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Time of India
2 hours ago
- Business
- Time of India
Trump's 'Big Beautiful Bill': Senate aims for passage by this date; hopes to finalise it 'even sooner'
Senator Ron Johnson said there's a strong chance that Donald Trump 's "Big Beautiful Bill" could be passed by the Senate and land on the US president's desk by July, possibly before the August recess. "I think we can do it before the August recess, yes, and maybe even sooner than that," Johnson told Fox News. President Trump has earlier urged Congress to send the bill to his desk by July 4, calling it "arguably the most significant piece of legislation that will ever be signed in the history of our country." — bennyjohnson (@bennyjohnson) The wide-ranging legislative package — formally known as the "One, Big, Beautiful Bill" bundles together major tax reforms, spending cuts, and border security proposals that aim to reshape key areas of American policy. At its core, the over 1,000-page bill seeks to make Trump's 2017 tax cuts permanent while adding new tax breaks, such as deductions for tips, overtime, and car loan interest. It also proposes raising the standard deduction to $32,000 for joint filers, boosting the child tax credit to $2,500, and offering a $4,000 deduction for certain seniors. But the bill has sparked backlash over proposed cuts to federal programs. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Thị trường có dấu hiệu suy thoái không? IC Markets Đăng ký Undo It includes major reductions in spending on Medicaid and the Supplemental Nutrition Assistance Program (SNAP). The Congressional Budget Office estimates the bill could cut SNAP spending by $295 billion over the next decade and push around 3.2 million people off the program each month by tightening work requirements and shifting more costs to states. While Republicans hold a slight majority in the Senate (53-47), opposition remains — not just from Democrats but also from some GOP senators worried about impacts on vulnerable populations and the potential to worsen the federal deficit.
The Hill
9 hours ago
- Business
- The Hill
Is the US in a debt-fueled national death spiral?
My Albanian-born father-in-law was an American patriot. In the mid-20th century, he served for decades as a CIA operative, quietly fighting against the spread of communism in Europe and Southeast Asia. Before his death at age 92, he lamented America's future, saying, 'I'm glad I won't be around to see the end.' Long before the U.S. was on the brink of World War III, I shared his bittersweet pessimism, prompted by the 'death spiral math' found on the U.S. Debt Clock. The 'clock' ticks real-time government data showing the ever-growing national debt — $36.9 trillion as of this writing — the most owed by any country or empire in human history. Nonetheless, this decades-long travesty of overspending, attributed to presidents from both parties, is still manageable if the U.S. gross domestic product — estimated at $29.2 trillion in 2024 — were to exceed the nearly $37 trillion national debt. At least, that is the economic theory recently espoused by Treasury Secretary Scott Bessent, who stated, 'If the economy grows faster than the debt, we stabilize the country.' Bessent's philosophy of 'we can grow our way out of debt' supports adding an estimated $3.3 trillion to the national debt, according to the Congressional Budget Office, if President Trump's 'Big, Beautiful Bill' were to become law. Cue the laugh track, because Bessent's growth fantasy is a joke when viewed through the lens of history and facts. The national debt has exceeded GDP since 2013, and the Debt Clock shows the U.S. debt-to-GDP ratio today at 123 percent. Reducing that unwieldy ratio requires a sustained economic boom not seen since the decades following World War II. In 1946, due to five years of war, the debt-to-GDP ratio reached a record 119 percent. If that upside-down ratio had persisted, it is unlikely that the U.S. would have maintained its global superpower status. Fortunately, America managed to climb its way out of debt through sustained post-war growth. Fueled by national optimism, the country experienced a significant