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A populist undercurrent running through President Biden’s State of the Union address and churned up by turbulent conditions in the global economy is resonating with Americans.

It’s the feeling that people are “getting ripped off,” as Biden put it, by an economy that isn’t “fair” – a word that appeared in Biden’s prepared remarks nine different times.

From pesky fees charged by big retail banks to deep, structural imbalances in the U.S. tax system that favor wealthy people and large corporations, Biden’s speech hit on a perennial frustration in American economic life: how the deck feels stacked by big companies and institutions against ordinary taxpayers and consumers.

“If we – the poorer people, the middle class – pay tax, the big companies are supposed to do the same. This is right. So I think the President [said] something that is true. We need more tax to be paid by the big companies and then that money can go back to the poorer people to help people,” Jean-Michel Dossous, a New York City cab driver who watched the State of the Union on his phone, told The Hill.

Returning to the notion of economic fairness again and again, Biden touted numerous initiatives to bring down prices after a year of high inflation that has harassed American pocketbooks and that fiscal authorities, like Congress and the president, have limited powers to fight.

“Big Pharma has been unfairly charging people hundreds of dollars [for insulin] – and making record profits,” Biden said during his speech on Tuesday, praising the $35 insulin price cap for seniors who use Medicare that was passed as part of Democrats’ Inflation Reduction Act last year. Price caps have only been used minimally so far in the government’s battle against high prices, which is mostly the responsibility of the Federal Reserve.

He also touted his administration’s effort to fight so-called “junk fees,” expensive penalties charged by banks, financial firms and other businesses for reasons such as late payments, insufficient funds or an attempt to cancel a service.

“I know how unfair it feels when a company overcharges you and gets away with it,” he said about the overdraft fees charged by banks, a commercial practice he called on Congress to curtail with new legislation.

The Biden administration also announced last week an effort to cap bank overdraft fees at $8 through a new rule to be issued by the Consumer Financial Protection Bureau (CFPB).

Tatiana Nazario, an administrative assistant at the Newark, New Jersey, public library told The Hill she “absolutely” had the feeling she was getting ripped off by big banks and that she knew people who’d gotten locked into a cycle of debt due to overdraft fees.

While some major banks have already phased-out overdraft fees, bank lobbyists and advocates for the sector call those penalties a useful and popular way for consumers to smooth out expenses.

“If you get one overdraft fee and it stays in your account for a couple of days, they overdraft you again and again and again until you pay it. If you’re already broke and you’re waiting on that direct deposit to hit, by the time it hits you’re not going to have much left,” Nazario said in an interview.

“People are living off of payday loans, and now they’re promoting these apps … where you get payday loans rather than coming up with better solutions for us,” she added.

The CFPB describes payday loans as short-term, high-cost loans for small amounts of money and cautions that people’s “ability to repay the loan … is generally not considered by a payday lender.”

Of all the mentions of unfairness in the economy in Biden’s State of the Union, perhaps the point he hammered home the most was about unfairness in the tax code.

“I think a lot of you at home agree with me that our present tax system is simply unfair. The idea that in 2020, 55 of the biggest companies in America made $40 billion in profits and paid zero in federal income taxes? That’s simply not fair,” Biden said.

Steve Taylor, an adjunct English professor at the City University of New York, said he felt the same way, arguing that rich people and corporations need to be paying more.

“I think they should pay their fair share. They’re getting away with murder. These guys are not paying any taxes. I mean, come on. I pay taxes. What’s the median for working people, like 25 percent? Come on. What’s going on?” he said in an interview.

Critics of corporate tax hikes argue that big businesses still pay billions in other types of taxes outside of taxed income.

The views of Taylor and Jean-Michel Doussos on the tax system are held by a majority of Americans, according to a variety of public opinion polls. 

Fifty-two percent of Americans believe the government should “redistribute wealth by heavy taxes on the rich,” according to one such poll published by Gallup last August, while 47 percent feel the opposite. Prior to the 2008 financial crisis, those preferences were by-and-large flipped, with more Americans disagreeing with the idea of redistributing rich people’s wealth with taxes than agreeing.

A 2020 poll by Reuters/Ipsos found that nearly two-thirds of respondents believed “the very rich should contribute an extra share of their total wealth each year to support public programs.” Support for that position was stronger among Democrats, at 77 percent, but 53 percent of Republicans also stood behind it.

The difference between how workers and wages are taxed and how profits and businesses are taxed has been coined the “two-tiered tax system” by other members of the Biden administration, including Treasury Secretary Janet Yellen.

