Daily Archives: August 2, 2021

To be sure, list down all your assets like bank accounts, investments, house and property, valuables, and your liabilities. The difference between what you owe from what you own is your net worth.

By Urvashi Varma

Financial independence refers to being in possession of sufficient money to sustain the current lifestyle for an indefinite longevity. The first step towards attaining financial independence starts with assessing ones net worth or current financial position.

To be sure, list down all your assets like bank accounts, investments, house and property, valuables, and your liabilities. The difference between what you owe from what you own is your net worth.

To achieve financial independence the net worth should always grow. A financial plan having lifetime goals or short-term goals will help achieve this. There are two basic principles: spend less and earn more. The greater the gap between earnings and spending the faster the net worth grows.

Financial independence is misrepresented with higher income. The more we save the easier is the path to financial independence.

Takeaways on financial independence:

The journey towards financial independence starts now because the best time to start saving and investing is always right now.

The writer is assistant professor, Finance, Amity Business School, Noida

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Your Money: Eight steps to walk the financial independence path - The Financial Express

I entered my 30s several thousand dollars in debt. With a car loan, graduate school loans, credit card debt, and medical bill payments, a good percentage of my monthly income was eaten up with payment to creditors.

It was around that time that I came across Dave Ramsey's book, "Total Money Makeover," and realized that I had dug myself into an unacceptable financial hole. I had done what society expected of me worked hard, finished school, and bought the things I thought I deserved. But I had little to show for it financially. Instead of building a healthy investment portfolio, I had racked up a mountain of debt. It was time for a change.

My debt-free journey is what brought me to the FIRE movement. FIRE stands for "financial independence/retire early" and is a financial movement that thousands of people are following today, often due to a desire to escape toxic corporate work environments or to travel and spend their days pursuing personal interests. I had started researching ways to cut down my budget, and came across FIRE blogger Pete Edney, author of the Mr. Money Mustache blog. His extreme frugality had allowed him to retire at age 30. I was intrigued.

I started researching the FIRE movement, and I learned about the Black female author of A Purple Life blog, who recently retired at 30. I learned about one of my favorite financial bloggers, Paula Pant, whose Afford Anything blog covers the ins and outs of personal finance and freedom. I learned that a reasonable lifestyle combined with index-fund investing could equal long-term financial freedom.

As I paid off my debts, I started putting extra money into an index-fund -based portfolio. Just a couple of years into my journey, I had eliminated thousands of dollars in debt and built up a six-figure investment portfolio. Today I am 100% debt-free and just years shy of achieving financial independence, at which point the earnings from my investments will be enough to cover my living expenses. This means that I will be completely financially free.

I count myself lucky to have found a career that is incredibly meaningful for me, and that I enjoy. Unlike my fellow FIRE community members who are seeking to escape toxic work environments, my motivation is less about escaping the working world and more about enjoying a level of freedom that my ancestors could only dream of.

There is a widely known sentiment in the African American community that we, today, are our ancestors' wildest dreams. I can't help but imagine that my ancestors dreamed of an unimaginable level of freedom for me. Freedom over when and with whom I worked, and freedom to rest whenever needed.

For me, FIRE meant that I could gain control of my money once and for all. Not only would I get out of debt, but I would use all of the money I saved from making debt payments to invest. FIRE taught me how my investments could shelter me from the unpredictable and give me the freedom to make choices based on my personal interests and values rather than taking jobs simply for the money.

When I got laid off in February of 2021, I was already years into my FIRE journey and in a financial position to pause and consider my next steps. While exploring options for the perfect next job, I was able to travel to visit friends I hadn't seen for quite some time given the pandemic. I was also able to write a book about my financial journey so that women like me could enjoy the freedom I found. FIRE isn't just about retiring from work. It's also about having the freedom to choose jobs that bring us joy and fulfillment, and to take breaks from working when needed.

Most importantly, FIRE is about freedom. Freedom from worrying about having money to pay the bills, freedom from anxiety over losing a job, and freedom to enjoy life despite what's happening in the economy. Most of the FIRE bloggers I read actually increased their net worth during the pandemic. It's the ultimate insurance policy against life's inevitable ups and downs. And in my opinion, it's the financial plan that every American could benefit from adopting.