baby boom that spurred unprecedented suburban expansion. The development of a national highway system, coast-to-coast new infrastructure and technological advancements coincided with the rise of consumerism, driven by wartime pent-up demand. By 1966, after 20 years of growth (with a few dips), the debt-to-GDP ratio decreased to 40 percent. Then, in 1974, with the Vietnam War winding down, the U.S. achieved its lowest post-war debt-to-GDP ratio of 31 percent, hitting that amount again in 1981 for the last time. After that, the debt-to-GDP ratio continued its dramatic climb. Does anyone honestly believe that Trump's 'Golden Age of America' policies will stimulate levels of explosive growth needed to reduce the debt-to-GDP ratio from 123 percent to double digits? Bessent's 'we can grow our way out of debt' wish-casting could easily be thwarted, starting with Trump's trade war. Then add untamed inflation, an aging population, ongoing global crises, natural disasters, supply-chain issues, AI's unpredictable impact and Trump's self-inflicted scientific brain drain resulting from cuts to research funding. Moreover, a shortage of highly skilled tech workers, the fallout from Trump's immigration policy, and economic uncertainty all contribute to slow growth, while government spending remains unchecked. No wonder the World Bank recently issued new economic projections contradicting Bessent's optimism. In 2024, the U.S. economy grew by 2.8 percent. However, for 2025, the World Bank's initial downward forecast of 1.8 percent growth has again been revised to 1.4 percent. It appears that Trump's Golden Age is only mining 'fool's gold.' Especially when, according to the Debt Clock's 'time machine,' the debt-to-GDP ratio is projected to reach 140 percent by 2029 — the year Trump leaves office. Most Americans don't know that the two largest federal expenditures are Medicaid and Medicare, totaling nearly $1.7 trillion, followed by Social Security at $1.5 trillion, according to the Debt Clock. Cuts to these massive programs are inevitable and will be painful, while Americans have a low tolerance for pain and sacrifice. Yet, that is the future. On the tax receipt side, the Debt Clock displays $5.1 trillion in revenue, relatively small compared to the $36.9 trillion national debt. This debt has risen so rapidly that interest has reached $1.03 trillion — the third-largest item in the federal budget. Debt service now exceeds defense spending, the fourth-largest expenditure at $907.7 billion. That little-known budget factor arose last year. In February, Niall Ferguson, a Hoover Institution fellow, wrote a stunning paper titled 'Ferguson's Law: Debt Service, Military Spending, and the Fiscal Limits of Power.' His 'law' states, 'Any great power that spends more on debt servicing than on defense risks ceasing to be a great power.' Ferguson argues that 'the debt burden draws scarce resources towards itself, reducing the amount available for national security, and leaving the power increasingly vulnerable to military challenge.' He cites numerous historical references to support his theory. For the optimists, Ferguson writes, 'it is very rare but not unprecedented for a great power to return to the right side of the Ferguson limit.' Thus, there is hope for our nation, but hope does not reverse the current death spiral of spending more on debt service than on defense. War is expensive, and the debt crisis will intensify as the U.S. edges closer to direct involvement in a Middle East conflict, which could easily widen. Our enemies are keenly aware of America's economic vulnerabilities. More defense spending means more borrowing and, eventually, the U.S. could cease to be a great power, according to Ferguson's Law. Meanwhile, proposed reductions to the two largest federal budget entitlements cited above elicited angry jeers from town hall participants, such as 'cuts will cause people to die.' To which Sen. Joni Ernst (R-Iowa) retorted, 'Well, we are all going to die.' But unlike my late father-in-law, many of us reading this might be around to see the end. Myra Adams is an opinion writer who served on the creative team of two Republican presidential campaigns in 2004 and 2008.
