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U.S. President Donald Trump and his Republican allies in Congress are determined to enact his tax-cut agenda in a political push that has largely abandoned longtime party claims of fiscal discipline, by simply denying warnings that the measure will balloon the federal debt. The drive has drawn the ire of Elon Musk, a once-close Trump ally and the biggest donor to Republicans in the 2024 election, who gave a boost to a handful of party deficit hawks opposed to the bill by publicly denigrating it as a “disgusting abomination,” opening a public feud with Trump. But top congressional Republicans remain determined to squeeze Trump’s campaign promises through their narrow majorities in the Senate and House of Representatives by July 4, while shrugging off warnings from the official Congressional Budget Office and a host of outside economists and budget experts. “All the talk about how this bill is going to generate an increase in our deficit is absolutely wrong,” Senate Finance Committee Chairman Mike Crapo told reporters after a meeting with Trump last week. Outside Washington, financial markets have raised red flags about the nation’s rising debt, most notably when Moody’s cut its pristine “Aaa” U.S. credit rating. The bill also aims to raise the government’s self-imposed debt ceiling by up to $5 trillion, a step Congress must take by summer or risk a devastating default on $36.2 trillion in debt. “Debt and deficits don’t seem to matter for the current Republican leadership, including the president of the United States,” said Bill Hoagland, a former Senate Republican aide who worked on fiscal bills including the 1997 Balanced Budget Act. The few remaining Senate Republican fiscal hawks could be enough to block the bill’s passage in a chamber the party controls 5347. But some have appeared to be warming to the legislation, saying the spending cuts they seek may need to wait for future bills. “We need a couple bites of the apple here,” said Republican Senator Ron Johnson of Wisconsin, a prominent fiscal hardliner. Republicans who pledged fiscal responsibility in the 1990s secured a few years of budget surpluses under Democratic former President Bill Clinton. Deficits returned after Republican President George W. Bush’s tax cuts and the debt has pushed higher since under Democratic and Republican administrations. “Thirty years have shown that it’s a lot easier to talk about these things when you’re out of power than to actually do something about them when you’re in,” said Jonathan Burks, who was a top aide to former House Speaker Paul Ryan when Trump’s Tax Cuts and Jobs Act was enacted into law in 2017. “Both parties have really pushed us in the wrong direction on the debt problem,” he said. Burks and Hoagland are now on the staff of the Bipartisan Policy Center think tank. DEBT SET TO DOUBLE Crapo’s denial of the cost of the Trump bill came hours after CBO reported that the legislation the House passed by a single vote last month would add $2.4 trillion to the debt over the next 10 years. Interest costs would bring the full price tag to $3 trillion, it said. The cost will rise even higherreaching $5 trillion over a decadeif Senate Republicans can persuade Trump to make the bill’s temporary business tax breaks permanent, according to the nonpartisan Committee for a Responsible Federal Budget. The CRFB projects that if Senate Republicans get their way, Trump’s One Big Beautiful Bill Act could drive the federal debt to $46.9 trillion in 2029, the end of Trump’s term. That is more than double the $20.2 trillion debt level of Trump’s first year at the White House in 2017. Majorities of Americans of both parties72% of Republicans and 86% of Democratssaid they were concerned about the growing government debt in a Reuters/Ipsos poll last month. Analysts say voters worry less about debt than about retaining benefits such as Medicaid healthcare coverage for working Americans, who helped elect Trump and the Republican majorities in Congress. “Their concern is inflation,” Hoagland said. “Their concern is affordability of healthcare.” The two problems are linked: As investors worry about the nation’s growing debt burden, they demand higher returns on government bonds, which likely means households will pay more for their home mortgages, auto loans and credit card balances. Republican denial of the deficit forecasts rests largely on two arguments about the 2017 Tax Cuts and Jobs Act that independent analysts say are misleading. One insists that CBO projections are not to be trusted because researchers predicted in 2018 that the TCJA would lose $1.8 trillion in revenue by 2024, while actual revenue for that year came in $1.5 trillion higher. “CBO scores, when we’re dealing with taxes, have lost credibility,” Republican Senator Markwayne Mullin told reporters last week. But independent analysts say the unexpected revenue gains resulted from a post-COVID inflation surge that pushed households into higher tax brackets and other factors unrelated to the tax legislation. Top Republicans also claim that extending the 2017 tax cuts and adding new breaks included in the House bill will stimulate economic growth, raising