• DOGE's Vivek Ramaswamy said eighth graders' reading scores in 2022 were "downright brutal."
• He said eliminating the Education Department would help improve literacy in the US.
• Education experts told BI that eliminating the department likely wouldn't help boost reading scores.

One of the business leaders tapped by President-elect Donald Trump to suggest cuts for government spending said axing the Education Department would help boost kids' reading scores in the US. Education policy experts say it's not that simple.

Vivek Ramaswamy, who is tasked with leading a new commission called the Department of Government Efficiency alongside Elon Musk, called reading proficiency scores for eighth graders "downright brutal" in a Sunday post on X.

"This is a 5-alarm fire & President Trump's vision to dismantle the Department of Education is the first step to fixing it," Ramaswamy wrote in response to a separate post highlighting the low reading scores.

The National Assessment of Education Progress found that 31% of eighth graders were proficient in reading in 2022 — 3 percentage points lower than the 2019 score.

It's unclear how eliminating the federal Education Department — which would require congressional action — would help boost literacy scores. Education policy experts across the political spectrum said that the department oversees federal grants and data collection that monitor students' progress.

Weadé James, the senior director for K-12 education policy at the left-leaning think tank Center for American Progress, told Business Insider that there's "no proof" eliminating the department would boost literacy.

"What we know is proven is that the department provides an opportunity for every child to have access and opportunity to receive a high-quality education," James said. "What is unproven is that closing the Department of Education is going to actually fix the literacy challenges that we're experiencing."

The department was founded in 1979, eight years after the National Assessment of Educational Progress began collecting long-term reading-assessment data — and the data found that reading scores were slightly higher after the department was established.

When previously asked how Trump's pick for education secretary, Linda McMahon, would address literacy, Liz Huston, a Trump-Vance transition spokesperson, said that given McMahon's "extensive background in the business world, government, and serving on Connecticut's School Board, she is ready to deliver on President Trump's agenda to restore America's education system and prepare our next generation for the future."

The Education Department's role in literacy

While reading scores over the past decades have fluctuated, there's never been a year in which students excelled in literacy, with the share of eighth graders meeting the department's reading proficiency standards ranging from a low of 29% in 1992 to a high of 36% in 2013 and 2017. The pandemic set back many children's reading progress, education experts previously told BI, along with a lack of consistent state and federal investment in reading instruction.

Nat Malkus, a senior fellow and deputy director of education policy at the conservative think tank American Enterprise Institute, told BI that Ramaswamy is right to be concerned about kids' reading scores, but the idea that eliminating the Education Department will address those scores "doesn't hold a lot of water."

"If it weren't for the Department of Education, we wouldn't know the statistics that he's citing about how many students are proficient at reading," Malkus said.

"I think the administration is interested in changing the way funds flow with fewer strings," Malkus added, "but whether that will actually get through what is still a very closely divided Congress seems dubious."

Ramaswamy, Musk, and Trump, along with some Republican lawmakers, have supported dismantling the Education Department in favor of giving states more power over kids' education. Malkus said, though, that states are already largely in control of education — states, rather than the federal government, set classroom curricula and most school policies.

The Education Department's main role is to facilitate federal funding and research. James said more investment in the Institute of Education Sciences — a nonpartisan research arm within the department — could "help us to identify, what is the effective literacy instruction that students need."

She also said the Education Department has the power to establish and expand grants that could foster partnerships with local school districts and researchers to equip teachers on the best literacy practices.

The Education Department oversees several grant programs, including $18.4 billion in funding for the Title I program, which provides federal assistance to school districts to help low-income students.

• Student-loan borrowers are entering the new year with uncertainty on their payments and debt relief.
• Ongoing litigation with the SAVE repayment plan makes it difficult for some borrowers to plan financially.
• Biden also officially withdrew his broad debt relief plans, and any future relief under Trump is unlikely.

Wade Burt, 67, is entering the new year without knowing when — or if — he'll be free of his nearly six-figure student-loan balance.

Burt first took out just under $20,000 in student loans for an associate degree in avionics that he earned in 1988. However, he had periods of unemployment through 1998, during which he could not afford student-loan payments. Over the years, the interest on his loans ballooned his balance.

He eventually earned a bachelor's degree in information systems management, which has allowed him to secure a well-paying job. Burt said he hopes to retire in a few years, but he doesn't see an easy route to getting a handle on the debt.

"I don't have any confidence that I'll pay the student loans beyond 72 because I just won't have that kind of income," Burt told Business Insider, saying that his Social Security checks won't be enough to help. "The reality is that I'm in the last third of my life, and I don't know if we will be able to make those student loans go away."

Millions of other Americans holding student loans are facing similar uncertainties. President-elect Donald Trump is taking office in less than a month, and he's made clear that he opposed President Joe Biden's efforts to enact incremental and broad student-loan forgiveness.

Plus, Biden's Education Department recently withdrew its unfinished broader debt relief rules, citing a limited amount of time to implement them before the end of Biden's term.

With Republican opposition to student-debt relief, some borrowers told BI they don't feel confident about significant balance reductions over the next four years.

"It feels like we're in a pretty hopeless situation," Burt said. "It's a weight on us, and we don't get very solid answers, so it's pretty hard to plan with all those conditions in place."

The Trump transition team did not immediately respond to a request for comment from BI.

'We're in this waiting game'

Aimee Cooper just wants to know when — and how much — her next monthly payment will be.

Cooper, 53, has been enrolled in the Public Service Loan Forgiveness Program since it started in 2007, which forgives student debt for government and nonprofit workers after 10 years of qualifying payments. She went back to school over the course of the 10-year period to earn two master's degrees, during which her loans were put on in-school deferment and pushed back her forgiveness timeline.

Her student-loan servicer estimated she's less than 10 payments away from reaching forgiveness through PSLF. But she's not sure when that will be achievable because the student-loan repayment plan she's enrolled in — the SAVE plan, created by Biden to make payments cheaper and shorten the timeline for borrowers to reach debt relief — is paused as a result of a GOP-led lawsuit to block the plan.

All borrowers enrolled in the SAVE plan have been placed on forbearance until a court issues a final decision, which means that even if Cooper does choose to make a payment during this time, it will not count toward her PSLF progress.

"We're just in limbo, wondering what's going to happen," Cooper told BI. "We're not asking for special favors, none of us are. We're just asking for someone to tell us what to do."

The Education Department recently reopened two income-driven repayment plans that would give borrowers the opportunity to switch from the SAVE plan and enroll in a new plan to make payments and get credit toward PSLF. Borrowers would likely see different, and possibly higher, payments on those plans, so some might choose to wait until the fate of SAVE is decided.

Malissa Williams, 40, has found herself in the same boat. Working as a nurse, Williams is also enrolled in PSLF, and through the SAVE plan, she was making steady progress toward forgiveness. She's now in forbearance due to the SAVE litigation, and she said she's attempted to contact her servicer's customer service representatives, but the long hold times have rendered it nearly impossible for her to get clear answers on what her next steps should be.

"I'm terrified because there's been the discussion of the income-driven repayment plans going away," Williams told BI. "And when I looked at what my payments could be, it was back up to almost a thousand dollars a month, and that would be a significant blow that would put my student loan payment almost at what my mortgage is."

Some higher education experts previously told BI that regardless of what a court decides on the SAVE plan, Trump's administration is unlikely to continue Biden's repayment and relief efforts. It's also possible that Trump could work to rescind existing regulations, but doing so through the rulemaking process could take at least a year. Trump has also previously suggested eliminating PSLF altogether, but that would require congressional approval, and there has not yet been sufficient support among lawmakers to make that happen.

The uncertainty with SAVE and the actions that Trump's administration might take leave borrowers in a bind as they try to plan for their financial futures.

"We're in this waiting game," Cooper said. "Who knows what's going to happen."

'It's a feeling of anxiety, but also defeat'

With Republicans holding control of both Congress and the White House, GOP-led higher education legislation has a greater chance of being signed into law over the next four years. A key bill, the College Cost Reduction Act, could benefit borrowers by requiring pricing transparency in college programs to limit the amount of debt students have to take on. It would also aim to limit the education secretary's authority to enact debt relief for borrowers outside existing repayment programs.

Rep. Virginia Foxx, the top Republican on the House education committee, said in a recent statement that Biden's debt relief efforts have tried to "foist student loan debt onto hardworking taxpayers."

"The result? A broken student loan program and false hope for millions of borrowers," Foxx said. "Thankfully, on January 20th, Americans will be able to trust the information that's coming from the White House again."

Molly Valentine Dierks, 44, said she's worried that ending relief programs would jeopardize her future investments. Dierks, a college teacher, is enrolled in the SAVE plan, and if the GOP litigation succeeds, she expects her payments to surge, and it would impact her ability to buy a house.

"There's reverberating effects for my financial future," Dierks said. She added that if it comes to it, she has the fortune of falling back on her family for financial support, but she's concerned for her students and other borrowers who don't have that as an option.

"It's a feeling of anxiety but also defeat," Dierks said. It's unclear what's in store for millions of federal student-loan borrowers in the new year. A court decision on SAVE is still pending, and it's unclear how Trump's education department will choose to manage existing repayment and forgiveness programs, including PSLF and the borrower defense to repayment for defrauded borrowers.

Burt, the 67-year-old borrower, said he hopes that the incoming administration will consider assistance for those who have made good-faith efforts to repay their student loans.

"There has to be some empathy for the person who went to school to get a degree to improve their life and never achieved what they expected that degree to achieve," Burt said.

• Vivek Ramaswamy doubled down on DOGE's calls to eliminate the Consumer Financial Protection Bureau.
• He wrote on X that the CFPB overstepped its authority with its recent rule to limit overdraft fees.
• The CFPB's rule aims to cap bank overdraft fees, not eliminate them, saving consumers billions.

Vivek Ramaswamy has called out a government agency's latest rule to give Americans banking relief as an example of why the office should be eliminated.

Ramaswamy, who was tapped by Donald Trump to co-lead a new Department of Government Efficiency to make spending-cut recommendations, posted on X on Thursday that the Consumer Financial Protection Bureau had exceeded its authority with its recent rule to limit overdraft fees.

