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Microsoft and Nvidia will likely have a weight of around 21% in this tech ETF, while Apple will be down to about 4.5%, according to Matthew Bartolini, head of SPDR Americas Research.
The rebalance will be in effect for one quarter, even if Apple outperforms Nvidia significantly ahead of the official date.
The ETF has about $71 billion in assets under management, so a 15-percentage-point change in the fund equates to more than $10 billion.

The logo of Nvidia Corporation is seen during the annual Computex computer exhibition in Taipei, Taiwan, May 30, 2017.
Tyrone Siu | Reuters

Nvidia’s blistering rally will force a major technology exchange-traded fund to acquire more than $10 billion worth of shares of the chip giant while cutting dramatically back on Apple.
The index that the Technology Select Sector SPDR Fund (XLK) follows will soon rebalance, based on an adjusted market cap value from Friday’s close. The new calculations show Microsoft as the top stock in the index, followed by Nvidia and then Apple, according to Matthew Bartolini, head of SPDR Americas Research.

All three stocks would have a weight above 20% in the index if there were no caps in place. But diversification rules for the index limit how big the cumulative weight of stocks with at least a 5% share of the fund can be.
As a result, Microsoft and Nvidia will likely have a weight of around 21%, while Apple will fall sharply to about 4.5%, Bartolini said.
That is a change from the prior weightings, which saw Nvidia’s weight be kept artificially low by index rules. As of June 14, Microsoft and Apple were both at about 22% each in the fund, while Nvidia was just 6%.

XLK Shake-Up

Company
Portfolio weight as of 6/14
Estimated weighting post-rebalance

Microsoft
22%
21%

Nvidia
6%
21%

Apple
22%
4.5%

Source: SPDR

The race to finish in the top two came down to the final day. As of Monday, market cap data from FactSet shows that all three companies are over $3.2 trillion and within $50 million of each other, though that data does differ slightly from the calculations used in the index.
The XLK has about $71 billion in assets under management, so a 15-percentage-point change in the fund equates to more than $10 billion. SPDR does not comment on specific trading strategies around rebalances.

The big shift in the XLK is an extreme example of how even passive index funds can diverge, especially when focusing on narrow slices of the market.
“Understanding how they might be weighted, where they’re allocated, what the rebalance frequency is, is really important because it can create differences in exposures and make what’s beneath the label seem different from fund to fund,” Bartolini said.
The fund follows the Technology Select Sector Index from S&P Dow Jones Indices, which uses a float-adjusted calculation to determine market cap. The rebalance officially takes effect at the end of this week.
The free-float adjustment for market cap accounts for large holders of an individual stock unlikely to be trading on a daily basis. For example, Warren Buffett’s Berkshire Hathaway owns more than 5% of Apple, which could count against it in the index, Bartolini said.
“Its free-float market capitalization is reduced because you have so many controlled interests in the company,” Bartolini said.
The rebalance will be in effect for one quarter, even if Apple outperforms Nvidia significantly ahead of the official date.
On Monday, shares of Apple were up 2%, while Nvidia dipped 0.7%.

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New government inflation data shows the rate of price increases for food is subsiding.
But many Americans still report feeling financially strained from paying for groceries.

A customer shops at a Safeway store on June 11, 2024 in Mill Valley, California. 
Justin Sullivan | Getty Images

The rate of price increases for food has subsided in recent months, according to the latest government inflation data.
However, shoppers still report feeling burdened by the prices they’re seeing in the grocery store aisles. To that point, within the past few years, 80% of Americans say they’ve felt a notable increase in the cost of groceries, Intuit Credit Karma reported last month.

Since the start of the pandemic, grocery prices have risen 25%, the report also found.
Some consumers have had to sacrifice necessities to afford food, the personal finance company found.
That includes 28% who sacrificed other needs like rent or bills to pay for groceries, and 27% who occasionally skipped meals. Additionally, 18% have either applied for or considered applying for food stamps, while 15% rely on or have considered turning to food banks.
Yet, 53% indicated they earn too much to qualify for food stamps or other government assistance but still have difficulties paying for necessities.
While most consumers report noticing higher grocery costs, 51% have also seen increases in gasoline prices; 39% said other bills like cable, electricity and internet have spiked; 27% said housing costs have gone up; and another 27% said dining out costs have risen.