Paris Woods is author of the forthcoming book, "The Black Girl's Guide to Financial Freedom: Build Wealth, Retire Early, and Live the Life of Your Dreams." She is a two-time graduate of Harvard University with a Bachelor's degree in African American studies and a...

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I Didn't Join the FIRE Movement to Escape the Working World - Business Insider

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Interest in ESG investments has exploded over the past few years among individual investors who are concerned about the impact of their investments, helping drive short-term outperformance. But some observers question whether such investments can deliver the longer-term market-beating returns that would likely be required by investors who are pursuing financial independence or looking to retire early.

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Cody Garrett, a certified financial planner at Houston-based Measure Twice Financial, isnt surprised that environmental, social, and governance investments have piqued the curiosity of his clients who are FIRE adherents. The philosophy behind financial independence is aligning financial objectives with personal values, he says. That closely mirrors the mindset of many ESG investors. The FIRE community is waking up to what their investments are supporting and how their money is being used.

But does restricting investment options to socially responsible assets hinder FIRE plans, where the ultimate goal is to maximize returns for the long haul?

Garrett says no, and he has some tips for aligning a FIRE portfolio with ESG tenets:

ESG for the right reasons: ESG funds are often overweighted with growth stocks that tend to be more ESG-compliant, such as big tech. These funds handily outperformed the broader stock market during the pandemic, Garrett says, though he warns that the lead may not be sustainable as value stocks recover.

That said, he believes large market cap-weighted ESG funds will likely remain closely correlated to their non-ESG counterparts. Why? As ESG funds make exclusions, they push more assets into the biggest companies by market cap, including big tech, which can help their performance relative to non-ESG funds, Garrett explains.

I think a lot of people are tempted to move into the ESG space because theyre attracted to the short-term gains made over the last year or so, Garrett says. Yet he cautions investors against the temptation to chase returns. What happens if ESG ends up underperforming, are you, as an investor, going to change your mind? he asks. The decision to use ESG should be a decision to align your money with personal values, not merely a financial choice.

Choosing funds. There is no consensus definition of an ESG asset. A particular company could excel in environmental issues while falling short at corporate governance. Whats more, ESG funds set their own criteria of inclusion or exclusion.

To know for sure whether investments match individuals values, investors have to take a look under the hood. The funds prospectus will explain its methodology, and Garrett recommends looking at Morningstars sustainability rating, which is continually improving, so theres more consistency, he says.

Ditch the one-size-fits-all approach. When considering the individual goals and values that bring people to the FIRE movement, the advice they receive is often strikingly generic: Put your money in a low-cost index fund and wait. The strategy is sometimes known as VTSAX and chill, referring to the Vanguard Total Stock Market Index Fund Admiral Shares commonly used by FIRE investors.

ESG strategies are inherently more varied, and Garrett encourages his FIRE clients to branch out and build a portfolio that better reflects their individual values.

When building out the equity portion of an ESG portfolio, Garrett recommends a core and explore strategy. Practically, that means a core investment representing about 90% of the equity portfolio that includes broad ESG index funds. These funds are typically based on broad-market indexes and exclude stocks that dont meet their ESG criteria, like petroleum companies, for example.

For Garrett, the remaining 10% of the equity portfolio represents a chance for clients to explore specific funds or sectors they are passionate about, such as alternative energy or funds that invest in women-led companies.

Write to retirement@barrons.com

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Yes, You Can Align Your Pursuit of Early Retirement With ESG Ideals. Here's How. - Barron's

High costs, low wages: Solutions for barbers trying to avoid student loan debt

Laura Faith Kebede| MLK50: Justice Through Journalism

For years, barbers and cosmetologists have not only created a safe place for Black people to gather, but used the profession to forge a path to entrepreneurship and financial independence.

Tennessee regulations require 1,500 hours of training. That, coupled with high tuition at local barber and cosmetology schools along with inadequate public funding and financial aid, has turned that career path into a high-debt obstacle course that too often ends in financial ruin.

The majority of students attending for-profit barber and cosmetology schools often their only choice because of a long waiting list at theonly public program in Memphis end up borrowing from the federal government to pay tuition.

