Category: US

An exchange of fire between Lebanese militant group Hezbollah and the armed forces in northern Israel signal that the conflict in Gaza could spread regionally.

With an Israeli ground incursion potentially imminent in the north of the Gaza Strip, the conflict could grow to involve other regional actors, including Hezbollah and potentially Iran, analysts say.

And if Hezbollah decides to join the conflict in neighboring Israel, “it will be nothing short of a game-changer,” Firas Maksad, a senior fellow at the Middle East Institute, told CNBC on Wednesday.

“Hamas is but the weak underling of Hezbollah, a much more formidable fighting force and widely recognized as the most powerful nonstate military in the world,” he added. “This will be a game-changer, not only for Israel, but also for the entire region.”

Hezbollah operates as both a political party and paramilitary group and is designated by the U.S. as a terrorist organization. It holds a great deal of power in Lebanon in the form of its Shiite political party, which holds 62 seats in the country’s Parliament, alongside its Iran-backed proxy militant unit.

Hezbollah, or the “Party of God,” was established during Lebanon’s civil war in 1982 with backing from Iran and support from Iran’s Revolutionary Guard. The group strengthened after a war with Israel in 2006, and its military wing has grown to overtake Lebanon’s army as the main military force in the country.

Now, experts say, Hezbollah doesn’t have the domestic popular support it had in 2006 to support a military operation in Israel’s current war with Hamas.

Joseph Daher, author of “Hezbollah: The Political Economy of Lebanon’s Party of God,” told CNBC that Hezbollah “has become not only a key Lebanese political and military actor, it has become a key regional actor.” But he says the country’s Christian community are against or critical of Hezbollah.

“It’s the scale of it, that will depend on Hezbollah intervening or not,” Daher told CNBC. The group “has accumulated huge experience, especially on the Syrian military scene, but also in Iraq and to a lesser extent Yemen,” Daher added.

He explained that Hezbollah is “intrinsically ideologically, politically, militarily [and] economically linked to Iran,” while also being a Lebanese actor with its own autonomy.

Hilal Khashan, a professor of political science at the American University of Beirut and the author “Hizbullah: A Mission to Nowhere” told CNBC that the militant group would hesitate to join the fight in full force.

“Irrespective of [Israeli Prime Minister Benjamin] Netanyahu’s decision, Hezbollah will not open a front from south Lebanon against Israel because it will justify Israel to destroy Lebanon. Iran has already informed Israel and the U.S. through third parties that it will rein in Hezbollah,” he said.

On Friday, Hezbollah’s deputy chief, Naim Qassem, said his party was “fully ready” to contribute to the fighting, according to Reuters. “The behind-the-scenes calls with us by great powers, Arab countries, envoys of the United Nations, directly and indirectly telling us not to interfere will have no effect,” he said at a rally, according to a translation by the news agency.

Lebanon is facing its worst economic crisis in history, with triple-digit inflation and a currency that has lost more than 90% of its value since the onset of an economic crisis in 2019. Almost three-quarters of the Lebanese people live below the poverty line.

The group rules over Lebanon with an iron fist, controlling most border crossings and wielding significant political influence, using its power to block key political appointments. Already spent from fighting alongside President Bashar Assad in Syria, as well as in Iraq and Yemen, a fresh front in Israel for Hezbollah could be crushing for the group, and experts say Iran may not want to use its strongest international militia fighting a fresh front in Gaza or in Israel to defend Hamas.

Hezbollah “do have to take into consideration public opinion in Lebanon,” Maksad told CNBC. Hezbollah’s own constituencies “are suffering war fatigue” and are “under the pressure of Lebanon’s financial collapse,” he added.

Netanyahu has hinted he will launch a ground invasion in Gaza in the coming days. In solidarity, the Biden administration has sent support in the form of a carrier strike group positioned in the Eastern Mediterranean, along with the U.S. secretary of State. The U.S. is “doing its utmost to try and deter Hezbollah and Iran from entering the war,” Maksad told CNBC.

The deployment of the USS Gerald R. Ford is “the administration trying to contain the conflict,” he added.

The threat of Hezbollah’s force looms large in the region and according to professor Khashan, the group’s armed component “is equivalent to a medium-sized European army.”

“It can effortlessly defeat the Lebanese military or occupy Saudi Arabia,” he said, but added that Hezbollah “is trained to fight asymmetric warfare and has no chance against the IDF [Israel Defense Forces] in the event of a total war.”

The U.S. Securities and Exchange Commission on Friday agreed to roll out new rules aimed at boosting transparency of short selling, the controversial practice of betting against stocks that drew new scrutiny amid the GameStop saga.

