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    U.S. Credit Rating Is Downgraded by Fitch

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    The ratings agency, which lowered the U.S. long-term rating from its top mark, said debt-limit standoffs had eroded confidence in the nation’s fiscal management.The long-term credit rating of the United States was downgraded on Tuesday by the Fitch Ratings agency, which said the nation’s high and growing debt burden and penchant for brinkmanship over America’s authority to borrow money had eroded confidence in its fiscal management.Fitch lowered the U.S. long-term rating to AA+ from its top mark of AAA. The downgrade — the second in America’s history — came two months after the United States narrowly avoided defaulting on its debt. Lawmakers spent weeks negotiating over whether the United States, which ran up against a cap on its ability to borrow money on Jan. 19, should be allowed to take on more debt to pay its bills. The standoff threatened to tip the United States into default until Congress reached a last-minute agreement in May to suspend the nation’s debt ceiling, which allowed the United States to keep borrowing money.Despite that agreement, the federal government now faces the prospect of a shutdown this fall, as lawmakers spar over how, where and what level of federal funds should be spent. The nonstop dueling over federal spending was a major factor in Fitch’s decision to downgrade America’s debt.“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch said in a statement. “In addition, the government lacks a medium-term fiscal framework, unlike most peers, and has a complex budgeting process.”Fitch pointed to the growing levels of U.S. debt in recent years as lawmakers passed new tax cuts and spending initiatives. The firm noted that the U.S. had made only “limited progress” in tackling challenges related to the rising costs of programs such as Social Security and Medicare, whose costs are expected to soar as the U.S. population ages.Fitch is one of the three major credit ratings firms, along with Moody’s and S&P Global Ratings. In 2011, S&P downgraded the U.S. credit rating amid a debt-limit standoff — the first time the United States was removed from a list of risk-free borrowers.By one common measure, Fitch’s move downgrades America’s credit rating not only under the rating agency’s own assessment, but also for the blended rating of the three largest agencies.At the margin, the move by Fitch could limit the number of investors able to buy U.S. government debt, analysts have warned. Some investors are bound by constraints on the quality of the debt they can buy, and those that require a pristine credit rating across the three major agencies will now need to look elsewhere to fulfill investment mandates.That could nudge up the cost of the government’s borrowing at a time when interest rates are already at a 22-year high. Most analysts, however, doubt that the impact will be severe given the sheer size of the Treasury market and the ongoing demand from investors for U.S. Treasury securities.Still, the downgrade is a blemish on the nation’s record of fiscal management. The Biden administration on Tuesday offered a forceful rebuttal of the Fitch decision — criticizing its methodology and arguing that the downgrade did not reflect the health of the U.S. economy.“Fitch’s decision does not change what Americans, investors, and people all around the world already know: that Treasury securities remain the world’s pre-eminent safe and liquid asset, and that the American economy is fundamentally strong,” Treasury Secretary Janet L. Yellen said in a statement.Ms. Yellen described the change as “arbitrary” and noted that Fitch’s ratings model showed U.S. governance deteriorating from 2018 to 2020 but that it did not make changes to the U.S. rating until now.Biden administration officials, speaking on the condition of anonymity, said that they had been briefed by Fitch ahead of the downgrade and made their disagreements known. They noted that Fitch representatives repeatedly brought up the Jan. 6, 2021, insurrection as an area of concern about U.S. governance.The downgrade came on the same day that former President Donald J. Trump was indicted in connection with his widespread efforts to overturn the 2020 election, which fueled the Jan. 6 riot.Senator Chuck Schumer of New York, the majority leader, said the Fitch downgrade was the fault of Republicans, who refused to raise America’s borrowing cap without steep concessions. He urged them to stop using the debt limit for political leverage.“The downgrade by Fitch shows that House Republicans’ reckless brinkmanship and flirtation with default has negative consequences for the country,” Mr. Schumer said.The debt limit agreement reached in June cuts federal spending by $1.5 trillion over a decade, in part by freezing some funding that was projected to increase next year and capping spending to 1 percent growth in 2025.Lawmakers and the White House avoided making big cuts to politically sensitive — and expensive — initiatives, including retirement programs. Even with the spending curbs the national debt — which is over $32 trillion — is poised to top $50 trillion by the end of the decade.It is unlikely that the downgrade by Fitch will convince lawmakers to drastically change the fiscal trajectory of the United States.“Instead of effectuating change, or fiscal discipline, our base case expectation is that Fitch will be pilloried by most members of Congress,” said Henrietta Treyz, director of macroeconomic policy research at Veda Partners. “It will not yield either deficit reduction, tax increases, reductions in military spending, entitlement reform or a change to the 12 appropriations bills that have already moved with substantial bipartisan support in the U.S. Senate.” More

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    Strong Economic Data Buoys Biden, but Many Voters Are Still Sour

