The Wall St.Journal 28Feb2020

A4| Friday, February 28, 2020 PWLC101112HTGKRFAM123456789OIXX **** THE WALL STREET JOURNAL.

of the people said. That might

prompt some carriers to fight

the charges against them

through the commission’s ad-

ministrative process.

The fines, if paid, could fall

heavily on T-Mobile if it closes

its planned merger with Sprint

in the coming weeks. The two

companies recently revised

the terms of that agreement,

which was worth $26 billion

when it was signed two years

ago. Under the revised merger,

the parents of T-Mobile and

Sprint agreed to split the cost

of any liabilities up to $

million. Sprint owner SoftBank

Group Corp. would be on the

hook for excess liabilities

above $200 million.

Data aggregators Loca-

tionSmart Inc. and Zumigo

Inc. told The Wall Street

Journal they distributed real-

time locations to legitimate

clients, including bank fraud-

detection departments and

roadside assistance services.

But others used the data

feeds for what the carriers

said were unauthorized pur-

poses. One prison phone pro-

vider created a website that

let law-enforcement agencies

find the location of any cell-

phone user without obtaining

a court order, the New York

Times and Motherboard have

reported.

The FCC didn’t offer the

carriers any settlements, one

who wrote to carriers in 2018

after the location-sharing

partnerships were revealed to

ask about their data privacy

practices, called the proposed

fines inadequate. He said in a

tweet that strong privacy leg-

islation was needed.

Cellphone companies need

to know their subscribers’ coor-

dinates to route calls and data

to the right place. That gives

them a more consistent view of

customers’ movements than

app developers, which use

global positioning systems, Wi-

Fi and other data sources that

users can shut off through their

smartphone settings. Wireless

carriers also sell anonymized

location data to marketers.

Technology at Georgetown

Law. “Carriers are not allowed

to turn around and sell that

location information to anyone

with a phone number and a

few dollars to spend. But this

has been a widespread prac-

tice, and the FCC has been

slow to rein it in.”

Sen. Ron Wyden (D., Ore.),

Continued from Page One

FCC Looks

To Fine

Carriers

wiping out all student loans,

federal or private. His proposal

would authorize the U.S. Edu-

cation Department to buy and

cancel student loans from pri-

vate lenders, covering any in-

terest due and late charges.

Beneficiaries would include

borrowers who have refi-

nanced their federal loans

through lenders such asSocial

Finance Inc., or who got loans

from nongovernment lenders

such asSLM Corp.’s Sallie

Mae and Wells Fargo & Co.

Parents who borrowed through

federal or private student-loan

programs would benefit, but

not those who borrowed

money against other assets—

such as through a home-equity

line of credit—to cover educa-

tional costs.

Mr. Sanders’s plan also

would help many well-off bor-

Outstandingstudent-loandebt

hasquadrupledsince2005,

outpacingotherformsofdebt.

Changesince

Sources: New York Fed Consumer Credit

Panel/Equifax

Note: Includes federal and private student

loans. Over 90% of student debt is federal debt.

300

• 
  

0

50

100

150

200

250

%

2005 ’10 ’15 ’

Studentloan

Creditcard Mortgage

Proposal Targets

Executive Tax Break

WASHINGTON—Sen. Bernie

Sanders (I., Vt.) would sharply

curb the tax benefits of execu-

tives’ retirement plans and re-

quire earlier taxation of stock

options in a proposal that could

dramatically alter compensation

at major U.S. companies.

In a plan introduced Thursday,

the front-runner for the Demo-

cratic presidential nomination

cited a new Government Ac-

countability Office report. That

analysis found executive de-

ferred-pay plans at the 500 big-

gest publicly traded companies

totaled about $13 billion in assets

in 2017, just considering the top

few executives at each company,

or about 2,300 people.

Chief executives typically

had higher account values than

other executives, averaging $

million apiece—but some have

executive-retirement plans top-

ping $100 million, according to

securities filings.

