Student Loan Forgiveness, Economy Updates, and IRS Revenue Boost

Tax Policy:

August 25: IRS Revenue Boost From Stronger Enforcement Is Scaled Back in CBO Estimate

Income limits on household tax audits and staffing challenges will reduce by $23 billion what the Internal Revenue Service is projected to collect from its expanded enforcement operations, according to the Congressional Budget Office. The CBO outlined the revised estimate Thursday in a letter issued by its director, adjusting the projected 10-year revenue generated by the nearly $80 billion in IRS spending included in the law President Biden signed last week.

Those restrictions will make the IRS less effective at policing the tax system, according to CBO. "It can use other enforcement activities instead, but they may not be as productive, and developing new ways of detecting noncompliance might take time," CBO Director Phillip Swagel wrote in Thursday's letter to two Republican House members. The importance of higher pay and fast hiring authority to IRS employee recruitment is the biggest takeaway from the CBO letter, said Janet Holtzblatt, a former CBO and Treasury Department official.

Overall, despite Ms. Yellen's directive, taxpayers making under $400,000 will still pay a "Small fraction" of new revenue gleaned from tougher enforcement, according to CBO, which expects the IRS to focus on noncompliance by higher earners. Beyond the lack of specificity in that term, CBO had been expecting audit rates to decline in coming years because IRS funding had been growing slower than taxpayers' incomes. Ms. Yellen's instruction focuses on audits, but not all IRS enforcement revenue comes from audits.

Economic News/Policy: 

August 29: A Different Take on the U.S. Economy: Maybe It Isn’t Really Shrinking

New data sends a different message: rather than in a recession, the economy might be in something closer to a stall. Economic output can be measured two different ways: gross domestic product, or gross domestic income. In theory, GDI and GDP should equal each other, though there is always some statistical discrepancy because they are measured using different data sets and different sources.

In a time of great economic volatility, the statistics measuring the economy can be less reliable. Some economists look for a clearer picture by averaging GDP and GDI. That measure of output barely moved at all, rising at a 0.2% annual rate, adjusted for inflation, over the first six months of the year.

"The economy is stagnating, but it's not declining," said Robert Gordon, a Northwestern University professor and longstanding member of a committee at the National Bureau of Economic Research, which dates the beginning and end of recessions.

Record fiscal stimulus enacted in 2020 and 2021 is diminishing at a rapid rate; higher inflation has reduced households' real purchasing power; the Fed has been raising short-term interest rates to counteract inflation, squeezing the housing market; supply-chain disruptions have made it harder for companies to source products.

August 29: Democrats peg inflation to corporate greed on the campaign trail

Democrats are vowing to crack down on corporate greed and price gouging on the campaign trail as the party aims to quell voters' concerns over decades-high inflation. Following President Biden's lead, Democrats are aiming at energy giants and meatpacking companies that recently notched record-shattering earnings on the back of higher prices.

Critics of corporate giants argue that insufficient competition in the U.S. enables the biggest companies to raise prices at will and that corporations refuse to invest in resilient supply chains because they prioritize short-term profits and stock buybacks.

Corporate executives have publicly noted that they've raised prices far beyond the additional costs incurred from supply chain issues or increased wages and that customers are willing to pay more in the inflationary environment. Several companies say that they intend to raise prices further or keep them elevated even as inflation appears to cool.

"As we continue to price inflation, the inflation events that start to ease, that might put us in a better position for us to continue to recover the margin," Andre Maciel, chief financial officer at Kraft Heinz, said on a recent earnings call.

House Democrats responded in May by passing a largely symbolic bill to give the Federal Trade Commission powers to investigate allegations of price gouging in the energy sector.

August 28: Economy Week Ahead: Job Market and Home Prices in Focus

Tuesday: The Labor Department releases July data on job openings, quitting, hiring, and layoffs. Openings declined for the third consecutive month in June but remained historically elevated.

The S&P CoreLogic Case-Shiller National Home Price Index will show home-price trends at the end of the second quarter. Economists surveyed by The Wall Street Journal expect the index to have risen at a slower pace in the year ended in June, compared with the month before. The Conference Board’s consumer-confidence index, which measures American attitudes toward jobs and the economy, is estimated to have increased in August.

Wednesday: Figures released by the European Union’s statistics agency are expected to show that the annual rate of consumer-price inflation remained at 8.9% in August. That could prove to be a brief pause in an otherwise relentless climb in prices as a surge in natural-gas prices on wholesale energy markets reaches consumers over the coming months.