"The new administration can & should nullify this overreach, but we must go further: this latest gambit of the CFPB is just a symptom of a deeper (and unconstitutional) cancer of unelected bureaucrats substituting their policy judgments for those of Congress," Ramaswamy said. "That's un-American & needs to end."

While DOGE is an advisory commission and would not have the power to eliminate agencies or cut spending on its own, it is in a position to make recommendations. Elon Musk, the co-head of DOGE, said in November that the Trump administration should "delete CFPB."

The CFPB finalized a rule on December 12 that would require banks to limit overdraft fees — the amount charged to customers when they attempt to spend more than their balance. The agency estimated that the new rule would save Americans up to $5 billion each year, or $225 per household.

"The CFPB has heard from tens of thousands of Americans who are sick and tired of paying billions in junk fees," Allison Preiss, a CFPB spokesperson, told Business Insider in a statement. "This rule is common sense and long overdue, and it's unclear why big banks are scared to be transparent with their customers about the interest rate they're charging on overdraft loans."

The rule updates federal regulations for banks with over $10 billion in assets, including major institutions like Bank of America and Capitol One. Banks can now choose between two options to address overdraft fees: They could implement a $5 cap on fees, or they could set their fee at an amount necessary to cover the bank's costs and losses. Banks earning profits on overdraft fees would also be required to disclose the terms of the fees, as they already do with credit cards and other types of loans.

The CFPB took action against Wells Fargo in 2022 after the bureau said it charged consumers surprise overdraft fees, which resulted in customers receiving $205 million in refunds. Other federal agencies, including the Federal Trade Commission and the Department of Transportation, have also taken steps to ban hidden and excessive fees.

The CFPB is no stranger to criticism. The Supreme Court in May rejected a conservative-led lawsuit that sought to dismantle the CFPB's funding structure. The lawsuit argued that Congress should have to approve annual funding for the agency rather than it receiving funding in perpetuity. Since its creation in 2011 in the wake of the financial crisis, the CFPB has received funds directly from the Federal Reserve, allowing it to carry out its functions independently of the political appropriations process.

Trump, Musk, and Ramaswamy have called for eliminating other federal agencies including the Education Department, the Internal Revenue Service, and the Environmental Protection Agency.

It's unclear if DOGE will succeed in its efforts to eliminate agencies like the CFPB. However, Rohit Chopra, the head of the CFPB, warned Musk and Ramaswamy in an interview earlier this month with MSNBC that axing the agency is "begging for a financial crisis" and would have dire consequences.

"I don't understand why people would want financial crime," Chopra said, "and if they say it's duplicative, who else will do it?"

• Beyoncé performed live during halftime of the Baltimore Ravens vs. Houston Texans game on Wednesday.
• The set list included live debuts of "Cowboy Carter" tracks, including "Texas Hold 'Em" and "Ya Ya."
• She also performed duets with singers Post Malone and Shaboozey.

Beyoncé took the stage at the Ravens vs. Texans game on Christmas Day, delivering a dynamic NFL halftime show that doubled as another test for Netflix's live event strategy.

The 12-minute performance at NRG Stadium in Houston, Beyoncé's hometown, featured live debuts of several tracks from her latest album, "Cowboy Carter," plus multiple duets with special guests — including Beyoncé's 12-year-old daughter Blue Ivy Carter, who joined the performance to line dance during the final song.

Here's every song on Beyoncé's Christmas Day setlist, listed below chronologically.

'16 Carriages'

"16 Carriages" was released alongside "Texas Hold 'Em" as the single's B-side. It has been nominated for Best Country Solo Performance at the 2025 Grammys.

'Blackbiird'

Beyoncé performed "Blackbiird" with Tanner Adell, Brittney Spencer, Tiera Kennedy, and Reyna Roberts — a cover of the 1968 classic by The Beatles, which was inspired by the Civil Rights Movement.

'Ya Ya'

The 20th track on "Cowboy Carter" is a country-rock banger that interpolates two hits from 1966: Nancy Sinatra's "These Boots Are Made for Walkin'" and The Beach Boys' "Good Vibrations."

"Ya Ya" was hailed by critics as a standout upon the album's release and will compete for best Americana performance at the Grammys in February.

The song was previously used in a promotional video for the 2024 Paris Olympics on NBC, which featured clips of Beyoncé introducing Team USA athletes like Noah Lyles, Sha'Carri Richardson, Caeleb Dressel, Katie Ledecky, and Simone Biles.

'My House'

"My House'" was released at the end of 2023 as a single ahead of Beyoncé's 2023 film, "Renaissance: A Film by Beyoncé."

'Spaghettii, 'Riiverdance,' and 'Sweet Honey Buckiin'

Beyoncé brought out Shaboozey to perform a medley of their collaborations on "Cowboy Carter," including "Spaghettii," a Grammy nominee for best melodic rap performance.

Following his featured role on "Cowboy Carter," Shaboozey had a breakout year with his own hit, "A Bar Song (Tipsy)." The country-pop anthem topped the Hot 100 for 19 weeks, tying Lil Nas X's "Old Town Road" for the longest streak in history.

'Levii's Jeans'

Beyoncé welcomed Post Malone to the stage for a duet of "Levii's Jeans," the 17th track on "Cowboy Carter," and Grammy nominee for best pop duo/group performance.

Like Beyoncé and Shaboozey, Malone had a big year. He released his own country album, "F-1 Trillion," in August." The tracklist included collaborations with Nashville legends like Tim McGraw, Dolly Parton, and Chris Stapleton.

The album's biggest hit, however, was a duet with Morgan Wallen titled "I Had Some Help," which debuted at No. 1 on the Hot 100 and remained atop the chart for six weeks.

Malone also topped the Hot 100 in April by teaming up with Taylor Swift for "Fortnight," the lead single from her record-breaking album "The Tortured Poets Department."

'Jolene'

Beyoncé's version of "Jolene" put a twist on country singer Dolly Parton's popular song about infidelity.

Parton recorded the introduction to Beyoncé's rendition, telling E! News in a May interview that she was "very proud" of the song's success.

"As a songwriter, you love the fact that people do your songs no matter how they do them," Parton said.

'Texas Hold 'Em'

"Texas Hold 'Em" was surprise-released as the lead single for "Cowboy Carter" during the 2024 Super Bowl.

The song shot to No. 1 on Billboard's Hot Country Songs, making Beyoncé the first Black woman in history to top the chart.

"Texas Hold 'Em" also held No. 1 on the Billboard Hot 100 for two weeks and earned three more nods — song of the year, record of the year, and best country song — for the most-nominated and most-awarded performer in Grammys history.

• Sam Altman asked his followers on X for ideas to improve OpenAI in 2025.
• Altman responded to suggestions about creating family accounts and improving video features.
• OpenAI had a rocky year following new litigation from competitor Elon Musk.

Sam Altman wants your suggestions for improving OpenAI in the new year.

On Christmas Eve, OpenAI's CEO opened the floor to his followers on X with a simple question: "what would you like openai to build/fix in 2025?"

Altman's post comes toward the end of a tumultuous year for OpenAI. Elon Musk, who cofounded the company but left the board in 2018, filed a lawsuit against Altman and OpenAI in February. Musk withdrew the lawsuit in June but filed a new lawsuit in August in which he argued that OpenAI executives "deceived" him into cofounding the company.

Amid its legal challenges, OpenAI raised $6.6 billion in funding in October — a record-high funding round for tech in Silicon Valley — pushing the company's valuation to $157 billion.

Now, Altman is looking at what's in store for the new year, and he's crowdsourcing ideas on how to continue advancing and improving not just ChatGPT but all of the company's existing and emerging products.

Here are three ideas Altman appears to be eyeing so far.

Family accounts

One X follower responded to Altman's post with a suggestion to allow OpenAI users to create accounts for families that include guardrails, allowing kids to use the platform safely.

"Let their curiosity take off, but within reasonable limits, as determined by the parent," the user wrote, to which Altman responded: "this is a good idea!"

OpenAI's website states that ChatGPT isn't meant for children under 13 and requires parental consent for children ages 13 to 18 to use the platform, but does not actively verify the consent.

Improvements to voice chats

ChatGPT developed a voice feature that allows users to speak directly to the chatbot. One of Altman's followers suggested that the feature be improved because, as of now, per the user, "you can't just silently think for 5 seconds without being interrupted."

Altman wrote that that's a "good point." Users have struggled with the feature since it was rolled out, with some having reported bugs and misinterpretations from the chatbot.

Better video generation

Multiple users urged Altman to improve Sora, OpenAI's text-to-video model. Sora allows users to describe a video they want the platform to create with a written prompt, which Sora will generate based on the text.

Sora officially launched on December 9 after being piloted to a limited group of creators in February. Rohan Sahai, Sora's product lead, said at the launch that the product would begin more conservatively because its team wants to prevent illegal activity like copyright violations while allowing for creative expression.

OpenAI did not immediately respond to a request for comment from Business Insider.

• Alrena Dale, 61, got $155,000 in student loans discharged through bankruptcy.
• Biden's new bankruptcy guidance, aimed at easing the process for borrowers, made that possible.
• Some attorneys told BI that the new guidance is a big help, but more outreach would be helpful.

Alrena Dale, 61, had her six-figure student-loan balance wiped out after decades of payments. She's one of hundreds of borrowers who have received relief after new changes to the bankruptcy process.

Though Dale filed over five years ago, President Joe Biden's new bankruptcy guidance, which streamlined the information she needed to provide in order to qualify for relief, was a turning point in her case.

In August 2023, Dale was finally relieved of her $155,000 balance, according to documents reviewed by Business Insider.

"There were no words. I was excited. I cried," Dale, who'd attended an online business bachelor's and master's program but struggled to find employment in her field, told BI. She worked multiple minimum-wage jobs at a time to afford her student-loan payments alongside her monthly expenses. "I really honestly didn't believe it until I got my discharge papers."

The reason it was so difficult for Dale and many other student-loan borrowers to seek relief in bankruptcy court before 2022 is that borrowers had to prove an "undue hardship" standard, in which they had to show that they cannot maintain a minimal standard of living, that their circumstances aren't likely to improve, and that they have made a good-faith effort to repay their debt.

That standard was an extremely high bar for borrowers to meet. The Biden administration's guidance changed that by establishing clearer guidelines for borrowers to meet undue hardship, and it allowed borrowers to complete a self-attestation form, allowing the bankruptcy process to move quicker and avoid investigations into their backgrounds.