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    Voters continue to rate the president poorly on economic issues, but there are signs the national mood is beginning to improve.President Biden and his aides are basking in what is arguably the best run of economic data to date in his presidency. Inflation is cooling, business investment is rising, job growth is powering on and surveys suggest rising economic optimism among consumers and voters.Polls still show Mr. Biden remains underwater on his handling of the economy, with voters more likely to disapprove of his performance than approve of it. Yet there are signs that voters may be brightening their assessment of the economy under Mr. Biden, in part thanks to the mounting effects of the infrastructure, manufacturing and climate bills he has signed into law.The run of positive economic news comes as his administration looks to credit “Bidenomics” for a sustained run of positive data.The economy grew at a 2.4 percent annual rate in the second quarter of the year, handily beating economists’ expectations, the Commerce Department reported last week. Price growth slowed in June even as consumer spending picked up. The Federal Reserve’s preferred measure of year-over-year inflation, the Personal Consumption Expenditures Index, has now fallen to 3 percent this year from about 7 percent last June — easing the pressure on Mr. Biden from the economic problem that has bedeviled his presidency thus far.And in less visible but significant ways, there are signs that Mr. Biden’s signature economic policies may be starting to bear fruit, most notably in a steep rise in factory construction. Government data released Tuesday showed that boom continued in June, with spending on manufacturing facilities up nearly 80 percent over the previous year. The manufacturing sector as a whole has added nearly 800,000 jobs since Mr. Biden took office and now employs the most people since 2008.“The public policy changes that have been put in place over the past two years are now starting to show up in the data,” said Joseph Brusuelas, chief economist at RSM. He said the increased investment was “undoubtedly linked” to government policies, in particular the CHIPS Act, which aimed to promote domestic manufacturing, and the Inflation Reduction Act, which targeted low-emission energy technologies to combat climate change.As Mr. Biden gears up for his re-election campaign, perhaps what is most encouraging to him is that consumer confidence is rising to levels not seen since the early months of his tenure in the White House, before inflation surged. Measures by the University of Michigan and the Conference Board suggest consumers have grown happier with the current state of the economy and more hopeful about the year ahead.That change in attitude may reflect an underlying economic reality: The combination of cooling inflation, low unemployment and rising pay means that American workers are seeing their standard of living improve. Hourly wages outpaced price gains in the spring for the first time in two years, giving consumers more purchasing power.National opinion polls still show a sour economic mood — but it appears to be improving slightly.In a new New York Times/Siena College poll, 49 percent of respondents rated the economy as “poor,” compared with 20 percent who called it “excellent” or “good.” That’s an improvement from last summer, when 58 percent of Americans in another Times/Siena poll called the economy “poor” and just 10 percent rated it “excellent” or “good.”Administration officials attribute the economy’s strength, particularly in the labor market, to the direct aid to individuals, businesses and state and local governments that was included in the $1.9 trillion stimulus package that Mr. Biden signed into law in 2021.Economists generally blame that same stimulus package for some of the rapid spike in inflation that ensued largely after its passage. But the recent moderation in price growth is emboldening officials to cite the bill as more of a positive factor, saying it helped keep consumers spending and businesses operating, speeding the return to a low unemployment rate.“The American Rescue Plan was designed for both getting the economy back up and running but making sure there was enough wiggle room to deal with challenges that could come down the pipeline,” Heather Boushey, a member of Mr. Biden’s Council of Economic Advisers, said in an interview. “And that has been, I think, very, very successful in getting people back to work. This has been the sharpest recovery in decades, in terms of job creation. We have outperformed our economic competitors.”Economic officials inside and outside the administration warn that risks remain as policymakers seek to achieve a so-called soft landing, bringing down sky-high inflation without triggering a recession. And many Republicans dispute the president’s claims that his policies have bolstered the economy. They note that inflation remains well above historical averages and that for many American workers, wage gains under Mr. Biden have failed to keep pace with rising prices.“Even if inflation ‘is less,’ those prices are not going down,” Gov. Ron DeSantis of Florida, a Republican presidential candidate, told Fox News this week. For a middle-class family, “affording a home is prohibitive,” he said. “If you look at the median income compared to the median home price, there’s a bigger gap than there was when the financial crisis hit after the big housing increase in 2006 and 2007. Cars are becoming less affordable; people feel that squeeze.”Some forecasters, including at the Conference Board, continue to predict the economy will fall into recession by the end of the year. They cite indicators that have frequently signaled downturns in the past, most notably the rapid decline in lending from both small and large banks.Tightening credit conditions, as reported this week by the Fed, “are consistent with G.D.P. growth slowing to recession territory in coming quarters,” researchers at BNP Paribas wrote this week.Yet most independent economists agree that the U.S. recovery has been stronger than expected. They are less united on how much credit Mr. Biden’s policies deserve for it. The decline in inflation, they say, is mostly the result of the Fed’s aggressive efforts to combat it, helped along by some good luck as oil prices have fallen and the pandemic’s disruptions have faded.Consumer confidence is rising to levels not seen since the early months of Mr. Biden’s presidency.Amir Hamja/The New York TimesThe resilience of the labor market — and the strength of the broader economy — is almost certainly the result, at least in part, of the trillions of dollars of aid that the federal government pumped into the economy in 2020 and 2021, which helped prevent the widespread bankruptcies, foreclosures and business failures that stymied the recovery from the Great Recession a decade and a half ago. But much of that came under President Donald J. Trump, and economists disagree about how much Mr. Biden’s stimulus package specifically helped the recovery.Still, recent economic developments have seemed to bear out one of the arguments that Democrats made early in Mr. Biden’s term: that the risks of doing too little to help the economy outweighed the risks of doing too much. Too little aid could leave the U.S. economy facing another “lost decade” of slow growth similar to the one that followed the last recession. Too much aid might cause inflation — but that, unlike slow growth, is a problem the Fed knows how to solve.Risks remain in the months to come. Inflation could pick back up, particularly if oil prices continue to rise, as they have in recent weeks. The job market could deteriorate, leading to a sharp rise in unemployment. Many forecasters still expect a recession to begin this year or early next.Drawing a straight line from government policies to economic outcomes is always difficult, especially in real time. But recent economic data has, at the very least, looked consistent with the Biden administration’s theory of how its policies would affect the economy.Administration officials point in particular at what they have begun referring to as the “hockey-stick graph”: a steep upward climb in investment in factory construction over the past two years, which they attribute to spending and tax incentives in several bills that Mr. Biden championed and signed into law. Those include bipartisan measures to boost infrastructure and advanced manufacturing, and a bill passed last year by Democrats when they controlled Congress that focused heavily on spurring new development in low-emission energy technologies to combat climate change.Private-sector analysts have largely agreed that policies have played a significant — though hard to quantify — role in the manufacturing construction boom in recent months. That, in turn, has helped to fuel a surprising increase in business investment more broadly, which helped lift economic growth in the spring even as consumer spending slowed.Even Treasury officials acknowledge significant risks to the economy in the months to come. Privately, many of Mr. Biden’s aides express at least some uncertainty about whether a soft landing is now assured.But the combination of solid growth, low unemployment and cooling inflation has made forecasters increasingly optimistic that the United States can avoid a recession that many of them once thought was inevitable.“You’ve got to look at that and say the probability of a soft landing has gone up,” said Jay Bryson, chief economist at Wells Fargo. More

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    The Fed’s Difficult Choice

