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Social Security recipients do not need to worry about their benefits being garnished due to their defaulted student loans, at least for now.
The development is an abrupt change in policy by the administration, which had announced in April that it would be resuming collection activity on defaulted student loan borrowers.
The Education Dept. had said that Social Security benefit offsets could begin as early as June.

The U.S. Department of Education is seen on March 20, 2025 in Washington, DC. U.S. President Donald Trump is preparing to sign an executive order to abolish the Department of Education. 
Win Mcnamee | Getty Images News | Getty Images

The U.S. Department of Education is pausing its plan to garnish people’s Social Security benefits if they have defaulted on their student loans, a spokesperson for the agency tells CNBC.
“The Trump Administration is committed to protecting Social Security recipients who oftentimes rely on a fixed income,” said Ellen Keast, an Education Department spokesperson.

The development is an abrupt change in policy by the administration.
The Trump administration announced on April 21 that it would resume collection activity on the country’s $1.6 trillion student loan portfolio. For nearly half a decade, the government did not go after those who’d fallen behind as part of Covid-era policies.
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The federal government has extraordinary collection powers on its student loans and it can seize borrowers’ tax refunds, paychecks and Social Security retirement and disability benefits. Social Security recipients can see their checks reduced by up to 15% to pay back their defaulted student loan.
More than 450,000 federal student loan borrowers age 62 and older are in default on their federal student loans and likely to be receiving Social Security benefits, according to the Consumer Financial Protection Bureau.

The administration’s reprieve gives older student borrowers who’ve defaulted on their debt more time to try to get current, and to avoid a reduced benefit check down the line.
Carolina Rodriguez, director of the Education Debt Consumer Assistance Program in New York, recently told CNBC that she was especially concerned about the consequences of resumed collections on retirees.
“Losing a portion of their Social Security benefits to repay student loans could mean not having enough for food, transportation to medical appointments or other basic necessities,” Rodriguez said in an April interview. More

Shares of online sports betting platforms struggled Monday.
Illinois lawmakers passed a budget that included what one analyst described as a surprise tax increase on wagers.

Omar Marques | LightRocket | Getty Images

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DratKings & Flutter, 1-day

Both chambers of Illinois’ state legislature passed a budget that includes a tax of 25 cents per wager on the first 20 million online sports bets made each fiscal year, rising to 50 cents per bet after.
Illinois Gov. J.B. Pritzker issued a statement saying he would sign the budget, according to local news reports.
Truist analyst Barry Jonas called the duties a last-minute surprise, adding that it’s the second straight year of the state slapped an unexpected tax on the industry. Under the latest plan, Jonas said Illinois’ rate will be among the highest in the country.
Jonas said DraftKings and Flutter’s FanDuel should both “certainly” surpass 20 million wagers, meaning they’ll face the higher tax rate on a portion of their bets.
But Jonas called the impact for smaller competitors in the market more “modest.” Still, shares of MGM Resorts, which owns the BetMGM platform through a 50/50 joint venture with Entain, declined 1.5%. Penn Entertainment, partners in the ESPN Bet platform, shed 0.3%.

Now, Wall Street is left wondering if other states will follow Illinois’ lead and try and plug their budget deficits by either adopting or increasing online sports gambling taxes.
Statewide levies on digital sports bets at the start of 2024 ranged from 51% in New Hampshire, New York and Rhode Island to 6.75% in states like Nevada and Iowa, according to a report from the Tax Foundation. Only 27 states and D.C. allow online sports betting statewide, according to the nonprofit. More

A new policy is expected to prompt nearly 2 million more individuals to visit local Social Security offices every year.
Those trips may require driving times of over an hour, depending on where a person lives and where their closest agency office is located.
Here’s which states may present the longest travel times for seniors, according to a new analysis from the Center on Budget and Policy Priorities.