“It is outrageous that the

wealthiest corporate executives

in America get unlimited, special

tax privileges on hundreds of

millions of dollars in savings,

while ordinary workers can only

get tax deferment of up to

$19,500 on their 401(k)s,” Mr.

Sanders said.

In Mr. Sanders’s broader

progressive agenda to expand

the public sector by tens of tril-

lions of dollars over a decade,

this is a $15 billion drop in the

bucket, equivalent to less than

a 0.25 percentage point in-

crease in the corporate tax

rate. And it is unlikely to be-

come law this year with Repub-

licans running the Senate.

But the bill offers a signal

about what a Sanders presi-

dency could bring and if en-

acted, the idea would prompt

large companies to restructure

compensation plans and force

many professional-class work-

ers to change their financial-

planning decisions.

“It will alter a lot of pay ar-

rangements—and not necessarily

in a way that moderates pay

packages,” said Robin Schachter,

an executive pay and benefits

attorney at Akin Gump Strauss

Hauer & Feld LLP.

Under current law, companies

can create retirement plans for

executives that largely live out-

side the limits and protections

for most workers’ plans.

—Richard Rubin and

Theo Francis

GEORGE FREY/AGENCE FRANCE-PRESSE/GETTY IMAGES

rowers, including workers with

graduate degrees and those

who attended elite private col-

leges. Graduate-school debt ac-

counts for roughly 40% of all

student debt.

Most borrowers in default

owe relatively little—less than

$10,000—typically because

they dropped out of college or

because they attended short-

duration trade programs.

Mr. Sanders has said he be-

lieves education is a societal

obligation and any benefit

should be universal.

Supporters of debt cancella-

tion say millions of borrowers

attended schools of dubious

quality, or were swindled by

recruiters with deceptive

pitches, and shouldn’t have to

repay their debt.

The WSJ/NBC News poll

showed that among Demo-

crats, 63% favor the plan, while

34% oppose it.

Tonya James, 33, a senior

analyst for a securities firm in

Buffalo, N.Y., strongly supports

Mr. Sanders’s plan, which she

said would allow her to spend

more on child care and other

purchases. She has repaid

about $30,000 in student loans

she borrowed for college and

graduate school, and still owes

$36,000.

The mother of two children

said, “My generation is se-

verely underwater by policies

that are not favorable to

growth.”

Mr. Sanders has called for

maintaining the government

loan program, but in a limited

role. He says he would limit

Americans’ reliance on student

debt by making public college

tuition-free, boosting scholar-

ship money for poor students,

capping the interest rate on

new student loans at 1.88% and

expanding a program that for-

gives debt for borrowers who

go into public-service jobs.

Tom Baslee, 76, a self-de-

scribed “yellow dog” Demo-

crat, hates Mr. Sanders’s idea.

The Missouri resident spent

two years in the Army and a

career delivering letters for

the U.S. Postal Service. The

savings he scrounged together

helped put a daughter through

college.

Forgive other people’s stu-

dent debt? “That’s crazy,” says

Mr. Baslee, of Boonville. “I

wouldn’t mind trying to get

some public service out of

these people to help cancel the

debt. But if it’s just giving

them a free ride, I don’t be-

lieve in that.”