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    The Federal Reserve has raised interest rates again. When should it stop?After raising interest rates again yesterday, the Federal Reserve now faces a tough decision.Some economists believe that the Fed has raised its benchmark rate — and, by extension, the cost of many loans across the U.S. economy — enough to have solved the severe inflation of the past couple years. Any further increases in that benchmark rate, which is now at its highest level in 22 years, would heighten the risk of a recession, according to these economists. In the parlance of economics, they are known as doves.But other experts — the hawks — point out that annual inflation remains at 3 percent, above the level the Fed prefers. Unless Fed officials add at least one more interest rate increase in coming months, consumers and business may become accustomed to high inflation, making it all the harder to eliminate.For now, Jerome Powell, the Fed chair, and his colleagues are choosing not to take a side. They will watch the economic data and make a decision at their next meeting, on Sept. 20. “We’ve come a long way,” Powell said during a news conference yesterday, after the announcement that the benchmark rate would rise another quarter of a percentage point, to as much as 5.5 percent. “We can afford to be a little patient.”The charts below, by our colleague Ashley Wu, capture the recent trends. Inflation is both way down and still somewhat elevated, while economic growth has slowed but remains above zero.Sources: Bureau of Labor Statistics; Bureau of Economic Analysis | By The New York TimesToday’s newsletter walks through the dove-vs.-hawk debate as a way of helping you understand the current condition of the U.S. economy.The doves’ caseThe doves emphasize both the steep recent decline in inflation and the forces that may cause it to continue falling. Supply chain snarls have eased, and the strong labor market, which helped drive up prices, seems to be cooling. “A happy outcome that not long ago seemed like wishful thinking now looks more likely than not,” the economist Paul Krugman wrote in Times Opinion this month.Economists refer to this happy outcome — reduced inflation without a recession — as a soft landing. The doves worry that a September rate hike could imperil that soft landing. (Already, corporate defaults have risen.)“It’s crystal clear that low inflation and low unemployment are compatible,” Rakeen Mabud, an economist at the Groundwork Collaborative, a progressive think tank, told our colleague Talmon Joseph Smith. “It’s time for the Fed to stop raising rates.”A recession would be particularly damaging to vulnerable Americans, including low-income and disabled people. The tight labor market has drawn more of them into work and helped them earn raises.The hawks’ caseThe hawks see the risks differently. They point to some signs that the official inflation rate of 3 percent is artificially low. Annual core inflation — a measure that omits food and fuel costs, which are both volatile — remains closer to 5 percent.“The Fed should not stop raising rates until there is clear evidence that core inflation is on a path to its 2 percent target,” Michael Strain of the American Enterprise Institute writes. “That evidence does not exist today, and it probably will not exist by the time the Fed meets in September.” (Adding to the hawks’ case is the fact that big consumer companies like Unilever keep raising their prices, J. Edward Moreno of The Times explains.)Fed officials themselves have argued that it’s important to tame inflation quickly to keep Americans from becoming used to rising prices — and demanding larger raises to keep up with prices, which could in turn become another force causing prices to rise.At root, the hawk case revolves around the notion that reversing high inflation is extremely difficult. When in doubt, hawks say, the Fed should err on the side of vigilance, to keep the U.S. from falling into an extended and damaging period of inflation as it did in the 1970s.And where do Fed officials come down? They have the advantage of not needing to pick a side, at least not yet. Between now and September, two more months of data will be available on prices, employment and more. Powell yesterday called a September rate increase “certainly possible,” but added, “I would also say it’s possible that we would choose to hold steady.”As our colleague Jeanna Smialek, who covers the Fed, says, “They have every incentive to give themselves wiggle room.”More on the FedThe Fed’s economists are no longer forecasting a recession this year.Powell noted that the labor force has been growing. “That’s good news for the Fed, because it helps ease the labor shortage without driving up unemployment,” Ben Casselman wrote.Responding to a question from Jeanna, Powell said it was good that consumer demand for the “Barbie” movie was so high — but that persistently high spending could be a reason for a future rate increase.Stock indexes rose after the Fed announced the increase, but fell after Powell delivered his economic outlook.THE LATEST NEWSWar in UkraineA Ukrainian soldier on the front line in eastern Ukraine.Tyler Hicks/The New York TimesUkraine appears to be intensifying its counteroffensive. Reinforcements are pouring into the fight, many trained and equipped by the West.The attack looks to be focused in the southern region of Zaporizhzhia, with the aim of severing Russian-occupied territories in Ukraine.U.S. officials said the assault was timed to take advantage of turmoil in the Russian military.PoliticsA judge halted Hunter Biden’s plea deal on tax charges after the two sides disagreed over how much immunity it granted him.In her first Supreme Court term, Ketanji Brown Jackson secured a book deal worth about $3 million, the latest justice to parlay fame into a big book contract.Mitch McConnell, the 81-year-old Senate Republican leader, abruptly stopped speaking during a Capitol news conference and was escorted away. He spoke in public again later.A former intelligence officer told Congress that the U.S. government had retrieved materials from U.F.O.s. The Pentagon denied his claim.Rudy Giuliani admitted to lying about two Georgia election workers he accused of mishandling ballots in 2020.Representative George Santos used his candidacy and ties to Republican donors to seek moneymaking opportunities.Other Big StoriesGetty ImagesSinead O’Connor, the Irish singer who had a No. 1 hit with “Nothing Compares 2 U,” died at 56. She drew a firestorm when she ripped up a photo of the pope on live TV.The heat wave that has scorched the southern U.S. is bringing 100-degree heat to the Midwest. The East Coast is probably next.Israel’s Supreme Court agreed to hear petitions challenging the new law limiting its power.Soldiers in Niger ousted the president and announced a coup.Gap hired Richard Dickson, the Mattel president who helped revitalize Barbie, as its chief executive.The messaging platform Slack was having an outage this morning.OpinionsCongress should create an agency to curtail Big Tech, Senators Lindsey Graham, a Republican, and Elizabeth Warren, a Democrat, argue.Thousands of Americans drown every year. More public pools would help, Mara Gay writes.Here are columns by Nicholas Kristof on affirmative action and Pamela Paul on the so-called Citi Bike Karen.MORNING READSEternally cool: Fans keep you dry on a hot day. They let you channel Beyoncé. They say, “I love you.” Can an air-conditioner do that?The yips: A star pitcher lost her ability to throw to first base. Now, she helps young athletes with the same problem.Spillover: Could the next pandemic start at the county fair?Lives Lived: Bo Goldman was one of Hollywood’s most admired screenwriters, winning Oscars for “One Flew Over the Cuckoo’s Nest” and “Melvin and Howard.” He died at 90.WOMEN’S WORLD CUPThe Dutch midfielder Jill Roord, left, and Lindsey Horan of the U.S. team.Grant Down/Agence France-Presse — Getty ImagesA second-half goal from the co-captain Lindsey Horan gave the U.S. a 1-1 tie against the Netherlands, in an evenly matched game.Spain’s star midfielder Alexia Putellas returned to the starting lineup for the first time in more than a year after a knee injury.OTHER SPORTS NEWSOff the market: The Angels are reportedly withdrawing the superstar Shohei Ohtani from trade talks.Honeymoon phase: Aaron Rodgers agreed to a reworked contract with the Jets, which saves the team money and likely ensures he plays multiple seasons in New York.ARTS AND IDEAS Alfonso Duran for The New York TimesA growing dialect: What is Miami English? The linguist Phillip Carter calls it “probably the most important bilingual situation in the Americas today,” but it’s not Spanglish, in which a sentence bounces between English and Spanish. Instead, Miamians — even those who are not bilingual — have adopted literal translations of Spanish phrases in their English speech. Some examples: “get down from the car” (from “bajarse del carro”) instead of “get out of the car,” and “make the line” (from “hacer la fila”) instead of “join the line.”More on cultureKevin Spacey was found not guilty in Britain of sexual assault.The Japanese pop star Shinjiro Atae came out as gay, a rare announcement in a country where same-sex marriage isn’t legal.THE MORNING RECOMMENDS …Armando Rafael for The New York TimesBrighten up grilled chicken with Tajín, the Mexican seasoning made with red chiles and lime.Preserve vintage clothes in wearable condition.Calculate your life expectancy to guide health care choices.Consider a body pillow.Reduce exposure to forever chemicals in tap water.GAMESHere is today’s Spelling Bee. Yesterday’s pangram was thrilling.And here are today’s Mini Crossword, Wordle and Sudoku.Thanks for spending part of your morning with The Times. See you tomorrow.P.S. David is on “The Daily” to talk about how the wealthy get an advantage in college admissions.Sign up here to get this newsletter in your inbox. Reach our team at themorning@nytimes.com. More