A Social Security Administration office in Washington, D.C., March 26, 2025.
Saul Loeb | Afp | Getty Images

A new Social Security Administration policy will require nearly 2 million additional beneficiaries to visit the agency’s offices each year to change their direct deposit information, according to agency estimates.
That’s often not a quick trip: Nearly one-quarter of seniors live more than an hour away from their local Social Security field office, according to a new analysis from the Center on Budget and Policy Priorities. Meanwhile, half of seniors need to drive for at least 33 minutes without traffic to get to their Social Security office.

The policy change will lead to more than 1 million hours of travel per year, according to the nonpartisan policy and research institute.

Why more people need to visit Social Security offices

The Social Security Administration said the new direct deposit requirements would curb fraud, which it said it’s been working to root out in coordination with the Trump administration’s so-called Department of Government Efficiency.
Since 2023, the agency has experienced a “marked increase” in allegations of direct deposit fraud, a Social Security Administration official said via email.
In March, SSA implemented enhanced fraud protection for direct deposit changes. Between March 29 and April 26, the enhanced fraud protection flagged more than 20,000 Social Security numbers where phone direct deposit requests failed security measures that check for multiple fraud indicators.
Of the direct deposit transactions flagged, 61% to 72% of individuals never resubmitted their requests, a “strong indicator” that many of those attempts may not have been legitimate, according to the SSA official.

The agency estimates $19.9 million in losses were avoided as a result of the enhanced safety measures.
However, advocates say the change is an overreaction, given the scale of such fraud. The Social Security Administration has said about 40% of direct deposit fraud comes from phone calls attempting to change direct deposit information.
In early 2024, anti-fraud officials at the agency told The New York Times that about 2,000 beneficiaries had their direct deposits redirected over the prior year. By those estimates, that would mean just 800 of those people experienced direct deposit fraud by phone, according to Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities. Yet the agency is now requiring about 2 million elderly and disabled individuals to visit its offices to prevent such fraud, she said.
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To help ensure benefit payments are not misdirected, the Social Security Administration has tightened beneficiaries’ ability to change their bank information over the phone.
As of April 28, individuals who want to change their direct deposit information will need to log into or create a personal My Social Security online account and obtain a one-time code before they call the agency’s 800 number.
Individuals who cannot use online or automatic enrollment services will need to visit a local field office to verify their identity in person. While the agency encourages those individuals to make an appointment, it is also possible to walk in for direct deposit changes.
Individuals who want to change their direct deposit information may also use automatic enrollment services through their bank. To do so, individuals need to contact their bank directly. Not all financial institutions participate in this process, according to SSA.

Because many seniors or disabled individuals do not have internet service, computers or smart phones — or if they do, may not know how to use those resources — many will likely have to make an in-person visit to their local Social Security office.
About 6 million seniors don’t drive, while almost 8 million older Americans have a medical condition or disability that makes it difficult for them to travel, according to CBPP research.

Where seniors may face longest drive times

In-person appointments may be burdensome for beneficiaries who face long travel times to get to their nearest Social Security office, according to the CBPP analysis.
In 31 states, more than 25% of seniors face travel times of more than an hour to get to their local field office.

In certain less-populated states, more than 40% of seniors would need to drive more than an hour. Those include Arkansas, Iowa, Maine, Mississippi, Montana, Nebraska, North Dakota, South Dakota, Vermont and Wyoming.
In other states, around 25% to 39% of seniors would need to travel over an hour. That includes Alabama, Alaska, Arizona, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Minnesota, Missouri, New Hampshire, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina, Tennessee, West Virginia, Wisconsin and Virginia.
Residents of other states may also face a burden if they do not live near their closest Social Security field office.

The analysis is a conservative estimate to help assess how much time it may cost individuals who are affected by the policy, according to Devin O’Connor, senior fellow at the CBPP.
For example, it doesn’t take into account the time spent getting an appointment to visit a Social Security office and the time spent waiting for the appointment, he said.
The CBPP’s analysis was created with information from multiple sources including the 2022 National Household Travel Survey, SSA field office location data, the OpenTimes travel time database and the Census Bureau’s 2023 American Community Survey.
The Social Security Administration has not independently validated the data, the agency said via email in response to a request for comment.