A disproportionate share of those borrowers struggles to pay back their loans. In fact, for-profit barber and cosmetology schools make up eight of the 10 schools nationwide with the highest student loan default rates, according to the U.S. Department of Education.

Even among this troubled group, Memphis stands out. One school, Vibe Barber College, ranks fifth-worst in the nation with 61% of students defaulting within three years of leaving school.

Defaulting on a federal student loandefined as failing to make a payment in nine months is financially ruinous. Borrowers are hounded by collectors, who can worsen the debt load by adding fees. Collectors can garnish wages and withhold tax refunds. Default ruins a borrowers credit score, making it difficult or expensive to get future home or car loans.

Of course, solving the shortage of affordable and effective career training will take a long time and a huge investment. But as the economy emerges from the pandemic shutdown, and President Joe Bidens administration attempts to address the issue of oppressive student debt, there are growing efforts to help Memphians achieve their dream of becoming a barber or cosmetologist without burdening them with unaffordable debts.

Barbers University School in Memphis purposefully offers cheaper training and does not accept federal loans so students can avoid debt traps. One of the instructors, Courtney Triggs, said having about $10,000 in student loan debt when he got his barbers license caused him and his wife to cut back on expenses and has kept him from pursuing a business loan to open up his own shop.

Its all about the loans, he said. The loans are what are holding a lot of barbers back from being able to own their own shops and see the money thats available to us to support our family comfortably.

Soon after Emancipation, hair care became a source of financial independence for Black people.

Self-sufficiency has been a key component of the meanings of Black freedom since slavery, writes Quincy T. Mills, an associate professor of history at the University of Maryland, in his 2013 book Cutting Along the Color Line: Black Barbers and Barber Shops in America. Barbershops have historically been one of the most accessible paths to business ownership and economic independence.

For example, Madam C.J. Walker famously made hair products and became the nations first woman millionaire while employing an army of saleswomen. Alonzo Herndon became Atlantas first Black millionaire through a chain of barbershops.

Today, Black people are overrepresented in the barbering field. Though Black people make up about 12% of the U.S. population, the profession is about 25% Black.

And local demand for trained hair stylists is above the national average. The U.S. Department of Labor expects a 7% increase in barber and cosmetologist jobs in the state by 2028, compared to a 2% decrease nationwide.

The average barber in the U.S. makes just over $38,000 per year, or roughly $18 per hour full time, which is similar to Tennessees average, according to the Bureau of Labor Statistics, but that doesnt include cash tips.

To become a barber in Tennessee, students must complete 1,500 hours of training, which can take anywhere from 14 to 24 months. By comparison, police officers typically receive just under 500 hours of training, which in Tennessee is completed in about three months.

For barbers, a long training period means higher costs. The for-profit schools in Memphis charge up to $18,000 for tuition.

At Memphis only public program, Tennessee College of Applied Technology, or TCAT, the annual price for tuition, fees and books is about $5,400.

But the state only provided enough funding to allow TCAT to serve 40 aspiring barbers per year. There are 80 people on the waiting list, a TCAT counselor said, which means students may have to delay their education for at least two years.

As a result, eager students have little choice but to enroll in expensive for-profit schools, which have plenty of room, explained Bob Obrohta, who leads the Tennessee College Access and Success Network in Nashville.

The student is sitting here saying, I dont want to wait for another year or two years trying to get into this TCAT program, I want to go to work now in this profession that I want to do, Obrohta said.

Most these students have to take out federal loans to pay the bulk of their tuition. These students are more likely to be people of color with low incomes. Three-quarters of for-profit college students take out loans, compared to one-fifth of community college students and just under half of students at four-year public colleges.

Aspiring barbers and cosmetologists are at a high risk of not being able to pay back those loans, which come due six months after leaving school. The U.S. Department of Education estimated the average 2019 graduate from Memphis barber and cosmetology schools that accept federal loans, pay between $80 and $170 per month on a standard repayment plan.

But it typically takes several years for barbers or cosmetologists to build up a profitable business or clientele. In the first two years after graduation, the typical graduate of a Memphis barber or cosmetology program makes about $16,000 a year, according to federal data on five area schools. (This likely doesnt include unreported cash tips.) That translates to about $7.70 per hour working full time or $10.25 an hour working 30 hours per week.