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    Biden Administration Unveils Tougher Guidelines on Mergers

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    The proposed road map for regulatory reviews, last updated in 2020, includes a focus on tech platforms for the first time.The Biden administration’s top antitrust officials unveiled tougher guidelines against tech mergers on Wednesday, signaling their deepening scrutiny of the industry despite recent court losses in their attempts to block tech deal-making.Lina Khan, the chair of the Federal Trade Commission, and Jonathan Kanter, the top antitrust official at the Department of Justice, released draft guidelines for merger reviews that for the first time include a focus on digital platforms and how dominant companies can use their scale to harm future rivals.The guidelines — which generally provide a road map for whether regulators block or approve deals — show the Biden administration’s commitment to an aggressive antitrust agenda aimed at curtailing the power of companies like Google, Meta, Apple and Amazon.The guidelines, which aren’t enforced by law, follow a losing streak in the courts. A ruling last week prevented the F.T.C. from delaying the closing of Microsoft’s $69 billion acquisition of the video game maker Activision Blizzard. In January, a court sided against the F.T.C. in its lawsuit to stop Meta’s purchase of Within, a virtual reality app maker.The forceful antitrust posture is a pillar of President Biden’s agenda to stamp out economic inequality and encourage greater competition. “Promoting competition to lower costs and support small businesses and entrepreneurs is a central part of Bidenomics,” a senior administration official said in a call with reporters.The new guidelines would apply to all deals across the economy. But they highlight obstacles to competition among digital platforms, including how an acquisition of a nascent rival may be intended to kill off future competition. Such deals, known as killer acquisitions, are prevalent in the tech industry and at the heart of an F.T.C. antitrust lawsuit against Meta, which owns Facebook, Instagram and WhatsApp. The agency has accused Meta of buying Instagram in 2012 and WhatsApp in 2014 to prevent future competition.The F.T.C. and Justice Department also said they would look at how companies used their scale, including their large number of users, to ward off competition. These so-called network effects have helped companies like Meta and Google maintain their dominance in social media and internet search.The agencies also laid out ways in which mergers involving “platform” businesses, the model used by Amazon’s online store and Apple’s App Store, could harm competition. An acquisition could hurt competition by giving a platform control over a significant stream of data, the draft guidelines said, echoing concerns that tech giants use their vast troves of information to squash rivals.“As markets and commercial realities change, it is vital that we adapt our law enforcement tools to keep pace so that we can protect competition in a manner that reflects the intricacies of our modern economy,” Mr. Kanter said in a statement. “Simply put, competition today looks different than it did 50 — or even 15 — years ago.”While they lack the force of law, the guidelines can influence how judges look at challenges to mergers and acquisitions. The effort to update the guidelines has been closely watched by businesses and corporate lawyers that navigate regulatory scrutiny of megadeals.The guidelines were last updated in 2020. In 2021, Mr. Biden ordered the Justice Department and the F.T.C. to update them again as part of a broader effort to improve competition across the economy. The agencies will take public comment on the proposals and could make amendments before final guidelines are adopted.“These guidelines contain critical updates while ensuring fidelity to the mandate Congress has given us and the legal precedent on the books,” Ms. Khan said in a statement.While the F.T.C. experienced the recent court losses, it has forced some companies, including the chip-maker Nvidia and the aerospace giant Lockheed Martin, to abandon some large deals. The Justice Department blocked the publisher Penguin Random House from buying Simon & Schuster, using an unusual argument that the merger would harm authors who sold the publication rights to their books. More

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    House Committee Targets U.C. Berkeley Program for China Ties