The survey was conducted online by Qualtrics on behalf of Intuit Credit Karma, from May 7-13 among 2,011 adults.

The high cost of groceries has caught the attention of Congress.
“Grocery prices skyrocketed during the pandemic, and in many cases they’ve kept going up, even though the pandemic is over,” Sen. Elizabeth Warren, D-Mass., said at a recent Senate hearing.
Some retailers have moved to reduce grocery prices in response to consumer price fatigue. Target announced plans to reduce prices on about 5,000 items including meat, milk, fruits and vegetables. Amazon Fresh plans to cut prices on about 4,000 items online and in stores. Walmart has also increased its “rollbacks” on groceries and sales on other items.
For those who are truly struggling to cover grocery costs, finding a local food bank through FeedingAmerica.org may help, according to Credit Karma.  
For those who have the flexibility to reevaluate their spending, trying new strategies may also help.
“It’s a good opportunity to create smart shopping habits,” said Trae Bodge, a smart shopping expert at TrueTrae.com.
While food inflation is subsiding, certain categories still had notable year-over-year price increases as of May. That includes juices and drinks, frankfurters and bacon.
Avoiding categories where food costs are surging may help keep grocery costs low, experts say.
Where possible, consumers can shift their purchasing habits — by eating at home rather than dining out or by buying chicken instead of beef, for example — to limit the effects of rising costs, said Mark Hamrick, senior economic analyst at Bankrate.
“There is a range of opportunities to make choices and to substitute at lower prices and to get better value,” Hamrick said.
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Visiting different retailers — both in person and online — may help consumers find the best value available and take advantage of sales.
If a store has a loyalty program, Bodge recommends signing up for it to make sure purchases are eligible for discounts or rewards. Switching over to store or generic brands can also provide meaningful savings. Additionally, buying products in bulk may help save up to 40%, she said.
Certain websites and apps help make shopping more efficient.
Coupon sites like CouponCabin may give discounts for ordering groceries online. Flashfood may provide alerts to deals on overstocked grocery items. Martie also has offers on deeply discounted items.
“If you combine all of those things, you can save significantly on your groceries,” Bodge said.
The method of payment at the checkout counter may also lead to more savings, specifically concerning cash-back rewards through credit cards, she said.
To effectively use those perks, it’s important to maintain a balance you can pay off each month. Research from the Urban Institute shows Americans may be saddled with debt after turning to credit cards, buy now pay later programs and payday loans to pay for groceries. More

The Federal Reserve signaled that just one cut is expected before the end of the year, which means anyone who carries a balance on their credit card won’t get much relief from sky-high interest charges.
Rather than wait for a Fed move, consumers should take matters into their own hands, experts say.
Here are the best ways to lower your credit card’s annual percentage rate.

The Federal Reserve left rates unchanged last week and signaled that only one cut is expected before the end of the year. That means anyone who carries a balance on their credit card won’t be getting much of a break from sky-high interest charges.
“Consumers need to understand that the cavalry isn’t coming anytime soon, so the best thing you can do is take things into your own hands when it comes to lowering credit card interest rates,” said Matt Schulz, chief credit analyst at LendingTree.

The good news is there are options out there, especially if you have solid credit, he added.

Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. In the wake of the recent rate hike cycle, the average credit card rate rose from 16.34% in March 2022 to almost 21% today — near an all-time high, according to Bankrate.
“As long as interest rates remain relatively high, it’s important that consumers continue to use credit smartly, especially when it comes to higher interest products such as credit cards,” Michele Raneri, vice president of U.S. research and consulting at TransUnion, recently told CNBC.
“It’s best to only use these cards to the extent there is confidence they can be paid off relatively soon, as interest can pile on quickly, particularly at the higher rates of today,” she added.

How to lower your credit card APR

Annual percentage rates will start to come down once the Fed cuts rates, but even then they will only ease off extremely high levels. Since the central bank now projects it will cut interest rates just once in 2024, APRs aren’t likely to fall much, Schulz explained.