Staffing cuts may add to appointment wait times

Notably, the new direct deposit requirements come as the Social Security Administration has moved to cut its work force by about 7,000 employees, reductions that have led some of the agency’s field offices to be “understaffed,” O’Connor said.
However, while it had been reported that DOGE planned to close Social Security field offices to help curb spending, thus far that has largely not happened, he said. The Social Security Administration has denied it plans to close local field offices.

Individuals who need to visit a Social Security field office will also be confronted by long wait times for appointments. Currently, just 43% of individuals are able to get a benefit appointment within 28 days, Social Security Administration data shows.
The agency’s new policy to limit phone transactions has been scaled back. The agency had proposed limiting the ability to apply for benefits over the phone, but after it received pushback from organizations including the AARP, the agency changed that policy to limit only direct deposit transactions. More

As the Senate debates President Donald Trump’s multi-trillion-dollar tax and spending package, there could be changes to the child tax credit.
If enacted as drafted, the House-approved bill would make permanent the maximum $2,000 credit and temporarily boost the top tax break to $2,500.
But “there’s some recognition here that they need do a little more,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.

Vera Livchak | Moment | Getty Images

As the Senate debates President Donald Trump’s multi-trillion-dollar tax and spending package, there could be changes to the child tax credit, policy experts say.
If enacted as drafted, the House-approved bill would make permanent the maximum $2,000 credit passed via Trump’s 2017 tax cuts — which could otherwise revert to $1,000 after 2025 without action from Congress.

The highest credit would also rise to $2,500 from 2025 to 2028. After that, the credit’s top value would revert to $2,000 and be indexed for inflation.
But the Senate could have different plans, and negotiations will be “really interesting to watch,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.
More from Personal Finance:House Republican budget bill boosts maximum child tax credit to $2,500What the House Republican budget bill means for your moneyWhy baby bonds and child tax credits can’t convince Americans to have kids
The proposed higher child tax credit comes as the U.S. fertility rate hovers near historic lows, which has been a concern for lawmakers, including the Trump administration.
Some research suggests financial incentives, like a bigger child tax credit, could boost U.S. fertility. But other experts say it won’t solve the issue long-term.

As the Senate prepares to debate Trump’s mega-bill, here’s how the child tax credit could change.

Republican child tax credit support

While Democrats have long pushed for a child tax credit expansion, there has also been a more recent bipartisan push for changes.
Vice President JD Vance, who formerly served as Senator of Ohio, floated a higher child tax credit during the campaign in August.   
“I’d love to see a child tax credit that’s $5,000 per child. But you, of course, have to work with Congress to see how possible and viable that is,” he told CBS’ “Face the Nation.”
Sen. Josh Hawley, R-Mo., in January also called on the Senate floor for a $5,000 child tax credit. His proposal would apply the credit to payroll taxes and provide advance payments throughout the year. 
“There’s some recognition here that they need do a little more,” Gleckman said.

Credit ‘refundability’ could change

Often, tax credits don’t benefit the lowest earners unless they are “refundable,” meaning filers can still claim without taxes owed. Nonrefundable credits can lock out those consumers because they often don’t have tax liability.
House lawmakers in January 2024 passed a bipartisan child tax credit expansion, which would have improved access and retroactively boosted the refundable portion.
While the bill failed in the Senate in August, Republicans said they would revisit the measure. 
However, the child tax credit in the latest House-approved bill is less generous than the provision passed in 2024, policy experts say.
As written, the House plan provides no additional benefit to 17 million children from low-income families who can’t claim the full $2,000 credit, Margot Crandall-Hollick, principal research associate at the Urban-Brookings Tax Policy Center, wrote in May. More

The Home Depot logo is displayed outside a store on March 10, 2025 in San Diego, California.
Kevin Carter | Getty Images

Earnings of major U.S. companies and the uncertainty around tariffs continued to impact investor sentiment this week. While the stock market remains volatile, investors seeking consistent returns could add some attractive dividend stocks to their portfolios.
In this regard, stock picks of top Wall Street analysts can be helpful, as the recommendations of these experts are based on in-depth analysis of a company’s financials and ability to pay dividends.

