Giving Continued | Infrastructure Bill and FASFA Changes

$1 Trillion Infrastructure Bill Passed: Congress voted to pass an initial $1 trillion infrastructure package that will improve commutes; restore lakes; refurbish roads, bridges, ports; replacing lead pipes, upgrade the US power grid; and expand internet access. Where does the money come from you may ask? $200 billion will simply come from repurposed funds that were meant for COVID relief. Another $100 billion will come from a combination of delayed Medicare rebates and unused unemployment insurance supplemental funds from various states. As for the rest, time will tell.

One Contributor to Labor Shortage: A recent analysis found that the COVID pandemic generated an early retirement boom. In the chart below, notice how in 2020 the percent of actual retirees (blue line) deviating suddenly from the trending, predictable percent of retirees (red line). Why the sudden spike? Perhaps because those close to retirement were among the vulnerable population, so decided to check out early for health concerns. Perhaps it was because our response to COVID induced a strange combination of lowered economic activity with higher asset valuation for things like housing and stocks, and these new retirees took this as an opportune signal to check out. Whatever the reason, it is one more contributing factor to the recent US labor shortage.

Forthcoming FAFSA Change—Good News for Grandparents: FAFSA is notorious for its confusing calculations that leave parents wondering which financial maneuvers will help vs hurt their child’s chances for aid. Sparing you, the reader, all the technical details, we wanted to note a forthcoming change that creates further favorable conditions (i.e. FAFSA calculations) for students who receive funding from 529s owned by grandparents rather than parents. It essentially comes to this: students must report funding from 529s owned by parents (reducing eligibility to whatever extent), while funding from 529s owned by grandparents will no longer be required to report (having no effect on eligibility). If you’re curious for more details, read this article from Forbes.

Picturing Port Blockage: We’ve all heard about the global supply chain issues by now, particularly of the shipment-bottlenecking at ports. Problems of this magnitude can be difficult to picture, which is why we liked this picture from the VisualCapitalist depicting the US’s largest backup in the port of Los Angeles where 540,000 containers are still waiting in harbor, as of last week.