Tag: u.s.
Why House Republicans May Still Tank Trump's 'Big Beautiful Bill'

Why House Republicans May Still Tank Trump's 'Big Beautiful Bill'

As the Republican-controlled U.S. Senate mulls changes to President Donald Trump's "One Big Beautiful Bill Act," one House Republican is warning his Senate counterparts against tweaking one particular section.

During a Sunday interview with CNN congressional correspondent Manu Raju, Rep. Mike Lawler (R-NY) cautioned Senate Republicans against making any changes to the state and local tax (SALT) deduction he and others negotiated with House Republican leadership. The SALT deduction cap is currently at $10,000, but House Speaker Mike Johnson (R-LA.) agreed to raise the cap to $40,000 in order to convince House's SALT caucus to support the legislation.

"This is an issue that not just impacts blue states, it impacts nearly every state in the country," Lawler said. "29 states blew through the $10,000 cap over the last seven years. And so lifting the cap on SALT is critically important. It provides middle-class tax relief. And that's exactly what we did here."

"I've been very clear with leadership all this past week that if the Senate changes the SALT deduction in any way, I will be a no," he continued. "And I'm not going to buckle on that. And I've spoken to my other colleagues, they will be a no as well."

Lawler's remarks come as Senate Republicans have spoken openly about slashing the SALT deduction, which they say is overwhelmingly beneficial to Americans in blue states (which typically have higher state and local tax rates). Sen. Mike Crapo (R-Idaho), who chairs the Senate Finance Committee, said last week that senators are likely to nix the SALT deal in the package they intend to send back to the House of Representatives.

"There’s not a single [Republican] senator from New York or New Jersey or California, and so there’s not a strong mood in the Senate Republican caucus right now to do $353 billion for states that basically the other states subsidize," Crapo said on Wednesday.

The House only narrowly passed the massive 1,037-page budget bill by a 215-214 margin in May, and only did so with the help of the SALT caucus, which includes representatives like Andrew Garbarino (R-NY), Young Kim (R-CA) and Nick LaLota (R-NY, as well as Lawler. Should they withhold their support from a final bill that cuts the SALT deduction, the legislation would likely fail to pass.

Reprinted with permission from Alternet.

Donald Trump

Humiliated Trump Seeks To Deflect Attention With Los Angeles Provocation

What is our moral responsibility as citizens of the United States when the President of the United States moves to deploy thousands of American soldiers against us?

Trump signed a memo on Friday night ordering 2,000 members of the National Guard to be deployed in Los Angeles County after federal immigration agents in riot gear squared off with hundreds of protesters for a second consecutive day.

Trump’s action is extreme although technically legal. Title 10 of the United States Code allows a president to federalize the National Guard units of states to suppress “any insurrection, domestic violence, unlawful combination, or conspiracy.” In a presidential memo, Trump said, “To the extent that protests or acts of violence directly inhibit the execution of the laws, they constitute a form of rebellion against the authority of the Government of the United States.”

Why is he doing it, and why now?

Because Trump can’t stand to be humiliated — as he has been in the last two weeks. By senate Republicans refusal to quickly enact his so-called One Big Beautiful Bill. By Xi Jinping’s refusal to back down on trade (and restrict shipments of China’s rare earths, which American industry depends on). By Putin’s refusal to end the war in Ukraine. By the federal courts pushing back against his immigration policy. And, now, by insults and smears from the richest person in the world, who has a larger social media following than does Trump.

So what does Trump do when he’s humiliated? He deflects public attention. Like any bully, he tries to find another way to display his power — especially over people whom he doesn’t consider “his” people.

He has despised California since the 2016 election when the state overwhelmingly voted against him.

And what better Ground Zero for him to try out his police state than Los Angeles — a city teaming with immigrants, with Hollywood celebrities who demonize him, and wealthy moguls who despise him?