Here are three dividend-paying stocks, highlighted by Wall Street’s top pros, as tracked by TipRanks, a platform that ranks analysts based on their past performance.

Home Depot

This week’s first dividend pick is Home Depot (HD). The home improvement retailer reported mixed results for the first quarter of fiscal 2025 but reaffirmed its full-year guidance. The company expressed its intention to maintain its prices and not increase them in response to tariffs.
Home Depot declared a dividend of $2.30 per share for the first quarter of 2025, payable on June 18, 2025. At an annualized dividend of $9.20 per share, HD stock offers a dividend yield of 2.5%.
Following the Q1 FY25 results, Evercore analyst Greg Melich reiterated a buy rating on HD stock with a price target of $400. The analyst thinks that the risk/reward profile of Home Depot stock is one of the best in Evercore’s coverage. 
Melich contends that while Home Depot’s headline results appear ordinary, he believes that a notable inflection has begun. The analyst highlighted certain positives in Home Depot’s Q1 performance, including stabilizing traffic, improving shrink (inventory lost due to theft or other reasons) rates, and acceleration in online sales growth to 8% after staying lower than 5% since Q3 FY22.   

“HD remains a benchmark retailer, investing in technology, multichannel and stores, even while current demand remains low,” concluded Melich. He continues to believe that once the macro environment improves, Home Depot could be the “next great Consumer/Retail breakout multiple stock” like Costco in 2023 and Walmart in 2024.
Melich ranks No. 607 among more than 9,500 analysts tracked by TipRanks. His ratings have been profitable 68% of the time, delivering an average return of 12%. See Home Depot Ownership Structure on TipRanks.

Diamondback Energy

Next on this week’s list is Diamondback Energy (FANG), an independent oil and gas company that is focused on onshore reserves, mainly in the Permian Basin in West Texas. FANG delivered better-than-expected first-quarter results. However, given the ongoing commodity price volatility, Diamondback reduced its full-year activity to maximize free cash flow generation.
Meanwhile, the company returned $864 million to shareholders in Q1 2025 through stock repurchases and a base dividend of $1.00 per share. FANG’s Q1 2025 capital return represented roughly 55% of adjusted free cash flow. Based on the base and variable dividends paid over the past 12 months, FANG stock offers a dividend yield of nearly 3.9%.
In a recent research note, RBC Capital analyst Scott Hanold reaffirmed a buy rating on FANG stock with a price target of $180. Hanold noted that while the company lowered its 2025 capital budget by $400 million or 10% to $3.4 – $3.8 billion, the production outlook was cut by only 1%.
The analyst stated that Diamondback’s move to reduce its capital spending plan increased his free cash flow estimate by 7% over the next 18 months. Hanold thinks that the company’s decision will not weigh on its operational momentum or the ability to efficiently return to its 500 Mb/d productive capacity.
Commenting on FANG’s free cash flow priorities, Hanold noted that the company is tracking ahead of its 50% minimum shareholder return target, thanks to stock buybacks amid the pullback in shares, mainly during early April. He expects the company to use the remaining free cash flow to pay down the $1.5 billion term loan related to its Double Eagle-IV acquisition in the Midland Basin, which was announced in February.
Overall, Hanold’s bullish thesis on FANG stock remains intact, and he believes that “FANG has one of the lowest cost structures in the basin and a corporate cash flow break-even (including dividend) that is among the best in the industry.”
Hanold ranks No. 17 among more than 9,500 analysts tracked by TipRanks. His ratings have been profitable 67% of the time, delivering an average return of 29.1%. See Diamondback Energy Insider Trading Activity on TipRanks.