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    A House select committee is requesting more information about a university collaboration that it said could help China gain access to cutting-edge research.A congressional committee focused on national security threats from China said it had “grave concerns” about a research partnership between the University of California, Berkeley, and several Chinese entities, claiming that the collaboration’s advanced research could help the Chinese government gain an economic, technological or military advantage.In a letter sent last week to Berkeley’s president and chancellor, the House Select Committee on the Chinese Communist Party requested extensive information about the Tsinghua-Berkeley Shenzhen Institute, a collaboration set up in 2014 with China’s prestigious Tsinghua University and the Chinese city of Shenzhen.The letter pointed to the institute’s research into certain “dual-use technologies” that are employed by both civilian and military institutions, like advanced semiconductors and imaging technology used for mapping terrain or driving autonomous cars.The committee also questioned whether Berkeley had properly disclosed Chinese funding for the institute, and cited its collaborations with Chinese universities and companies that have been the subjects of sanctions by the United States in recent years, like the National University of Defense Technology, the telecom firm Huawei and the Chinese drone maker DJI.It also said that Berkeley faculty serving at the institute had received funding from the Defense Advanced Research Projects Agency and other U.S. funding for the development of military applications, raising concerns about Chinese access to those experts.In April, for example, a team from a Shenzhen-based lab that describes itself as being supported by the Tsinghua-Berkeley Shenzhen Institute said it had won a contest in China to optimize a type of advanced chip technology that the U.S. government is now trying to prevent Chinese companies from acquiring, the letter said.It is not clear what role the university had in that project, or if the partnership, or the institute’s other activities, would violate U.S. restrictions on China’s access to technology. In October, the United States set significant limits on the type of advanced semiconductor technology that could be shared with Chinese entities, saying that the activity posed a national security threat.“Berkeley’s P.R.C.-backed collaboration with Tsinghua University raises many red flags,” the letter said, referring to the People’s Republic of China. It was signed by Representative Mike Gallagher, a Wisconsin Republican who chairs the committee, and Representative Virginia Foxx, a Republican of North Carolina who is the committee chair on education and the work force.In a statement to The New York Times, U.C. Berkeley said it takes concerns about national security “very seriously” and was committed to comprehensive compliance with laws governing international academic engagement. “The campus is reviewing past agreements and actions involving or connected to Tsinghua-Berkeley Shenzhen Institute” and would “fully and transparently cooperate with any federal inquiries,” it said.The university also said it had responded to inquiries from the Department of Education with detailed information about gifts and contracts related to the institute, that it was committed to full compliance with laws governing such arrangements, and that it “follows the lead of Congress and federal regulators when evaluating proposed research relationships with foreign entities.”Universities have also emphasized that foreign governments might have little to gain from infiltrating such partnerships, since academic researchers are focused on fundamental research that, while potentially valuable, is promptly published in academic journals for all to see.“As a matter of principle, Berkeley conducts research that is openly published for the entire global scientific community,” the university said in its statement.The letter, and other accusations from members of Congress about U.S. universities with partners in China, underscores how a rapid evolution in U.S.-China relations is putting new pressure on academic partnerships that were set up to share information and break down barriers between the countries.The Chinese government has sought to improve the country’s technological capacity through legitimate commercial partnerships, but also espionage, cybertheft and coercion. Those efforts — along with a program to meld military and civilian innovation — has led to a backlash in the United States against ties with Chinese academic institutions and private companies that might have seemed relatively innocuous a decade ago.The select committee, which was set up earlier this year, describes its mission as building consensus on the threat posed by the Chinese Communist Party and developing a plan to defend the United States. The bipartisan committee, which is led by Republicans, can provide legislative recommendations but cannot legislate on its own. It has been busily naming and shaming major companies and others over ties to China in congressional hearings, investigations and letters.Tensions between the United States and China are high, and some lawmakers have called for decoupling the two economies. But severing academic ties is a tricky prospect. American universities are geared toward open and collaborative research and count many Chinese scholars among their work force. China’s significant technology industry and huge population of science and technology doctorates make it a natural magnet for many research collaborations.Still, the rapid expansion of export controls in the United States is putting more restrictions on the type of information and data related to advanced technologies that can be legally shared with individuals and organizations in China. Under the new rules, even carrying a laptop to China with certain chip designs on it, or giving a Chinese national a tour of an advanced U.S. chip lab, can violate the law.The House committee has requested that the university provide extensive documents and information by July 27 about the partnership, including its funding, structure and technological work, its alumni’s current and past affiliations, and its compliance with U.S. export controls. More

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    Affirmative Action Ruling May Upend Diversity Hiring Policies, Too