The Hill
a day ago
- Business
- The Hill
Trump extends TikTok sale deadline
The Big Story President Trump extended the deadline for TikTok's parent company to divest the popular video sharing app by 90 days. © Manuel Balce Ceneta, Associated Press The order punts the deadline for China-based ByteDance to Sept. 17. The most recent deadline was Thursday. 'I've just signed the Executive Order extending the Deadline for the TikTok closing for 90 days (September 17, 2025). Thank you for your attention to this matter!' Trump wrote in a post on Truth Social, attaching a screenshot of the order. The order instructs the Department of Justice not to enforce the law or impose penalties related to it. 'We are grateful for President Trump's leadership and support in ensuring that TikTok continues to be available for more than 170 million American users and 7.5 million U.S. businesses that rely on the platform as we continue to work with Vice President Vance's Office,' TikTok said in a statement following Thursday's order. White House press secretary Karoline Leavitt confirmed earlier this week Trump planned to sign another extension, telling reporters the president 'does not want TikTok to go dark.' 'This extension will last 90 days, which the Administration will spend working to ensure this deal is closed so that the American people can continue to use TikTok with the assurance that their data is safe and secure,' Leavitt said in a statement Tuesday. When asked Monday whether he would give the popular video-sharing platform another extension, the president told reporters aboard Air Force One, 'Probably, yeah.' 'Probably have to get China['s] approval, but I think we'll get it,' Trump said as he traveled back from the Group of Seven summit in Canada. 'I think President Xi [Jinping] will ultimately approve it.' The order marks the third extension from Trump since he took office in January. Read more in a full report at Welcome to The Hill's Technology newsletter, we're Miranda Nazzaro and — tracking the latest moves from Capitol Hill to Silicon Valley. Did someone forward you this newsletter? Subscribe here. Essential Reads How policy will be impacting the tech sector now and in the future: Misleading information on climate science delaying action: Report Misleading information about the nature of climate change is further complicating and delaying action to fight the environmental issue, according to a new research report. A sprawling report, released this month from the International Panel on the Information Environment (IPIE), found 'powerful actors' like governments, political parties and corporations are often behind the intentional spreading of inaccurate or … Texas Democrats ask Tesla to delay robotaxi rollout A group of Democratic lawmakers in Texas urged Tesla to delay the rollout of its robotaxis in Austin, as the driverless cars prepare to hit the streets this weekend. In a letter to Tesla's director of field quality, Eddie Gates, seven lawmakers asked the electric vehicle maker to push back its launch until September, when a new Texas law is set to take effect. The law, which revises earlier state guidelines for autonomous … SpaceX rocket explodes during test A SpaceX rocket exploded late Wednesday during a static fire test, which the company attributed to 'a major anomaly.' 'On Wednesday, June 18 at approximately 11 p.m. CT, the Starship preparing for the tenth flight test experienced a major anomaly while on a test stand at Starbase,' the aerospace company, owned by tech billionaire Elon Musk, wrote early Thursday on the social platform X. 'A safety clear area around … Honda says it successfully launched and landed reusable rocket Honda successfully launched and landed its experimental reusable rocket at its facility in Japan, the company said in a surprise announcement Tuesday. The rocket reached an altitude of 271.4 meters, or roughly 890 feet, and landed within 37 centimeters, or roughly 15 inches, of the target touchdown point, the company said. The duration of the flight was 56.6 seconds. 'The test was completed successfully, the first time Honda … The Refresh News we've flagged from the intersection of tech and other topics: Crypto Corner Trump calls on House to pass 'clean' stablecoin bill © Evan Vucci, Associated Press Welcome to Crypto Corner, a daily feature focused on digital currency and its outlook in Washington. President Trump is urging House lawmakers to pass stablecoin legislation that cleared the Senate earlier this week without any major additions — a demand that may clash with hopes of tying two key crypto bills together. 'The Senate just passed an incredible Bill that is going to make America the UNDISPUTED Leader in Digital Assets — Nobody will do it better, it is pure GENIUS!' Trump wrote in a post on Truth Social of the GENIUS Act. 'Digital Assets are the future, and our Nation is going to own it,' he continued. 'We are talking about MASSIVE Investment, and Big Innovation. The House will hopefully move LIGHTNING FAST, and pass a 'clean' GENIUS Act.' The Senate voted 68-30 Tuesday to pass the GENIUS Act Tuesday, with 18 Democrats joining most Republicans to get the stablecoin bill across the finish line. It marked a milestone moment for the crypto industry as the first major digital asset legislation to clear the chamber. 