ConocoPhillips

Another dividend-paying energy stock in this week’s list is ConocoPhillips (COP). The oil and gas exploration and production company reported market-beating earnings for the first quarter of 2025. Given a volatile macro environment, the company reduced its full-year capital and adjusted operating cost guidance but maintained its production outlook.
In Q1 2025, ConocoPhillips distributed $2.5 billion to shareholders, including $1.5 billion in share repurchases and $1.0 billion via ordinary dividends. At a quarterly dividend of $0.78 per share (annualized dividend of $3.12), COP stock offers a yield of about 3.7%.
Following investor meetings with management in Boston, Goldman Sachs analyst Neil Mehta reiterated a buy rating on COP stock with a price target of $119. Mehta highlighted that management sees significant uncertainty in oil prices in the near term due to concerns about economic growth and voluntary production cuts by OPEC+. That said, the company is bullish about long-term gas prices.
Meanwhile, the analyst expects COP’s breakeven to shift lower in the times ahead, with major growth projects on track. Mehta stated that while the benchmark price of West Texas Intermediate crude oil – also known as WTI – breakeven (before dividend) is in the mid $40s in 2025, he sees the breakeven heading towards the low $30s once COP’s LNG spending comes down and production at its Willow project in Alaska comes online in 2029.
Commenting on COP’s shareholder returns, Mehta stated that management acknowledged that their decision not to stick with the $10 billion capital return target led to short-term volatility in COP stock. That said, COP still offers a “compelling” return, which Mehta estimates will be 8%.
Mehta ranks No. 568 among more than 9,500 analysts tracked by TipRanks. His ratings have been successful 59% of the time, delivering an average return of 8.6%. See ConocoPhillips Hedge Fund Trading Activity on TipRanks. More

The Trump administration warned that Social Security benefits could be garnished for defaulted student loans as early as June.
Here’s what borrowers need to know about their rights, and available relief options.
Some recipients can expect their monthly Social Security check on June 3.

T-studios2 | E+ | Getty Images

Some Social Security beneficiaries may find their June check is smaller: Starting this month, a share of people’s benefits can be garnished if they’ve defaulted on their student loans.
The Trump administration announced on April 21 that the U.S. Department of Education would resume collection activity on the country’s $1.6 trillion student loan portfolio. For nearly half a decade, the government did not go after those who’d fallen behind as part of Covid-era policies.

More than 450,000 federal student loan borrowers age 62 and older are in default on their federal student loans and likely to be receiving Social Security benefits, the Consumer Financial Protection Bureau found.
More from Personal Finance:What the House GOP budget bill means for your money’Maycember’ is over — here’s how to recover financiallyCourt order challenges Trump’s plan to move student loans to SBA
Depending on details like their birth date and when they began receiving benefits, their monthly Social Security check may arrive June 3, 11, 18 or 25, according to the Social Security Administration.
Many Social Security recipients rely on those checks for most, if not all, of their income. So people who are facing a smaller federal benefit as a result of garnishment are likely in a panic, said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.
But, Nierman said, “the good news is there are multiple options for borrowers to stop those payment offsets.”

Here’s what you need to know if you’re at risk of a smaller benefit.

How to challenge the garnishment

Federal student borrowers should have received at least a 30-day warning before their Social Security benefit is offset, said higher education expert Mark Kantrowitz.
That notice should include information on whom to contact in order to challenge the collection activity, Kantrowitz said. (The alert was likely sent to your last known address, so borrowers should make sure their loan servicer has their correct contact information.)

You may be able to prevent or stop the offset if you can prove a financial hardship or have a pending student loan discharge, Kantrowitz added.
With that in mind, your next step may be pursuing a discharge with your student loan servicer. That’s more likely in circumstances where you have significant health challenges.
“If they are sick or disabled, they can file for a Total & Permanent Disability discharge,” Nierman added.
Borrowers may qualify for a TPD discharge if they suffer from a mental or physical disability that is severe and permanent and prevents them from working. Proof of the disability can come from a doctor, the Social Security Administration or the Department of Veterans Affairs.

Get current on your loans

Another route to stop the offset of Social Security benefits is getting current on the loans, said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.
You can contact the government’s Default Resolution Group and pursue several different avenues to get out of default, including enrolling in an income-driven repayment plan.
“If Social Security is their only income, their payment under those plans would likely be zero,” Mayotte said.