“At the core of the problem is a discrepancy in the ways types of income are reported to the IRS: opaque income sources frequently avoid scrutiny while wages and federal benefits are typically subject to nearly full compliance. This two-tiered tax system is unfair and deprives the country of resources to fund core priorities,” she said in 2021. Biden has big plans for junk fees, a billionaire’s tax and paid leave. But can he actually enact them? Yahoo announces layoffs of 20 percent of staff by end of 2023

Tom Ankner, a librarian in Newark, New Jersey, said he appreciated hearing the message during Biden’s speech that the economy could treat people more fairly.

“I liked the fact that he was taking that line,” Ankner told The Hill. “Because that’s where I’d like [to see changes]. That’s the direction I’d like to see the country go.”

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Lightning sign McDonagh to 3-year, $12.3M deal

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Lightning sign McDonagh to 3-year, .3M deal

TAMPA, Fla. — The Tampa Bay Lightning have signed veteran defenseman Ryan McDonagh to a three-year extension worth $12.3 million.

General manager Julien BriseBois announced the deal Thursday. McDonagh will be 37 when the new contract kicks in; it counts $4.1 million against the salary cap through the 2028-29 season.

McDonagh helped the Lightning win back-to-back Stanley Cups in 2020 and 2021 and reach the Final in 2022 before losing in six games to the Colorado Avalanche.

They traded him to the Nashville Predators that summer to clear cap space at a time when it was not going up much because of the pandemic and reacquired him in 2024.

Record cap increases will have McDonagh account for less than 4% of the cap each of the next three years.

McDonagh is currently injured, one of several players Tampa Bay has been missing, along with No. 1 defenseman Victor Hedman. The team has still won 16 of 26 games and leads the Atlantic Division.

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UK

Officials accused of ‘failing’ to tell Lords about three large-scale illegal waste sites

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Officials accused of 'failing' to tell Lords about three large-scale illegal waste sites

Environment Agency bosses have been accused of “failing” to tell a cross-party committee of peers about three large-scale illegal waste sites – including one that was recently exposed by Sky News. 

Our investigation into waste crime in Wigan heard from residents who repeatedly complained to the Environment Agency that 20 to 30 lorries a day drove down their street last winter and dumped industrial amounts of waste.

The rubbish now sits at a staggering 25,000 tonnes. It burnt for nine days in July, and has seen local homes infested with rats and flies.

Since then, a similarly sized site in Kidlington near the River Cherwell in Oxfordshire sparked national outrage. One man has been arrested in connection with the dumping.

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‘Epidemic’ of waste crime in Britain

Despite the scale of these two locations – which were well known to the Environment Agency – it neglected to name them when asked by the Lord’s Environment Committee’s inquiry into waste crime how many “significant” sites there were around the country.

Phil Davies and Steve Molyneux of the Environment Agency gave evidence on 17 September.

Just six sites were cited, but three more have been exposed in the past few weeks alone. These are Wigan, Kidlington and a mound of dumped waste in Wadborough.

Now, the Lords are worried there are more environmentally destructive locations the public aren’t aware of.

Read more:
A community plagued by 25,000 tonnes of illegal waste

Urgent action needed to stop fly-tipping by gangs, peers say

In a letter to the EA’s chair Alan Lovell and chief executive Philip Duffy, Baroness Sheehan, chair of the Environment and Climate Change Committee, said: “We are increasingly concerned that there may be other sites of a similarly large and environmentally damaging scale.”

She asked how much progress has been made to remove waste from the various sites, why restriction notices in places like Wigan weren’t served sooner – and for a full list of other sites of a similar size.

Baroness Sheehan also expressed her “disappointment” that these three new locations “were not deemed necessary to bring to the committee’s attention”, though she thanked journalists for “bringing these sites to the public attention”.

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UK’s ‘biggest ecological disaster’

Her original report saw the Lords call for an independent “root and branch” inquiry into how waste crime is tackled. She said the crime, which costs the UK £1bn every year, has been “critically under-prioritised”.

Sky News has been investigating the scourge of waste crime all year, exposing how criminal gangs involved in drugs, weapons and people trafficking can make “millions” from illegally dumping waste.

In the summer, we tracked down a group of suspected organised fly-tippers who waved wads of cash on TikTok after dumping waste in the countryside.

It’s so lucrative, it was dubbed the “new narcotics” by a former head of the Environment Agency.

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UK

Starmer wants to lift half a million children out of poverty – but does his plan go far enough?

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Starmer wants to lift half a million children out of poverty - but does his plan go far enough?

