reserve governor, said he favored a quarter-point move. Many of his colleagues agree — or haven’t ruled it out.Christopher Waller, a Federal Reserve governor, added his voice on Friday to a chorus of central bank officials who favor slowing rate increases at the central bank’s Feb. 1 meeting. That most likely locks in place market expectations for a return to smaller policy adjustments after a series of jumbo rate moves.Mr. Waller spoke on the eve of the central bank’s quiet period before its meeting, which means investors will not hear any more commentary from Fed officials before they make their rate decision. His comments were in line with what many of his colleagues have said: Several openly support slowing down rate increases at the meeting, and top policymakers who haven’t made up their minds have not ruled it out.Central bankers raised rates rapidly in 2022, lifting borrowing costs in three-quarter-point increments for much of the year, before slowing to a half-point move in December. But they are entering a new phase that is focused more on how high interest rates rise and less on how quickly they get there. The thinking is that rates are now high enough to meaningfully slow the economy, and that adjusting them more gradually will give policymakers time to see how their policy is working.That has nudged policymakers toward a quarter-point increase, also known as 25 basis points, an increment that was common before the pandemic.“After climbing steeply and using monetary policy to significantly raise interest rates throughout the economy, it was apparent to me that it was time to slow, but not halt, the rate of ascent,” Mr. Waller said of the December downshift. “There appears to be little turbulence ahead, so I currently favor a 25-basis-point increase” at the Fed’s next meeting, he said.Inflation F.A.Q.Card 1 of 5What is inflation? More

The Cuban government is facing a high-stakes court case over unpaid commercial debt.
If Cuba loses, it could ultimately cost the island nation billions.
The loans in question were denominated in German Deutschmarks, a currency that no longer exists.

A Cuban pilgrim participates in the San Lazaro procession at El Rincon church in Havana, on December 16, 2022.
Yamil Lage | AFP | Getty Images

Accusations of bribery, an imprisoned Cuban bank official and Interpol all feature in a high-stakes case against the Cuban government set to start Monday in the United Kingdom’s High Court.
The legal battle is over a portion of Cuba’s unpaid commercial debt dating back to the 1980s. If Cuba loses, it could ultimately cost the island nation billions in long overdue payments — and, in a worst-case scenario, lead to the seizure of government-owned assets such as oil tankers and in-bound wire transfers.

Investment fund CRF1, originally called the Cuba Recovery Fund, is suing Cuba for roughly $72 million in principal and past due interest on two loans it now owns. They were originally granted to the Caribbean island nation by European commercial banks in the 1980s, and were denominated in German Deutschmarks, a currency that no longer exists.
This is the first time Cuba is facing legal action for what is estimated to be about $7 billion in outstanding commercial loans from the 1970s and 1980s. If CRF wins this case on this small slice of that debt, it could lead to further lawsuits from creditors with claims rising into the billions. Any unpaid judgments could lead to asset seizures.
If they don’t reach a deal, Cuba could then face yet another court fight over whether it finally has to pay. If CRF is successful, it could lead to many other creditors filing suit, with claims rising into the billions.
Cuba would be unable to borrow in the international capital markets until its debts are settled. According to the World Bank, Cuba’s gross domestic product in 2020 was $107 billion, slightly larger than New York City’s budget. The country has managed to survive for decades on the largess of other sympathetic governments: the former Soviet Union, Venezuela and China. But with Venezuela financially strained and China facing a weaker economy, those lifelines look increasingly undependable.
Because of the U.S. embargo against Cuba, American investors are prohibited from owning and trading Cuban debt, which frustrates some frontier-market hedge fund managers in the U.S. They argue that holding Cuban debt would better serve U.S. foreign policy interests because it would give Americans a seat at some future negotiating table.

An old American car passes by the Floridita bar in Havana on December 27, 2022.
Adalberto Roque | AFP | Getty Images

Beyond the commercial debt, there are still nearly 6,000 claims outstanding from Americans and American companies whose properties were confiscated by the Cuban government after former leader Fidel Castro came to power in a coup in 1959.
John Kavulich, the longtime head of the U.S.-Cuba Trade and Economic Council, a private, nonpartisan nonprofit, says the lawsuit “may prove stimulative” to the U.S. and Cuban administrations “to negotiate a settlement for the 5,913 claims valued at $1.9 billion.”