The rules, first proposed in late 2021 and early 2022, will require investors to report their short positions to the agency, and companies that lend out shares to report that activity to the Financial Industry Regulatory Authority (FINRA), a self-regulatory body that polices brokers.

Short selling involves borrowing a stock to sell it in the expectation the price will fall, then repurchasing the shares and pocketing the difference. Should the price rise, the seller can be exposed to potentially unlimited losses.

Short interest in the U.S. market totaled $927 billion as of Thursday, according to analytics firm S3 Partners. The practice has long been divisive, with critics accusing short sellers of trying to hurt companies, and short sellers arguing they help root out fraud and corporate misconduct.

Short selling drew renewed scrutiny from Congress in 2021 when retail investors drove up the price of shares in retailer GameStop), causing heavy losses for hedge funds that had shorted the company. In the wake of the saga, SEC chair Gary Gensler told lawmakers he would increase the transparency of the market.

Since at least 2021, the Justice Department and the SEC have also been investigating potential manipulation by short sellers and hedge funds around the publication of negative research reports.

SEC officials said the new rules, which the commission agreed upon in a 3-2 vote, support the agency’s efforts to police the practice.

Specifically, institutional investors will have to report gross short positions to the SEC monthly and certain “net” short activity for individual dates on which trades settle. The SEC plans to then publish aggregate stock-specific data on a delayed basis.

In another 3-2 vote, the SEC decided to require institutional investors and other companies involved in lending stock as well as certain broker-dealers who borrow stocks to report information about the loans, such as the name and volume of the stock, collateral, loan dates and termination dates to FINRA.

FINRA will then publish most of this data on an aggregate anonymized basis the following day. In a concession to industry, the final rule would see FINRA delay release of loan amounts by 20 business days.

Before the pandemic, the federal student loan system caused borrowers frustration and confusion. As the Biden administration resumes payments this month for some 40 million Americans after more than a three-year reprieve, the situation has been especially difficult.

Borrowers describe receiving incorrect bills and spending hours on the phone trying to reach their servicers. One woman told CNBC the estimated wait time to speak to someone at her servicer was 542 minutes.

“It’s a challenging environment,” said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers. “Sometimes there are incredibly divergent call hold times from what we’d like to see.”

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The many recent government announcements related to student loans seem to be adding to borrower confusion, Buchanan said. Though many of those developments are positive for borrowers, including a recent cancellation of $9 billion in student debt, they also raise a lot of questions about who is eligible and how soon that relief might arrive.

Other issues may be due to a change in servicers and incorrect calculations of borrowers bills under a new income-driven payment plan.

The Supreme Court in June struck down President Joe Biden’s broad plan to cancel up to $20,000 in student debt for tens of millions of Americans, rolled out in August 2022.

Before the high court’s ruling, a top official at the U.S. Department predicted some of the problems now unfolding.

“These student loan borrowers had the reasonable expectation and belief that they would not have to make additional payments on their federal student loans,” said Education Department Undersecretary James Kvaal said in a court filing last year.

“Unless the Department is allowed to provide one-time student loan debt relief,” Kvaal went on, “we expect this group of borrowers to have higher loan default rates due to the ongoing confusion about what they owe.”

Former President Donald Trump first announced the stay on federal student loan bills and the accrual of interest in March 2020, when the coronavirus pandemic hit the U.S. and crippled the economy. The pause was extended eight times.

Nearly everyone eligible for the relief took advantage of it, with less than 1% of qualifying borrowers continuing to make payments. Outstanding education debt in the U.S. exceeds $1.5 trillion, burdening Americans more than credit card or auto debt.

To ease the transition for borrowers, the Biden administration worked quickly to implement a new payment plan option, which it describes as the “most affordable repayment plan ever.”

Yet many borrowers who’ve signed up for the Saving on a Valuable Education, or SAVE, plan, complain they’ve gotten incorrect bills.

Higher education expert Mark Kantrowitz said that while he’s heard from several borrowers who’ve run into this issue, he estimates that “hundreds of thousands of borrowers may have been affected.”

According to Kantrowitz, student loan servicers seem, in some cases, to be using the 2022 poverty line to calculate borrowers’ payments instead of the current 2023 figure. (The SAVE plan is supposed to use the poverty data to shield a share of borrowers’ income from their payment calculation.)

Miscommunication between servicers may also have contributed to the errors.

Several of the largest companies that service federal student loans announced during the Covid-19 pandemic that they’ll no longer be doing so, including Navient and FedLoan. As a result, about 16 million borrowers have had a different company to deal with this month.

“Whenever there is a change of loan servicer, there can be problems transferring borrower data,” Kantrowitz said.

Meanwhile, Buchanan said that some of the data provided by the U.S. Department of Education has been wrong. Borrowers can sign up for the SAVE plan with their servicer or with the department.