He is calling out the National Guard to provoke violence. As California governor Gavin Newsom said, “that move is purposefully inflammatory and will only escalate tensions.”

Exactly. Trump wants to escalate tensions. He wants a replay of the violence that occurred in the wake of the George Floyd murder — riots, mayhem, and destruction that allow him to escalate his police state further — imposing curfews, closing down parts of Los Angeles, perhaps seeking to subdue the entire state. And beyond.

Please do not give him this. Don’t fall into his trap.

We cannot be silent in the face of Trump’s dictatorial move. But we must not succumb to violence.

What is needed is peaceful civil disobedience. Americans locking arms to protect those who need protection. Americans sitting in the way of armored cars. Americans singing and chanting in the face of the Americans whom Trump is drafting into his handmade civil war.

Americans who do not attempt to strike back, but who do what many of us did during the Civil Rights and anti-Vietnam War movements — peacefully but unambiguously reject tyranny.

A humiliated Trump is the most dangerous Trump. But he will overreach. He already has. And this overreach will ultimately be his undoing.

As long as we keep our heads.

May we look back on this hellish time and feel proud of what we did.

Be strong. Be safe. Hug your loved ones.

Robert Reich is a former secretary of labor and professor of public policy at University of California-Berkeley, who served in four presidential administrations of both parties. He is the author of several books and currently writes daily commentary on Substack.

Reprinted with permission from Alternet.

Crypto Is A Criminal Enterprise That Now Controls Our Government

Crypto Is A Criminal Enterprise That Now Controls Our Government

I spent my very early years in Utica, New York. I was too young to know anything about the city’s reputation — I left when I was 8 — but I would later learn that it was known at the time as “Crime City,” because it was reportedly controlled by the Mob.

Stories of towns infiltrated by organized crime or ruled by blatantly corrupt politicians used to be fairly common. These days you hear tales of blatant personal corruption at the local level less often.

But who could have imagined raw corruption determining policy for the United States as a whole?

Unless there’s a sudden outbreak of conscience and rationality on Capitol Hill, Congress is about to pass, with (alas) wide bipartisan support, the GENIUS Act, which will legitimize and normalize “stablecoins” — cryptocurrency tokens that, unlike the original tokens such as Bitcoin and its imitators, are supposed to be protected against wild fluctuations in their purchasing power, because they’re backed by conventional assets like Treasury bills.

I’ll talk in a minute about why encouraging stablecoins is such a bad idea. But first let’s talk about crypto in general.

Crypto’s early enthusiasts may well have been idealists, imagining that they could create something that was better and safer than traditional money. But as the years have gone by — Bitcoin was introduced in 2009! — crypto keeps failing to find legitimate uses. There is, to a first approximation, nothing you can legally buy with crypto assets except other crypto assets.

The journalist Zeke Faux, who wrote “Number Go Up,” a portrait of the crypto industry, went around the world both studying cryptocurrencies and trying, when he could, to use them. In the end, he wrote, “Traveling around the world investigating crypto had given me a new appreciation for my Visa card.”

So why do ordinary people keep buying crypto? Part of the answer is intense marketing; as I mentioned in a recent post, my Venmo app (which is actually useful) is constantly trying to sell me crypto. But the most compelling explanation why people buy crypto is that there is a clear affinity between the psychology of buying crypto and the psychology of gambling. Retail crypto looks, in particular, a lot like the “numbers racket,” which siphoned millions of dollars from generations of working-class Americans until it was largely supplanted by state lotteries.

The numbers racket was illegal, but flourished anyway because the criminal organizations paid off police and politicians.

But they were pikers by today’s standards. According to Public Citizen, crypto companies accounted for almost half of all corporate spending during the 2024 election. Donald Trump and his family have made billions off the $Trump and $Melania “meme coins,” but I wouldn’t be surprised to learn that other politicians have also been the beneficiaries of crypto largesse.

And what the crypto industry wants out of today’s politicians, above all, is legislation that gives a veneer of legitimacy to stablecoins like Tether.