Offset is limited to 15%

Social Security recipients can typically see up to 15% of their monthly benefit reduced to pay back their defaulted student debt, but beneficiaries need to be left with at least $750 a month, experts said.
The offset cap is the same “regardless of the type of benefit,” including retirement and disability payments, said Kantrowitz.
The 15% offset is calculated from your total benefit amount before any deductions, such as your Medicare premium, Kantrowitz said.

When Social Security benefit isn’t enough

Many retirees worry about meeting their bills on a fixed income — with or without facing garnishment, experts said.
Utilizing other relief options may help stretch your funds while you work on stopping the offset to your Social Security benefits.
For example, there are a number of charitable organizations that assist seniors with their health-care costs. At Copays.org you can apply for funds to put toward copays, premiums, deductibles and over-the-counter medications.
The National Patient Advocate Foundation has a financial resource directory in which you can search for local aid for everything from dental care to end-of-life services.
Many older people aren’t taking advantage of all the food assistance available to them, experts say. A 2015 study, for instance, found that less than half of eligible seniors participated in the Supplemental Nutrition Assistance Program, or SNAP.
The extra money can go a long way for retirees on a fixed income, though. The maximum benefit a month for a household of one is $292. Grocery stores, online retailers and farmers markets accept the funds. More

House GOP passed a multi-trillion-dollar tax and spending package that includes many of President Donald Trump’s priorities.
Some provisions, including Medicaid, the “SALT” deduction and child tax credit, among others, could change amid Senate Republican debate.
After the Senate vote, House lawmakers will have to approve changes to the bill, which could be tough, experts say.  

Staff members remove a sign following a press conference after the House passage of the tax and spending bill, at the U.S. Capitol on May 22, 2025 in Washington, DC.
Kevin Dietsch | Getty Images

House Republicans passed a multi-trillion-dollar tax and spending package after months of debate, which included many of President Donald Trump’s priorities. 
Now, policy experts are bracing for Senate changes as GOP lawmakers aim to finalize the “big bill” by the Fourth of July.

If enacted as currently drafted, the House’s “One Big Beautiful Bill Act” would make permanent Trump’s 2017 tax cuts, while adding new tax breaks for tip income, overtime pay and older Americans, among other provisions.
More from Personal Finance:What the House GOP budget bill means for your moneyHouse bill calls for bigger ‘pass-through’ business tax breakWhat Medicaid and SNAP cuts in House bill mean for benefits
The House bill also approved historic spending cuts to programs for low-income families, including Medicaid health coverage and SNAP, formerly known as food stamps.
“Overall, the [Senate] bill is not going to be that much different,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.
But there will be “a lot of debate” about the Medicaid provision, as well as other changes, he said.

Here are some other issues to watch during negotiations, policy experts say.

Fiscal hawks could ‘stop the process’

With control of Congress, Republicans are using a process called “budget reconciliation,” which bypasses the Senate filibuster and only needs a simple majority vote to clear the upper chamber.
But some GOP senators have cost concerns about the House-approved bill.
“We have enough to stop the process until the president gets serious about spending reduction and reducing the deficit,” Sen. Ron Johnson, R-Wis., said last week on CNN’s ‘State of the Union.’
An earlier version of the House package could raise the deficit by an estimated $3.8 trillion over the next decade, according to the Congressional Budget Office. However, the agency hasn’t released an updated score to reflect the bill’s last-minute changes.
Other cost estimates for the House-passed reconciliation bill have ranged between $2 to $3 trillion over 10 years.

Under reconciliation, the Senate bill also must follow the “Byrd Rule,” which bans anything unrelated to federal revenue or spending.
After the Senate vote, House lawmakers must approve changes to the bill, which could be tricky with a slim Republican majority.
“That’s where the fight is really going to happen,” Gleckman said.