“Those anticipating a dip in new credit card APRs in the near future should probably adjust their expectations,” Schulz said.
Rather than wait for a modest adjustment in the months ahead, borrowers could call their card issuer and ask for a lower rate, switch to a zero-interest balance transfer credit card or consolidate and pay off high-interest credit cards with a personal loan, Schulz advised.
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Cards offering 15, 18 and even 21 months with no interest on transferred balances are still out there, according to Ted Rossman, senior industry analyst at Bankrate.
“The fact that zero-percent balance transfer cards remain widely available, is, on its face, surprising,” said Rossman, particularly given the amount of inflation and the number of interest rate hikes the credit card market has weathered since the pandemic.
Meanwhile, U.S. consumers are carrying more credit card debt.
Total credit card balances have been above $1 trillion since August 2023 and are currently hovering around $1.12 trillion, according to the most recent report from the Federal Reserve Bank of New York.
But that hasn’t deterred credit card issuers from offering generous terms on balance transfer cards, Rossman said.

“It’s actually a very profitable time for credit card issuers because rates are up and more people are carrying more debt for longer periods of time,” Rossman said. “But most of those people are paying that debt back. If we were to see the job market worsen or delinquencies to go up even more, that’s when I think issuers get nervous. But right now, it’s kind of a Goldilocks environment for credit card issuers.”
It’s also an ideal time for consumers to take advantage of all the options credit card issuers are offering.
“Balance transfer cards are still your best weapon in the battle against credit card debt,” Schulz said.
A balance transfer credit card moves your outstanding debt from one or more credit cards onto a new card, typically with a lower interest rate.

Alternatively, “consumers should consider exploring lower interest products to help consolidate their higher interest debt and lower their monthly payments,” TransUnion’s Raneri said.
Currently, the interest rate on a personal loan is just above 12%, on average, according to Bankrate.
“If you don’t have good enough credit to get a zero-percent balance transfer card, a personal loan can be a good alternative,” Schulz also said.
And consolidating comes with the added benefit of letting you simplify outstanding debts while lowering your monthly payment.
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Car payments have skyrocketed in recent years due to a combination of high prices and high interest rates. While some relief may come soon, industry insiders say prices may still remain high for quite some time.
As of May, customers were paying, on average, $760 a month for an auto loan, according to Moody’s Analytics. While that is a drop from a high of $795 in December 2022, it is still a roughly 40% increase over the $535 average payment in May 2019.

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A near-record 17% of car owners are paying more than $1,000 a month, according to Edmunds, a car shopping site and industry data provider. Though slightly down from the record of 17.9% in the fourth quarter of 2023, the rate has remained above 17% for a year.
“The idea you’re going to pay $700, $800 a month for the next six years, I mean, it just sounds crazy for a depreciating asset,” said Charlie Chesbrough, senior economist for Cox Automotive, which owns Autotrader and Kelley Blue Book, plus provides a range of services for the auto industry.

‘Underwater’ trade-ins are bumping up payments

Many customers who bought vehicles at high prices in the middle of the Covid-19 pandemic are now “underwater” or have negative equity — meaning the loan on their car is larger than what the car is worth — by a record amount. In the first quarter, 23% of customers with trade-ins had negative equity of more than $6,167 on average, according to Edmunds.
The steep drop in used-car prices from pandemic-era highs has produced unusually high rates of depreciation for a lot of vehicles.

It is not uncommon for car owners to have a bit of negative equity on a vehicle when they trade it in. About one-third of trade-ins carried negative equity prior to the pandemic. It is the amount of negative equity that is concerning, says Edmunds Senior Director of Insights Ivan Drury.

Trading in a vehicle with negative equity often means the consumer rolls that balance owed into the new auto loan, resulting in higher payments, with higher interest rates, for longer periods.
In the first quarter of 2024, the average payment with a trade-in was $736, with an average interest rate of 7.1% for 68 months. The rate for a trade-in with negative equity was $887, at a rate of 8.1%, for nearly 76 months.
Steeper payments on that new car can create a kind of vicious cycle that dog consumers for much of their lives, Drury said.
“You’re paying off a car from like 10 or 15 years ago,” Drury said. “You’ve never actually paid off a vehicle. That means you’re constantly paying for something you don’t even own anymore.”