Details of the case

The trial is expected to last eight days. It will feature remote testimony from an imprisoned former employee of the Banco Nacional de Cuba, Raul Eugenio Olivera Lozano.
According to documents filed in the case, Lozano is serving a 13-year prison sentence after he was convicted in Cuba for accepting bribes of more than $25,000 in exchange for processing paperwork that allowed the loans in question to be reassigned to CRF from Chinese-owned ICBC Standard Bank. 
In filings with the court, CRF says the bribery claims are “scurrilous” and that Lozano was railroaded by the Cuban government for the purpose of not having to pay back the loans. Human rights organizations have long criticized Cuba for arbitrary detention and lax rule of law. Both Amnesty International and Human Rights Watch describe it as one of the most repressive regimes in the world.
There are other costs to consider, too. Thus far, the Cuban government has spent roughly $3 million on legal fees in its defense, and the plaintiffs have spent about $2.6 million. In the U.K., the loser pays the winner’s legal fees, so one of the parties will be out nearly $6 million. 
Cuban officials and their lawyers declined to comment.
Also expected to testify is Jeet Gordhandas. He is a representative of CRF whom the plaintiffs say was prevented from entering Mexico after the Cuban government issued a “Red Notice” through Interpol for his arrest, claiming he initiated the bribe.

Cuban boxers prepare for their fights in the first official women’s boxing program in Cuba at the Giraldo Cordova boxing school in Havana, on December 17, 2022.
Yamil Lage | AFP | Getty Images

In more recent filings, the Cuban government appears to have backed away from the bribery accusation. Instead, it is arguing that the bank executives who facilitated the reassignment of the debt did not have the authority to do so.
Cuba also argues that CRF, which is registered in the Cayman Islands, is a “vulture fund, which invests in distressed Cuban sovereign debt for enforcement purposes.”  David Charters, the chairman of CRF, pushed back: “Characterizing us as a vulture fund is a gross misrepresentation of us.”
CRF, meanwhile, says in court filings that it first reached out to Cuba 10 years ago to settle the debt but were ignored. The fund also says it didn’t file suit until it made multiple attempts over the decade to meet with Cuban authorities.
In 2018, CRF says in filings, the fund offered the Cuban government a better deal than the one the country struck in 2015 with bilateral creditors for billions in unpaid debts. Cuba also ignored that overture, according to CRF. Bilateral loans are government-to-government loans. 
CRF would rather not go to court, Charters said in an interview, days before the trial.
“We are seeking to engage Cuba even at this late stage. Even today we are ready to talk,” he said. “You make offers, and nothing happens, you are either ignored or rebuffed, so what do you do? It’s been a decade.”

What happens to bad old debt

Defaulted loans trade on the secondary market. There are investors who specialize in buying them at discounts to the loan’s face value and then in negotiating with the government in question to finally settle them. Usually, it’s at a discount to face value and some portion of the past due interest. 
Often, the settlement is not in the form of cash, but rather in some other type of long-term financial instrument. One example is a GDP warrant, which pays out based on the growth level of country’s GDP over an extended period.
GDP warrants were used in the Greek debt restructuring in 2012. Sometimes debts are settled via a debt-for-equity swap, in which the creditor receives a concession or ownership of a government-owned property such as an airport or a port, and the creditors receive a share of the revenues generated by the assets.
For decades, Cuban debt has traded around 8 to 10 cents on the dollar, with occasional spikes driven by events such as the death of former Cuban dictator Fidel Castro in 2016 or the temporary thawing of U.S.-Cuba relations under then-President Barack Obama in 2014, in the hopes that a settlement was more likely.  
Getting paid on very old, defaulted debt isn’t without precedent. Iraqi debt traded between 8 and 10 cents on the dollar for a decade, and then settled for roughly 32 cents on the dollar after the U.S. invasion in 2003.
Even though Cuba’s defaulted debt is nearly 40 years old, there’s a precedent for bondholders waiting even longer. More than 300,000 holders of czarist-era Russian bonds, which the Bolsheviks defaulted on in 1917 after the revolution, received payment in 2000. 
Michelle Caruso-Cabrera, a CNBC contributor, has 30 years of experience at the nexus of finance, economic development, and communication.