Whatever the actual earnings, its clear that for many students, they simply arent enough to cover the student loan payments.

Its sort of a perverse outcome that federal financial aid, including loans, is supposed to help provide access to education to help increase their economic mobility, said Amy Laitinen, the director of higher education for the liberal think tank New America. And sometimes those loans end up doing the exact opposite.

You combine abysmal earnings with really high debt loads and you have a recipe for disaster, said Laitinen.

To prevent the problem from getting worse, local, state, and national leaders are working on student loan debt forgiveness, lower training costs and income-based loan repayment programs.

All federal student loan borrowers can apply for an income-driven repayment plan that adjusts monthly payments to typically around 10% of a borrowers discretionary income income above a basic living budget. Borrowers who sign up for these plans and make payments on time usually can have the remainder of their debt forgiven after 20 years.

But the program is notoriously difficult to navigate. Borrowers must reapply every year or get dropped. And the federal governments bureaucracy has been slow to approve forgiveness applications.

As a part of its pandemic response, the federal government suspended loan payments for all federal student and parent loans at least through Sept. 30. And Secretary of Education Miguel Cardona has hinted that the pause may be extended further.

Long-term relief may be on the horizon if Biden makes good on his campaign promise to back federal student loan forgiveness of $10,000.

While he has yet to act on that promise, many advocates and elected officials are continuing to push for forgiveness. Sen. Elizabeth Warren, a Democrat, recently stalled confirmation of Bidens nominees for the U.S. Department of Education until his administration implements some student loan reform.

Judith Scott-Clayton, a Columbia University associate professor, says forgiving a little would go a long way because the majority of people who fall behind on their loan payments owe less than $10,000.

Its not necessarily about the amount thats being borrowed, said Scott-Clayton. Its about whether you have the capacity to repay even a small amount of debt.

Another popular option to reduce student debt has been the free community college program, Tennessee Promise.

In 2015, Tennessee became the first state in the nation to pay tuition costs for thousands of students headed to community college and public technical schools. After students exhausted other forms of scholarships and grants, the state kicks in the rest, or about $2,000 for the average student. Recent research shows the program has dramatically reduced student debt.

Since the state launched Tennessee Promise, the number of students taking out loans at community colleges decreased by about 40%. The average students debt load also decreased by about 32%, according to a study the Journal of Higher Education published in April.

But the rising affordability of public schools has attracted more applicants, leading to capacity issues and waitlists for job certification programs at the states technical schools, said Emily House, the executive director of the Tennessee Higher Education Commission.

The capacity constraints are real in TCAT, House explained. A lot of that has to do with equipment. You cant learn how to do automotive technology if you dont have a car to work on.

So, Tennessee plans to spend $80 million on equipment and building renovations for technical schools across the state to accommodate more students. The effect wont be immediate as projects start in phases, but the hope is to significantly increase the number of students attending publicly funded trade schools.

Entrepreneurs are also trying to fill the vacuum. Jwan Buck Buckhalter founded Barbers University School in Memphis in 2017 so he could continue the tradition and train future business leaders.

I wanted people to understand it could be done. You can run a business. You can earn a living, he said. Lets keep the barbering industry as strong as we possibly can.

Buckhalter has the cheapest regular tuition for barber training in Memphis, at $4,800, payable in monthly installments. (Bluff City Barber College recently halved their tuition to $3,000 to attract more students during the pandemic but will eventually raise the price again.) Students typically attend morning or evening classes as they work other jobs.

Buckhalter, who has been a barber for 20 years, purposefully decided not to participate in federal student aid programs because he didnt want to encourage students to borrow. He saw the toll debt took on his colleagues. Buckhalter attended a school that offered low-cost tuition in New Orleans and wanted to offer the same opportunity in Memphis.

One student, Jerry Johnson, enrolled last year to fulfill the dream hes had since he was 15 years old when he picked up his first set of clippers in high school cosmetology class. He says he lives for the moment his clients smile as they turn to the mirror and see their finished haircut. He even started a TikTok account to promote his work.

