The daily business briefing: August 24, 2022

1. Ex-Twitter security chief files whistleblower complaint

Twitter's former head of security, Peiter "Mudge" Zatko, said in a whistleblower disclosure obtained by CNN and The Washington Post that the social media company has misled its board, investors, and government regulators about security vulnerabilities. Zatko sent the complaint to Congress and federal agencies last month, warning that Twitter has not come clean about "extreme, egregious deficiencies" in its defenses against hackers. Zatko, a widely admired hacker, depicted Twitter as a chaotic company that is vulnerable to foreign intelligence services. He also said Twitter's leaders lack the resources to determine how many bots are on the platform, an issue Tesla CEO Elon Musk cited to justify his effort to back out of his $44 billion deal to buy Twitter.

CNN The Washington Post

2. FTC drops Zuckerberg as defendant in antitrust lawsuit

The Federal Trade Commission said in a court document filed Tuesday that it will drop Meta Platforms CEO Mark Zuckerberg as a defendant in an antitrust lawsuit filed last month to block the company from buying a small virtual-reality firm, Within Unlimited. Zuckerberg agreed in return not to buy the company and its fitness app, Supernatural. The FTC sought to keep Meta, the parent of Facebook and Instagram, from acquiring the startup on the grounds that it is already a force in the virtual-reality sector. The FTC said Meta, which is developing its "metaverse" VR project, would violate antitrust laws and reduce competition if it acquired the fitness app.

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The Wall Street Journal

3. Biden expected to share decision on student loan forgiveness

President Biden is expected to announce as early as Wednesday whether his administration will extend the repayment moratorium on student loan payments in place since the start of the coronavirus pandemic in March 2020, Reuters reported Tuesday. The current payment pause is set to expire Aug. 31, and borrowers have been waiting to hear about an expected extension. Student debt relief advocates also think Biden will announce a plan to forgive as much as $10,000 for borrowers who make under $125,000 a year, according to Reuters. Senior administration officials were still working on the policy and the White House has kept the deliberations quiet, so the details could change, The Wall Street Journal reports.

Reuters The Wall Street Journal

4. Stock futures little changed after 3rd day of losses

U.S. stock futures were essentially flat early Wednesday following the third straight decline for the Dow Jones Industrial Average and the S&P 500. Futures tied to the Dow were down less than 0.1 percent at 6:30 a.m. ET. S&P 500 and Nasdaq futures were little changed. The Dow and the S&P 500 fell 0.5 percent and 0.2 percent, respectively, on Wednesday. The tech-heavy Nasdaq was flat. Many investors are being cautious as they await a speech by Federal Reserve Chair Jerome Powell at the central bank's three-day economic symposium in Jackson Hole, Wyoming. Economists expect Powell to reiterate the Fed's commitment to aggressively raise interest rates to fight high inflation.

CNBC

5. Biden administration forecasts record drop in deficit as tax receipts rise

The White House released a mid-year budget update Tuesday forecasting a record drop in the federal deficit this year as tax revenue rises more than expected while spending, including pandemic aid, falls. The Biden administration now expects the fiscal-year budget gap to be $1 trillion — $1.7 trillion less than last year's deficit and $400 billion less than the Office of Management and Budget projected in March. The budget is expected to total $1.03 trillion for the fiscal year ending Sept. 30. The deficit reached a record of $3.13 trillion in 2020 as the coronavirus pandemic shook the economy and prompted massive relief spending. The improved forecast came as the tight labor market pushed wages higher, in turn increasing tax receipts.

Politico The Associated Press