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NEW ORLEANS — The pandemic-era collapse of supply chains spurred speculation that globalization was on the decline, as companies vowed to become less reliant on foreign providers of goods and services. But if New Orleans is any example, the world is headed for less of a retreat from global trade and more of an overhaul to how it operates.A critical gateway between the Mississippi River and global oceans, New Orleans has been an entry and exit point for the United States since before the Louisiana Purchase. The city is now betting that position will continue — and even deepen — as the world enters a new era of global integration.The New Orleans port is one of the nation’s busiest for agricultural exports like soybeans and corn. But it has struggled to compete for the lucrative imports that are ferried on huge ships from Asia in part because those vessels cannot fit under a local bridge. As global supply chains rearrange in the pandemic’s wake, New Orleans’s proximity to Mexico and its position on the Mississippi River could help make it a crucial stop in what many expect to be a more resilient and supply chain of the future.Executives at the New Orleans port are wagering on that transformation: They recently unveiled a plan to spend $1.8 billion on expanding the port to a new site that can handle more trade and accommodate bigger boats.That optimism about the future of trade breaks with some of the worst fears of the past few years, as pandemic-related supply chain disruptions, Covid lockdowns in China and Russia’s war with Ukraine shook confidence in the global trading system. Policymakers and company executives vowed to become less reliant on China and to locate supply chains closer to home. That prompted predictions that the world was headed for a period of “de-globalization,” in which the trade and financial ties that have brought countries closer in recent decades would spin into reverse.So far, economic data show few signs of such a sharp retreat. Global trade volumes are growing more slowly, but they continue to reach new highs, with significantly more goods and currency crossing international borders than ever before.New Orleans has long been a key artery through which products made in the America’s South and Midwest flow to buyers overseas.Some firms are looking beyond China for manufacturing capacity, but that doesn’t necessarily mean that they are retreating from global integration: Many are turning to countries like Mexico, India and Vietnam. And even as pandemic supply chain issues have alerted companies to the risks inherent in the existing trading system, that seems to be encouraging them to diversify their global supply chains, not dismantle them.The trends, and the way institutions like the Port of New Orleans, are responding underscore that globalization is evolving rather than unraveling altogether. The changes to trade now underway seem likely to rework who partners with whom and could make international commerce less efficient and more expensive. But the profit motives that have encouraged companies to search out the globe for parts, workers and new markets are still going strong.“When I hear people say the word ‘globalization,’ what I hear is ‘cost minimization,’” Raphael Bostic, president of the Federal Reserve Bank of Atlanta, said in an interview on Jan. 7. “The new globalization is not going to have that second part to it.”Inflation F.A.Q.Card 1 of 5What is inflation? More

The Treasury Department has started employing “extraordinary measures,” but the path to raising the debt ceiling is likely to be a long one.The United States hit a limit this week on how much money it can borrow, forcing the Treasury Department to initiate so-called extraordinary measures to make sure the nation has enough cash to fulfill its financial obligations.Treasury Secretary Janet L. Yellen has told lawmakers that those measures will allow the United States to keep paying military salaries, retiree benefits and interest to bondholders through at least early June.But initiating those extraordinary measures is just the first step in a series of moves that will take place as the Treasury tries to keep the United States from defaulting on its debt. Ultimately, it will be up to Congress to decide whether to let the country borrow more money or allow it to default on its debt by failing to pay investors who expect interest and other payments.At stake is the fate of the U.S. economy, which could face a financial crisis and fall into a deep recession if lawmakers cannot reach an agreement.Among the looming questions is when the United States will hit the so-called X-date — the point at which the government can no longer find creative ways to stay beneath the $31.4 trillion debt limit and will need to borrow more money or fail to pay its bills.The other big question: Will Congress agree to raise the borrowing cap?So far, House Republicans have vowed to oppose any increase in the debt limit without spending cuts. President Biden has said the debt limit needs to be raised without conditions. That has set up what could be a protracted fight to ensure that the United States does not default on its debt.Here are some of the key moments to expect over the next few months.A Spring Budget BattleThe White House is expected to unveil its annual budget proposal in early March, outlining Mr. Biden’s spending priorities. That could serve as an opening bid for any negotiations between the Biden administration and Republicans in Congress, who have been calling for spending cuts and are likely to seize on this document as evidence of what they say is “runaway spending.”Understand the U.S. Debt CeilingCard 1 of 5What is the debt ceiling? More