'Get it to my desk, ASAP — NO DELAYS, NO ADD ONS,' Trump added. 'This is American Brilliance at its best, and we are going to show the World how to WIN with Digital Assets like never before!' After embracing the industry on the campaign trail, Trump has made crypto legislation a priority for his administration, pushing to pass two crypto bills before Congress leaves for its August recess. In addition to the stablecoin bill, the White House and GOP lawmakers are trying to pass legislation that would divvy up oversight of the rest of the digital asset market between two financial regulators. While Trump pushes lawmakers to get a 'clean' GENIUS Act to his desk as fast as possible, some in the industry and Congress have voiced support for tying the two crypto bills together to ensure they don't lose momentum before getting to market structure. However, others are pushing to take the win on stablecoin legislation and tackle market structure legislation afterward. In Other News Branch out with other reads on The Hill: Vance briefly booted from Bluesky after joining platform Vice President Vance was briefly suspended from the social media network Bluesky shortly after joining the platform Wednesday, but was quickly reinstated online. Publishing his first post on Bluesky on Wednesday evening, Vance wrote, 'Hello Bluesky, I've been told this app has become the place to go for common sense political discussion and analysis. So I'm thrilled to be here to engage with all of you.' … What Others are Reading Two key stories on The Hill right now: Fannie, Freddie overseer wages online war against Fed chief The overseer of Fannie Mae and Freddie Mac is waging an online battle to force out Federal Reserve Chair Jerome Powell. Over the span of 24 hours, … Read more Leavitt: Trump to decide on Iran action in next 2 weeks President Trump is expected to make a decision about whether to take direct action against Iran in the next two weeks, he said Thursday in a message … Read more What Others are Reading Opinion related to tech submitted to The Hill: You're all caught up. See you tomorrow! Thank you for signing up! Subscribe to more newsletters here
Yahoo
a day ago
- Business
- Yahoo
Goldman Sachs says Trump's spending plan won't stop the national debt from hitting ‘unsustainable' highs not seen since World War II
The U.S. will pay $1 trillion in interest on the $36 trillion national debt next year, more than it spends on Medicare and defense. If lawmakers wait too long to address deficits, Goldman economists warn, a historic austerity push could be needed to avert disaster. President Donald Trump has claimed the GOP's 'Big, Beautiful' bill will put the U.S. on a sustainable fiscal path. Economists at Goldman Sachs say it won't prevent the nation's debt from surpassing levels only seen during World War II. The spending bill passed by House Republicans, combined with increased tariff revenue, will slightly lower the budget deficit when excluding interest payments, Goldman's Manuel Abecasis, David Mericle, and Alec Phillips acknowledged in a note Tuesday. Coupled with rising borrowing costs, they said, the bill leaves the total deficit's course essentially unchanged. 'But that path remains unsustainable: the primary deficit is much larger than usual in a strong economy, the debt-to-GDP ratio is approaching the post-[WWII] high, and much higher real interest rates have put the debt and interest expense as a share of GDP on much steeper trajectories than appeared likely last cycle,' the Goldman team wrote. As the charts above show, the scale of the debt going forward depends greatly on how interest rates move over the next couple decades. Right now, the $36 trillion national debt accounts for roughly 120% of GDP, and the Treasury Department finds itself borrowing more just to meet the rising cost of servicing it. The U.S. pays more in interest on its debt than it spends on Medicare and defense. Those interest payments will hit $1 trillion next year, trailing only Social Security as the government's biggest outlay, according to the Committee for a Responsible Federal Budget, a think tank. 'If the debt grows large enough,' the Goldman team wrote, 'interest expense could become so large that stabilizing debt-to-GDP would require running persistent fiscal surpluses of a size that has seldom been sustained historically because it is economically costly and politically difficult.' The first Trump and Biden administrations responded to the COVID-19 pandemic with a wartime-like budget. But the spigot never got turned off, even when the U.S. economy moved back to full employment. The nonpartisan Congressional Budget Office estimates the version of the GOP spending bill passed by the House would increase deficits by $2.8 trillion over the next decade. The White House and some Republican lawmakers argue that projection should not include the cost of extending Trump's 2017 tax cuts, which are set to expire this year without the bill. But the crux of the $36 trillion problem is that no one knows at what level the debt becomes unsustainable, Gennadiy Goldberg, the head of U.S. rates strategy at TD Securities, told Fortune. Treasury Secretary Scott Bessent has said the U.S. government has a 'spending problem,' but not a 'revenue problem.' Goldberg agrees with the former argument, but he said the U.S. also does not tax much compared to both the size of the country's GDP and government outlays. 