When and how car buyers may see pricing relief

Customers at a Ford dealership in Colma, California, on July 22, 2022.
David Paul Morris | Bloomberg | Getty Images

The good news for car shoppers is that incentives have risen over the course of the past year by 81%, according to Moody’s.
Incentives can vary. There are straightforward discounts on a car, sometimes called “cash on the hood.” There is interest rate subvention, where a customer might receive 0% interest for a certain number of months. There are also trade-in allowances, where a dealer might give an above-market price on a trade-in.
But it is unclear when the Federal Reserve will lower interest rates, and even when they do, there is about a six-month lag before those changes show up in auto loan rates.
The Federal Reserve does not determine auto loan rates, but it does determine the rate at which banks can borrow federal funds. Due to that, it influences the rates banks then charge customers for loans, including ones on cars. In addition, inflation pushes vehicle sticker prices higher.
“Inflation has remained a little higher and stickier than we thought,” said Mike Brisson, senior economist for Moody’s. “So the Fed’s expected date of lowering interest or lowering the prime rate has been pushed out. The manufacturers lower the interest rate artificially using incentives. So you’ll see some relief there. However, real relief in the actual interest rate isn’t going to come until after this year.”
That relief may be short lived, however. Longer-term structural changes to the auto market may keep prices — and payments — high for years to come.
Watch the video to learn more. More

The U.S. Department of the Treasury and the IRS on Monday unveiled a plan to “close a major tax loophole” used by large, complex partnerships.
The plan targets so-called “related party basis shifting,” and could raise more than $50 billion in tax revenue over the next 10 years.
Pass-through business filings with more than $10 million in assets increased 70% between 2010 and 2019, but the audit rate for these partnerships fell from 3.8% to 0.1% during that period, according to the Treasury. 

IRS Commissioner Danny Werfel testifies before the House Appropriations Committee in Washington, D.C., on May 7, 2024.
Kevin Dietsch | Getty Images

The U.S. Department of the Treasury and the IRS on Monday unveiled a plan to “close a major tax loophole” used by large, complex partnerships, which could raise more than an estimated $50 billion in tax revenue over the next 10 years.
The plan targets so-called “related party basis shifting,” where single businesses operating through different legal entities trade original purchase prices on assets to take more deductions or reduce future gains, according to the Treasury.

“These tax shelters allow wealthy taxpayers to avoid paying what they owe,” IRS Commissioner Danny Werfel told reporters on a press call Friday.  
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After a year of studying the basis-shifting issue, the agencies announced their intent to issue proposed regulations. They also released a revenue ruling on related-party partnership transactions involving basis shifting without “economic substance” for the parties or “substantial business purpose.”    
The plan builds on ongoing IRS efforts to increase audits on the wealthiest taxpayers, large corporations and complex partnerships.
“Treasury and the IRS are focused on addressing high-end tax abuse from all angles, and the proposed rules released today will increase tax fairness and reduce the deficit,” U.S. Secretary of the Treasury Janet Yellen said in a statement.

Pass-through business filings with more than $10 million in assets increased 70% between 2010 and 2019, but the audit rate for these partnerships fell from 3.8% to 0.1% during that period, according to the Treasury. 
This has contributed to an estimated $160 billion a year tax gap — the shortfall between what is owed and collected — attributed to the top 1% of tax filers, the agency said.

The battle over IRS funding

The announcement comes less than one week after President Joe Biden’s top economic advisor unveiled his “key principles” for tax policy, including sustained IRS funding.  
“We should ensure ultra-wealthy taxpayers pay what they owe and play by the same rules by maintaining the President’s investment in the IRS,” White House National Economic Council advisor Lael Brainard told reporters Wednesday during a press call.
IRS funding has been a target for Republicans since Congress approved nearly $80 billion in funding via the Inflation Reduction Act. More

The Cisco logo is displayed in front of Cisco headquarters on February 09, 2024 in San Jose, California. 
Justin Sullivan | Getty Images

Dividend-paying stocks can give investors an opportunity to cushion their portfolios from market volatility — and they can also enhance returns.
Selecting the right dividend stocks is no easy feat for investors. Wall Street’s best analysts have insight into companies’ ability to provide attractive dividend yield and upside for the long term.

Here are three attractive dividend stocks, according to Wall Street’s top pros on TipRanks, a platform that ranks analysts based on their past performance.
Kimberly-Clark
Consumer products giant Kimberly-Clark (KMB) is this week’s first dividend pick. The owner of popular brands like Huggies and Kleenex is a dividend king, a term used for companies that have raised their dividends for at least 50 consecutive years.
In the first quarter of 2024, Kimberly-Clark returned $452 million to shareholders in the form of dividends and share repurchases. With a quarterly dividend of $1.22 per share ($4.88 on an annualized basis), KMB offers a dividend yield of 3.5%.
Earlier this month, RBC Capital analyst Nik Modi upgraded his rating for KMB stock to buy from hold and boosted the price target to $165 from $126. The upgrade followed a thorough assessment of the company following its analyst day event in March, which reflected that KMB has “shifted from a cost-focused company to a growth-oriented enterprise.”
Modi thinks that KMB is well-positioned for faster and more reliable growth. He is now confident about the company achieving its long-term targets, including a gross margin of 40% and a compound annual growth rate of more than 3% (local currency) in revenue by 2030.