A lower ‘SALT’ deduction limit

One sticking point during the House debate was the current $10,000 limit on the federal deduction for state and local taxes, known as “SALT,” which is scheduled to sunset after 2025.
Enacted by Trump via the Tax Cuts and Jobs Act, or TCJA, of 2017, the $10,000 cap has been a key issue for certain lawmakers in high-tax states like New York, New Jersey and California.
Before TCJA, filers who itemized tax breaks could claim an unlimited deduction on state and local income taxes, along with property taxes. But the so-called alternative minimum tax reduced the benefit for some higher earners.
After lengthy debate, House Republicans approved a $40,000 SALT limit. If enacted, the higher cap would apply to 2025 and phase out for incomes over $500,000.

But the SALT limit is likely to be lower than $40,000 after Senate negotiations, experts say.
Staying closer to the current $10,000 cap “seems like a very natural place to start,” but the final number could be higher, said Alex Muresianu, senior policy analyst at the Tax Foundation.

Child tax credit could be more generous

The Senate could also expand the child tax credit further, policy experts say.
If enacted in its current form, the House bill would make permanent the maximum $2,000 credit passed via the TCJA, which will otherwise revert to $1,000 after 2025.
The House measure would also make the highest child tax credit $2,500 from 2025 through 2028. After that, the credit’s top value would revert to $2,000 and be indexed for inflation.
But some senators, including Josh Hawley, R-Mo., have called for a bigger tax break. Vice President JD Vance also floated a higher child tax credit during the campaign in August.
With the House-approved tax breaks favoring higher earners, “there’s some recognition that they need to do a little more” for families, Gleckman said.
“That’s going to be a fun one to watch,” he said of the upcoming Senate debate. More

Confetti falls as Lyft CEO Logan Green (C) and President John Zimmer (LEFT C) ring the Nasdaq opening bell celebrating the company’s initial public offering (IPO) on March 29, 2019 in Los Angeles, California. The ride hailing app company’s shares were initially priced at $72.
Mario Tama / Getty Images

Company: Lyft Inc (LYFT)

Lyft (LYFT) is a multimodal transportation network in the United States and Canada. It offers access to a variety of transportation options through its platform and mobile-based applications. The Lyft Platform provides a marketplace where drivers can be matched with riders via the Lyft App, where it operates as a transportation network company. Transportation options through its platform and mobile-based applications are substantially comprised of its ridesharing marketplace that connects drivers and riders in cities across the United States and in certain cities in Canada, Lyft’s network of bikes and scooters, and the Express Drive program, where drivers can enter into short-term rental agreements with its subsidiary, Flexdrive Services, LLC or a third party for vehicles that may be used to provide ridesharing services on the Lyft Platform. It makes the ridesharing marketplace available to organizations through Lyft Business offerings, such as the Concierge and Lyft Pass programs.
Stock Market Value: $6.86 billion ($16.26 per share)

Stock chart icon

Lyft, 1-year

Activist: Engine Capital

Percentage Ownership: 0.81%
Average Cost: N/A
Activist Commentary: Engine Capital is an experienced activist investor led by Managing Partner Arnaud Ajdler, former partner and senior managing director at Crescendo Partners. Engine’s history is to send letters and/or nominate directors but settle rather quickly.

What’s happening:

On March 25, Engine announced a position in Lyft and stated that they are calling for a strategic review, improved capital allocations and the elimination of the company’s dual-class share structure. On April 16, Engine nominated two directors for election to the Board at the 2025 annual meeting, but ultimately withdrew those nominations following productive engagement with the company that led to several capital allocation initiatives, including the company committing to significant share repurchases in the coming quarters.

Behind the scenes:

Since David Risher took control as CEO of Lyft in 2023, Lyft has made some major improvements, streamlining operations, enhancing platform functionality, and expanding market presence. These have led to notable material enhancements in the company’s operational and financial performance. From 2023 to 2024, revenue increased by 31.39%, EBITDA went from a negative$359.1 million to $27.3 million and free cash flow (FCF) increased from negative $248.06 million to $766.27 million, the latter two of which are in the green for the first time since its IPO. Despite these improvements, Lyft’s share price decreased by 30% over the same period.