Thursday: The Labor Department reports the number of new filings for unemployment benefits for the week ended Aug. 27. Initial jobless claims are hovering near 250,000 a week after having steadily increased since the spring when they reached the lowest level in more than half a century.

The Labor Department is expected to report a revised estimate of U.S. labor productivity, a measure of goods and services produced per hour worked. Productivity fell for the second straight quarter in the April-through-June period.

A survey of purchasing managers released by the Institute for Supply Management is expected to show that activity in the U.S. manufacturing sector slowed in August compared with the month before. S&P Global will also release a manufacturers survey. Construction spending in the U.S. is expected to have held steady last month, after seeing its first decline in June since September 2021.

Friday: The Labor Department will report how many jobs the U.S. economy added in August and say whether the unemployment rate held at the 50-year low reached in July. The August employment report will include updated figures on wage gains, a factor driving high inflation.

August 28: Warren says she is ‘very worried’ Fed will ‘tip this economy into a recession

Sen. Elizabeth Warren on Sunday said she is "Very worried" that the Federal Reserve will "Tip this economy into a recession" after Chairman Jerome Powell announced the bank would keep raising interest rates in an effort to combat inflation. Warren told CNN's "State of the Union" co-anchor, Dana Bash, that raising interest rates does not help alleviate problems with the economy caused by supply chain disruptions and exacerbated by the war in Ukraine. "There is nothing in raising the interest rates. Nothing in Jerome Powell's toolbag that deals directly with those, and he has admitted as much in congressional hearings when I've asked him about it."

During a keynote speech in Jackson Hole, Wyo., Powell said the Federal Reserve is focused on bringing inflation down and will keep raising interest rates to tame the 40-year high inflation rate.

In July, the Federal Reserve raised interest rates by 75 basis points following the same hike in June. Leading economists have expressed concern about the Fed's ability to lower inflation while not triggering a recession, with a majority in one survey expecting a recession sometime next year.

August 26: Fed Chair Signals More Rate Increases Ahead, Shaking Wall Street

The Federal Reserve chair pledged to resolutely fight rapid price increases, arguing the bigger mistake would be allowing inflation to become entrenched. The central bank's campaign is likely to come at a cost to workers and overall growth, he acknowledged; but he argued that not acting would allow price increases to become a more permanent feature of the economy and prove even more painful down the road. Stock prices plunged in the wake of Mr. Powell's comments, as investors digested his stern commitment to raising rates and choking back inflation even if doing so damages growth and causes unemployment to rise.

"While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses." He then added: "These are the unfortunate costs of reducing inflation." Mr. Powell was speaking at the Federal Reserve Bank of Kansas City's annual conference near Jackson, Wyo., in a speech that is typically his most closely watched appearance of the year. "The likelihood of recession is rising, because that's the solution to the inflation problem - that's what they're telling you." While central bankers have spent much of the past year saying they hope to set the economy down gently - and not tip it into recession - Mr. Powell's remarks made it clear that a bumpy landing would be a price worth paying to return price stability to the United States.

"Lower inflation readings for July are welcome, a single month's improvement falls far short of what the committee will need to see before we are confident that inflation is moving down," Mr. Powell said, referring to the policy-setting Federal Open Market Committee.

“It’s really premature to even think that inflation has peaked,” Loretta Mester, president of the Federal Reserve Bank of Cleveland, said during an interview on Yahoo Finance on Friday. "The July inflation report had some positives, it was welcome news, but it was based on, basically, a downturn in energy prices, and we know they're volatile." Central bankers want to see more evidence that inflation is cooling before they will feel confident that it is headed in the right direction.

"Inflation has just about everyone's attention right now, which highlights a particular risk today: The longer the current bout of high inflation continues, the greater the chance that expectations of higher inflation will become entrenched," Mr. Powell said. The final line of his speech even seemed like it might allude to his long-ago predecessor, Paul Volcker, who raised rates sharply in the 1980s to choke down inflation and who detailed his campaign against rapid inflation in an autobiography, "Keeping at It," published in 2018.

August 26: Inflation Eased in July, According to the Fed’s Preferred Measure

Consumer prices rose 6.3% in July from a year earlier, down from 6.8% in June, as measured by the Commerce Department's personal consumption expenditures price index, which it reported Friday.

"We're heading in the right direction-inflation is coming down. But we're a long way off target and we think it's going to be a while-multiple years-before we're back to target," said Andrew Schneider, U.S. economist at BNP Paribas, referring to the Fed's 2% inflation goal, measured by the PCE price index.