The analyst attributed Kimberly-Clark’s transformation to the leadership of its CEO Mike Hsu. He acknowledged that the company’s decision to reorganize into three business units (North America, International Personal Care, and International Family and Professional) was a step in the right direction. It brought down KMB’s product costs and enhanced speed to market.
Modi ranks No. 593 among more than 8,800 analysts tracked by TipRanks. His ratings have been profitable 61% of the time, delivering an average return of 6.8%. (See Kimberly-Clark’s Stock Buybacks on TipRanks) 
Chord Energy
Next on the list is Chord Energy (CHRD), an oil and gas operator in the Williston Basin. In June, the company paid a base dividend of $1.25 per share and a variable dividend of $1.69 per share.
Chord Energy recently announced the completion of its acquisition of Enerplus. The company expects the deal to strengthen its position in the Williston Basin, with enhanced scale, low-cost inventory, and solid shareholder returns.
Following the announcement, Mizuho analyst William Janela reaffirmed a buy rating on CHRD stock with a price target of $214. The analyst highlighted that the company increased its estimate for annualized deal synergies by $50 million, or 33%, to more than $200 million.
Janela thinks that given the well productivity of both Chord Energy and Enerplus in the Williston Basin, the focus will now be on the combined company’s enhanced operational scale. Moreover, the deal will result in above-average cash returns, with about a 9% payout yield and below-average financial leverage.
“Relative valuation remains attractive with shares trading at a discount to peers on FCF/EV [Free Cash Flow/ Enterprise Value],” said Janela. 
Janela ranks No. 333 among more than 8,800 analysts tracked by TipRanks. His ratings have been successful 57% of the time, delivering an average return of 29.9%. (See Chord Energy Stock Charts on TipRanks) 
Cisco Systems
Our third pick is dividend-paying technology stock Cisco Systems (CSCO). The networking giant paid $2.9 billion to shareholders in the third quarter of fiscal 2024, including dividends worth $1.6 billion and share repurchases of $1.3 billion. At a quarterly dividend of 40 cents per share, CSCO offers a dividend yield of 3.5%.
In reaction to the recently held investor and analyst day, Jefferies analyst George Notter reiterated a buy rating on Cisco stock with a price target of $56. The analyst said that he feels more positive about the company’s prospects after the event and has better clarity on its strategy with regard to Splunk. Cisco completed the acquisition of Splunk, a cybersecurity company, in March 2024.
At the event, the company maintained its Q4 fiscal 2024 guidance and continues to expect low-to-mid-single-digit revenue growth in fiscal 2025. Regarding the company’s fiscal 2026 and 2027 targets, Notter said, “We thought the 4-6% Y/Y revenue growth targets looked pretty good.” Cisco expects its earnings per share (EPS) to grow by 6% to 8% in Fiscal 2026-2027, with improved gross margins. 
The analyst explained that Cisco’s long-term growth targets look good, given that the company has been growing its revenue at a rate of 1% to 3% in a period spanning more than the past decade.   
Notter ranks No. 629 among more than 8,800 analysts tracked by TipRanks. His ratings have been profitable 62% of the time, delivering an average return of 10.1%. (See Cisco Hedge Fund Activity on TipRanks)  More

The topic of student loan forgiveness sparks heated feelings about fairness, personal responsibility and economic soundness.
Why is the subject so fraught? CNBC asked a range of experts for their thoughts.

D’Aungilique Jackson, of Fresno, California, holds a “Cancel Student Debt” sign outside the U.S. Supreme Court in Washington, D.C., after the nation’s high court struck down President Joe Biden’s student debt relief program on Friday, June 30, 2023.
Kent Nishimura | Los Angeles Times | Getty Images

It took Arkansas Attorney General Tim Griffin around 30 years to pay off his $100,000 student loan balance. He told CNBC that he wonders why other borrowers should just get their debt wiped away and has battled President Joe Biden’s efforts to cancel the loans.
The topic of student loan forgiveness sparks heated feelings about fairness, personal responsibility and economic soundness. The Biden administration’s most recent student loan forgiveness proposal garnered a record number of public comments, with over 148,000 people sharing their opinion.