tax revenues and paying for the bill. Despite similar arguments in 2017, CBO estimates the Tax Cuts and Jobs Act increased the federal deficit by just under $1.9 trillion over a decade, even when including positive economic effects. Economists say the impact of the current bill will be more muted, because most of the tax provisions extend current tax rates rather lowering rates. “We find the package as it currently exists does boost the economy, but relatively modestly . . . it does not pay for itself,” said William McBride, chief economist at the nonpartisan Tax Foundation. The legislation has also raised concerns among budget experts about a potential debt spiral. Maurice Obstfeld, senior fellow at the Peterson Institute for International Economics, said the danger of fiscal crisis has been heightened by a potential rise in global interest rates. “This greatly increases the cost of having a high debt and of running high deficits and would accelerate the point at which we really got into trouble,” said Obstfeld, a former chief economist for the International Monetary Fund. David Morgan, Reuters
Category:
E-Commerce
President Donald Trump really wants to fly on an upgraded Air Force Onebut making that happen could depend on whether he’s willing to cut corners with security.As government lawyers sort out the legal arrangement for accepting a luxury jet from the Qatari royal family, another crucial conversation is unfolding about modifying the plane so it’s safe for the American president.Installing capabilities equivalent to the decades-old 747s now used as Air Force One would almost certainly consign the project to a similar fate as Boeing’s replacement initiative, which has been plagued by delays and cost overruns.Air Force Secretary Troy Meink told lawmakers Thursday that those security modifications would cost less than $400 million but provided no details.Satisfying Trump’s desire to use the new plane before the end of his term could require leaving out some of those precautions, however.A White House official said Trump wants the Qatari jet ready as soon as possible while adhering to security standards. The official, who spoke on the condition of anonymity, did not provide details on equipment issues or the timeline.Trump has survived two assassination attempts, and Iran allegedly also plotted to kill him, so he’s well aware of the danger he faces. However, he seems willing to take some chances with security, particularly when it comes to communications. For example, he likes to keep his personal phone handy despite the threat of hacks.He boasted this week that the government got the jet “for free,” saying, “We need it as Air Force One until the other ones are done.”Here’s a look at what it would take to make the Qatari plane into a presidential transport: What makes a plane worthy of being Air Force One? Air Force One is the call sign for any plane that’s carrying the president. The first aircraft to get the designation was a propeller-powered C-54 Skymaster, which ferried Franklin D. Roosevelt to the Yalta Conference in 1945. It featured a conference room with a bulletproof window.Things are a lot more complicated these days. Boeing has spent years stripping down and rebuilding two 747s to replace the versions that have carried presidents for more than three decades. The project is slated to cost more than $5.3 billion and may not be finished before Trump leaves office.A 2021 report made public through the Freedom of Information Act outlines the unclassified requirements for the replacement 747s under construction. At the top of the listsurvivability and communications.The government decided more than a decade ago that the new planes had to have four engines so they could remain airborne if one or two fail, said Deborah Lee James, who was Air Force secretary at the time. That creates a challenge because 747s are no longer manufactured, which could make spare parts harder to come by.Air Force One also has to have the highest level of classified communications, anti-jamming capabilities and external protections against foreign surveillance, so the president can securely command military forces and nuclear weapons during a national emergency. It’s an extremely sensitive and complex system, including video, voice and data transmissions.James said there are anti-missile measures and shielding against radiation or an electromagnetic pulse that could be caused by a nuclear blast.