"Those are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain," said Mr. Powell, speaking at the Kansas City Fed's annual economic symposium in Jackson Hole, Wyo. Fed officials on July 27 lifted the benchmark federal-funds rate by 0.75 points, the fourth consecutive rise since March.

The Labor Department's measure of consumer prices rose 8.5% in July from the same month a year earlier, down from 9.1% in June. The Fed has traditionally tended to focus on the PCE price index because it gives a more complete picture of consumer prices, while the public and many investors tend to be more tuned into the CPI figure.

An elevated rate of price gains adds pressure on the Fed to increase rates aggressively. Both the PCE price index and CPI signaled a downshift in inflation in July, one that appears to have continued through August-suggesting that June's high inflation readings may be the peak.

August 24: A dip in inflation will likely be a cold comfort to Fed at the Jackson Hole summit

The Fed's annual summer policy summit in Jackson Hole, Wyo., kicks off Wednesday as the bank attempts to steer the U.S. out of high inflation and away from a recession. Like his predecessors, Powell has used his past Jackson Hole speeches to frame his vision on the Fed's approach to its biggest challenge of the moment, beyond the month-to-month speculation of what the bank will do to interest rates.

Fed watchers generally don't expect Powell to hint at what the Fed will do in September during its next monetary policy meeting - particularly with so much uncertainty facing the bank in its fight against inflation. The combination of slowing price pressures and a steep decline in some sectors of the economy sensitive to higher interest rates - particularly housing - spurred speculation the Fed may soon ease up on interest rate hikes.

The brief dip in inflation is likely cold comfort to Powell and the Fed, who were caught off guard by the persistence of rapid price growth through much of the past two years. The Fed is still working to rebuild its credibility after expecting inflation to fall far sooner, only to watch it rise despite a series of sharp interest rate hikes earlier in 2022. 

“We are seeing some green shoots, but they don’t want to declare victory prematurely,” said Derek Tang, co-founder, and economist at research firm Monetary Policy Analytics, in a Monday interview. Tang, like many Fed experts, expects Powell to reinforce the Fed's commitment to bringing inflation down while acknowledging the pain likely to come with higher interest rates.

Student Loan Forgiveness:

August 30: Biden’s Student Loan Plan Sets Off Fierce Debate Among Economists

President Biden's plan to forgive some student debt has sharply divided liberal economists and pitted the White House economic team against both independent analysts and veterans of past Democratic administrations. The areas of disagreement include how much the package of debt relief and other changes to student loans will cost taxpayers and whether the plan is "Paid for" in budgetary terms.

The plan, announced last week, includes forgiving up to $10,000 in loans for individuals earning $125,000 or less and an additional $10,000 for borrowers from low-income backgrounds who received Pell Grants in college.

Conservative economists have attacked the plan, claiming it would stoke higher inflation and burden taxpayers with hundreds of billions of dollars in new debt. Researchers at Goldman Sachs agree that the plan won't worsen inflation, saying the reduced buying power from restarting interest payments will more than offset the boost from loan forgiveness.

The inflation rate is unlikely to surge again next year as a result of Mr. Biden's plans, according to Goldman Sachs and other forecasters. The early Penn Wharton modeling of Mr. Biden's plan, with more generous benefits to borrowers from low-income backgrounds and income limits on who gets debt relief, has found that nearly three-quarters of the benefits of the plan will go to low-income and middle-class earners, with almost none to those at the very top.

August 28: White House faces legal questions with student loan forgiveness plan

The White House has stepped into tricky legal territory with a plan to erase $10,000 in federal student loan debt for millions of borrowers. There has been discussion for months about the administration's legal authority to cancel student loan debt, as progressives increased pressure on Biden to take action.

Bharat Ramamurti, deputy director of the National Economic Council, said Friday that Biden did not want to move forward with loan forgiveness unless he was certain he was on a firm legal footing.

“It’s an obvious standing hurdle. It seems plausible to me that some plaintiffs could overcome it,” said Richard Re, University of Virginia law professor. “If someone can show that this measure will cost them something financially, that would probably be the strongest way to have a challenge be heard on the merits. Re and others have suggested that loan servicers could potentially sue to stop the loan forgiveness.

Should they retake control of the House of Representatives in the upcoming midterm elections, Republicans could also file a lawsuit against the student loan forgiveness plan as early as January, she said, like the suit then-House Speaker John Boehner filed over the Affordable Care Act in 2014.