Some bankruptcy attorneys told BI that the new guidance has made student-loan bankruptcy much more achievable for borrowers, with some having seen quick success after decades of stagnancy. Still, they said many lawyers are reluctant to lean into the new process, and more outreach and education on navigating bankruptcy for student loans would help.

Dale said the overwhelming emotion she now feels is relief.

"Knowing that I don't have to go out and work a second job just to pay it back because they've removed it for me, I really can't thank them enough," Dale said. "I have no words because I'm just happy and grateful and thankful."

'It's given us so much hope'

Bob and Tammy Branson, a bankruptcy attorney and senior paralegal, respectively, successfully represented Dale in her bankruptcy proceedings.

Tammy said that over the past 25 years, it was nearly impossible to discharge their clients' student loans in bankruptcy — but after the new guidance, she said their law firm has successfully discharged over $1 million in student loans.

"Now we're actually getting people not just to the point of treading water, but we're getting them out of the water," Bob said.

Dustin Baker, a bankruptcy attorney in Iowa, has seen similar success with the new guidance. Baker told BI that before November 2022, he advised his clients that considering a student-loan discharge wasn't worth their effort because it was so difficult to achieve, and he didn't want to take his clients' money for litigation he wasn't confident would be successful.

But once the guidance was announced, Baker said he's eliminated student debt for about a dozen of his clients, with a few more in the pipeline. He said his "biggest excitement" with the new process is the self-attestation form, which directly tells borrowers the questions they need to answer to get approved for a discharge, making communication between the borrower and the government easier.

The Justice Department released new data in July on how the process was going since the new guidance was announced. It showed that 588 new cases were filed from October 2023 to March 2024 — a 34% increase from the prior 6-month period. New data BI obtained from Sen. Elizabeth Warren in October showed that nearly 900 borrowers sought out the process in fiscal year 2024, and 85% of borrowers who filed using the new guidance received a full or partial discharge.

Baker said his experience incorporating the new guidance into his work was "very easy," and he added that members of the Justice Department gave attorneys in his area training sessions. However, Tammy and Bob said more education and outreach would be helpful because some lawyers are unsure if the new process is worth it.

Still, it's clear the guidance works, and Tammy said she hopes that continues.

"It's given us so much hope," she said.

'I would've had to work another job'

The new bankruptcy process for student-loan borrowers still isn't perfect. Igor Roitburg, a former attorney and senior managing director at Stretto — a bankruptcy services and technology firm — told BI that the timeline for borrowers to receive a bankruptcy decision can still widely vary and that uncertainty is a roadblock for some borrowers and attorneys to participate.

"For them to invest time and effort into a new process that they're uncertain about if they don't see results for months and months and months, makes it hard for them to commit to the process and offer it as a global service to all their clients," Roitburg said.

Dale said she saw no other option but to file for bankruptcy, regardless of whether it would be successful. Once the new guidance was released, the self-attestation form allowed Dale to prove that her financial circumstances were unlikely to improve, qualifying her for relief.

She now works at a call center and said she can't afford to retire yet. If she had the opportunity to do things differently, she might have considered going to a trade school to avoid the student-debt burden.

"I'm just making the best of what I have to work with right now," she said, adding that if she didn't see success through bankruptcy, "I would've had to work another job just to pay the student loans."

Have you successfully discharged your student loans in bankruptcy? Are you struggling with the process? Share your story with this reporter at [email protected].

• President-elect Donald Trump has called on Congress to raise or eliminate the debt ceiling.
• He said doing so before his term would put the onus on Joe Biden and let him avoid an early fight.
• Going over the debt ceiling could lead to a default and a deep recession.

The debt ceiling is the unexpected debate in Washington this week after President-elect Donald Trump threw the annual holiday-season government-funding talks into disarray.

Trump said he wanted to raise or eliminate the limit on how much the federal government can borrow. Doing so now would mean the much-debated move would happen on President Joe Biden's watch and be resolved before Trump takes office, when he'll want to implement his agenda without a fight over borrowing limits.

"Congress must get rid of, or extend out to, perhaps, 2029, the ridiculous Debt Ceiling," Trump wrote Friday in a Truth Social post. "Without this, we should never make a deal. Remember, the pressure is on whoever is President.'"

This all comes amid a chaotic scramble to reach a funding deal for the US government and avoid a shutdown when Friday ends. The debt ceiling was one of the sticking points Trump used to scrap a bipartisan deal to keep the government funded through March. Now he's revisiting a much-used political tool.

"Trump is right to identify that he doesn't want his fingerprints on increasing the debt ceiling, and he doesn't want to have to deal with it in six months while he's trying to pass what he considers a must-pass tax-extension bill," Elizabeth Pancotti, the director of special initiatives at the left-leaning Roosevelt Institute think tank, told Business Insider.

A debt-ceiling breach has become a political tool — one that Trump is trying to wield for the last time

The debt ceiling limits the amount of money the federal government is allowed to borrow to pay for its programs and operations. If it's not regularly raised or suspended, the US government risks defaulting on its debt and failing to pay its bills.

This could compromise everyday Americans' access to crucial government programs such as Social Security, Medicaid, and housing vouchers. Len Burman, a fellow at the think tank Urban Institute, told BI that a default could also cause interest rates to rise drastically if investors no longer viewed the US government as a creditworthy borrower. That would mean Americans may face higher rates on mortgages and credit cards, which could lead to a broader financial crisis and deep recession.

Because of these widespread consequences, the debt ceiling has evolved into a political bargaining chip, and the US has repeatedly come close to breaching it over partisan disagreements, most recently in 2023. That's why some Democrats have long advocated abolishing the ceiling, arguing that Republicans weaponize it to push spending cuts. Sen. Elizabeth Warren capitalized on Trump's recent comments, writing Thursday morning on X that she agreed with him on terminating the debt limit.

During recent debt-ceiling standoffs, various plans to sidestep the limit were floated. Democratic Rep. Jamie Raskin told BI that the president could invoke a clause in the 14th Amendment that would declare a default and the debt ceiling that caused that default unconstitutional.

Other ideas to eliminate the debt ceiling have included minting a $1 trillion platinum coin, which some economists have said would allow the Treasury secretary to deposit the coin to pay off debts.

In an interview with Fox News Digital on Thursday, Trump said that Republicans who didn't support repealing the debt limit could face primary challenges; many Republicans have historically opposed getting rid of it, arguing that it's a check on borrowing. Trump told NBC News that Democrats had signaled they wanted to get rid of the debt limit and that he would "lead the charge" to do so.

The country will technically hit the debt ceiling at the start of next year, but the Treasury Department can hold off default and keep paying the bills through various accounting tricks, likely until late spring or early summer.

• Biden's administration posted notices to withdraw its broader student-loan-forgiveness plans.
• Amid lawsuits, the Education Department wrote that it stands by the legality of its debt-relief plans.
• The plans aimed to cancel some student debt for over 38 million borrowers.

President Joe Biden's administration has officially scrapped its unfinished rules for broad student-loan forgiveness.

The Education Department posted notices to withdraw its plans to cancel student debt for over 38 million borrowers. The withdrawal notices were for two of the department's unfinished debt-relief rules. The first rule was Biden's Plan B for broader debt relief after the Supreme Court struck his first plan down in summer 2023. The second rule was a proposal to provide relief to borrowers facing financial hardship.

In the notices to withdraw the unfinished rules, the Education Department said it is focused on helping student-loan borrowers manage the remaining elements of the return to repayment that began last year following the pandemic pause.

The department said that withdrawing these regulations will give future stakeholders the flexibility to craft new forms of relief, especially with the uncertainty the incoming administration brings. Trump has previously criticized broad relief and is unlikely to continue Biden's efforts.

The department also said that the withdrawal of these rules is not a result of the questions surrounding their legality, saying that it believes the relief "is authorized by the Secretary's longstanding and existing authority" under the Higher Education Act.

Biden's Plan B for student-loan forgiveness would have benefited over 30 million borrowers. It proposed full or partial relief for categories including borrowers with unpaid interest and those who have made at least 20 years of payments. While the rule was never finalized, a group of GOP-led states filed a lawsuit in September to block its implementation.

Meanwhile, the Education Department proposed a separate rule in October to provide relief to 8 million borrowers facing financial hardship. Those categories would have included borrowers facing challenges with childcare or medical expenses.

The Education Department did not immediately respond to a request for comment from Business Insider on the withdrawal of the plans.

Biden is still pursuing other avenues for debt relief before his term is up. On Friday, his administration announced an additional $4.28 billion in debt relief for 54,900 borrowers in Public Service Loan Forgiveness — a result of ongoing improvements to the program. Despite not being able to pass broad relief, Biden, over the course of his term, has provided relief to nearly 5 million borrowers through changes to various programs.

Some Republican lawmakers lauded the withdrawal of the plans. Sen. Bill Cassidy, the top Republican on the Senate education committee, said in a Friday statement that Biden's "student loan schemes were always a lie."

Meanwhile, some advocates criticized the GOP-led challenges to Biden's relief efforts. Persis Yu, the deputy executive director of the advocacy group Student Borrower Protection Center, said in a statement that Biden's plans "would have freed millions from the crushing weight of the student debt crisis and unlocked economic mobility for millions more workers and families."

"We are deeply grateful to President Biden for the work he did to fight for the 40 million borrowers trapped in student debt," Yu said.

• Biden announced $4.28 billion in student-debt cancellation for 54,900 borrowers in Public Service Loan Forgiveness.
• The relief is a result of the Education Department's ongoing fixes to PSLF.
• President-elect Donald Trump is unlikely to continue Biden's student-debt relief efforts.

President Joe Biden announced more student-loan forgiveness with one month left until he leaves the White House.

On Friday, Biden and his Education Department said they have approved $4.28 billion in student debt for 54,900 borrowers in the Public Service Loan Forgiveness program, which forgives student debt for government and nonprofit workers after 10 years of qualifying payments.

The relief is a result of ongoing improvements to PSLF, including a waiver that expired in October 2022 that allowed payments that previously did not qualify for relief to count toward borrowers' forgiveness progress.