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When Marlon Fox, a chiropractor in North Charleston, South Carolina, got his $119,500 student debt forgiven last year, he didn’t tell many people his story. He lives in a mostly Republican area where there is deep skepticism toward forgiving the debt of those who’ve benefited from higher education.
“They say, ‘Hey, you got your school loans paid off? That’s unfair,'” Fox told CNBC last year.
Why is the subject of student loan forgiveness so fraught? CNBC asked a range of different experts for their thoughts.

’A common-sense fairness question’

“There is a common-sense fairness question when it comes to erasing student debt,” Griffin wrote in an email to CNBC. He served as Arkansas’ lieutenant governor before he was sworn in as attorney general in 2023.

“It’s not that the debt doesn’t get paid, it’s that the debt gets paid using existing resources, which comes from taxpayers,” Griffin said. This spring, he and attorneys general at six other states brought a lawsuit against the Biden administration’s new repayment plan, known as the Saving on a Valuable Education, or SAVE, plan, which leads to a faster path to debt forgiveness.
“How is it fair for someone like me, who paid back my student loans, or for someone who never went to college in the first place and therefore does not have student debt, to have our tax dollars cover the personal debts of other people?” he said.

‘A narrative of personal responsibility’

To understand our attitudes about debt today, we need to look back in time, said Kate Padgett Walsh, a professor of philosophy at Iowa State University who researches the ethics of borrowing.
“Long before the invention of money, human beings were indebted to one another in families and small communities,” she said. “Children are indebted to parents for care, family and friends likewise become indebted to one another when we help each other out. Repaying these debts is part of how we all live together and build communities. Debts are a basic feature of human life with one another.”
“A person who receives the benefits of family, friends, and community without contributing their fair share is failing to be a responsible member of the group,” she added.

But the reason so many people today feel that failing to repay debts is irresponsible is because they’ve been “inundated with that message” from entities who profit from it, Padgett Walsh said.
“Lenders and businesses — especially now, given how much of our consumption is propped up by debt —profit from people taking out debt and feeling obligated to pay it back,” she said. “So, they encourage us to take out as much debt as we can possibly bear, and then insist that it would be morally wrong not to repay it.”
“We buy into this message in part because it resonates with our basic sense of an obligation to repay debts to family, friends and community that existed before money was invented,” Padgett Walsh said.
“But that can blind us to some of the real harms caused by actual forms of financial debt,” she said. “Our priorities should be preventing and alleviating student debt, rather than insisting on a narrative of personal responsibility.”

‘Different relationships to the education system’

“One reason why loan forgiveness is such a partisan issue is that members of each party have different relationships to the educational system,” said Devin Singh, an associate professor of religion at Dartmouth College and author of the forthcoming book, “Sacred Debt.”
“Statistically, a higher percentage of Democratic voters graduated from a four-year college and attended graduate school. So student loan forgiveness may affect more Democrats than Republicans directly.”
“The fact that most Americans don’t have a college degree may also mean that many resist loan forgiveness because student debt is not their problem and so forgiveness does not appear to directly benefit them,” said Singh, whose work has included explorations of the intersection of religion with politics and with economics.
The different parties also have different understandings of the role of higher education, he added.
“Democrats may express views about education contributing to the public good and supporting an engaged citizenry. Some who oppose student loan forgiveness view education as a private commodity that benefits the person who purchases it.”

‘A generational gap’

“I think there’s also a lot of misconceptions about fairness,” said Charlie Eaton, an associate professor of sociology at the University of California, Merced.
“A lot of people have trouble putting themselves in the shoes of a student loan borrower if they haven’t been one,” he said. “There’s a generational gap. A lot of older Americans didn’t have to borrow to go to college.”
“A lot of people also don’t understand many student loan borrowers who haven’t been able to pay off their debts have been making payments,” Eaton said. “It’s not they’re not making payments on their debts, but that the interest on the debt is so great that even when they’re making payments, the size of the debt still goes up.”