What is a stablecoin? It’s a digital token like Bitcoin — that is, an asset that “belongs” to whoever has the secret numerical key that unlocks it. But unlike Bitcoin, whose value in dollars fluctuates wildly day to day, a stablecoin is supposed to retain a fixed value in dollars. The stablecoin issuer maintains that stability by standing ready to buy its tokens back, holding reserves of conventional assets like Treasury bills for that purpose.

One way to think about this is that stablecoin issuers are like banks back in the days before the Civil War, when gold and silver coins were the only official forms of money. Many banks issued paper currency, which they promised to redeem for gold and silver coins on demand. Similarly, stablecoin firms issue tokens that they promise to redeem for dollars.

Antebellum banks that issued their own notes served a useful function, because the federal government wasn’t yet issuing its own paper currency. So bank notes played an important role in ordinary, legitimate commerce. For example, the $10 “Dixie” notes issued by the Citizens Bank of Louisiana (they were printed in French on one side) circulated widely across the lower Mississippi. Yet some of these early, unregulated banks were “wildcat banks”: banks that were specifically set up to defraud anyone foolish enough to accept their bank notes as payment.

So like antebellum bank notes, which were privately issued currencies supported by the claim that they were backed by gold and silver, stablecoins are privately issued tokens supported by the claim that they are backed by dollars. Unlike antebellum bank notes, however, stablecoins don’t serve any clearly useful function. They can’t be used to make ordinary purchases, and there’s nothing you can do with them that can’t be done more cheaply and more easily with debit cards, Venmo, Zelle, wire transfers etc. That is, why not just use dollars instead of tokens that are supposedly backed by dollars?

The answer to that question is that the ownership and disposition of stablecoins, unlike the ownership and distribution of bank deposits, is anonymous. This is a highly valuable feature for those who want to engage in money laundering, extortion, purchase of illegal drugs, and so on. In other words, the only economic reason for stablecoins is to facilitate criminal activity.

Do the politicians backing the GENIUS Act not understand this? Some of them probably do. As for the rest, well, it’s difficult to get someone to understand something when their campaign contributions and, in some cases, their personal wealth depends on their not understanding it.

But wait, there’s more. As I’ve already explained, stablecoin issuers are teched-up versions of antebellum banks, which were for the most part unregulated and, when they failed, provided no safety net for people who placed their money in their care (or accepted their notes.) As a result of this lack of regulation, the antebellum banking system repeatedly experienced “panics” — mass runs on banks perceived as risky.

Today, however, the federal government is deeply involved in banking, for very good reasons. After the devastating bank runs of the 1930s, in particular, officials realized that they needed to guarantee the value of deposits via the FDIC, while at the same time requiring banks to limit the kinds of risks they take. The goal was to limit the risk of financial crisis. While we did have a nasty crisis in 2008, that mostly involved “shadow banks” that evaded precautionary regulation. And stablecoins are, among other things, a new kind of shadow bank.

Recognizing that they could suffer the equivalent of self-fulfilling bank runs, the biggest stablecoin issuers are trying to reassure holders of their solvency by accumulating large reserves of U.S. government debt. But the flip side of this is that a run on stablecoins could turn into a run on U.S. government debt! That is, if the owners of stablecoins were to rush to convert their holdings into dollars, this would force stablecoin issuers into a fire sale of U.S. Treasury bills, driving up interest rates.

The fundamental point is that the growth and legitimation of stablecoins poses new risks to overall financial stability — all in the name of making it easier for criminals to do their business.

It's an amazing, depressing story, one that many readers may find hard to accept. But the truth is that when it comes to crypto (and other issues, but I’ll talk about them another day), Washington has become Utica on the Potomac: A town that, if not entirely controlled by the digital Mob, has at least been largely bought and paid for.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times. Please consider subscribing to his Substack, where he now posts almost every day.