"Four years ago, the Biden-Harris Administration made a pledge to America's teachers, service members, nurses, first responders, and other public servants that we would fix the broken Public Service Loan Forgiveness Program, and I'm proud to say that we delivered," Education Secretary Miguel Cardona said in a statement.

This latest relief brings the total student-loan forgiveness under Biden to about $180 billion for nearly 5 million Americans, including $78 billion for just over 1 million borrowers enrolled in PSLF.

It's unclear if the Biden administration will announce more student-debt relief before President-elect Donald Trump takes office on January 20. Still, it caps off a tumultuous past few years for student-loan borrowers hoping for broad debt relief — Biden's first student-loan forgiveness plan was struck down by the Supreme Court last summer, and his Plan B for debt relief is now in court following legal challenging from Republican-led states.

On top of that, 8 million borrowers enrolled in the SAVE plan — Biden's new income-driven repayment plan intended to make monthly payments cheaper with a shorter timeline to forgiveness — are in limbo as they wait for a court to decide if the plan can move forward.

Even if Biden's plans for broader relief do survive their legal challenges, it's unlikely Trump's administration would continue those efforts. Preston Cooper, a senior fellow at the conservative-leaning American Enterprise Institute, previously told Business Insider that Biden "has taken a stance of, 'We want to try and forgive as much debt as possible through various different programs.'"

"And to put it mildly, we're not going to see that same attitude under the Trump administration," Cooper said.

Trump proposed eliminating PSLF during his first term, but doing so requires congressional approval. Republican control of Congress and the White House means that Trump would likely have more success achieving his goals.

"From Day One of my Administration, I promised to make sure that higher education is a ticket to the middle class, not a barrier to opportunity," Biden said in a statement. "Because of our actions, millions of people across the country now have the breathing room to start businesses, save for retirement, and pursue life plans they had to put on hold because of the burden of student loan debt."

Joshua McGoun, a K-12 public-school teacher in Frederick, Maryland, first noticed a change in his students about 10 years ago. They began to struggle with focus.

Increasingly, younger kids were not nailing basic reading skills before third grade — a crucial window. Those who miss it have a tough road ahead in middle and high school. Even adept readers in their tweens and teens have become afraid of complex or extended reading tasks and more comfortable with short texts or bite-size summaries.

McGoun, who has a doctorate in education, shared one stark example. With struggling readers, he hands each child a book upside down and backward. "They should be able to turn the book the right way up and open it at the first page," he said. These days, "some students aren't able to do that."

This is not unusual. Across the US, kids are struggling to read. Last year, reading performance for fourth graders hit its lowest level since 2005, and teachers expect that number to keep tumbling.

The panic to turn things around quickly is driving a wedge between teachers, politicians, and parents, all pointing the finger of blame at one another.

The Senate education committee, calling it a crisis, is pushing school districts to retrain teachers in a trendy new teaching style called "the science of reading," which has dramatically improved literacy in some areas (scroll down for more detail on that). Parents with resources to do so are moving their kids to schools that tout science-backed teaching styles.

Some teachers and policy experts worry this frenzy may have an ironic side effect, putting pressure on public schools to resolve a problem that cannot be tackled in the classroom alone.

"It makes the task of teaching harder," McGoun said, referring to new literacy programs and a focus on test results. "We're burning out at a faster rate, and it's causing a lot of apathy."

Gen Alpha kids, aged 2 to 12, need to discover the joy of reading, he and other teachers say. It's doable, but it's a more creative and slower process that many parents don't have time to wait for.

Teaching a 6-year-old to read is political

There has never been a golden age for reading scores in America. The record high was in 2017, when 37% of US fourth graders pass their NAEP reading test — just 5% higher than the most recent results.

Still, this new low raised alarm among lawmakers who were already concerned about screens and loneliness among Gen Alpha.

“The long-term implications will be dire” if literacy does not improve, Sen. Bill Cassidy, the top Republican on the Senate education committee, said in February. “We are at risk of having an entire generation of children, those who were in their prime learning years during the COVID-19 pandemic, fail to become productive adults if reading proficiency does not improve.”

His proposed solution? Get all teachers to use the same, evidence-backed teaching style.

Teaching styles have served as political footballs for over 100 years. The fierce, ongoing debate — known as the “reading wars” — dates back to at least the mid-19th century, when Horace Mann, then Massachusetts’ education secretary, slammed the alphabet as “skeleton-shaped, bloodless, ghostly apparitions” and said children should be taught whole words rather than their structure.

While teaching unions maintain that teachers should be able to draw from various teaching styles, it’s a tough sell with parents.

“Parents and others are getting upset about their kids’ literacy curriculum because they've heard that there's a certain way to teach kids how to read, and that might not be properly implemented in schools,” Carly Robinson, a senior education researcher at Stanford University, said.

Recently, the “science of reading” method (see chart below) has been touted as a silver bullet that transformed literacy rates in Mississippi between 2013 and 2019 — even in areas with high child-poverty rates, which typically correlate with lower literacy levels. It became known as the “Mississippi Miracle.”

In a February report, the Senate education committee said teachers who still used other methods — particularly the three-cueing system — were setting students “up for failure in the long run.”

TEACHING STYLES

In other states, parents want a Mississippi Miracle of their own.

Susie Coughlin, a mom in Falmouth, Maine, found herself going down rabbit holes about literacy techniques after her 5-year-old daughter, Carter, repeated kindergarten. Despite spending a second year at that level, the little girl had fallen behind in reading and writing.

One day, near the end of the school year, Coughlin saw a piece of Carter’s homework where she had written, “I went to the osen,” rather than, “I went to the ocean.” The teacher had not corrected the mistake because the emphasis was on visual cues — a picture of the sea — rather than spelling. Coughlin was appalled; spelling was why Carter struggled to keep up in other classes. The mom took up her concerns with the teacher, who, she said, defended the visual method.

Coughlin said that the impression the teacher gave off was that the school was "just going to let your child slide through." "So we hit the brakes."

Carter finished the year, but her parents elected to send her to a private Catholic school for first grade. In her new school, Carter was taught to “sound it out” — articulating the word as she read it rather than scanning pages for context cues.

Her progress was dramatic, Coughlin said. Now 8 years old, Carter thrives in her second-grade reading classes. “It broke my heart when her confidence was in the toilet at her old school, but her bucket of self-esteem is filling up,” Coughlin, who has since enrolled Carter’s younger brother at the same school, added.

Coughlin said her family was fortunate to have the resources to go private because the annual fees at the Catholic school are relatively low: $10,000 a child, compared with about $40,000 for secular private schools in Falmouth.

Forty-five states and Washington, DC, are considering bills that would retrain public school teachers in new, evidence-based reading practices. Susan Neuman, a professor of childhood and literacy education at New York University and an education official under President George W. Bush, said the bills represented “the biggest, boldest, and most inclusive effort to date to promote high-quality, scientifically supported reading instruction for all children,” adding: “We cannot fail.”

Educators are not so bullish about another initiative that requires retraining and devotion to new materials that cost hundreds or thousands of dollars a year, preventing creativity with the syllabus.

“The problem is that some school districts think: ‘We pay for this program, and therefore you have to use this program.’ You can't use anything else,” McGoun said.

While his school allows for flexibility, he’s seen panic take over in other districts, he said: “As a teacher, you can't even make your own materials. It’s because the school district attended a conference and learned about a particular program — they promised XYZ outcomes if you only use its resources.”

Nailing the right method is not a teacher’s biggest concern, McGoun said. “The most important thing an educator can do is provide good pedagogy by focusing on the student’s interests,” he said. “When you have motivated students, they will read.”

Kids are falling out of love with the written word

Students, McGoun said, have “fallen out of love” with the written word because the march of technology has made it seem “alien” and “outmoded” to them.

Parents know tearing a school-age child away from a phone is no easy feat. No matter what literacy technique you employ, the pull of screens tends to be stronger.

There are efforts to leverage technology to help with literacy. Some artificial-intelligence programs, already appearing in classrooms, listen to students read aloud and give them instant feedback on pronunciation and comprehension, an alternative to having students play a reading game for 10 minutes on their own.

Subtitles on TV shows have proved beneficial for early readers by presenting words on a screen that a child will read, sometimes without even realizing it — so much so that the actor Jack Black joined a campaign to promote subtitles to boost kids’ literacy.

Tara West, a former kindergarten teacher and the founder of the literary-coaching organization Little Minds at Work, believes the benefits of constructive tech could outweigh the harm of kids spending too much time on screens. “Kids gravitate toward anything that’s digital,” so teachers can take advantage of that, West said, adding: “Technology is going to go far.”

Getting teachers on board may not be easy. In a recent Pew survey of elementary-school teachers, 47% of respondents said they weren’t sure how AI in classrooms would influence their students’ learning.

Jeff Jarvis, a public-school teacher in Los Angeles, is skeptical about the tech method. Sure, it might work in small groups, “but you’d almost definitely be struggling to use it effectively in a large class with 25 kids,” he said.

Educational digital media is “often attached to visuals, not texts,” Jarvis said, adding: “They’re getting quick blurbs from Snapchat and TikTok but nothing in-depth.”

Teachers like Jarvis and McGoun say that, at the most basic level, kids should be surrounded by books to simply learn how they work — turning physical pages instead of swiping on an iPad, for example. That’s where parents come in.

Pavel Buyeu, a 43-year-old dad from Seattle, said that when his daughter, Liza, now 15, began to show a reluctance to read, he feared she’d miss out on the joy and satisfaction of discovering books as a kid.

“Liza and I are from different generations with different interests,” Buyeu said. Still, he said he would like to see her enjoy some of the books he loved when he was younger. “My favorites were ‘The Adventures of Tom Sawyer,’ ‘The Adventures of Huckleberry Finn,’ and ‘The Little Prince,’” he told Business Insider.

Buyeu devised a “game” to make reading fun for Liza. He’d take his daughter to the bookstore and have her pick a title in return for privileges like sleeping in on weekends. The pair read and discussed the books before writing an alternative ending to the plot. Family members voted on a winner, which motivated Liza even more.

“Reading became a joy for her,” Buyeu said, adding that Liza’s reading speed and spelling improved, said.

Buyeu’s game speaks to the power of parental involvement — a luxury not afforded to every kid.