A new long-awaited child poverty strategy is promising to lift half a million children out of poverty by the end of this parliament – but critics have branded it unambitious. 

The headline announcement in the government’s plan is the pledge to lift the two-child benefit cap, announced in Rachel Reeves’s budget last week.

It also includes:

• Providing upfront childcare support for parents on universal credit returning to work
• An £8m fund to end the placement of families in bed and breakfasts beyond a six-week limit
• Reforms to cut the cost of baby formula
• A new legal duty on councils to notify schools, health visitors, and GPs when a child is placed in temporary accommodation

Many of the measures have previously been announced.

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Two-child cap ‘a real victory for the left’

The government also pointed to its plan in the budget to cut energy bills by £150 a year, and its previously promised £950m boost to a local authority housing fund, which it says will deliver 5,000 high-quality homes for better temporary accommodation.

Downing Street said the strategy would lift 550,000 children out of poverty by 2030, saying that would be the biggest reduction in a single parliament since records began.

More on Poverty

But charities had been hoping for a 10-year strategy and argue the plan lacks ambition.

A record 4.5 million children (about 31%) are living in poverty in the UK – 900,000 more since 2010/11, according to government figures.

Phillip Anderson, the Strategic Director for External Affairs at the National Children’s Bureau (NCB), told Sky News: “Abolishing the two-child limit is a hell of a centre piece, but beyond that it’s mainly a summary of previously announced policies and commitments.

“The really big thing for me is it misses the opportunity to talk about the longer term. It was supposed to be a 10-year strategy, we wanted to see real ambition and ideally legally binding targets for reducing poverty.

“The government itself says there will still be around four million children living in poverty after these measures and the strategy has very little to say to them.”

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‘A budget for benefits street’

‘Budget for benefits street’ row

The biggest measure in the strategy is the plan to lift the two-child benefit cap from April. This is estimated to lift 450,000 children out of poverty by 2030, at a cost of £3bn.

The government has long been under pressure from backbench Labour MPs to scrap the cap, with most experts arguing that it is the quickest, most cost-effective way to drive-down poverty this parliament.

The cap, introduced by Conservative chancellor George Osborne in 2017, means parents can only claim universal credit or tax credits for their first two children. It meant the average affected household losing £4,300 per year, the Institute for Fiscal Studies calculated in 2024.

The government argues that a failure to tackle child poverty holds back the economy, and young people at school, cutting their employment and earning prospects in later life.

However, the Conservatives argue parents on benefits should have to make the same financial choices about children as everyone else.

Shadow chancellor Mel Stride said: “Work is the best way out poverty but since this government took office, unemployment has risen every single month and this budget for Benefits Street will only make the situation worse. “

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OBR leak: This has happened before

‘Bring back Sure Start’

Lord Bird, a crossbench peer who founded the Big Issue and grew up in poverty, said while he supported the lifting of the cap there needed to be “more joined up thinking” across government for a longer-term strategy.

He has been pushing for the creation of a government ministry of “poverty prevention and cure”, and for legally binding targets on child poverty.

“You have to be able to measure yourself, you can’t have the government marking its own homework,” he told Sky News.

Lord Bird also said he was a “great believer” in resurrecting Sure Start centres and expanding them beyond early years.

The New Labour programme offered support services for pre-school children and their parents and is widely seen to have improved health and educational outcomes. By its peak in 2009-2010 there were 3,600 centres – the majority of which closed following cuts by the subsequent Conservative government.

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Lord Bird on the ‘great distraction’ from child poverty

PM to meet families

Sir Keir Starmer’s government have since announced 1,000 Best Start Family Hubs – but many Labour MPs feel this announcement went under the radar and ministers missed a trick in not calling them “Sure Starts” as it is a name people are familiar with.

The prime minister is expected to meet families and children in Wales on Friday, alongside the Welsh First Minister, to make the case for his strategy and meet those he hopes will benefit from it.

Several other charities have urged ministers to go further. Both Crisis and Shelter called for the government to unfreeze housing benefit and build more social rent homes, while the Children’s Commissioner for England, Dame Rachel de Souza, said that “if we are to end child poverty – not just reduce it” measures like free bus travel for school-age children would be needed.

The strategy comes after the government set up a child poverty taskforce in July 2024, which was initially due to report back in May. The taskforce’s findings have not yet been published – only the government’s response.

Sir Keir said: “Too many children are growing up in poverty, held back from getting on in life, and too many families are struggling without the basics: a secure home, warm meals and the support they need to make ends meet.

“I will not stand by and watch that happen, because the cost of doing nothing is too high for children, for families and for Britain.”

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