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    The Supreme Court decision on college admissions could lead companies to alter recruitment and promotion practices to pre-empt legal challenges.As a legal matter, the Supreme Court’s rejection of race-conscious admissions in higher education does not in itself impede employers from pursuing diversity in the workplace.That, at least, is the conclusion of lawyers, diversity experts and political activists across the spectrum — from conservatives who say robust affirmative action programs are already illegal to liberals who argue that they are on firm legal ground.But many experts argue that as a practical matter, the ruling will discourage corporations from putting in place ambitious diversity policies in hiring and promotion — or prompt them to rein in existing policies — by encouraging lawsuits under the existing legal standard.After the decision on Thursday affecting college admissions, law firms encouraged companies to review their diversity policies.“I do worry about corporate counsels who see their main job as keeping organizations from getting sued — I do worry about hyper-compliance,” said Alvin B. Tillery Jr., director of the Center for the Study of Diversity and Democracy at Northwestern University, who advises employers on diversity policies.Programs to foster the hiring and promotion of African Americans and other minority workers have been prominent in corporate America in recent years, especially in the reckoning over race after the 2020 murder of George Floyd by a Minneapolis police officer.Even before the ruling in the college cases, corporations were feeling legal pressure over their diversity efforts. Over the past two years, a lawyer representing a free-market group has sent letters to American Airlines, McDonald’s and many other corporations demanding that they undo hiring policies that the group says are illegal.The free-market group, the National Center for Public Policy Research, acknowledged that the outcome on Thursday did not bear directly on its fight against affirmative-action in corporate America. “Today’s decision is not relevant; it dealt with a special carve-out for education,” said Scott Shepard, a fellow at the center.Mr. Shepard claimed victory nonetheless, arguing that the ruling would help deter employers who might be tempted overstep the law. “It couldn’t be clearer after the decision that fudging it at the edges” is not allowed, he said.(American Airlines and McDonald’s did not respond to requests for comment about their hiring and promotion policies.)Charlotte A. Burrows, who was designated chair of the Equal Employment Opportunity Commission by President Biden, was also quick to declare that nothing had changed. She said the decision “does not address employer efforts to foster diverse and inclusive work forces or to engage the talents of all qualified workers, regardless of their background.”Some companies in the cross hairs of conservative groups underscored the point. “Novartis’s D.E.I. programs are narrowly tailored, fair, equitable and comply with existing law,” the drugmaker said in a statement, referring to diversity, equity and inclusion. Novartis, too, has received a letter from a lawyer representing Mr. Shepard’s group, demanding that it change its policy on hiring law firms.The Supreme Court’s ruling on affirmative action was largely silent on employment-related questions.Kenny Holston/The New York TimesBeyond government contractors, affirmative action policies in the private sector are largely voluntary and governed by state and federal civil rights law. These laws prohibit employers from basing hiring or promotion decisions on a characteristic like race or gender, whether in favor of a candidate or against.The exception, said Jason Schwartz, a partner at the law firm Gibson Dunn, is that companies can take race into account if members of a racial minority were previously excluded from a job category — say, an investment bank recruiting Black bankers after it excluded Black people from such jobs for decades. In some cases, employers can also take into account the historical exclusion of a minority group from an industry — like Black and Latino people in the software industry.In principle, the logic of the Supreme Court’s ruling on college admissions could threaten some of these programs, like those intended to address industrywide discrimination. But even here, the legal case may be a stretch because the way employers typically make decisions about hiring and promotion differs from the way colleges make admissions decisions.“What seems to bother the court is that the admissions programs at issue treated race as a plus without regard to the individual student,” Pauline Kim, a professor at Washington University in St. Louis who specializes in employment law, said in an email. But “employment decisions are more often individualized decisions,” focusing on the fit between a candidate and a job, she said.The more meaningful effect of the court’s decision is likely to be greater pressure on policies that were already on questionable legal ground. Those could include leadership acceleration programs or internship programs that are open only to members of underrepresented minority groups.Many companies may also find themselves vulnerable over policies that comply with civil rights law on paper but violate it in practice, said Mike Delikat, a partner at Orrick who specializes in employment law. For example, a company’s policy may encourage recruiters to seek a more diverse pool of candidates, from which hiring decisions are made without regard to race. But if recruiters carry out the policy in a way that effectively creates a racial quota, he said, that is illegal.“The devil is in the details,” Mr. Delikat said. “Were they interpreting that to mean, ‘Come back with 25 percent of the internship class that has to be from an underrepresented group, and if not you get dinged as a bad recruiter’?”The college admissions cases before the Supreme Court were largely silent on these employment-related questions. Nonetheless, Mr. Delikat said, his firm has been counseling clients ever since the court agreed to hear the cases that they should ensure that their policies are airtight because an increase in litigation is likely.That is partly because of the growing attack from the political right on corporate policies aimed at diversity in hiring and other social and environmental goals.Gov. Ron DeSantis of Florida has signed legislation to limit diversity training in the workplace.Haiyun Jiang for The New York TimesGov. Ron DeSantis of Florida, who is seeking the 2024 Republican presidential nomination, has deplored “the woke mind virus” and proclaimed Florida “the state where woke goes to die.” The state has enacted legislation to limit diversity training in the workplace and has restricted state pension funds from basing investments on “woke environmental, social and corporate governance” considerations.Conservative legal groups have also mobilized on this front. A group run by Stephen Miller, a White House adviser in the Trump administration, contended in letters to the Equal Employment Opportunity Commission that the diversity and inclusion policies of several large companies were illegal and asked the commission to investigate. (Mr. Miller’s group did not respond to a request for comment about those cases.)The National Center for Public Policy Research, which is challenging corporate diversity policies, has sued Starbucks directors and officers after they refused to undo the company’s diversity and inclusion policies in response to a letter demanding that they do so. (Starbucks did not respond to a request for comment for this article, but its directors told the group that it was “not in the best interest of Starbucks to accept the demand and retract the policies.”)Mr. Shepard, the fellow at the center, said more lawsuits were “reasonably likely” if other companies did not accede to demands to rein in their diversity and inclusion policies.One modest way to do so, said David Lopez, a former general counsel for the Equal Employment Opportunity Commission, is to design policies that are race neutral but nonetheless likely to promote diversity — such as giving weight to whether a candidate has overcome significant obstacles.Mr. Lopez noted that, in the Supreme Court’s majority opinion, Chief Justice John G. Roberts Jr. argued that a university could take into account the effect on a candidate of having overcome racial discrimination, as long as the school didn’t consider the candidate’s race per se.But Dr. Tillery of Northwestern said making such changes to business diversity programs could be an overreaction to the ruling. While the federal Civil Rights Act of 1964 generally precludes basing individual hiring and promotion decisions explicitly on race, it allows employers to remove obstacles that prevent companies from having a more diverse work force. Examples include training managers and recruiters to ensure that they aren’t unconsciously discriminating against racial minorities, or advertising jobs on certain campuses to increase the universe of potential applicants.In the end, companies appear to face a greater threat of litigation over discrimination against members of minority groups than from litigation over discrimination against white people. According to the Equal Employment Opportunity Commission, there were about 2,350 charges of that latter form of discrimination in employment in 2021, among about 21,000 race-based charges overall.“There’s an inherent interest in picking your poison,” Dr. Tillery said. “Is it a lawsuit from Stephen Miller’s right-wing group that doesn’t live in the real world? Or is it a lawsuit from someone who says you’re discriminating against your work force and can tweet about how sexist or racist you are?”He added, “I’ll take the Stephen Miller poison any day.”J. Edward Moreno More

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    Congress Spotlights Forced Labor Concerns With Chinese Shopping Sites Shein and Temu