Parents with means are paying for tutoring

Learning to read isn’t just about getting a grade; it can reverberate throughout someone’s career and personal life. Want to vote? It helps to be able to read and comprehend complex material.

If not all students become readers in school, you will start to see “the haves and the have-nots,” Neuman, the former education official, said — people with the money to pay for extra help moving ahead in school and life, and those relying on public resources falling behind.

Kumon, a private company that provides after-school math and reading tutoring, has recorded a recent surge in its number of new students, with enrollment increasing by 56% between 2020 and 2024. The company’s methodology incorporates both meaning-based instruction and phonics.

Kalisha Brooks of Indian Land, South Carolina, enrolled her son, Corey, at Kumon when he was in kindergarten during the COVID-19 pandemic. She was worried that the disruption of the health crisis might set him back.

“I’d read articles about children being home and getting further and further behind,” Brooks said. So she bit the bullet, budgeting an extra $200 a month for Corey to have twice-weekly reading classes. She’s glad she did. Corey, now 8, performed above average in second grade and is now in third with a renewed confidence in reading.

Jessica Mercedes Penzari, a 40-year-old mom in New York City, can relate to Brooks’ dilemma. Her son Hendrix's kindergarten report card showed that he had dramatically fallen behind in reading within months. “It was a moment of panic,” Penzari said. “Once you fall behind, getting caught up is so difficult. I thought, ‘I’m slipping as a mom because my eye isn’t on the ball.’”

Penzari secured a private tutor — a special-education teacher who lived in her building. She babysat the woman’s kids in exchange for the typically $75-an-hour lessons. It proved successful. Hendrix, who recently entered second grade, is back at proficiency level and above grade level in some subcategories.

Children who have fewer educational resources find themselves a step behind their peers at the outset. Just 10% of multilingual students can read proficiently by fourth grade compared with 33% of fourth graders overall, the NAEP found.

Last year, Nichelle Watkins, who lives in public housing in Baltimore, told Fox 45 News that her fourth-grade son, Logan, still could not read and that they couldn’t afford tutoring.

“How is he supposed to be productive if he can’t read?” she said in the news segment.

“They go there to be babysat for eight hours and come home,” the mom added, referring to Logan’s elementary school. She said legislators — to whom she later wrote pleading for improvements — ignored the problem.

“I feel like they don’t care. It’s not their children,” she said.

What now?

Linda McMahon, President-elect Donald Trump’s pick to lead his Education Department, will have a mammoth managerial job on her hands if she is confirmed.

McMahon, a former wrestling executive who sat on the Board of Trustees for Sacred Heart University and served one year on Connecticut’s Board of Education, supports Trump’s plans to deliver funds for education directly to states, giving them the authority to choose how to spend the money. She’s sparked anger from some educators who argue her plans would hurt public schools. She has also been accused in a recent lawsuit of enabling sexual abuse of kids in the WWE. McMahon has denied the allegation, and the lawsuit is on hold while another court rules on the constitutionality of such cases.

In an emailed statement, Trump-Vance transition spokesperson Liz Huston told BI that McMahon "is ready to deliver on President Trump's agenda to restore America's education system and prepare our next generation for the future."

Robinson, the Stanford researcher, said teachers would need much more funding to implement all the new bipartisan reading policies coming through states. Still, it’s not enough to simply shower schools with cash — smart policies are key. “Just giving money without any guidelines isn't actually that helpful if you want it to be directed in a certain way,” Robinson said.

In the meantime, all of these moving parts have created a divide between parents and teachers, who point the finger of blame at each other. It’s easier to take on someone close to you than to tackle unanswerable questions, such as, “how much have screens derailed attention spans?”, and “how much education funding is enough to make a difference?”

Jarvis, the special education teacher in LA, said he understands parents’ frustration that something so fundamental to modern life now feels impossible. He agreed that federal funding for literacy programs is essential to stop reading rates from tumbling further.

In the meantime, he said that parents can make a major difference by engaging in reading with their children at home. Take your kids to libraries, the teacher said. Let your kids see you reading books at home, he added, to create motivation and a rich environment for “reading to flourish.”

“Put down your own electronic devices and read with your kids, even if it’s just for 15 minutes a day,” Jarvis said. “Let them read aloud to you and then ask questions about the text. It’s important to have parent-child time away from technology.”

• The House of Representatives failed to pass a pared-down spending bill.
• The vote came after President-elect Donald Trump tanked a bipartisan version that looked set to pass.
• The move pushes the government closer to a holiday shutdown.

The House of Representatives on Thursday failed to pass a stripped-down spending bill following a tumultuous 48 hours on the Hill, pushing the government closer to a partial shutdown right before the holidays.

Republicans in the House said they had settled on a new version of the continuing resolution ahead of the vote on Thursday after President-elect Donald Trump tanked a previous spending bill that initially won bipartisan support.

But the final vote was 174-235-1. Thirty-eight Republicans flouted Trump and voted against the continuing resolution.

On Wednesday, Trump came out hard against the original continuing resolution, urging Republican lawmakers to renegotiate the bill and threatening to primary those who failed to fall in line.

The president-elect's apparent turnabout came after billionaire Elon Musk publicly backed the idea of shutting down the government until the day Trump is inaugurated. Musk railed against the resolution, which he said included items unrelated to government funding, such as pay raises for lawmakers and pandemic preparedness.

Musk, who has been tapped to lead the Department of Government Efficiency alongside fellow billionaire Vivek Ramaswamy, celebrated the pared-down spending bill ahead of the failed Thursday vote.

"This shows how much your voice matters!" the Tesla CEO wrote on X. "And having a President like @realDonaldTrump means that your voice is finally heard."

Lawmakers on both sides of the aisle seem to agree that Musk played a major role in killing the original bill. Some have expressed concern about the outsized influence Musk seems to have on Trump. The president-elect, for his part, has pushed back on suggestions that Musk is the one in control.

The continuing resolution that failed to pass on Thursday was smaller in scope than the original legislation. Among the items cut from the bipartisan resolution included funding for a child cancer research program, funding for research on premature labor, money for treatment of sickle cell disease, money for early cancer detection, a program for Down syndrome research, and an anti-deepfake porn bill.

The newer version of the resolution would have kept the government funded through mid-March and suspended the nation's debt ceiling until January 2027.

Trump encouraged Republican lawmakers to back the new version of the bill on Thursday.

House Democrats, on the other hand, expressed frustration about the series of events. CNN reported Thursday that Democrats could be heard chanting "hell no" during a caucus meeting ahead of the vote.

If lawmakers fail to reach an agreement, a partial shutdown would lead to suspended funding for many government entities and withheld paychecks for thousands of federal employees right before the holidays.

• Elon Musk and Vivek Ramaswamy pressured Republicans to scrap their bill to keep the government funded.
• The US government is now set to shut down early Saturday morning if Congress doesn't act.
• A shutdown would furlough thousands of federal workers, impacting programs many Americans rely on.

The US is once again on the brink of a government shutdown following intense pressure from President-elect Donald Trump and his newly created DOGE commission.

It would mean federal workers are temporarily out of work, and Americans could experience slowdowns at airport security and customer-service delays for programs like Social Security. During the last government shutdown under Trump, national parks shuttered and flights were delayed or rerouted because of limited transportation staffing.

The possibility of a shutdown starting at 12:01 a.m. Saturday comes after the House of Representatives seemed poised this week to approve a continuing resolution to keep the government funded through March. However, following intense criticism on social media from Trump and the leaders of his new Department of Government Efficiency, Elon Musk and Vivek Ramaswamy, House Republicans scrapped the bill.

They took issue with the inclusion of a range of items in the bill that they said were not relevant to government funding, including pandemic preparedness and a pay raise for lawmakers.

Ramaswamy posted on X on Wednesday morning that the bill is "full of excessive spending, special interest giveaways & pork barrel politics."

Musk also wrote on X on Wednesday that a government shutdown is "infinitely better than passing a horrible bill."

Trump and his vice president-elect, JD Vance, released a joint statement Wednesday saying the resolution would "give Congress a pay increase while many Americans are struggling this Christmas."

Now, Congress must find a new funding solution in just over 24 hours, leaving Americans on the brink of the first government shutdown since 2018. Here's what that could mean.

What happens in a government shutdown

Every federal agency is required to prepare for a government shutdown by creating contingency plans to submit to the Office of Management and Budget. Each agency outlines how it will structure its workforce in a shutdown, including how many workers it will furlough and for how long.

This means federal workers would be affected first, with many finding themselves temporarily out of work. The longer the shutdown lasts, the more severe the consequences for Americans would be, but if federal workers are furloughed, agencies will be strained to carry out their usual daily functions.

For example, the Social Security Administration's latest contingency plan said it expects to furlough 8,103 of its 59,000 employees at the start of a shutdown. This means that while Social Security payments would still continue to reach Americans, customer service would be limited for beneficiaries dealing with payment issues.

During a government shutdown, active-duty military service members would remain on duty but may go unpaid until funding is restored. The Department of Education's latest contingency plan, from 2023, said that it would have to pause most of its grantmaking activities during a shutdown, including its review of grant applications from local school districts.

The Department of Transportation's contingency plan in 2024 said that while facility service inspections and air-traffic-controller training would cease, essential services like air travel would continue. The Department of Homeland Security's most recent contingency plan said that the Transportation Security Administration would furlough over 2,000 workers, likely resulting in longer wait times for travelers at airports.

The US Postal Service, however, would not be affected by a shutdown because it's an independent agency.

Additionally, a 2023 brief from the progressive think tank Center for American Progress said that a number of federal programs "immediately cease" during federal shutdowns, including the processing of new small business loan applications, workplace safety inspections, NASA research programs, and federal loans to farmers.

The collapse of the previous deal means the clock is ticking for both parties to come to an agreement on avoiding a government shutdown before the weekend.

Karine Jean-Pierre, the White House press secretary, criticized the recent government shutdown threats in a statement Wednesday.

"Triggering a damaging government shutdown would hurt families who are gathering to meet with their loved ones and endanger the basic services Americans from veterans to Social Security recipients rely on," she said. "A deal is a deal. Republicans should keep their word."

• The Federal Reserve cut interest rates in its final decision of the year.
• It also penciled in two interest-rate cuts in 2025.
• Still, Powell said that Trump's proposed trade policies pose economic uncertainty.