“The point is, it remains in flight no matter what,” she said. Will Trump want all the security bells and whistles? If the Qatari plane is retrofitted to presidential standards, it could cost $1.5 billion and take years, according to a U.S. official who spoke on the condition of anonymity to provide details that aren’t publicly available.Testifying before Congress this week, Meink discounted such estimates, arguing that some of the costs associated with retrofitting the Qatari plane would have been spent anyway as the Air Force moves to build the long-delayed new presidential planes, including buying aircraft for training and to have spares available if needed.In response, Rep. Joe Courtney, D-Conn., said that based on the contract costs for the planes that the Air Force is building, it would cost about $1 billion to strip down the Qatar plane, install encrypted communications, harden its defenses and make other required upgrades.James said simply redoing the wiring means “you’d have to break that whole thing wide open and almost start from scratch.”Trump, as commander in chief, could waive some of these requirements. He could decide to skip shielding systems from an electromagnetic pulse, leaving his communications more vulnerable in case of a disaster but shaving time off the project.After all, Boeing has already scaled back its original plans for the new 747s. Their range was trimmed by 1,200 nautical miles, and the ability to refuel while airborne was scrapped.Paul Eckloff, a former leader of protection details at the Secret Service, expects the president would get the final say.“The Secret Service’s job is to plan for and mitigate risk,” he said. “It can never eliminate it.”If Trump does waive some requirements, James said that should be kept under wraps because “you don’t want to advertise to your potential adversaries what the vulnerabilities of this new aircraft might be.”It’s unlikely that Trump will want to skimp on the plane’s appearance. He keeps a model of a new Air Force One in the Oval Office, complete with a darker color scheme that echoes his personal jet instead of the light blue design that’s been used for decades. What happens next? Trump toured the Qatari plane in February when it was parked at an airport near Mar-a-Lago, his Florida resort. Air Force chief of staff Gen. David Allvin was there, too.The U.S. official said the jet needs maintenance but not more than what would be expected of a four-engine plane of its complexity.Sen. Tammy Duckworth, an Illinois Democrat on the Senate Armed Services Committee, said it would be irresponsible to put the president and national security equipment aboard the Qatari plane “without knowing that the aircraft is fully capable of withstanding a nuclear attack.”“It’s a waste of taxpayer dollars,” she said.Meanwhile, Boeing’s project has been hampered by stress corrosion cracks on the planes and excessive noise in the cabins from the decompression system, among other issues that have delayed delivery, according to a Government Accountability Office report released last year.Boeing referred questions to the Air Force, which said in a statement that it’s working with the aircraft manufacturer to find ways to accelerate the delivery of at least one of the 747s.Even so, the aircraft will have to be tested and flown in real-world conditions to ensure no other issues.James said it remains to be seen how Trump would handle any of those challenges.“The normal course of business would say there could be delays in certifications,” she said. “But things seem to get waived these days when the president wants it.” AP writer Lolita C. Baldor in Wasington contributed to this report. Tara Copp and Chris Megerian, Associated Press
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E-Commerce
Warner Bros Discovery said on Monday it would split into two companies, separating its studios and streaming business from its fading cable television networks as the parent of HBO and CNN looks to compete better in the streaming era. The breakup is the latest sign of the great unraveling of decades of media consolidation that have created global conglomerates spanning content creation, distribution and in some cases, telecommunications. The strategic reset would provide Warner Bros Discovery’s streaming unit more room to scale by producing hit studio content without being bogged down by the declining cable networks business. Its CEO David Zaslav will lead the streaming and studios business after the breakup, while CFO Gunnar Wiedenfels will head the global networks unit. “By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape,” Zaslav said. The separation for the company formed out of a merger between WarnerMedia and Discovery in 2022 will be structured as a tax-free transaction and is expected to be completed by mid-2026. WBD shares were up nearly 6% in premarket trading. The company had laid the groundwork for a possible sale or spin-off of its declining cable TV assets in December by announcing a separation from its streaming and studio operations. The split will align the company with Comcast, which is spinning off most of its cable TV networks such as MSNBC and CNBC. Bank of America research analyst Jessica Reif Ehrlich has said Warner Bros Discovery’s cable television assets are a “very logical partner” for Comcast’s new spin-off company. WBD also said on Monday it launched tender offers to restructure its existing debt, funded by a $17.5 billion bridge facility provided by J.P. Morgan. The bridge loan is expected to be refinanced ahead of the planned separation, it said, adding that global networks will retain up to a 20% stake in streaming and studios, which it plans to monetize to further reduce debt. J.P. Morgan and Evercore are advising WBD on the deal, while Kirkland & Ellis is serving as legal counsel. Aditya Soni and Akash Sriram, Reuters
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E-Commerce
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