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    A congressional investigation into Temu and Shein offered new insight into services that are delivering a deluge of cheap and little-regulated products.Lawmakers are flagging what they say are likely significant violations of U.S. law by Temu, a popular Chinese shopping platform, accusing it of providing an unchecked channel that allows goods made with forced labor to flow into the United States.In a report released Thursday, the House Select Committee on the Chinese Communist Party said Temu, a rapidly growing site that sells electronics, makeup, toys and clothing, had failed “to maintain even the facade of a meaningful compliance program” for its supply chains and was likely shipping products made with forced labor into the United States on a “regular basis.”The report stems from a continuing investigation into forced labor in supply chains that touch on China. Lawmakers said the report was based on responses submitted to the committee by Temu, as well as the fast fashion retailer Shein, Nike and Adidas.The report offered a particularly scathing assessment of Temu, saying there is an “extremely high risk that Temu’s supply chains are contaminated with forced labor.” The site advertises itself under the tagline “Shop like a billionaire” and is now the second most downloaded app in the Apple store.The report also criticized Shein’s use of an importing method that allows companies to bring products into the United States duty-free and with less scrutiny from customs, as long as packages are sent directly to consumers and valued at under $800. Some lawmakers have been pushing to close off this shipping channel, which is called de minimis, for companies sourcing goods from China.Lawmakers said that they were troubled by what the bipartisan committee’s investigation had uncovered so far, and that Congress should review import loopholes and strengthen forced labor laws.“Temu is doing next to nothing to keep its supply chains free from slave labor,” said Representative Mike Gallagher, a Wisconsin Republican who heads the committee. “At the same time, Temu and Shein are building empires around the de minimis loophole in our import rules: dodging import taxes and evading scrutiny on the millions of goods they sell to Americans.”“The initial findings of this report are concerning and reinforce the need for full transparency by companies potentially profiting from C.C.P. forced labor,” said Representative Raja Krishnamoorthi, an Illinois Democrat and a co-author of the report, referring to the Chinese Communist Party.Temu, which began operating in the United States in September, told the committee that it now brought millions of shipments into the United States annually through a network of more than 80,000 suppliers that sell directly from Chinese factories to U.S. consumers. The site sells clothing, temporary tattoos, modeling clay, electronics and other items directly to consumers for low prices, like $3 for a baby romper, $6 for sandals and $8 for a vacuum.The report also contained new data showing that Temu and Shein make heavy use of the de minimis rule, together accounting for almost 600,000 such packages shipped to the United States daily.The shipping method allows retailers to sell their goods to consumers at cheaper prices, since they are not subject to duties, taxes or government fees that apply to traditional retailers that typically ship overseas goods in bulk.A Shein pop-up store last year at the Shops at Willow Bend in Plano, Texas.Cooper Neill for The New York TimesDe minimis shipping also requires far less information to be disclosed about the products and the companies involved in the transaction, making it harder for U.S. customs officials to detect packages with narcotics, counterfeits and goods made with forced labor. The number of de minimis packages entering the United States more than tripled between 2016 and 2021, when it reached 720 million.At an annualized rate, the shipments reported by Shein and Temu would represent more than 30 percent of the de minimis shipments that came into the United States last year, and nearly half of those packages from China, the report said.Both Shein and Temu have steadily taken market share from U.S. brick-and-mortar retailers and won over younger consumers by investing in sophisticated e-commerce technology and offering hundreds more new products than competitors. Among teenagers, Shein was the third most popular e-commerce site behind Amazon and Nike, according to a Piper Sandler report this spring.As their popularity has grown, so has congressional scrutiny of the firms, given their ties to China. Shein was originally based in China but has moved its headquarters to Singapore. Temu, which is based in Boston, is a subsidiary of PDD Holdings, which moved its headquarters to Ireland from China this year.Lawmakers have been questioning their relationship with the Chinese government, as well as the companies’ ability to vet their supply chains to ensure they don’t contain materials or products from Xinjiang. Last year, the U.S. imposed a ban on products from Xinjiang, citing the region’s use of forced labor in factories and mines.The Chinese government has carried out a crackdown in Xinjiang on Uyghurs and other ethnic minorities, including the organized use of forced labor to pick cotton; work in mines; and manufacture electronics, polysilicon and car parts. Because of this, the U.S. government now presumes all materials from the region to be made with forced labor unless proved otherwise.A young Uyghur women working in a garment factory in Xinjiang in 2019.Gilles Sabrié for The New York TimesShein said in a statement that it had zero tolerance for forced labor and had a robust compliance system, including a code of conduct, independent audits, robust tracing technology and third-party testing. It provided detailed information to the House committee and will continue to answer its questions, the company said.“We have no contract manufacturers in the Xinjiang region,” it said. “As a global company, our policy is to comply with the customs and import laws of the countries in which we operate.” Temu did not respond to a request for comment.Laboratory tests commissioned by Bloomberg News in November found that some Shein clothing had been made with cotton from Xinjiang. Shein didn’t dispute those findings, but said in a statement to Bloomberg that it took steps in all global markets to comply with local laws and had engaged another lab, Oritain, to test its materials.The congressional report also criticized Temu’s failure to set up a compliance or auditing system that could independently verify that its sellers were not sourcing products from Xinjiang.Temu told the committee that it had a reporting system that consumers and sellers could use to file complaints, and that it asked its sellers to sign a code of conduct specifying a “zero-tolerance policy” for the use of forced, indentured or penal labor. Temu’s code of conduct also says the company reserves the right to inspect factories and warehouses to ensure compliance.But the code does not mention Xinjiang or the U.S. ban, and Temu told the House committee that it did not prohibit vendors from selling products made in Xinjiang, the report said.Temu also argued that its use of direct shipping meant that the U.S. consumer, not Temu, would bear the ultimate responsibility for adhering to the ban on Xinjiang goods.“Temu is not the importer of record with respect to goods shipped to the United States,” the report quoted it as saying.Customs lawyers said that it was not entirely clear which party would be liable for complying with the U.S. ban, but that any company facilitating the importation of goods from Xinjiang could face civil or criminal penalties.The committee report also pictured a key chain that was listed on Temu’s website this month and labeled “pendant with Xinjiang cotton.” The key chain itself is shaped like a bud of cotton, and the report said that the Xinjiang label “may refer to the materials, the supplier, the pattern or the origin of the product.”Temu’s “policy to not prohibit the sale of products that explicitly advertise their Xinjiang origins, even in the face of mounting congressional and public scrutiny on related topics, raises serious questions,” the report said.The New York Times was not able to verify whether the product is made using Xinjiang cotton, which is barred under U.S. law. The Times found an identical product listed for sale on a Chinese wholesale site that was described as manufactured in Henan Province, outside Xinjiang.A Times review of information shared by Temu vendors on Chinese social media sites also suggested that Temu did not require sellers to provide detailed information about where their products were made or which companies manufactured them.Vendors sharing tips online about Temu’s product review process gave several reasons that Temu commonly rejected new listings: for example, if the price was too high, if the samples were inconsistent with the photos or if the goods lacked consumer warning labels. But none mentioned concerns about links to Xinjiang or the U.S. import ban.Jordyn Holman More

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    Student Loan Pause Is Ending, With Consequences for Economy