President-elect Donald Trump's potential trade policies could change the Federal Reserve's plans in the coming year.

On Wednesday, the Federal Open Market Committee announced its third consecutive interest-rate cut of the year, lowering rates by 25 basis points. Alongside the rate cut announcement, the Federal Reserve's quarterly Summary of Economic Projections also penciled in two interest-rate cuts for 2025, based on the median prediction from voting Fed members.

Markets took a dive after the Fed announcement, with the Dow Jones Industrial Average closing down over 1,100 points, or about 2.6%.

Fed chair Jerome Powell said during the Wednesday press conference that the decision to cut rates in December was "a closer call" but ultimately "the best decision" to achieve the Fed's dual mandate of maximum employment and price stability.

"I feel very good about where the economy is. Honestly, I'm very optimistic about the economy, and we're in a really good place. Our policy is in a really good place. I expect another good year next year," Powell said.

However, Powell said Trump's proposed tariff plans pose more uncertainty to the US economy in the coming year.

The president-elect has suggested he would impose broad tariffs on imports from key trading partners with the US, including China, Mexico, and Canada, which could lead to higher prices for imported goods.

At this point, Powell said there is too much uncertainty around Trump's trade plans to make any concrete predictions about next year's policy decisions at this point.

"We just don't know really very much at all about the actual policy, so it's very premature to try to make any kind of conclusion," Powell said. "We don't know what will be tariffed, from what countries, for how long, in what size. We don't know whether there'll be retaliatory tariffs. We don't know what the transmission of any of that will be into consumer prices."

Additionally, Powell said some FOMC members did consider fiscal policy, like tariffs, in their economic predictions, showing how the Fed is facing a range of uncertain scenarios in 2025.

He said that once Trump unveils his policies, the Fed would consider any necessary changes to its policy, but "we're just not at that stage."

Over the past year, Powell has reiterated that the Fed should move more cautiously instead of risking cutting rates prematurely and having to course correct later on. That's still the Fed's outlook going into the new year as the central bank continues its goal of reaching 2% inflation.

Amid economic progress over the past year, Powell said that inflation is coming down at a slower pace than the Fed would prefer. The consumer price index, which measures inflation, rose 2.7% year-over-year in November, a slight uptick from the 2.6% reading in October.

"When the path is uncertain, you go a little bit slower," Powell said. "It's not unlike driving on a foggy night or walking into a dark room full of furniture, you just slow down."

• 56 million US workers lack employer-provided pension or retirement savings plans.
• A new AARP report highlights the financial insecurity facing workers without retirement plans.
• Those workers would likely have difficulty living solely off Social Security.

Many Americans don't feel ready for retirement — and their jobs aren't stepping in to fill in the economic gaps.

A new analysis from the AARP Public Policy Institute finds that, in 2022, 56 million Americans — nearly half of the private-sector workforce — worked for employers who didn't offer pension or retirement savings plans.

Workers with less education and lower earnings were less likely to have access to plans. Specifically, AARP said that about 75% of private-sector workers with less than a high school degree, 50% of workers with some college, and 31% of workers with a bachelor's degree do not have a retirement plan. On top of that, about 79% of workers earning $53,000 or less annually and 21% of workers earning over $53,000 do not have retirement plans.

David John, one of the AARP report's authors, told Business Insider that even while those workers would get Social Security benefits, they likely wouldn't be enough to supplement other expenses.

"The fact is that if you are a career lower-income individual, yes, Social Security is going to replace a higher proportion of your earnings, but you still have the emergencies that are going to come up," John said. "And that includes things like car repair, cost of medication, house repair — hot water heaters don't really care who you are at the time they decide to fail."

The AARP report said that, with the average Social Security benefit totaling around $1,767 a month in 2022, most retirees will need additional income sources to stay financially afloat.

"We have a substantial number of people who don't have sufficient retirement savings to supplement their Social Security. Social Security is it for a substantial number of people," John said. "And that means, essentially, that they may not have the kind of retirement that they dreamed of."

The report uses data from the Census Bureau's Current Population Survey on employer coverage, which provides data on Americans' work, earnings, and education, and adjusts it by factoring in additional data from the Survey of Consumer Finances and IRS to bring the findings in line with the overall population, allowing the researchers to break out specific demographic groups.

Financial security remains a top concern for many older adults. A recent report from the Alliance for Lifetime Income's Retirement Income Institute found that in 2024, over 30 million Americans born between 1959 and 1964 — the tail end of the baby boomer generation — will start turning 65, meaning many of them will increasingly start to rely on retirement savings. Without a retirement plan, some previously told BI they would likely have to continue working to supplement their Social Security.

Some states have taken steps to aid workers who do not have access to retirement plans through their employers. California created a program in 2019 called CalSavers, which requires employers in the state who do not sponsor a retirement plan to provide individual retirement accounts that employees are automatically enrolled into unless they opt out. John said that some variation on that type of plan could work at the federal level.

"The basic model or the basic way the state programs are structured can be a guide to help create a national solution to the retirement coverage problem," he said.

The latest Social Security and Medicare Board of Trustees report found that Social Security will only be able to pay out full benefits for the next 11 years if Congress does not intervene.

John said that the lack of coverage goes beyond just weighing down individuals — it could also have a drag on the wider economy.

"If we have a substantial number of people who don't have sufficient resources, they're going to put pressure on governments," he said. Those retirees will likely be more dependent on government programs like housing, healthcare, and senior citizen centers. "There is an expense to the economy and there is an expense to frankly the future by not dealing with this problem."

Do you not receive retirement benefits through work and are worried about your future? Contact these reporters at [email protected] and [email protected].

• The Federal Reserve is expected to cut interest rates this week by 25 basis points.
• Inflation has ticked back up in recent months, and economists think the job market is still robust.
• The outlook for 2025 is more uncertain while the Fed waits to see how Trump will impact the economy.

The final interest-rate decision of the year is coming this week, and it's likely to give Americans some more financial relief.

On Wednesday, the Federal Open Market Committee is expected to announce another interest-rate cut. As of Monday afternoon, CME FedWatch, which estimates interest-rate changes based on market predictions, forecasts a close to 100% chance the Federal Reserve will cut rates by 25 basis points.

Data out last week showed overall inflation has sped up. The consumer price index's year-over-year growth rate rose from 2.4% in September to 2.6% in October before climbing to 2.7% in November. Core CPI, which excludes volatile food and energy prices, has been holding steady, with a year-over-year change of 3.3% from September to November.

Jerome Powell, chair of the Fed, said at The New York Times' DealBook Conference on December 4 that "we're in a very good place with the economy," but inflation is still not quite where the central bank wants it to be.

"The labor market is better, and the downside risks appear to be less in the labor market, growth is definitely stronger than we thought, and inflation is coming a little higher," Powell said. "So the good news is that we can afford to be a little more cautious as we try to find neutral."

Slower job growth and higher unemployment may add fuel to the argument for continuing to cut, while a tighter-than-expected labor market could lead the central bank to pause while waiting to see if wage growth and inflation speed up.

"I don't think there's that much cause for concern in the labor market data that would lead to them suspending their plan to cut," Julia Pollak, the chief economist at ZipRecruiter, told Business Insider.

Pollak said the quits rate, the latest reading of which was 2.1% in October, is "consistent with a non-inflationary labor market" and that "wage growth at 4% over the year should be sustainable given current productivity growth." Cory Stahle, an economist at the Indeed Hiring Lab, said the US economy continues to add jobs above population growth and has low unemployment.

The unemployment rate increased from 4.1% to 4.2% in November. The three-month average job gain in November was around 173,000, lower than early 2024 but still strong.

"There are still many reasons to be optimistic about the labor market, but also you don't, as a Federal Reserve policymaker, you don't want to wait until things start looking bad to react to that because by then, you might be too late," Stahle said.

The interest rate outlook for 2025 is a bit more uncertain. President-elect Donald Trump has already posed broad tariff threats on key trading partners with the US, including China, Canada, and Mexico. If he implements those tariffs, consumers would likely face higher prices on impacted goods. The Fed could respond to inflationary trade pressures by once again raising interest rates.

However, Powell has so far declined to comment on any policy changes the Fed would consider in response to Trump's tariff threats, saying during the DealBook conference that too much about what Trump might do with tariffs is unknown.

"We can't really start making policy on that at this time. That is something that lies well into the future. We have to let this play out," Powell said, emphasizing that the Fed is making decisions about what's happening in the economy now and not six months from now.

Still, some economists expect 2025 to be another strong year for the economy. Gregory Daco, the chief economist at EY, said that the US "remains on a solid growth trajectory supported by healthy employment and income growth, robust consumer spending, and strong productivity momentum that is helping tame inflationary pressures."

"We expect these positive dynamics will carry into 2025 allowing the Fed to pursue gradual, but cautious, policy recalibration," Daco said in written commentary.

• The government lost billions of dollars to fraud and improper payments last year.
• Both Musk and Ramaswamy have indicated they'll crack down on fraud through DOGE.
• Some experts told BI they're optimistic about action on fraud, but the DOGE leaders have to be willing to invest in the issue.

Elon Musk and Vivek Ramaswamy have an opportunity to take on fraud in government programs once President-elect Donald Trump takes office.

Musk and Ramaswamy are tasked with leading the new Department of Government Efficiency, or DOGE, which seeks to reduce government waste and slash spending. Musk set a goal of cutting $2 trillion in annual outlays.

One of Musk and Ramaswamy's aims for DOGE could lead to a relatively early win with bipartisan support: eliminating fraud in federal programs like Medicare. In a recent interview, Ramaswamy told CNBC that "the dirty little secret is that many of those entitlement dollars aren't even going to people who they were supposed to be going to in the first place."

"There are hundreds of billions of dollars of savings to extract" through basic fraud prevention measures, he said.

Musk shared that sentiment, posting on X in November: "The sheer magnitude & audacity of government fraud is mind-blowing!"

Data from the Government Accountability Office showed that government agencies have made about $2.7 trillion in improper payments since 2003, and in fiscal year 2023, the GAO estimated agencies made $236 billion in improper payments. Notably, those improper payments include other categories than intentional fraud, like administrative errors, Orice Williams Brown, the GAO's chief operating officer, said in a September testimony to Congress.