Fox, the chiropractor who got his debt forgiven last year, had been paying off his student debt since 1988.
Over those years, he paid around $200,000. He originally borrowed close to $60,000. More

Social Security beneficiaries may face an across-the-board benefit cut in the next decade if Congress does not take action sooner.
While Congress seems to be at a standstill, some say a bipartisan commission is the answer.
Here’s why the idea has drawn both fierce opposition and fierce support.

zimmytws | iStock | Getty Images

A protester interrupted a January congressional committee hearing to consider a bill that would create a bipartisan commission to address Social Security. “A vote for a commission is a vote to cut Social Security,” the man shouted before he was escorted off the floor.
While there was a protest of one that day, there has been a chorus of opposition to the idea of creating a commission, as well as strong support — from experts and politicians on both the left and the right.

The combined trust funds Social Security relies on to pay benefits are now projected to be depleted in 2035. On that date, the program will be able to pay just 83% of benefits.
But another date — the depletion of the trust fund specifically devoted to retirement benefits — is approaching sooner. Less than a decade from now, in 2033, Social Security may pay just 79% of those benefits.
Most Americans, 89%, think Congress should act immediately to make sure full benefits are available to both current and future beneficiaries, a 2023 AARP poll found. And 90% said Republicans and Democrats should work together to find a solution.

“We all as Americans want to get ourselves into a room, face the facts, make the hard choices and then communicate with the public about how we save this program,” said Rep. Scott Peters, D-Calif., in an interview with CNBC.
Peters is pushing for the Fiscal Commission Act alongside Rep. Bill Huizenga, R-Mich., and Sens. Joe Manchin, I-W.Va., and Mitt Romney, R-Utah.

The bill would create a commission to provide policy recommendations to address the federal government’s long-term fiscal issues, and those proposals could get expedited consideration from Congress. The commission would also be responsible for a public awareness campaign to educate Americans about the country’s current fiscal situation.
Another Democratic leader — Rep. John Larson of Connecticut — has vehemently opposed the proposal, due to the closed-door nature of the negotiations and the priority consideration any ensuing recommendations would receive.
“It’s probably one of the most undemocratic things that a Congress has ever put forward,” Larson said.
Instead, Larson is championing his own bill, Social Security 2100, to improve the program’s solvency and expand benefits through tax increases targeted at the wealthy.
Social Security advocacy groups have also staunchly opposed efforts to create a commission.
“This is a thinly veiled effort to avoid political accountability,” Nancy Altman, president of Social Security Works, recently testified in an April congressional committee hearing.

How the last major reforms, in 1983, came together

President Ronald Reagan signs the Social Security Act Amendment into law on April 20, 1983.
Corbis | Getty Images

The last major Social Security reforms, which were enacted in 1983, were preceded by a commission.
The National Commission on Social Security Reform, formed in 1981, is often called the Greenspan Commission, after its chairman, economist Alan Greenspan, who more famously served as chairman of the Federal Reserve.
“Most commissions, of course, don’t do anything,” Greenspan wrote in his 2007 memoir, “The Age of Turbulence.” “But [White House chief of staff] Jim Baker, the architect of this one, believed passionately the government could be made to work.”
The bipartisan commission included 15 members chosen either by the White House, the Senate majority leader or the Speaker of the House. Every commissioner was an “all-star in his or her field,” according to Greenspan.
“I ran the commission in the spirit that Jim Baker had envisioned, aiming for an effective bipartisan compromise,” Greenspan wrote.
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The group had a tall task — to come up with recommendations to solve the financing crisis the program faced at the time.
The Social Security amendments President Ronald Reagan signed into law in 1983 “involved pain for everyone,” Greenspan wrote.
The changes involved taxes on Social Security benefits, increases to payroll tax rates, a future increase to the retirement age and a near-term postponement of cost-of-living adjustments.
At the time, the changes were projected to enable Social Security to pay full benefits through 2057.
Today, the projected date is 2035, with rising income inequality contributing to the depletion dates being pushed up, according to the Economic Policy Institute and other experts. Social Security payroll taxes are capped at $168,600 in earnings. As wage growth for high earners outpaces average wage growth, more income falls above the threshold where it is not subject to Social Security payroll taxes, the EPI says.

