Amy Coney Barrett's confirmation and your money: A big change hangs in the balance
Amy Coney Barrett's confirmation and your money: A big change hangs in the balance
“Not Pretty, Not Rich” is a newsletter about money, finance, and the economy written by me, Sam Becker. You can connect with me through my website, Twitter, LinkedIn, or send me an email at sammbecker@gmail.com. Also, if you enjoy this newsletter, I’d really appreciate it if you would share or forward it to others.
It’s Friday, October 16, 2020.
What’s shaping the world this week
Supreme Court hearings are dominating headlines. President Trump’s nominee to the Supreme Court, Amy Coney Barrett, appears primed for confirmation — more on that below.
Pandemic relief? Or no? Congressional leaders are still at an impasse regarding more stimulus measures to offset the effects of the pandemic. The ball is (mostly) in the Senate’s court right now, but the Supreme Court vacancy appears to be the priority.
More bad signs for the economy. Jobless claims increased this week to 898,000 — the highest level since late August, and a sign that the economic recovery has hit a snag.
Did you get the memo?
Revelations surface that the Trump administrations tipped wealthy donors off about the coming economic destruction wrought by COVID-19.
On Thursday, the New York Times reported that members of the Trump administration gave private briefings to donors and friends — a warning about the cataclysmic economic effects of the coronavirus pandemic — back in February. All while they kept telling the public that everything was fine, that there was nothing to worry about, and that the virus was contained.
This, of course, gave these donors and friends of the administration time to move their money around, sell their stocks, and take necessary steps to protect their jobs — while everyone else sat idly by, only to be blindsided by the full force of the pandemic weeks later.
Of course, it would’ve been nice if everyone had been read into the fact that the highest levels of government knew we were facing down a much more serious situation than they were letting on. But hey, we can’t all be writing big checks to super PACs when Verizon won’t stop calling about that overdue phone bill.
Read the story, though, and come to your own conclusions.
I bring the story up because it’s this exact type of scenario that inspired me to create this newsletter. There are now hundreds of you that read it, and as far as I can tell, relatively few are privy to this type of special treatment or information dumps. Instead, these people get the pertinent information they need to preserve their wealth and jobs — while everyone else is told that there’s no reason to be alarmed.
It gets my blood boiling, and it should make you heated, too.
How a new Supreme Court Justice could affect us all financially
As mentioned, Amy Coney Barrett, a federal judge who currently sits on the Seventh Circuit Court of Appeals, appears primed to join the Supreme Court, replacing Ruth Bader Ginsburg. Barrett is a conservative person, to say the least — perhaps even more so than the other two Justices placed on the court by President Trump: Brett Kavanaugh and Neil Gorsuch.
I’m not going to get into the politics of the situation — there’s simply too much to dig into. You can have your issues with how Barrett’s nomination is being handled, the timing of the confirmation, and so on, and that would be perfectly understandable. But I think the safest bet, barring something completely unforeseen occurring, is that Barrett will be confirmed and placed on the Supreme Court as soon as possible.
So, with that, I’m writing now with the assumption that the Supreme Court will have nine Justices come November. And the new Court will have a 6-3 conservative tilt — that doesn’t mean that every ruling will go in the direction that conservatives want, of course, but it does give them an edge. That could have huge consequences for a number of issues.
But right now, I want to focus on the decisions the Court could make that would have a financial impact for many, if not most Americans. At some point, that could include things like student debt, rulings related to the CFPB, etc. — but among the current cases that have yet to be decided, I think that the one with the most potential to financially hurt the most people is California v. Texas. The case that will explore whether the Affordable Care Act (aka Obamacare) is unconstitutional, now that the individual mandate has been severed.
Broadly speaking, conservatives tend to dislike the ACA and have attempted to repeal the law for more than a decade now. Again, it’s understandable to have your beef with the law, but during that decade, there hasn’t been a real, plausible effort to replace it — only to repeal it (which nearly happened), or have it ruled unconstitutional by the courts.
We all remember this:
But with Barrett on the Supreme Court, and California v. Texas pending, there’s a very real possibility — and likelihood, really — that the ACA could be struck down. And soon. The consequences of that would likely be disastrous, again, because we don’t have a plan to replace it with.
According to an analysis from the NYT, It could mean the loss of coverage for pre-existing conditions, of which there are 133 million Americans. It could lead to the loss of health insurance subsidies for tens of millions of people who otherwise can’t afford to buy it. A further 15 million people would los access to Medicaid. And insurance costs would skyrocket for millions more, too.
You can read other analyses, too, to get a fuller grasp on what would happen if the law is struck down with no replacement. And don’t forget that we’re still in the midst of a pandemic, too.
In short, it would be disastrous — and for tens, if not hundreds of millions of Americans, very expensive. And I just got a taste of how inaccessible and expensive the system can be, even with insurance, which you can read about here.
To sum this all up, I think that the most immediate and financially impactful result of Barrett being confirmed to the Supreme Court would be the striking down of the ACA. There will be many other things that come down the pipeline in the coming years, too, but in terms of a single decision that could happen very soon, this is it.
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This week’s numbers and links
$20: The boost that the average retiree will see in their benefits after a 1.3% cost-of-living adjustment kicks in for 2021.
$18 million: How much Delta Airlines burned through every single day during September.
80%: Over the next decade, the IEA predicts renewables will account for 80% of new power generation. Keep that in mind the next time you open up Robinhood...
31%: The decrease in rent prices in San Francisco. The average studio now costs a paltry $2,285 per month.
A lot has happened this year, but don’t forget that we’re still embroiled in trade wars that can, and likely are, affecting your finances.
Keep up the fight,
Sam