"While all fraudulent payments are considered improper, not all improper payments are due to fraud," Brown said.

The top impacted agencies were Medicare and Medicaid, which the GAO said had $51 billion and $50 billion in improper payments, respectively, followed by pandemic programs, including the Paycheck Protection Program.

Experts told Business Insider that there's potential for DOGE to make progress on the issue if they focus on effective solutions like system modernization and improved data analysis, an area where Ramaswamy and Musk could leverage their Silicon Valley tech experience.

Both fraud and improper payments have been difficult for the government to address because of "outdated technology and a limited focus on program integrity," Linda Miller, cofounder of the Program Integrity Alliance — a group that focuses on fraud prevention in the government — told BI.

"You need to use advanced technology and data in order to really move the needle," Miller said. "And the government is not using advanced technology and data to solve this problem."

Jetson Leder-Luis, an assistant professor at Boston University and researcher on government fraud, told BI that DOGE could pursue "a lot of low-hanging fruit ideas" to combat fraud in big industries like healthcare.

"I think DOGE has the opportunity to make big strides on fraud," Leder-Luis said, adding that if they boost enforcement funding and create enhanced data pipelines, "they have a major opportunity to save tens of billions of dollars."

The Trump transition team did not immediately respond to a request for comment from BI.

How government programs make way for fraud

The government has been unable to implement widescale fraud intervention in recent decades because of a lack of resources and staff to investigate fraud, and a failure to modernize data and technology systems, according to Miller and Leder-Luis.

The GAO found that the government's annual financial losses from fraud were between $233 billion and $521 billion, based on data from fiscal years 2018 through 2022.

Miller pointed to the pandemic as the "perfect storm" for fraud, with the Paycheck Protection Program and disaster loan programs as key examples. Miller said that all that aid being available, coupled with limited oversight at the government level during a national emergency, made it easier for fraud to go undetected; some of the programs allowed individuals to self-certify their loan applications, paving the way for misrepresentations.

"The lack of modernization of our digital technology at the state government level was a real hindrance to fraud prevention during the pandemic," Leder-Luis said.

There have been a number of instances where individuals attempt, and sometimes succeed, to game the system and score welfare benefits that they're not entitled to. But, Miller said, the bigger concern is beyond the individual circumstances; it's the "large-scale fraud schemes" that have taken millions of dollars from the government. For example, the FBI opened an investigation into a scheme that Medicare officials said defrauded the program out of $3 billion after some companies billed the program for catheters patients never requested or used.

Lawmakers and the Department of Justice have worked to take action over the past years to address fraud, including with the federal Pandemic Response Accountability Committee that oversaw pandemic-era programs. Still, Miller said that while agencies are focused on getting benefits to the beneficiary, there still isn't enough attention on ensuring benefits are going to the right person.

"That's the kind of thing that I think really angers Americans," Miller said. "You wonder, 'What are your tax dollars going to if they're not stopping that kind of fraud?'"

Where DOGE can play a role

Miller said she expects DOGE to look for "quick wins" soon after Trump takes office. These could include modernizing IT systems and investing more resources into fraud detection. A critical point DOGE will have to contend with is that cracking down on the cost of fraud would require some upfront investments.

"It can be very helpful to have a private sector lens come in and look at this," Miller said, which is why Musk and Ramaswamy's backgrounds could be useful in introducing new technology to government systems. However, she said, the two DOGE leaders have to be willing to invest in new fraud detection systems because, even amid their goals to slash spending, modernizing technology is not going to be free.

The GAO's Brown also outlined recommendations for federal agencies to better prevent fraud, including using external data from third parties to verify information Americans provide on loan and insurance applications.

With Republicans soon holding control of both Congress and the White House, DOGE's recommendations to Trump and lawmakers would likely see an easier path to passage. Addressing fraud has also seen Democratic support; Rep. Jamie Raskin introduced the Government Spending Oversight Committee Act in April, which would give federal inspectors general tools to combat fraud across major funding bills.

To be sure, some lawmakers and experts are skeptical of DOGE's approach. The US spent $6.75 trillion in fiscal year 2024, data from the Treasury Department showed, and it wouldn't be as simple as the DOGE leaders have said to ax that spending, lawyers told BI.

While administrative law requires a lengthy process to rescind regulations in federal agencies, Musk and Ramaswamy previously said they would recommend a list of regulations that Trump could "immediately pause." Some lawyers previously said the process is a lot more complicated, and the DOGE leaders would likely face legal hurdles if they pursued that route.

Musk and Ramaswamy also aren't the first to suggest cuts to government spending. Former President Ronald Reagan's Grace Commission, aimed at eliminating waste and inefficiency in the federal government, eliminated $22 billion in social welfare programs that ended up being offset by his tax cuts and defense spending.

Still, Leder-Luis said, what DOGE determines as "waste" is up for interpretation, whereas fraud is illegal, and there's support across the aisle to take that on.

"If we lose $50 billion a year to fraud in just the healthcare system alone, that's ultimately paid for by us," Leder-Luis said. "There are so many things that people want the government to be able to pay for that we all think are good and valuable, like better roads and schools. And when we say, 'I'm sorry, we can't afford that,' well, we are affording healthcare fraud instead."

• The CFPB finalized a rule that allows banks to cap overdraft fees at $5 or set the fee at an amount that covers losses.
• The rule, which will take effect in October 2025, is projected to save Americans $5 billion annually, or $225 per household.
• The CFPB previously found that banks were charging Americans unnecessary overdraft fees.

Americans who spend more than they have in their bank accounts won't be burdened with hefty fees come October next year.

On Thursday, the Consumer Financial Protection Bureau announced that it finalized a rule that would limit overdraft fees at the bank. Overdraft fees are charged when customers make a withdrawal that results in a negative account balance. However, the CFPB found that some banks charged higher fees than they needed to cover their losses, leaving consumers in a financial bind.

The new rule updates federal regulations for banks with more than $10 billion in assets. It provides those banks with options for lowering overdraft fees, including capping them at $5. For banks that choose to offer overdraft as a service for their customers, the rule allows banks to set their fee at an amount that covers costs and losses. If banks do want to keep making profits off of overdraft fees, they'll have to disclose the terms of it like they do with credit cards and other loans.

These changes are expected to save Americans up to $5 billion each year, or $225 per household, the CFPB said.

"For far too long, the largest banks have exploited a legal loophole that has drained billions of dollars from Americans' deposit accounts," CFPB Director Rohit Chopra said in a statement. "The CFPB is cracking down on these excessive junk fees and requiring big banks to come clean about the interest rate they're charging on overdraft loans."

Lower-earning Americans are disproportionately impacted by overdraft fees, per a previous report from the CFPB. The agency found that around a third of households with income below $65,000 were charged with an overdraft or a non-sufficient fee, compared to just 10% of consumers in households earning over $175,000. Americans of color and those without a college degree were also more likely to live in households affected by those fees.

The CFPB's finalization of the overdraft rule comes as the future of the agency is unclear. President-elect Donald Trump tapped Elon Musk and Vivek Ramaswamy to lead the new Department of Government Efficiency, or DOGE, which aims to get rid of government waste. The two DOGE leaders said they would accomplish that goal, in part, by eliminating some federal agencies, including the CFPB.

"Delete CFPB," Musk wrote in a late November post on X. "There are too many duplicative regulatory agencies."

Chopra responded to Musk's remarks during an MSNBC interview on December 7, saying that getting rid of the CFPB would be "mayhem" and "begging for a financial crisis."

"I don't understand why people would want financial crime," Chopra said, "and if they say it's duplicative, who else will do it?"

Have you paid overdraft fees or struggled with banking fees? Contact these reporters at [email protected] and [email protected].

• Sen. Elizabeth Warren led over 20 colleagues in requesting the CFPB and FTC investigate student-loan company Navient.
• They said they're concerned that Navient might be improperly denying defrauded borrowers debt relief.
• Navient said it's committed to getting relief to borrowers, but the discharge process is still in its early stages.

A group of Democratic lawmakers said that a major student-loan company is denying some student-loan borrowers relief that they might qualify for.

Sen. Elizabeth Warren led over 20 of her Democratic colleagues, including Rep. Alexandria Ocasio-Cortez and Sen. Ron Wyden, in sending a letter Wednesday to the Consumer Financial Protection Bureau and the Federal Trade Commission urging an investigation into the student-loan company Navient.

In the letter, viewed exclusively by Business Insider, the lawmakers wrote that Navient's process to cancel student loans for borrowers who said their schools defrauded them is "flawed, convoluted, and opaque," and it may have resulted in borrowers being "improperly" denied relief they qualified for.

A process known as the borrower defense to repayment allows borrowers with federal student loans to apply for debt cancellation if they believe their schools defrauded them. If approved, the government would wipe out their balances.

However, borrowers with private loans held by Navient cannot access the federal process. Instead, they can request a school misconduct application from Navient, and Navient would then decide whether to approve it.

The company previously said it's committed to addressing all "valid" misconduct claims.

The issue, the lawmakers wrote, is that Navient has denied relief for the majority of borrowers who applied. Navient wrote to Warren and her colleagues in a September letter, viewed by BI, that the company services about 65,000 borrowers who attended for-profit schools. As of September, Navient has sent 4,233 borrowers a school-misconduct discharge application, and 1,801 borrowers have submitted applications. Of the 1,061 applications Navient fully reviewed, 238 borrowers have been approved for relief, and 823 have been denied.

Navient wrote to the lawmakers that borrowers' applications are "carefully reviewed" by a legal team to determine eligibility for debt cancellation, and to date, it has approved over $8 million in relief. Still, the lawmakers said that the denials do not contain sufficient explanations, "leaving a fraction of Navient's borrowers who attended predatory, for-profit colleges with the relief that they deserve."

BI previously spoke to some borrowers who have attempted to navigate Navient's school misconduct application process. Nick Eucker, 38, said he received an application from Navient, and after submitting 200 pages worth of paperwork in support of his claim he was defrauded, Navient denied his application. The only reasoning he was provided was: "You do not meet the requirements for discharge based on misconduct by your school."

A Navient spokesperson previously said that the discharge process is still in its early stages, and the company expects more borrowers to see relief as it rolls out.