Reprinted with permission from Substack.

Drill Baby Drill? How 'MAGA Brain' May Kill US Energy Independence

Drill Baby Drill? How 'MAGA Brain' May Kill US Energy Independence

Does anyone remember “Drill, baby, drill?” What with all the tumult over Donald Trump’s disastrous trade war, many have forgotten that energy production played a big role in his second inaugural address. He claimed that we were facing a “national energy emergency,” and that he would bring prices down and make America rich by releasing the “liquid gold under our feet.”

There was, in fact, no energy emergency. One thing you always find Trump and MAGA in general doing is assuming that the real world must look the way their prejudices say it should look. Squishy liberals who believe in rule of law were in charge last year, so America must have been in the grip of a terrifying crime wave — even though the homicide rate in 2024 was close to a 65-year low:


Source: Jeff Asher

Similarly, the Biden administration was full of woke environmentalists who believe in the global warming hoax, so they must have crippled energy production — even though America in the Biden years was, for the first time in generations, producing more energy than it consumed:

When I wrote about this at the time, I suggested that Trump was suffering from "MAGA brain,"

the belief that the only way you can get results is by being tough and nasty, avoiding anything that might be considered woke. Thus, to achieve energy independence, we must put aside worries about pollution and climate change while blocking clean energy.

So administrations that care about climate change and the environment in general must be crippling the energy sector. Biden may have presided over record oil production and growing energy exports, but we’ll just say that we have an energy emergency anyway.

You can probably guess what’s coming next. There appears to be a real chance that America will lose its newly reacquired energy independence. And if it does, we know who will be responsible: Trump himself.

To see why, we need to look at the factors responsible for America’s return to energy self-sufficiency.

One of these is fracking — extracting oil and gas embedded in shale by fracturing that shale with high-pressure liquids. Yes, there are serious environmental issues involved both in the fracking process and in the fact that more fossil fuel production adds to greenhouse gas emissions. But while the Biden administration took climate change seriously, that didn’t stop oil and gas production from rising on its watch.

The other factor was the incredible rise of renewable energy. Not that long ago wind and solar power were widely seen as silly, hippy-dippy conceits. Now they’re major contributors to energy supply:


Data source: US Energy Information Administration

In the case of shale, it’s all about prices. Drilling new shale wells is expensive. In fact, Trump’s vision of drastically lower oil prices never made any sense, because any large drop in oil prices would make new shale wells unprofitable. And since production from any given shale well drops quickly over time, anything that caused new drilling to fall substantially would quickly translate into declining oil production.

How low would prices have to go to shrink the U.S. oil industry? Recently the Dallas Fed did a survey which suggested that drilling in many major fields would stop if the price per barrel fell below the low 60s:

And that was before Trump’s tariffs raised costs, so the critical price is probably higher now. And guess what: oil prices right now are at a level where we can expect production to fall. Here are oil futures:

Why did oil get cheap? Look at the sudden drop on April 2, a.k.a. Liberation Day, when Trump first announced extreme tariffs. It’s obvious that oil prices are down thanks to pessimism about the global economy, which in turn is tied to Trump’s trade war. And by the way, that war is by no means over. A new analysis by the Yale Budget Lab finds that the damaging effects of Trump’s tariffs are only modestly mitigated by his surrender to China.

And as for renewables: Trump hates them, wind power in particular. He offers crazy justifications for that hatred — did you hear about his claim that offshore wind farms kill whales? — but it’s pretty clear that he has been nursing an irrational grudge ever since he was unable to stop a Scottish wind farm that he thought ruined the view from a golf course he owns.

Oh, and I’m pretty sure that MAGA types in general dislike renewable energy because they don’t consider it manly.

So what will be the economy-boosting effects of drill, baby, drill? Nil, baby, nil.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times. Please consider subscribing to his Substack, where he now posts almost every day.

Reprinted with permission from Paul Krugman Substack.

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