There are a few factors that may help explain the company’s current undervaluation. First is the industry’s dynamics as Lyft operates in a duopoly with Uber in the rideshare market. In the US, Uber holds approximately 75% percent of the market while Lyft holds 24% with the rest controlled by niche areas (i.e. Curb, Alto, and Waymo). The company is in an inherently difficult strategic position due to Uber’s dominance — while Lyft is only in the US and Canada, Uber is diversified across most global markets and has expanded into other synergetic areas like food and alcohol delivery. This makes Lyft particularly vulnerable to Uber’s decisions regarding pricing and promotions, as management noted during the company’s most recent earnings call. The market has sensed this situation, with Lyft’s shares underperforming compared to Uber by 37%, 287%, and 210% over the past 1-, 3- and 5-year periods, respectively. Second to this is Lyft’s suboptimal capital allocation practices. The company has experienced excessive share dilution. Since 2019, Lyft’s shares outstanding have almost doubled. Currently, dilution is primarily caused by the company’s stock-based compensation (SBC) practices, which are currently around $330 million annually, 4.9% of Lyft’s market cap.
Enter Engine, who is calling for a strategic review, improved capital allocation practices and the elimination of the company’s dual-class share structure. These proposals are all worth evaluating. First, there are a few reasons why a strategic review, specifically a potential strategic acquisition, makes sense. As has been already discussed, one of, if not the largest challenge Lyft faces is their inability to scale and diversify at the pace of Uber. As the rideshare industry continues to grow and evolve, this will only become increasingly important to Lyft’s potential long-term success. It seems like the most effective way to overcome this is to be either sold to or merged with a larger strategic entity that can give Lyft the scale and diversification it needs to compete with Uber.  Large players in the food delivery or automotive industry make sense as potential acquirers. For example, Doordash, with a roughly $80 billion market cap, could easily afford Lyft, has synergies to better optimize both platforms, a global presence, and would create more revenue stream options for drivers. On the other hand, automative companies testing the rideshare autonomous vehicle industry like Google (Waymo) and Amazon (Zoox), which is potentially the next technological evolution in the rideshare space, also make sense as acquirers. Given Lyft’s depressed valuation (EV to 2026 consensus EBITDA multiple of approximately 6.6x), recent growth, and large number of potential synergies, a large takeout premium is certainly possible here.
Secondly, the company clearly needs to improve its capital allocation practices. While Lyft recently announced a $500 million buyback program, this is not even sufficient to counter the dilution over the next two years due to current SBC practices. With $2 billion of cash (approximately $700 million of net cash) and the company dramatically increasing their FCF, it appears that Lyft has the ability to much more aggressively repurchase shares to do more than just counter SBC dilution.
Lastly, as a corporate governance investor, Engine will propose eliminating the dual-class structure. Originally set up to give control to the founders, this structure now seems unnecessary since co-founders John Zimmer and Logan Green are no longer involved in day-to-day operations. These preferred shares carry 20 votes per share, which give them 30.8% of the total voting power while owning only approximately 2.3% of outstanding shares. Eliminating the dual-class share structure makes complete sense, is the right thing to do and would be supported by the vast majority of shareholders. However, there is virtually no way that Zimmer and Green will voluntarily give up this control position. As an experienced activist investor Ajdler knows that, but also as an experienced activist investor, he has to try. But at the very least, the Company can refine the board to reflect the changes over the past six years since its IPO – seven of the ten current directors have no public company experience other than Lyft – the Board has a lean towards directors with experience in startup companies or early-stage investments. While this background may have once been valuable, that is not where Lyft is as a Company anymore. A refreshment of these directors for people with public market, capital allocation and capital markets expertise, would better position the Company for what it is today.
After launching a proxy fight for two board seats, this campaign came to a head when Engine withdrew their director nominations on May 8. This withdrawal came following the company’s public announcement to increase its share repurchase authorization to $750 million and commit to utilize $200 million of such authorization over the next three months and $500 million within the next 12 months.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. More