‘Not an example of a successful bipartisan commission’

The 1983 legislation is often touted as a grand bipartisan bargain between Reagan, a Republican, and House Speaker Tip O’Neill, a Democratic congressman from Massachusetts.
Yet some Greenspan Commission participants have opposed using it as a future model for reform.
One prominent critic was Robert M. Ball, who served as the commissioner for Social Security under three presidents and who represented O’Neill on the Greenspan Commission.
“Nothing, however, should obscure the fact that the National Commission on Social Security Reform was not an example of a successful bipartisan commission,” Ball wrote in a portion of the memoir he was working on when he died in 2008. The memoir, “The Greenspan Commission: What Really Happened,” was published in 2010.
“The commission itself stalled — essentially deadlocked despite continuing to talk — after reaching agreement on the size of the problem that needed to be addressed,” Ball wrote. “As a commission, that was as far as it got.”

Social Security Commission Chairman Alan Greenspan, left, shakes hands with Sen. Charles Grassley, R-Iowa, prior to a Social Security hearing on Feb. 15, 1983. At right is Sen. Bob Dole, R-Kan., chairman of the Senate Finance Committee. In the background is Sen. John Danforth, R-Mo.
Bettmann | Bettmann | Getty Images

More recently, in November, five staff members who worked on the commission — including Altman of Social Security Works, who served as Greenspan’s executive assistant — issued a statement to urge policymakers not to use it as a model to fast-track changes including benefit cuts.
“In the end, they left a big hunk of the problem to be solved by the Congress, which solved it,” Bruce D. Schobel, who served as a staff actuary on the commission and signed the statement, said in an interview with CNBC.
The increase to the retirement age that is still getting phased in today resulted from House amendment, rather than from a commission recommendation, the staff members said in their statement.
Since 1983, there have been similar efforts to create a commission to consider Social Security that have failed, the staff members noted.
“Congress should address Social Security in the sunshine through regular order, as it always has,” the staff members wrote.

Lawmakers divided on best path forward

Today, lawmakers are divided on the best path forward to address Social Security.
Larson, the Democratic congressman representing Connecticut, hopes to advance his bill.
The Social Security 2100 proposal currently has almost 200 Democratic House co-sponsors. The bill would provide a host of benefit increases — including a 2% across-the-board benefit boost — which would be paid for by adding Social Security payroll and investment taxes for individuals with earnings above $400,000.
A similar proposal put forward by Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt., would apply tax increases for earnings over $250,000.
If the Social Security 2100 bill makes it to the floor, it may pass “overwhelmingly” on a bipartisan basis, Larson predicts.
“Congress needs to vote,” Larson said.
But Peters — the Democratic congressman representing California — said he believes a bipartisan commission is the answer after Social Security 2100 failed to move forward even under Democratic control of the White House and Congress.
“I think the other efforts are honest efforts and they’re just not going to pass,” Peters said.

House Minority Leader Hakeem Jeffries, D-N.Y., conducts a news conference on Democrats’ plan to “secure and expand” Social Security, in the Capitol Visitor Center, May 23, 2023. From left are Reps. John Larson, D-Conn., Brian Higgins, D-N.Y., Jimmy Gomez, D-Calif., Jeffries, Dan Kildee, D-Mich., and Richard Neal, D-Mass.
Tom Williams | CQ-Roll Call, Inc. | Getty Images

He said that by waiting until the last minute ahead of the projected depletion date, lawmakers who are facing a 21% across-the-board benefit cut may instead negotiate that down to 15%.
“If I wanted to cut Social Security, [if] that was my goal, what I would do is do nothing,” Peters said. “My goal is not to have any cuts.”
The 1983 reform efforts are a lesson to not wait until the last minute, he said.
“When you say, ‘Don’t touch Social Security’ in the situation it’s in, it’s like telling the doctor not to treat the cancer patient in the hospital,” Peters said. “It’s just dumb.”
The Fiscal Commission Act has drawn criticism from both Social Security advocates on the left and notable figures on the right, including former House Speaker Newt Gingrich and Grover Norquist, president of Americans for Tax Reform.
Peters takes opposition as a sign they’re in the “right spot” for bipartisanship.
“I don’t understand why anyone would do this job if they don’t want to fix these big problems,” Peters said. “And that’s why we’re sent here explicitly.”
Experts including Altman have said the future of Social Security is on the ballot this November.
The AARP is posing one question — What is your position on Social Security? — to all candidates for federal office this year. More