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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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Young people may lose benefits if they don’t engage with help from new £820m scheme, government warns

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Young people may lose benefits if they don't engage with help from new £820m scheme, government warns

Young people could lose their right to universal credit if they refuse to engage with help from a new scheme without good reason, the government has warned.

Almost one million will gain from plans to get them off benefits and into the workforce, according to officials.

Latest updates from the Politics Hub

Pic: iStock
Image:
Pic: iStock

It comes as the number of young people not in employment, education or training (NEET) has risen by more than a quarter since the COVID pandemic, with around 940,000 16 to 24-year-olds considered as NEET as of September this year, said the Office for National Statistics.

That is an increase of 195,000 in the last two years, mainly driven by increasing sickness and disability rates.

The £820m package includes funding to create 350,000 new workplace opportunities, including training and work experience, which will be offered in industries including construction, hospitality and healthcare.

Around 900,000 people on universal credit will be given a “dedicated work support session”.

That will be followed by four weeks of “intensive support” to help them find work in one of up to six “pathways”, which are: work, work experience, apprenticeships, wider training, learning, or a workplace training programme with a guaranteed interview at the end.

However, Work and Pensions Secretary Pat McFadden has warned that young people could lose some of their benefits if they refuse to engage with the scheme without good reason.

“Doing nothing should not be an option,” he told Sky News’ Sunday Morning with Trevor Phillips.

“If someone just took that attitude, yes, they would then be subject to, you know, the obligations that are already part of the system.”

“What I want to see is young people in the habit of getting up in the morning, doing the right thing, going to work,” he added.

“That experience of that obligation, but also the sense of pride and purpose that comes with having a job.”

Some young people on benefits will be offered job opportunities in construction. Pic: iStock
Image:
Some young people on benefits will be offered job opportunities in construction. Pic: iStock

Read more from Sky News:
Child poverty strategy unveiled – but not everyone’s happy

Universal credit claimants soar by over million in a year

The government says these pathways will be delivered in coordination with employers, while government-backed guaranteed jobs will be provided for up to 55,000 young people from spring 2026, but only in those areas with the highest need.

However, shadow work and pensions secretary Helen Whately, from the Conservatives, said the scheme is “an admission the government has no plan for growth, no plan to create real jobs, and no way of measuring whether any of this money delivers results”.

She told Sky News the proposals are a “classic Labour approach” for tackling youth unemployment.

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Youth jobs plan ‘the wrong answer’

“What we’ve seen today announced by the government is funding the best part of £1bn on work placements, and government-created jobs for young people. That sounds all very well,” she told Sunday Morning with Trevor Phillips.

“But the fact is, and that’s the absurdity of it is, just two weeks ago, we had a budget from the chancellor, which is expected to destroy 200,000 jobs.

“So the problem we have here is a government whose policies are destroying jobs, destroying opportunities for young people, now saying they’re going to spend taxpayers’ money on creating work placements. It’s just simply the wrong answer.”

Ms Whately also said the government needs to tackle people who are unmotivated to work at all, and agreed with Mr McFadden on taking away the right to universal credit if they refuse opportunities to work.

But she said the “main reason” young people are out of work is because “they’re moving on to sickness benefits”.

Ms Whately also pointed to the government’s diminished attempt to slash benefits earlier in the year, where planned welfare cuts were significantly scaled down after opposition from their own MPs.

The funding will also expand youth hubs to help provide advice on writing CVs or seeking training, and also provide housing and mental health support.

Some £34m from the funding will be used to launch a new “Risk of NEET indicator tool”, aimed at identifying those young people who need support before they leave education and become unemployed.

Monitoring of attendance in further education will be bolstered, and automatic enrolment in further education will also be piloted for young people without a place.

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A peace deal isn’t a sure thing, Zelenskyy’s UK visit needs more than a warm welcome

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A peace deal isn't a sure thing, Zelenskyy's UK visit needs more than a warm welcome

Volodymyr Zelenskyy is heading to Downing Street once again, but Prime Minister Sir Keir Starmer will be keen to make this meeting more than just a photo op.

On Monday the PM will welcome not only the Ukrainian president, but also E3 allies France and Germany to discuss the state of the war in Ukraine.

French President Emmanuel Macron and German Chancellor Friedrich Merz will join Sir Keir in showing solidarity and support for Ukraine and its leader, but it’s the update on the peace negotiations that will be the main focus of the meet up.

The four leaders are said to be set to not only discuss those talks between Ukraine, the US and Russia, but also to talk about next steps if a deal were to be reached and what that might look like.

Read more:
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Inside a secret underground military base in eastern Ukraine

Ahead of the discussions, Sir Keir spoke with the Dutch leader Dick Schoof where both leaders agreed Ukraine’s defence still needs international support, and that Ukraine’s security is vital to European security.

But while Russia’s war machine shows no signs of abating, a warm welcome and kind words won’t be enough to satisfy the embattled Ukrainian president at a time when Russian drone and missile attacks continue to bombard Kyiv.

More on Sir Keir Starmer

Mr Zelenskyy held a call on Saturday with US President Donald Trump’s special envoy Steve Witkoff and Mr Trump’s son-in-law Jared Kushner.

“The American representatives know the basic Ukrainian positions,” Mr Zelenskyy said in his nightly video address. “The conversation was constructive, although not easy.”

Meanwhile, Mr Trump’s outgoing Ukraine envoy has said a peace deal between Russia and Ukraine is “really close”.

Keith Kellogg, who is due to step down in January, told the Reagan National Defence Forum that efforts to resolve the conflict were in “the last 10 metres”, which he said were always the hardest.

Mr Kellogg pinpointed the future of the Donbas and Ukraine’s Zaporizhzhia nuclear power plant as the two main outstanding issues.

But Russia has signalled that “radical changes” are needed to the US-Ukraine peace plan before it is acceptable to Moscow.

Yuri Ushakov, Russian President Vladimir Putin’s top foreign policy aide, was quoted by Russian media as saying the US would have to “make serious, I would say, radical changes to their papers” on Ukraine.

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Reform UK denies Nigel Farage broke electoral law

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Reform UK denies Nigel Farage broke electoral law

Reform UK has denied claims of Nigel Farage breaking electoral law.

It follows a report in Monday’s The Daily Telegraph that Mr Farage has been referred to the police by a former member of his campaign team over claims he falsified election expenses.

The claims relate to Mr Farage’s campaign in Clacton-on-Sea, the seat he won for Reform UK in the 2024 General Election.

In a statement, a Reform UK spokesperson said: “These inaccurate claims come from a disgruntled former councillor… the party denies breaking electoral law. We look forward to clearing our name.”

According to the Telegraph, the claims have been made by Richard Everett, a former Reform councillor.

It is reported by the Telegraph that Mr Everett has submitted documents to the Metropolitan Police.

Mr Everett was one of four councillors who defected from the Conservatives to Reform UK on the eve of the 2024 General Election campaign.

Sky News has not verified the allegations and the Metropolitan Police and the Electoral Commission are yet to comment.

Both Labour and the Conservatives have called for answers from Mr Farage.

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