Critics pointed to comments last July from House Speaker Nancy Pelosi when she cast doubt on the president's authority to unilaterally wipe out student loan debt.

Akash Chougule, vice president of government affairs at Americans for Prosperity also suggested the administration was hypocritical in describing the COVID-19 pandemic as an emergency that necessitated the loan forgiveness since the White House moved to lift the Title 42 immigration policy on the grounds that the pandemic was no longer an emergency that required the rapid expulsion of migrants.

August 26: Student debt forgiveness may be taxable in more than a dozen states

The billions in student loan debt forgiveness announced by the Biden Administration will be exempt from federal taxation but could be taxable at the state level in more than a dozen states - a hiccup many states are expected to quickly handle.

Jared Walczak, vice president of state projects at the Tax Foundation lists 13 states that haven't fully conformed to the student loan debt provisions of ARPA, including Arkansas, Hawaii, Idaho, Kentucky, Massachusetts, Minnesota, Mississippi, New York, Pennsylvania, South Carolina, Virginia, West Virginia, and Wisconsin.

Mark Kantrowitz, an authority on student lending and publisher of the website www.privateStudentLoans.guru came up with his own analysis of state laws and puts the number of states where taxes would be imposed at 19.

Assuming $10,000 of debt is discharged for the 2022 tax year, Walczak said taxpayers could find themselves stung for between $500 and $1,100 in state taxes, depending on the rate in each state and other nuances in state tax codes.

Quick action Legislatures in the nonconforming states would have to act quickly if they want to spare their residents from taxes on the cancellation of student loan debt for the 2022 tax year - a tall order since most legislatures have adjourned for the year.

"The states would have to pass laws to affirmatively exclude it," Kantrowitz said. "I'm not sure any of them would do anything. Even in the best of times, it takes the states a while to pass something. For them to pass laws in the next four months doesn't seem likely." Pressure to conform to the federal code will be particularly intense in blue states, including Hawaii, Massachusetts, Pennsylvania, and New York, Kantrowitz said.

John Buhl, a senior communications manager at the Tax Policy Center, anticipates most if not all states will pursue the nontaxable route, especially since they're sitting on strong revenues now.

August 26: What the student debt forgiveness plan would mean for taxpayers and the U.S. economy

Concerns have mounted over the last few days about the tax ramifications of President Biden's forgiveness of student loan debt. Biden announced Wednesday he would forgive $10,000 in federal student debt for borrowers making less than $125,000 per year, or $250,000 for married couples filing together or heads of households. Currently, 43 million Americans have student debts and the White House estimated that Biden's student debt plan would eliminate the full remaining balance for about 20 million borrowers.

The White House confirmed that the American Rescue Plan of 2021, which made student loan forgiveness nontaxable through 2025, would also cover Biden's current plan. If a borrower with $15,000 in student loans and an annual income of $50,000 sees their debt forgiven, the $15,000 debt is added to their taxable income for a total of $70,000.

"As hardworking Americans struggle with soaring costs and a recession, Biden is giving a handout to the rich," said Ronna McDaniel, chair for the Republican National Committee, in a statement. "Biden's bailout unfairly punishes Americans who saved for college or made a different career choice, and voters see right through this short-sighted, poorly veiled vote-buy."

U.S. borrowers hold about $1.75 trillion in student debt, and a recent survey from Acorn CNBC revealed that 81% of Americans deferred major financial decisions because of their student loans.

"The policy issue is not whether to forgive some debt, but how and for whom," said Adam Looney, executive director of the Marriner S. Eccles Institute at the University of Utah. "Debt forgiveness could be an opportunity to redress failures of the current system, make college financing more fair and equitable, and provide hope not just for existing borrowers, but also to future students who will borrow to pay for college and graduate school."

 Last week, Biden also forgave $4 billion in student debt for 208,000 borrowers who attended ITT Technical Institute, an online university that had to close its doors in 2016 after years of lawsuits involving fraud, corruption, predatory loans, and harassment.

August 25: How will Biden’s student loan plan impact inflation?

President Biden announced on Wednesday an executive order to cancel at least $10,000 in federal student debt per borrower and extend a payment freeze through the end of the year. Critics of the plan say that lifting student debt will enable borrowers to spend far more over a short period of time, driving up demand, and thus, prices.

Biden's plan goes further than that by doubling the debt cancellation to $20,000 for Pell Grant recipients and proposing a new rule that would cut the monthly student loan payment in half for certain low-income borrowers.

He estimated the plan would add 0.1 percentage points to overall inflation - a negligible difference between the current annual inflation rate of 8.5 percent and the Federal Reserve's annual goal of 2 percent.