Johnson, 22, was previously a certified nurse assistant at an urgent care clinic but craved a career change as the pandemic began to take its toll on medical workers. If national salary averages hold true for him, hell make more money as a barber. He researched and called several area barber schools and started applying for scholarships. Taking out a loan was a possibility, but he hoped to avoid it. The decision was easy after he called Buckhalter during his work break and heard the cost.

Compared to other area barber schools he researched, were learning the same material at a lower cost, Johnson said. And for him, that leaves more money for helping take care of his girlfriend and her child as well as investing in his own career.

I expect to make a good living once I receive my license. Thats the whole purpose of school: to better your future, he said.

Part of what has made the school affordable is its small size, Buckhalter said. The school currently has three instructors and 12 students. Another 12 have graduated and most of them passed their license exam.

Buckhalter hopes to expand, but he worries that he wont be able to without participating in federal student aid programs. He loses dozens of potential students every year who call and ask if the school accepts federal loans. But with federal loans come federal rules, including one that prohibits operation of a barbershop and a barber school in the same building, as Buckhalter does now. Getting a separate building would force him to raise tuition.

So now you ask yourself: Do I go for the money? he said. Or do I go for the cause and what Im trying to accomplish?

The cost of attending Memphis barber schools. Price includes tuition, supplies and books.

The rest is here:

How Tennessee schools are helping aspiring barbers with high debt kickstart their careers - Commercial Appeal

Lafayette Consolidated Government has announced that their Social Securitys "Ticket to Work" Program will allow people with disabilities to return to work.

The goal of their program, they say, is to help individuals with disabilities progress toward financial independence.

Lafayette Consolidated Government is a Ticket to Work services provider known as an Employment Network and they are authorized to help people who receive Social Security disability benefits prepare for, find, and maintain employment.

Their services include: career counseling, resume assistance, job referrals, mock interviews, disability disclosure discussions, and job accommodation requests.

To decide if LCGs Employment Network is right and to discuss individualized services, the public can email TicketToWork@lafayettela.gov or call (337) 291-8421.

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LCG's 'Ticket to Work' program is available to assist those living on social security - KATC Lafayette News

NEW YORK--(BUSINESS WIRE)--Trading.TV, the worlds first social livestream and immersive chat platform for traders and financial content creators, announced today the launch of its platform, closed beta and a $6.1M seed funding round led by L Catterton Growth, Activant, Navy Capital and Tribe Capital. As part of the launch, Trading.TV also announced a $1M Creator Fund to support the first group of creators joining the platform.

Trading.TV is the only dedicated platform for creators to develop and share financial content on everything from stocks to crypto to NFTs and rare sneakers. Eventually, Trading.TV will also serve as a commission-free trading platform where community members can turn information into action.

There has never been such a large influx of new asset classes and new traders to the markets - and with that comes a massive need for both entertaining and educational financial content. Trading.TV will remove the friction between idea generation and investment execution for millions of fans, followers and audiences around the world.

By building a platform that is digitally native, values diversity of interests and assets, and puts inclusion at its center, we hope to unlock financial wellbeing for millions of people that havent previously felt welcome in the financial conversation, said Trading.TV Founder and CEO Tobias Heaslip. We want to empower and excite younger generations to start thinking about their financial futures sooner -- to do smart things with their investments earlier on so they can live life on their own terms.

Trading.TV is the first and only fintech platform purpose built for the creator economy. It will be a destination for financial influencers to create entertaining content and build communities around their interests and users to buy and sell the underlying assets that creators are talking about.

Trading.TV is currently hand picking its first 50 creators to join the closed beta, unlocking new ways for them to monetize their content and offering immediate support through the $1M Creator Fund. In addition to the fund, Trading.TV will use its seed funding to continue building the team and investing in platform growth ahead of public availability in the fall.

Creators interested in joining Trading.TVs closed beta can apply here. People interested in joining the Trading.TV community and getting early access to creator content can sign up for the waitlist here.

About Trading.TV

Trading.TV is the world's first social livestream platform purpose-built for the next generation of traders and financial content creators. In an era where everything is an asset and everyone is a trader, Trading.TV offers the content, community and collaboration necessary to become an expert. We're dedicated to a future where anyone can Stream, Chat and Trade their way to financial independence.