U.S. NEWS

Bernie Sanders’s plan to
wipe out Americans’ $1.6 tril-
lion in student debt could face
thorny political and practical
problems if he is elected presi-
dent in November.
The Vermont senator, an in-
dependent who has surged to
the top of the national polls in
the Democratic presidential
primary, has drawn little con-
gressional support for his plan.
A bill he introduced with Rep.
Ilhan Omar (D., Minn.) last
summer has just a dozen co-
sponsors, all in the Demo-
cratic-controlled House, where
it has languished.
A majority of Americans,
57%, oppose canceling all stu-
dent debt, according to a Sep-
tember 2019 Wall Street Jour-
nal/NBC News poll. Among the
strongest opponents are
groups Democrats hope to peel
away from President Trump:
Rust Belt voters, independents,
whites, men and voters in ru-
ral areas.
Mr. Sanders has said his
plan would free up money for
young adults to buy homes and
cars, stirring economic growth.
“It is not merely immoral to
doom an entire generation to
endless educational debt—it is
also bad for our economy,” Mr.
Sanders wrote in an op-ed for
Fortune.
More than 43 million Amer-
icans owe student debt, which
has quadrupled since 2005 and
is now the second-highest
form of household debt, after
mortgages, according to the
Federal Reserve Bank of New
York. More than 90% of all stu-
dent debt was originated or
guaranteed by the federal gov-
ernment. The rest—about $
billion—was originated by pri-
vate banks without a govern-
ment guarantee, according to
MeasureOne, an analytics firm.
Mr. Sanders proposes to
pay for the debt-forgiveness
effort with a new tax on finan-
cial transactions. Progressive
Democrats in Congress intro-
duced a bill last year to im-
pose a 0.1% tax on deals such
as stock purchases and deriva-
tives trades. The idea has
gained momentum in recent
years as progressives seek
higher taxes on the financial
sector, but Republicans gener-
ally oppose the levy.
Another Democratic presi-
dential primary contender,
Sen. Elizabeth Warren (D.,
Mass.), has said she would use
executive powers to sidestep
Congress and cancel up to
$640 billion in student debt. A
Sanders campaign spokesman
said Mr. Sanders hasn’t stud-
ied such a move but would
look into the possibility.
Mr. Sanders has proposed

BYJOSHMITCHELL

Sanders Loan Plan Faces a Slog

Proposal to erase all

student debt struggles

to gain support from

Congress and public

Vermont Sen. Bernie Sanders seeks to eliminate $1.6 trillion in student debt. He spoke Thursday at a rally in Spartanburg, S.C.

VICTOR J. BLUE FOR THE WALL STREET JOURNAL

WASHINGTON—President

Trump has signaled his sup-

port for a measure that would

prohibit the U.S. government

from turning to a secretive

surveillance court to get wire-

taps on Americans, according

to a White House official, set-

ting up a potential clash be-

tween the president and the

intelligence community.

Sen. Rand Paul, the Ken-

tucky Republican drafting the

measure, told reporters Thurs-

day that he is crafting an

amendment to a coming intel-

ligence bill that would over-

haul the Foreign Intelligence

Surveillance Court.

The court has been used for

decades by investigators to

clandestinely get permission to

surveil people in the U.S. sus-

pected of posing a national-se-

curity or counterintelligence

risk. Mr. Paul said his amend-

ment would force the Justice

Department to seek surveillance

warrants for national-security

cases from traditional federal

courts, as the government does

in routine criminal cases.

The senator said Mr. Trump

gave the effort his approval. The

White House official confirmed

that the president supports the

amendment. The White House

press office didn’t respond to a

request for comment.

Mr. Paul’s amendment would

appear to radically change the

Foreign Intelligence Surveillance

Act, a Watergate-era law estab-

lished in the wake of revelations

of spying abuses by U.S. intelli-

gence agencies. The law governs

how the FBI, the National Secu-

rity Agency and other agencies

conduct national-security-re-

lated spying on domestic targets.

Lawmakers, spurred by the

disclosures from former intel-

ligence contractor Edward

Snowden in 2013, have in re-

cent years imposed some pri-

vacy and transparency

changes to the FISA process.

But restricting the court

from being able to approve

surveillance warrants on

Americans would represent

one of the most significant

erosions of the court’s power

since it was established and

deprive it of one of its most

central functions.

Mr. Trump has told his ad-

visers he wants to see an over-

haul of the government’s sur-

veillance program. The

president remains outraged

about the government’s deci-

sion to surveil an adviser to his

2016 campaign, Carter Page.

The White House’s Domes-

tic Policy Council has been

crafting possible changes to

the Foreign Intelligence Sur-

veillance Act.

President

Supports

Court

Limits

BYANDREWRESTUCCIA

ANDSIOBHANHUGHES

AT&T, Sprint, T-Mobile and Verizon have been given notice of possible penalties over sharing users’ real-time locations. A Verizon tower.

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