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    Three years of relief from payments on $1.6 trillion in student debt allowed for other borrowing and spending — and will shift into reverse.A bedrock component of pandemic-era relief for households is coming to an end: The debt-limit deal struck by the White House and congressional Republicans requires that the pause on student loan payments be lifted no later than Aug. 30.By then, after more than three years in force, the forbearance on student debt will amount to about $185 billion that otherwise would have been paid, according to calculations by Goldman Sachs. The effects on borrowers’ lives have been profound. More subtle is how the pause affected the broader economy.Emerging research has found that in addition to freeing up cash, the repayment pause coincided with a marked improvement in borrowers’ credit scores, most likely because of cash infusions from other pandemic relief programs and the removal of student loan delinquencies from credit reports. That let people take on more debt to buy cars, homes and daily needs using credit cards — raising concerns that student debtors will now be hit by another monthly bill just when their budgets are already maxed out.“It’s going to quickly reverse all the progress that was made during the repayment pause,” said Laura Beamer, who researches higher education finance at the Jain Family Institute, “especially for those who took out new debt in mortgages or auto loans where they had the financial room because they weren’t paying their student loans.”The pause on payments, which under the CARES Act in March 2020 covered all borrowers with federally owned loans, is separate from the Biden administration’s proposal to forgive up to $20,000 in student debt. The Supreme Court is expected to rule on a challenge to that plan, which is subject to certain income limits, by the end of the month.The moratorium began as a way to relieve financial pressure on families when unemployment was soaring. To varying degrees, forbearance extended to housing, auto and consumer debt, with some private lenders taking part voluntarily.By May 2021, according to a paper from the Brookings Institution, 72 million borrowers had postponed $86.4 billion in loan payments, primarily on mortgages. The pause, whose users generally had greater financial distress than others, vastly diminished delinquencies and defaults of the sort that wreaked havoc during the recession a decade earlier.But while borrowers mostly started paying again on other debt, for about 42.3 million people the student debt hiatus — which took effect automatically for everyone with a federally owned loan, and stopped all interest from accruing — continued. The Biden administration issued nine extensions as it weighed options for permanent forgiveness, even as aid programs like expanded unemployment insurance, the beefed-up child tax credit and extra nutrition assistance expired.Student Loan Repayment Dropped PrecipitouslyMonthly payments received by the Treasury, annualized

    Source: Goldman Sachs analysis of Treasury Department dataBy The New York TimesTens of millions of borrowers, who, according to the Federal Reserve, paid $200 to $299 on average each month in 2019, will soon face the resumption of a bill that is often one of the largest line items in their household budgets.Jessica Musselwhite took on about $65,000 in loans to finance a master’s degree in arts administration and nonprofit management, which she finished in 2006. When she found a job related to her field, it paid $26,500 annually. Her $650 monthly student loan installments consumed half her take-home pay.She enrolled in an income-driven repayment program that made the payments more manageable. But with interest mounting, she struggled to make progress on the principal. By the time the pandemic started, even with a stable job at the University of Chicago, she owed more than she did when she graduated, along with credit card debt that she accumulated to buy groceries and other basics.Not having those payments allowed a new set of choices. It helped Ms. Musselwhite and her partner buy a little house on the South Side, and they got to work making improvements like better air conditioning. But that led to its own expenses — and even more debt.“The thing about having a lot of student loans, and working in a job that underpays, and then also being a person who is getting older, is that you want the things that your neighbors have and colleagues have,” said Ms. Musselwhite, 45. “I know financially that’s not always been the best decision.”Now the end of the repayment hiatus is looming. Ms. Musselwhite doesn’t know how much her monthly payments will be, but she’s thinking about where she might need to cut back — and her partner’s student loan payments will start coming due, too.As student debt loads have risen and incomes have stagnated in recent decades, Ms. Musselwhite’s experience of seeing her balance rise instead of sink has become common — 52.1 percent of borrowers were in that situation in 2020, according to an analysis by Ms. Beamer, the higher education researcher, and her co-authors at the Jain Family Institute, largely because interest has accumulated while debtors can afford only minimum payments, or even less.The share of borrowers with balances larger than when they started had been steadily growing until the pandemic and was far higher in census tracts where Black people are a plurality. Then it began to shrink, as those who continued loan payments were able to make progress while interest rates were set at zero.A few other outcomes of this extended breather have become clear.It disproportionately helped families with children, according to economists at the Federal Reserve. A greater share of Black families with children were eligible than white and Hispanic families, although their prepandemic monthly payments were smaller. (That reflects Black families’ lower incomes, not loan balances, which were higher; 53 percent of Black families were also not making payments before the pandemic.)What did borrowers do with the extra space in their budgets? Economists at the University of Chicago found that rather than paying down other debts, those eligible for the pause increased their leverage by 3 percent on average, or $1,200, compared with ineligible borrowers. Extra income can be magnified into greater spending by making minimum payments on lines of credit, which many found attractive, especially earlier in the pandemic when interest rates were low.Put another way, the Consumer Financial Protection Bureau found that half of all borrowers whose student loan payments are scheduled to restart have other debts worth at least 10 percent more than they were before the pandemic.The effect may be most problematic for borrowers who were already delinquent on student loans before the pandemic. That population took on 12.3 percent more credit card debt and 4.6 percent more auto loan debt than distressed borrowers who were not eligible for the pause, according to a paper by finance professors at Yale University and Georgia Tech.In recent months, the paper found, those borrowers have started to become delinquent on their loans at higher rates — raising the concern that the resumption of student loan payments could drive more of them into default.“One of the things we’re prepping for is, once those student loan payments are going to come due, folks are going to have to make a choice between what do I pay and what do I not pay,” said David Flores, the director of client services with GreenPath Financial Wellness, a nonprofit counseling service. “And oftentimes, the credit cards are the ones that don’t get paid.”For now, Mr. Flores urges clients to enroll in income-driven repayment plans if they can. The Biden administration has proposed rules that would make such plans more generous.Further, the administration’s proposal for debt forgiveness, if upheld by the Supreme Court, would cut in half what would otherwise be a 0.2-percentage-point hit to growth in personal spending in 2023, according to researchers at Goldman Sachs.Whether or not debt forgiveness wins in court, the transition back to loan repayment might be rocky. Several large student loan servicers have ended their contracts with the Department of Education and transferred their portfolios to others, and the department is running short on funding for student loan processing.Some experts think the extended hiatus wasn’t necessarily a good thing, especially when it was costing the federal government about $5 billion a month by some estimates.“I think it made sense to do it. The real question is, at what point should it have been turned back on?” said Adam Looney, a professor at the University of Utah who testified before Congress on student loan policy in March.Ideally, the administration should have decided on reforms and ended the payment pause earlier in a coordinated way, Dr. Looney said. Regardless, ending the pause is going to constrain spending for millions of families. For Dan and Beth McConnell of Houston, who have $143,000 left to pay in loans for their two daughters’ undergraduate educations, the implications are stark.The pause in their monthly payments was especially helpful when Mr. McConnell, 61, was laid off as a marine geologist in late 2021. He’s doing some consulting work but doubts he’ll replace his prior income. That could mean dropping long-term care insurance, or digging into retirement accounts, when $1,700 monthly payments start up in the fall.“This is the brick through the window that’s breaking the retirement plans,” Mr. McConnell said. More