For more information, visit https://www.trading.tv/

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Trading.TV Launches Out of Stealth with $6.1 Million in Seed Funding to Support Financial Creators - Business Wire

Supreme Court Justice Sonia Sotomayor and Roberto Goizueta, an immigrant from Cuba who became the CEO of the Coca-Cola Company, rose from humble beginnings to wealth. A new study indicates more and more of their fellow Latinos are becoming affluent.

A report released Wednesday by Merrill Lynch Research mentions them in its profile of affluent Latinos, a segment growing faster than in the general population of the United States.

According to the report, the segment of affluent people, or those with incomes of $125,000 or higher, has grown 81 percent among Hispanics during the last five years compared to 53 percent in the general population.

The complexion of wealth in our country continues to demonstrate that it's changing, and changing at a rapid pace, with Latinos playing a significant role in diversifying the U.S. market, said Jen Auerbach Rodriguez, head of Strategic Growth Markets at Merrill Lynch.

Auerbach said that studies about the Hispanic population have shown its increasing market participation and influence, with an overall purchasing power of $1.5 trillion and productivity that would make them the eighth largest GDP in the world if they were an independent country.

But while the popular narrative can often spend a lot of time at the bookends of the wealth spectrum, this (study) is really meant to populate the narrative desert that exists in between, Auerbach said. She added that the study is part of a larger project of five years of studying diverse communities, including Black and LGBT people, using interviews and immersive techniques to add nuance and knowledge about frequently stereotyped communities and market perceptions.

Auerbach said that the most profound three topics mentioned by affluent Latinos in the study as the biggest motivators in their life are family, followed by hard work and education, and then giving back.

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Affluent Hispanics are three times more likely than the general population to say that they are driven by a desire to make their family proud, the report said. More than two-thirds of them identify with the statement that Family is the most important aspect of my life.

They are also four times more likely to list planning to financially assist or support their aging parents at the top of their financial goals.

"For many Hispanics, financial success is defined by the ability to support ones parents as they age, and this research further emphasizes the importance placed upon (the) care of our older generation, said Rick Jaramillo, Bank of America Houston Market Executive.

The greater Houston area is home to the nation's fourth-largest Hispanic-Latino population, and this report reveals that the national growth of affluent households within this population has grown considerably, he said.

Auerbach said that one of her favorite quotes cited in the report from interviewed people is, My inheritance was hard work. She said it emphasizes the fact that many affluent Latinos are immigrants or children of immigrants who came with nothing, with a primary goal to provide for their families, settle and leave a legacy for continuity.

The report said that affluent Latinos or their immediate family members are more likely to have come from outside the U.S. Almost 30 percent said they are originally from another country while 38 percent said the same about at least one of their parents.

Although the report doesnt profile this population by region, the overall trend of wealth growth is reflected in Houston, according to Laura Murillo, the CEO of the Greater Houston Hispanic Chamber of Commerce.

We are experiencing and seeing more and more wealth, even among the younger, where they are purchasing properties and real estate, and they're learning from people who have been or have become successful in their community, Murillo said.

Murillo herself is an example in the city of a prominent affluent Latina who was raised from humble beginnings to become a successful Latina leader who has been named one of the Women who Run Houston and among the Most Powerful & Influential Women in Texas, among other distinctions.

The youngest of nine children of Mexican immigrants supported by a father who was a tile mason, Murillo began working at 10 at a Mexican restaurant that he opened in Houston. She went on to study, earned a doctorate and has led the chamber to become the largest organization of its kind in a U.S. city during her 15 years as president.

Murillo said that people like her are only the tip of the iceberg of wealth creation among Hispanics and that women, in particular, are increasingly joining the rank of small business creation in Houston.

Among Hispanic affluent women, the study found that they are 30 percent more likely to list the desire to achieve financial independence as their top financial motivator compared to their men peers.

Still, with all the advancement and wealth grow among Latinos, We have a lot of work to do, Murillo said. We know there are many Latinos who are still lacking opportunities and education and training.