Biden's plan aims to lift the freeze on student loan payments at the start of next year, a pandemic-era program that some economists blamed for helping fuel red-hot demand.

While millions of Americans will have their student debt balanced wiped out by Biden's action, those with debt remaining must begin paying it back in January unless they are able to enroll in a different federal forgiveness program.

Advocates for student debt relief also argue that the growing threat of a recession-driven in part by the Fed's attempts to fight inflation - makes it essential to give borrowers a head start with payments resuming next year.

Energy and Environmental Policy/News:

August 26: GOP targets powerhouse Wall Street firms over investments meant to fight climate change

Governmental initiatives in Florida, West Virginia, and Texas are targeting powerhouse Wall Street firms that they say are engaging in environmental, social, and governance investing, which they view to be harmful to their states' economies. Letters dated Aug. 10 were sent out this month by the Texas Senate Committee on State Affairs to Wall Street firms Blackrock, Vanguard, Institutional Shareholder Services, and State Street, asking for details about the companies' ESG practices and how they could affect the state's public pensions, including retirement funds for teachers and state employees.

Texas State Affairs Committee Chairman Bryan Hughes (R) said in an interview with The Hill that numerous public pension funds, endowments, and retirement accounts could all be affected by ESG investing practices.

"The Teacher Retirement System of Texas and the Employees Retirement System of Texas, all of our university endowment funds and various other pension funds, as well as the millions of investors who are trusting these firms with their 401(k)s, and then, of course, all the Texas companies that are being bullied and being manipulated by these firms - for all those reasons, this is important for the Texas legislature to do something about," he said. "The people of Texas are finding out that a handful of Wall Street firms are using other people's money to push a narrow agenda and we're pushing back," he said.

While ESG doesn't have a hard and fast definition, it generally aligns with the United Nations's sustainable development goals, a massive international program of environmental and social equality objectives agreed to by all of the U.N.'s 193 member states, including the U.S. "As of December 2020, over two-thirds of the world's GDP was being generated in places with actual or intended 'net zero by 2050' targets, covering over half of the world's population and emissions," a write-up on the latest SDG status report from the U.N.'s statistics agency says, referring to the goal of reaching net-zero carbon emissions, which are produced in abundance by the fossil fuel industry.

"Blackrock does not boycott fossil fuels - investing over $100 billion in Texas energy companies on behalf of our clients proves that," the company said in a statement, adding that "Elected and appointed public officials have a duty to act in the best interests of the people they serve. Politicizing state pension funds, restricting access to investments, and impacting the financial returns of retirees, is not consistent with that duty."

ICYMI: 

August 28: White House effort to stave off fall COVID surge with new boosters faces an uphill battle

The White House is rushing ahead to roll out a new COVID-19 booster shot campaign in early September but is facing an uphill battle to ensure it is successful. Immunity from the initial round of vaccines is waning and health officials said they want to ensure the public is protected as much as possible against another wave of infections in the fall and winter.

Administration officials say these new vaccines will be key to controlling a potential fall surge, but they will need to convince an increasingly checked-out public to get the shots.

White House COVID-19 response coordinator Ashish Jha has been front and center trying to promote the reformulated boosters, saying recently that “all the data suggests [they] should be highly effective against the new variants.” "The big picture bottom line is these are substantial upgrades in our vaccines in terms of their ability to prevent infection, to prevent transmission. Certainly to prevent serious illness. And so it's going to be really important that people this fall and winter get the new shot." Jha said during a U.S. Chamber of Commerce event on Aug. 16.

Rupali Limaye, a vaccine expert at the Johns Hopkins Bloomberg School of Public Health, said she doesn't expect the retooled boosters will do much to convince the under-vaccinated population to get another shot. The same people who rushed to get the initial vaccine series and then the first round of boosters will be the ones to receive the omicron-specific shots, she said, and mixed messages from health officials are partly to blame.

Health officials maintain they don't need additional data, because vaccine manufacturers are essentially making a minor update to the existing vaccine, which has an established track record of success.

August 26: Democrats clash over Manchin side deal, raising shutdown risk

Liberal lawmakers are pressing Democratic leaders in the House to not include a side deal undercutting environmental reviews worked out with Sen. Joe Manchin in a short-term measure funding the government. House Natural Resources Chairman Raúl Grijalva is circulating a letter asking leadership to separate the Manchin deal out from a continuing resolution that would temporarily avert a government shutdown.

