The daily business briefing: August 25, 2022
Biden unveils plan to forgive $10,000 in student loans for most borrowers, California unveils plan to ban gas-powered new car sales by 2035, and more
Biden forgives $10,000 in student loan debt for most borrowers
President Biden on Wednesday announced his long-awaited plan for cutting federal student loan debt, saying he would forgive $10,000 for borrowers earning under $125,000 a year, or couples making under $250,000. Biden also said recipients of Pell Grants who make less than $125,000 annually would be eligible for another $10,000 reduction. Biden said the plan will help middle-class Americans "saddled with unsustainable debt." He also announced the extension of a pandemic-era pause of student loan repayments through the end of the year. Advocacy groups praised the plan, although some had called for erasing more debt. Republicans opposed the program, independently estimated at $300 billion over a decade. House Minority Leader Kevin McCarthy (R-Calif.) called it a "debt transfer scam."
California unveils plan to ban sale of new gas-powered cars by 2035
California plans to ban the sale of new gasoline-powered cars starting in 2035 under a policy unveiled Wednesday. State regulators are scheduled to vote Thursday on launching the plan, which will start with restrictions on new gasoline-powered vehicle sales leading up to the ban. California is the biggest U.S. auto market, so its transition to EVs is expected to speed up the global shift. "This is huge," said Margo Oge, an EV expert who led the Environmental Protection Agency's transportation emissions program under Presidents Bill Clinton, George W. Bush, and Barack Obama. Oge said other states following California's lead "will drive the market, and drive innovation." More than a dozen states usually set auto emissions standards modeled after California's.
Amazon tells employees it's shutting down Amazon Care
Amazon plans to shut down its Amazon Care primary health-care services at the end of 2022, GeekWire reported Wednesday, citing an internal Amazon memo. The decision marks a retreat in the online retail giant's push into health care, although the company said it is not discontinuing any of its other health initiatives. Amazon Care "is not a complete enough offering for the large enterprise customers we have been targeting, and wasn't going to work long-term," Neil Lindsay, Amazon Health Services senior vice president, said in the email to Amazon Health Services employees. Amazon said it realized Amazon Care wasn't working out before it agreed in July to acquire primary care company One Medical for $3.9 billion. That deal, which needs regulatory approval, is moving forward.
Stock futures rise ahead of Fed's Jackson Hole gathering
U.S. stock futures rose early Thursday after the Dow Jones Industrial Average and the S&P 500 snapped three-day losing streaks. Futures tied to the Dow and the S&P 500 were up 0.3 percent and 0.5 percent, respectively, at 6:30 a.m. ET. Nasdaq futures were up 0.7 percent. Big gainers included Snowflake, which jumped 17 percent after reporting better-than-expected earnings. The Dow and the S&P 500 rose 0.2 percent and 0.3 percent, respectively, on Wednesday. The tech-heavy Nasdaq gained 0.4 percent. Investors will be looking for clues about the Federal Reserve's next moves to fight high inflation at the central bank's symposium in Jackson Hole, Wyoming, which starts Thursday. Fed Chair Jerome Powell is scheduled to speak Friday morning.
Germany launches 1st fleet of hydrogen-powered trains
Germany on Wednesday launched what it called the world's first fleet of hydrogen-powered passenger trains. The 14 new trains, manufactured by French company Alstom, are powered by hydrogen fuel cells and are emission-free. They will replace 15 diesel-powered trains operated by regional rail company LNVG on routes in the state of Lower Saxony. The new trains will save more than 422,000 gallons of diesel fuel per year. Alstom says the Coradia iLint trains have a range of 621 miles and a top speed of 87 miles per hour. The hydrogen used to fuel the new trains is a byproduct in chemical processes, but German specialty gas company Linde has plans to start manufacturing it locally using renewable energy within three years.