The Biden administration has set out to measure the economic value of ecosystems, offering new statistics to weigh in policy decisions.Forests that keep hillsides from eroding and clean the air. Wetlands that protect coastal real estate from storm surges. Rivers and deep snows that attract tourists and create jobs in rural areas. All of those are natural assets of perhaps obvious value — but none are accounted for by traditional measurements of economic activity.On Thursday, the Biden administration unveiled an effort to change that by creating a system for assessing the worth of healthy ecosystems to humanity. The results could inform governmental decisions like which industries to support, which natural resources to preserve and which regulations to pass.The administration’s special envoy for climate change, John Kerry, announced the plan in a speech at the World Economic Forum, the annual gathering of political and business leaders in Davos, Switzerland. “With this plan, the U.S. will put nature on the national balance sheet,” he said.The initiative will require the help of many corners of the executive branch to integrate the new methods into policy. The private sector is likely to take note as well, given rising awareness that extreme weather can wreak havoc on assets — and demand investment in renewable energy and sustainable agriculture.In the past, such undertakings have been politically contentious, as conservatives and industry groups have fought data collection that they saw as an impetus to regulation.A White House report said the effort would take about 15 years. When the standards are fully developed and phased in, researchers will still be able to use gross domestic product as currently defined — but they will also have expanded statistics that take into account a broader sweep of nature’s economic contribution, both tangible and intangible.Those statistics will help more accurately measure the impact of a hurricane, for example. As currently measured, a huge storm can propel economic growth, even though it leaves behind muddied rivers and denuded coastlines — diminishing resources for fishing, transportation, tourism and other economic uses.“You can look at the TV and know that we’ve lost beaches, we’ve lost lots of stuff that we really care about, that makes our lives better,” said Eli Fenichel, an assistant director at the White House Office of Science and Technology Policy. “And you get an economist to go on and say, ‘G.D.P.’s going to go up this quarter because we’re going to spend a lot of money rebuilding.’ Being able to have these kinds of data about our natural assets, we can say, ‘That’s nice, but we’ve also lost here, so let’s have a more informed conversation going forward.’”John Kerry, the White House’s special envoy on climate, in Davos, Switzerland, this week. A Biden administration plan would incorporate the value of ecosystems into measurements of economic activity.Markus Schreiber/Associated PressTaking nature into economic calculations, known as natural capital accounting, is not a new concept. As early as the 1910s, economists began to think about how to put a number on the contribution of biodiversity, or the damage of air pollution. Prototype statistics emerged in the 1970s, and in 1994, the Commerce Department’s Bureau of Economic Analysis proposed a way to augment its accounting tools with measures of environmental health and output.But Congress ordered the bureau to halt its efforts until an independent review could be completed. States whose economies depend on drilling, mining and other forms of natural resource extraction were particularly worried that the data could be used for more stringent regulation.“They thought that anything that measured the question of productivity of natural resources was inherently an environmental trick,” a Commerce Department official said afterward. Five years later, that independent review was completed in a report for the National Academy of Sciences. The academy panel — led by the Yale economist William Nordhaus, who went on to win the Nobel Prize for his work on the economic impact of climate change — said the bureau should continue.“Natural resources such as petroleum, minerals, clean water and fertile soils are assets of the economy in much the same way as are computers, homes and trucks,” the report read. “An important part of the economic picture is therefore missing if natural assets are omitted in creating the national balance sheet.”While the United States lagged, other countries moved ahead with incorporating nature into their core accounting. The United Nations developed a framework for doing so over the last decade that supported decisions such as assessing the impact of shrinking peat land and protecting an endangered species of tree. Britain has been publishing environmental-economic statistics for several years as well. International groups like the Network for Greening the Financial System, which includes most of the world’s central banks, use some of these techniques for assessing systemic risk in the financial system.The proposed plan will take into account a broader sweep of nature’s economic contribution, both tangible and intangible.Chanell Stone for The New York TimesSkepticism about including environmental considerations in economic and financial decision-making remains in the United States, where conservatives have disparaged investing guidelines that put a priority on a company’s performance along environmental, social and governance lines. The social cost of carbon, another measurement tool for assessing the economic impact of regulations through their effect on carbon emissions, was set close to zero during the Trump administration and has been increased significantly under President Biden.Understand Inflation and How It Affects YouFederal Reserve: Federal Reserve officials kicked off 2023 by grappling with a thorny question: How should central bankers understand inflation after 18 months of repeatedly misjudging it?Social Security: The cost-of-living adjustment, which helps the benefit keep pace with inflation, is set for 8.7 percent in 2023. Here is what that means.Tax Rates: The I.R.S. has made inflation adjustments for 2023, which could push many people into a lower tax bracket and reduce tax bills.Your Paycheck: Inflation is taking a bigger and bigger bite out of your wallet. Now, it’s going to affect the size of your paycheck in 2023.Benjamin Zycher, a senior fellow at the right-leaning American Enterprise Institute, expressed concern Thursday that the new approach would introduce a degree of subjectivity.“I think there’s a real danger that if in fact they’re trying to put environmental quality values into the national accounts, there’s no straightforward way to do that, and it’s impossible that it wouldn’t be politicized,” Dr. Zycher said in an interview. “That’s going to be a process deeply fraught with problems and dubious interpretations.”Few economic statistics are a perfect representation of reality, however, and all of them have to be refined to make sure they are consistent and comparable over time. Measuring the value of nature is inherently tricky, since there is often no market price to consult, but other sources of information can be equally illuminating. The Bureau of Economic Analysis has undertaken other efforts to measure the value of services that are never sold, like household labor.“That’s exactly why we need this sort of strategy,” said Nathaniel Keohane, president of the Center for Climate and Energy Solutions, a research and advocacy group. “To really develop the data we need so that it’s not subjective, and make sure we are really devoting the same quality control and focus on integrity that we do to other areas of economic statistics.”The strategy does not pretend to cover every aspect of nature’s value, or solve problems of environmental justice simply by more fully incorporating nature’s contribution, particularly for Indigenous communities. Those concerns, said Rachelle Gould, an associate professor of environmental studies at the University of Vermont, will need to be prioritized separately.“There are a lot of other ways nature matters that can’t be accounted for in monetary terms,” Dr. Gould said. “It’s appropriately cautious about what might be possible.” More