Still, the lawmakers said that Navient has the authority to cancel the loans of impacted borrowers without requiring a lengthy application process.

"Navient should cancel all of the private fraudulent debts for borrowers who have been harmed by its misconduct," they wrote, "all of whom the company is able to identify without an application."

• Elon Musk and Vivek Ramaswamy said a SCOTUS ruling on federal regulations will help them cut spending through DOGE.
• Some legal experts said it could actually restrict some of DOGE's aims.
• That's because, under the new legal framework, it will be more difficult to change interpretations of an existing rule.

The Supreme Court might not help Elon Musk and Vivek Ramaswamy's spending cut goals as much as they might think.

President-elect Donald Trump tapped Musk and Ramaswamy to lead a new Department of Government Efficiency, or DOGE, aimed at reducing government waste. Since then, both have said a recent Supreme Court decision that restricts the ability of federal agencies to enact regulations would empower their plans to reduce head count at those agencies and cut unauthorized government programs.

This summer, the Supreme Court overturned the Chevron doctrine, which was established in 1984 and allowed federal agencies to interpret ambiguously worded laws while writing regulations as long as they did not counter Congress' language. Instead, courts themselves are obligated to resolve those ambiguities, rather than executive-branch agency experts.

Ramaswamy, a former GOP presidential candidate, wrote in a December 1 post on X that overturning Chevron "paves the way for not a slight but a drastic reduction in the scope of the federal regulatory state. It's coming." Musk responded to the post, saying: "We are going to use this ruling to gut the federal government."

Some legal experts said that's likely not the case, telling Business Insider that the Supreme Court's overturning of Chevron could actually constrain DOGE because it takes away an agency's power to interpret rules and make decisions independently.

Gillian Metzger, a constitutional law professor at Columbia Law School, told Business Insider that Musk and Ramaswamy's argument is "somewhat puzzling" because the Chevron decision "is about pulling back on executive and agency power."

"Chevron deference gave an agency room to change its interpretation of a statute, provided the statute was ambiguous, and the agency reasonably offered a permissible interpretation," Metzger said. "Without that precedent, it's going to be harder for them to change interpretations of statutes in ways that justify repealing regulations."

Still, Republican control of Congress and the White House could mean that DOGE's goals have a better chance of being implemented with lawmaker support.

Musk, Ramaswamy, and the Trump transition team did not immediately respond to a request for comment from BI.

Holes in Musk and Ramaswamy's argument

The Supreme Court overturned the Chevron doctrine in June 2024 in a ruling on the case Loper Bright Enterprises v. Raimondo. The case was brought on by a group of fisheries that disagreed with the National Marine Fisheries Service's interpretation of a law.

Nicholas Bagley, an administrative law professor at the University of Michigan, wrote in The Atlantic that following the ruling, "an agency that has already adopted the soundest interpretation of a law can't change its mind."

"If the agency were to try to adopt a new reading of the law—perhaps one that DOGE prefers—and to use that to justify rescinding the rule, the courts would stop the agency," Bagley wrote. "Saying that Loper Bright gives DOGE flexibility is about as sensible as saying that handcuffs help when throwing a baseball."

The Administrative Procedure Act, a federal statute that outlines how agencies must enact and revoke regulations, would also complicate matters. Musk and Ramaswamy wrote in The Wall Street Journal that DOGE would offer Trump a list of regulations they recommend rescinding, and Trump could then "immediately pause the enforcement of those regulations and initiate the process for review and rescission." They wrote that doing so would "liberate" Americans and businesses from complying with regulations Congress never passed.

However, to actually rescind a regulation, the APA requires a lengthy rulemaking process that includes seeking public comment and providing justification for the reasoning to rescind a rule. The Biden administration went through that process to craft its second student-loan forgiveness plan after the Supreme Court struck down the first one. Metzger said that rescinding a rule would require agency workers with expertise in the area to help conduct that analysis, something that would be difficult if DOGE fulfills its aim of cutting the federal workforce.

Cary Coglianese, a law professor at the University of Pennsylvania, said he could see why Musk and Ramaswamy are depending on Chevron's overruling to help them slash regulations. If DOGE begins the process of rescinding existing federal regulations, there is likely to be litigation, and Coglianese said that the two DOGE leaders might be banking on courts looking at a regulation afresh and deciding that "the rule was too adventurous and acting well beyond their statutory authority."

Still, Coglianese said, that won't be easy to do — an agency has to provide extensive justification for implementing a new rule, and Musk and Ramaswamy would then be tasked with proving why the original justifications should be undone.

"There's a wild card about how much courts will be willing to reopen old precedents that were decided on Chevron grounds," Coglianese said. "They're banking on some ability to kind of be able to revisit some old statutory interpretations. It's not clear that the Supreme Court had that in mind when it overruled Chevron."

How Congress can advance DOGE's goals

Recent Supreme Court rulings might not help DOGE achieve its goals, but a Republican trifecta in Congress would. Since many of the changes Musk and Ramaswamy are seeking to make are unlikely to be accomplished by executive power alone, Congress would need to approve legislation to enact those changes.

Already, a bipartisan group of lawmakers is on board with advancing some of DOGE's spending cut proposals. Rep. Jared Moskowitz recently became the first Democratic lawmaker to officially join the DOGE caucus alongside dozens of Republicans, saying in a December 3 statement, "I believe that streamlining government processes and reducing ineffective government spending should not be a partisan issue."

Moskowitz pointed to the Department of Homeland Security as a specific agency for which he would support investigating spending cuts. Rep. Ro Khanna, another Democratic lawmaker, wrote in a December 5 post on X that he's ready to work with DOGE to "slash waste" in the Department of Defense, and Sen. Bernie Sanders recently told BI that Musk "is absolutely right" to call for defense spending cuts.

Data from the Treasury Department shows that the US spent $6.75 trillion in fiscal year 2024, with the highest amounts of spending coming from the Department of Health and Human Services, the Social Security Administration, and the Treasury Department. National defense spending also ranked high on the list, coming in at $874 billion.

With a glimmer of bipartisan support emerging for some of DOGE's goals, spending cuts could be facilitated through legislation. Musk and Ramaswamy met with lawmakers on Capitol Hill on December 5, during which GOP Sen. Joni Ernst presented a proposal to enact existing legislation to cut spending by cracking down on teleworking and getting rid of unused federal office space.

Sen. Marsha Blackburn also posted on X that she will be introducing legislation — the DOGE Act — that "will freeze federal hiring, begin the process to relocate agencies out of the D.C. swamp, and establish a merit-based salary system for the federal workforce."

Both Metzger and Coglianese said DOGE's proposals could happen through legislation, and the assumption that Musk and Ramaswamy can act on spending cuts alone — using Chevron as a backup — will likely face legal hurdles.

"If you just came along and said, 'We've got a new sheriff in town, a new president, and we don't like that rule,' that's not enough," Coglianese said. "You've got to be able to essentially rebut all that prior cases and explain why, in the face of all that you said just a couple of years ago, now, you want to get rid of a rule. That's not easy to do."

• Democratic lawmakers urged Biden to cancel student debt for defrauded borrowers before Trump takes office.
• Some borrower defense applications are still pending, and lawmakers are pushing for prompt relief.
• Biden has canceled student debt for over 1 million borrowers defrauded by their schools.

A group of Democratic lawmakers want President Joe Biden to quickly process student-debt cancellation applications for thousands of borrowers before it's too late.

On Wednesday, 75 Democratic lawmakers, led by Sens. Dick Durbin and Ed Markey and Rep. Maxine Waters, sent a letter to Education Sec. Miguel Cardona urging him to discharge unprocessed borrower defense applications, which are applications student-loan borrowers can submit if they believe they were defrauded by the school they attended. If approved, the loans they took out to attend that school would be discharged.

With President-elect Donald Trump taking office in under two months, the lawmakers said debt relief would become a lot more uncertain under his leadership.

"We're here today to demand that the Department of Education deliver on President Biden's commitment to debt relief and process all outstanding borrower defense relier before President Trump slams the door shut on borrowers on January 20," Markey said during a Wednesday press conference. "Borrowers who attended fraudulent schools and have struggled with debt for years or even decades cannot afford to wait any longer."

The lawmakers urged Biden during their press conference to cancel the loans of borrowers who applied for borrower defense in the next 50 days. In their letter, they added that the relief should include the thousands of borrowers already approved for relief who are still waiting for their balances to be wiped out. The lawmakers also wrote that the department should use its authority to enact group discharges for borrowers who attended schools "with documented histories of predatory practices," along with processing any remaining applications.

Democratic Rep. Bobby Scott also urged the Education Department in late November to approve student-debt relief applications not just for borrower defense but for Public Service Loan Forgiveness. During his first term, Trump proposed eliminating the program, which cancels any remaining debt for public sector workers after 10 years of qualifying payments.

An Education Department spokesperson told Business Insider that the department "remains committed to getting borrowers whose colleges took advantage of them all the relief they are entitled without further action on their part."

The spokesperson said that the department paused payments for borrowers with approved discharges and recommended that borrowers with questions on the status of their applications call the borrower defense hotline at 1-855-279-6207.

Biden's Education Department has canceled student debt for nearly 5 million borrowers over the past years, including $28.7 billion for over 1.6 million borrowers who were defrauded by their schools. However, thousands of borrowers are still waiting for their borrower defense applications to be processed, and time is running out.

Durbin said on the Senate floor on Monday that it's "critical" Biden discharge those borrowers' loans "as quickly as possible" because, under Trump's first term, his Education Department ran up a backlog of borrower defense claims, leaving impacted borrowers waiting years for relief.

"History shows that a second Trump Administration is likely to do everything in its power to prevent these students from receiving relief again," Durbin said on Monday. "But our nation's students, who are simply trying to better their lives deserve better."

Trump has not yet provided details on how he will approach student-loan forgiveness. However, some higher education experts previously told Business Insider that relief would likely not be his priority. Preston Cooper, a senior fellow at the conservative-leaning American Enterprise Institute, said that Trump would likely "take a bit more of a skeptical attitude" with borrower defense applications because the Education Department can determine if a borrower qualifies.

"If it's a loan cancellation program that leaves a lot more discretion up to the Department of Education, we could certainly see some major swings in policy," Cooper said.