The issue is expected to come to a head in September, when lawmakers return from recess, as Democrats try to secure funding for the government and prevent a shutdown.

Democrats do not want to shut down the government months before the midterm elections, so an actual shutdown is highly unlikely. Democratic leaders would face a difficult choice between passing a clean continuing resolution and potentially angering Manchin; convincing their own members to shed their environmental concerns and back the Manchin side deal, or leaning on GOP votes to prevent a shutdown.

Getting Republicans on board to counter any liberal defections is a very real possibility - dozens of GOP lawmakers supported a CR to prevent a shutdown last September - although Pelosi's style has been to unite Democrats before bringing virtually any legislation to the floor, thereby avoiding reliance on votes across the aisle.

Senate Minority Leader Mitch McConnell had previously threatened not to support the semiconductor bill if Democrats pursued their partisan package, and that measure moved at a time when the larger climate, tax, and health care bill looked dead. Sen. Lindsey Graham has pledged to vote against the permitting deal on principle, even if he may actually like the policies included in it.

For Fun: 

August 29: Serena Williams isn’t done yet after gritty first-round U.S. Open win

Fueled by an electric crowd and her fierce competitive fire, Serena Williams stepped onto the court at Arthur Ashe Stadium on Monday night and defied time, rust, and her own frustration to extend her remarkable career at least one more round.

Monday wasn't going to be that night, she declared in gritty fashion, toppling 80th-ranked Danka Kovinic, 6-3, 6-3, to advance to the second round of the U.S. Open. With the victory, Williams kept intact one of countless distinctions in her illustrious career.

After a rocky start by both players, Williams broke into a broad smile upon clinching the victory over Kovinic. Williams proved her mettle, drawing on experience, savvy, and grit to compensate for anything time and age have taken away.

She went on to break Kovinic, who was competing against Williams at the cavernous Ashe Stadium for the first time, in the next game, energizing the crowd by plucking a lob out of the sky for a winner to break for a 2-0 lead. The play was patchy for both players.

Williams started moving better and, in turn, serving better. Midway through the second set, Williams was in full control, and she raced to a 4-2 lead. In a matter of minutes, it seemed, Williams had three match points as she readied for Kovinic's serve.

August 29: NASA Artemis rocket launch delayed, next attempt could be Friday

NASA on Monday delayed the launch of the Space Launch System rocket from the Kennedy Space Center in Cape Canaveral, Fla., because one of the rocket's engines failed to condition to the correct temperature. The next available time for the launch is on Friday.

The highly anticipated launch, part of the ambitious Artemis program, will serve as a key test for the SLS and the Orion exploration spacecraft, which NASA plans to send more than 40,000 miles past the moon on an unmanned test flight.

NASA officials said the SLS rocket's engine bleed could not be remedied in time for a launch today, but the rocket will remain in its current configuration. NASA officials will hold a press conference Monday afternoon to discuss what happened and the next steps. NASA Administrator Bill Nelson said the SLS rocket is a "Very complicated system" and that "We don't launch until it's right."

The Artemis I launch will fly the SLS into space, where it will send Orion past the moon before plummeting back down.

August 28: Mickey Mantle Card Sets Record, Sells For $12.6 Million

A mint-condition Mickey Mantle baseball card sold for a mint Sunday, bringing $12.6 million at auction, the most ever paid in the booming sports memorabilia market. The rare card passed the record $9.3 million a buyer paid for a jersey worn by Diego Maradona when he scored the "Hand of God" goal in the 1986 World Cup. It passed the $7.25 million that a century-old Honus Wagner baseball card recently brought in a private sale and the nearly $6.2 million paid for the heavyweight boxing belt reclaimed by Muhammad Ali in the 1974 Rumble in the Jungle.

Even before bidding at Heritage Auctions began, it was anticipated that the Mantle card would set a record because of its excellent condition, its legendary New York Yankees subject, its rarity, a market in which sports memorabilia is a hedge against inflation and investors becoming active again after the pandemic.

The 1952 Topps card brought a tidy profit for Anthony Giordano, the president of a recycling and waste management company in New Jersey who bought it for $50,000 at a New York City show in 1991 and told The Washington Post he can sense a good deal.

Mantle died in 1995. Joe Orlando, recently named executive vice president at Heritage Auctions, told The Post that, while the card would be extremely valuable on its own, an accompanying letter elevated its value. When Giordano purchased the card from Alan Rosen, a card dealer nicknamed "Mr. Mint," Rosen praised its condition and Giordano asked him to put that in writing.