The Houston leader said she hopes that the wealthy Latinos will continue giving back and put more resources and influence in getting elected to offices, so they help change public policy to help those behind them.

olivia.tallet@chron.com

Twitter.com/oliviaptallet

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Why the affluent Latino population is growing strikingly faster than other wealthy groups - Houston Chronicle

For decades, we have lived under the shared view that independent agencies should be insulated from the raw partisan politics that frustrate our ability to manage government competently. That illusion was finally revealed when President BidenJoe BidenThe Supreme Court and blind partisanship ended the illusion of independent agencies Missed debt ceiling deadline kicks off high-stakes fight Senate infrastructure talks spill over into rare Sunday session MORE firedSocial Security Administration Commissioner Andrew Saul earlier this month.

Unlike most of the 1,200 presidentially appointed senate confirmed (PAS) positions who can be fired for any reason, the commissioner of Social Security thanks to the 1994 Social Security Independence and Program Improvements Act was appointed for a six-year term and could only be fired for cause. The six-year term was necessary to ensure that the SSA would have the long-term consistent management necessary to lead an agency without political pressure. SSA touches the lives of millions of Americans as the largest government program with expenditures of over $1 trillion annually covering 180 million workers and paying benefits to almost 70 million Americans including retirees, widows, disabled workers, survivors, and Supplemental Security Income recipients.

The independent status of many agencies was placed into question when the Supreme Court ruled in 2020 (Seila Law v. CFPB) that the president has the authority to fire the head of the Consumer Financial Protection Bureau. The Court took issue that a member of the Executive branch of government could hold so much power without the ability of the president to fire at will. The Courts concern was limited to those agencies with a single head of power, not a commission structure, such as the Securities and Exchange Commission. The Chief Justice wrote, an unlucky President might be elected on a consumer protection platform and find herself saddled with a holdover director from a competing political party who is dead set against that agenda.

The independent status of agencies was further eroded with the courts 2021 decision in Collins v. Yellen, when it ruled that the head of the Federal Housing Finance Agency (where one of us was its first director) could be fired by the president for any reason, and then one was fired immediately.

The final nail in the agency independence coffin was hammered on July 9, when Biden fired Saul in what Saul described as echoing Nixons Friday Night Massacre. Any illusion remaining that independent agencies were insulated from political interference ended that night.

Many will agree with the Supreme Courts decision that agency heads should serve at the pleasure of the president. One would hope that the test for dismissal would model Chief Justice Roberts theme of major policy differences rather than removing a competent manager who was making long overdue reforms in systems, the disability program and communications to better serve the American people, at the behest of labor unions.

One of the reasons reforms were overdue was that there were six years of acting commissioners prior to Sauls two years.

Our immediate concern is that Bidens firing of Saul will create ripple effects that will hamper the ability of SSA to be managed effectively and with bipartisan oversight. There is now a new, unconfirmed Biden political appointee serving as the acting commissioner, with limited management experience. It is questionable that Senate Republicans will vote to confirm any Biden appointee for the Social Security Commissioner position after the Saul Massacre.

The politicization of the federal government has been growing worse for many years. However, Sauls summary dismissal makes the politicization surrounding Social Security, and the programs the agency administers, even worse. As of today, the Social Security Trustees Report is over three months late. The two public trustee positions, Republican and Democrat, which provide much needed public oversight, have been vacant for the last six years. The three PAS positions on the seven-member Social Security Advisory Board are also vacant. No nominees are pending for any of these important public oversight positions.

Social Security faces immense challenges that will require effective leadership, management and bipartisan oversight given its massive pending deficits. Bidens decision to fire Saul further increases the challenges and barriers the agency faces in managing the Social Security programs that impact the lives of hundreds of millions of Americans. Congress should immediately hold hearings on the leadership and governance of the Social Security Administration and its programs, and look to create a new, politically stable management and oversight structure.

Jason J. Fichtner and James B. Lockhart III, both served in the position of principal deputy commissioner of Social Security. Lockhart also served as director of FHFA. Fichtner was the last presidential nominee for the Social Security Advisory Board, while Lockhart was the last nominee for Public Trustee of Social Security and Medicare. Both nominations timed out without a Senate vote at the end of 2020.

Fichtner is vice president and chief economist at the Bipartisan Policy Center. Lockhart is a senior fellow at BPC and co-chairs BPCs Commission on Retirement Security and Personal Savings.

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