Lael Brainard, the vice chair of the Federal Reserve, emphasized that non-wage causes had driven inflation in a sweeping speech.The Federal Reserve’s second-in-command offered a hopeful analysis of America’s inflation situation on Thursday, emphasizing that many of the factors that have driven prices higher over recent years may be poised to fade.“It remains possible that a continued moderation in aggregate demand could facilitate continued easing in the labor market and reduction in inflation without a significant loss of employment,” Lael Brainard, the Fed’s vice chair, said in a speech at the University of Chicago Booth School of Business.Ms. Brainard spoke just days before Fed officials are set to begin the quiet period ahead of their Feb. 1 interest rate decision.In some ways, she broke with what her colleagues have been saying about the forces that could keep inflation high. Many central bankers have emphasized the roles that a tight labor market and strong wage growth are likely to play in propping up price increases, but Ms. Brainard focused on other factors that have sped up price increases, particularly when it comes to services.“There are a range of views on what it will take to bring down this component of inflation to prepandemic levels,” Ms. Brainard acknowledged in the remarks. She noted that wages are an important cost for services firms, so “one possible channel is through a weakening in labor demand.”But she added that “to the extent that inputs other than wages may have been responsible in part for important price increases,” a reversal in those factors could help to lower services inflation.In particular, Ms. Brainard noted that supply chain issues and jumps in fuel prices might be passing through to elevate some service costs, and that those could fade away, assuming supply chains continue to heal and gas stays relatively cheap.And Ms. Brainard also cited the reversal of swollen profit margins as something that could help inflation to moderate.Companies have enjoyed an unusual burst of pricing power in the pandemic era as repeated supply chain issues and resilient consumer demand have given them both a reason to try to raise prices and the wherewithal to do so without scaring away shoppers. Many firms have lifted what they are charging more than they needed to cover climbing costs, swelling their profits.“The labor share of income has declined over the past two years and appears to be at or below prepandemic levels, while corporate profits as a share of G.D.P. remain near postwar highs,” Ms. Brainard said.But that might be changing as demand wanes and price sensitivity returns.“The compression of these markups as supply constraints ease, inventories rise and demand cools could contribute to disinflationary pressures,” she said.The Fed is expected to raise interest rates again at its upcoming meeting as it tries to ensure that rapid inflation comes back under control. Officials slowed from a string of three-quarter-point moves in 2022 to a half-point move in December, and several have signaled that they would favor slowing to a quarter-point move at the February gathering.While Ms. Brainard did not speculate on what size rate move would be warranted in her prepared remarks, she did emphasize that borrowing costs will need to remain high to make sure that inflation moderates fully.“Policy will need to be sufficiently restrictive for some time to make sure inflation returns to 2 percent on a sustained basis,” she said. More