“We’re having challenges with data integrity issues coming from the department,” Buchanan said. “It’s meant a lot of questions.”

A spokesperson for the U.S. Department of Education said they’ve worked swiftly to resolve these problems.

It directed servicers to notify affected borrowers and put them into an administrative forbearance until they were able to calculate the correct payment amount, the spokesperson said. It may also refund some borrowers.

“Our top priority continues to be supporting borrowers as they successfully navigate return to repayment,” they said.

Still, consumer advocates caution that the new problems will only reduce borrowers trust in the lending system.

“Because of the misinformation being disseminated, borrowers are likely to make overpayments, or underpayments and get off-track,” said Ella Azoulay, a policy analyst at the Student Borrower Protection Center.

“Moreover, being forced to make incorrect monthly payments places additional strain on borrowers’ monthly finances and puts some in the position of being unable to afford necessities, like medication.”

Zaza Cristina Robles worked as a pregnancy coach in her native Peru, so when she arrived in the U.S. at 16 weeks pregnant, the first thing she did after settling in with her in-laws was to seek medical care.

“When they showed us the bill, it was so expensive, my husband and I thought, ‘If this is just for the doctor’s visit, imagine what the delivery will be?’ It scared us,” she said.

Her sister-in-law put her in touch with the Hispanic Health Council, a nonprofit in Hartford, Connecticut. The organization’s Comadrona — or midwife — program helps Latina immigrants and low-income pregnant women navigate the complications of the U.S. health-care system.

“They really helped clear up a lot of my fears,” Robles said.

The program helped Robles gain health-care coverage as she and her husband seek asylum in the United States. Her comadrona helped her find a doctor who treats low-income patients and connected her with other services.

“One of the things that we do here at Hispanic Council is provide birthing classes, in their own language,” said Bianca Noroñas, the Comadrona program manager.

Noroñas said coaching and social services have helped the mothers in the nonprofit’s program avoid medical complications during childbirth.

“If you don’t receive education and support, that is going to affect you directly in your life,” Noroñas said.

In the U.S., the rate of maternal morbidity — medical complications in childbirth — and maternal mortality is nearly twice as high as in other developed nations.

“We’ve been paying a lot more attention to try to understand why these differences persist and why our numbers are so high,” said Marie Thoma, a professor at the department of family science at the University of Maryland School of Public Health. “A lot of investment has been going into addressing some of these factors around the health before, during and after pregnancy that we can improve on in the U.S.”

U.S. maternal mortality worsened during the pandemic, especially for Latinas. According to the Centers for Disease Control and Prevention, the U.S. saw 23.8 maternal deaths per 100,000 live births in 2020, up 18.4% from 2019. For Black women, the maternal mortality rate jumped 25%, while for Hispanic women it surged 44%.

While researchers are not clear on why Latinas saw such disproportionately higher mortality rates in 2020, the overall trend in the U.S. has been that women of color have had poorer outcomes in childbirth.

Latinas with private insurance plans have a 22% higher rate of severe pregnancy complications than non-Hispanic white women, according to a Blue Cross Blue Shield Association study. Low-income Hispanic women on Medicaid have a 28% higher rate of complications.  

Higher rates of obesity and chronic conditions such as diabetes among women of color can play a role in maternal morbidity. Financial barriers to getting proper care also contribute to poorer outcomes for Black and Hispanic women, as well as cultural barriers in health care, said Hispanic Health Council board member Dr. Yvette Martas.

“It is the issue of being listened to,” said Martas. She said the health-care system needs to support mothers beyond the delivery room, “creating the culture where this is not a disease model, but it’s a very natural course of how we reproduce.” 

An analysis by the Commonwealth Fund calculated that the cost of maternal and child morbidity for U.S. births in 2019 reached $32.3 billion from conception through the child’s fifth birthday. That amounts to an additional $8,624 for each mother-child pair, according to the researchers.

Health insurers and large employers such as Walmart have taken note of the problem. This year, Walmart expanded coverage for pregnancy-support programs to workers in four states by providing up to $1,000 for doula services. 

Through its pregnancy-support initiative, Blue Cross Blue Shield of South Carolina has seen maternal and infant morbidity rates decline substantially. The insurer’s Centering Pregnancy program has cut the rate of newborns needing to go into the neonatal intensive care unit from 13.9% to 3.5% — at an average savings of $67,000 on NICU costs.

“I think offering doula programs and offering paid leave — there’s a lot of things that I think our companies can do … that could really support moms during and then just as they return to work,” Thoma said. “It will give back to the company as well.”

Beyond pregnancy, the Comadrona program also offers postpartum support. Robles said she got help with diapers and lactation coaching. 

“Thank God … It turned out well for us and they cared for us so well,” said Robles, whose delivery had no complications.