'So either taxes have to go up, spending has to come down, or some combination of the two,' Goldberg said last month. 'And it sounds simple, but it's politically very, very complicated to figure out.' Continuing to avoid taking action puts future lawmakers in a tighter spot, however, especially if borrowing costs rise. Yields on long-term U.S. Treasury bonds have remained elevated as investors wait for a patient Federal Reserve to cut interest rates, and concerns about the burgeoning deficit and a possible resurgence of inflation might also continue to put upward pressure on rates. Fixed-income experts are also closely monitoring any changes to foreign demand for U.S. debt. If rising trade and geopolitical tensions undermine the dollar's status as the world's reserve currency, the U.S. government would also find itself borrowing at higher rates than it's become accustomed to. That means Congress may eventually be forced to make increasingly tough choices when it comes to both spending and taxes. If lawmakers wait too long, a historic austerity push could be needed to avert disaster, the Goldman team said. 'In that scenario, one might worry either that a large fiscal consolidation and a persistent fiscal surplus could be self-defeating—if GDP declines enough, the debt-to-GDP ratio might not shrink,' they wrote. Of course, politicians would also face the temptation of printing way more money to pay the government's bills. Germany's Weimar Republic tried that tactic in the aftermath of World War I. It resulted in ruinous hyperinflation, fueling the economic malaise and social unrest that led to the rise of the Nazi Party. That warning from history, however, is not always heeded by governments. This story was originally featured on Sign in to access your portfolio
Miami Herald
a day ago
- Business
- Miami Herald
Trump move to tax money sent abroad could devastate Latin America, Caribbean economies
A proposed tax on the money sent by immigrants in the United States to friends and families back in their home countries could have unintended devastating consequences for US. national security and for receiving countries, especially those in Latin America and the Caribbean that have come to heavily rely on the funds, experts warn. The 3.5% tax on remittances, which are not currently taxed, is among several provisions tucked inside President Donald Trump's 'One, Big, Beautiful Bill' tax and spending plan that House Republicans narrowly passed last month. Senate Republicans are now trying to agree on a version before sending it to the floor for a vote ahead of July 4, the deadline Trump has set for it to hit his desk. While there are some notable differences between what the House passed and what the Senate Finance Committee published on Monday, the proposed tax on remittances still risks pushing migrants to use unregulated and unlicensed networks to send money to their home countries and plunging countries like Haiti, where the money represents a key source of family income, deeper into economic hardship. It also requires U.S. citizens, green-card holders and anyone with a Social Security number to provide that information before they can send money abroad. 'We did a conservative estimate of the impact of these flows and it will have an effect of reducing transfers by at least 5% in the next year,' said Manuel Orozco, director of Migration, Remittances and Development Program at the Inter-American Dialogue in Washington. Orozco said that will have a devastating effect for countries in Central America along with the four nations — Cuba, Haiti, Nicaragua and Venezuela — that were recently part of a Biden-era humanitarian parole program now being targeted by the Trump administration. Earlier this month the Supreme Court ruled that the Department of Homeland Security can deport beneficiaries of the program that had allowed them to temporarily stay and work in the U.S. for up to two years, while Trump's decision to end the program is being litigated in the courts. Last week, the administration began sending revocation letters to about 500,000 recipients of the program, urging them to leave the U.S. on their own. Many of those targeted are also enrolled in Temporary Protected Status, another benefit that the administration is seeking to end after rolling back their end dates. 'On the one hand, the Temporary Protected Status and the humanitarian parole is being discontinued for people from these four nationalities,' Orozco said. 'On the other hand, you have the tax increase for those nationalities who happen to be much less likely to have a social security number because they arrived recently, they escaped their home country for political reasons or due to state fragility or state failure as in the case of Haiti.' In the case of Haiti, which has become highly dependent on remittances, 'you're dealing with a time bomb,' said Orozco, who found that for every $10 dollars remitted to Haiti in 2020 — when the country received $3.8 billion from abroad — at least $8 came from the U.S. 'The impact of this tax on Haiti will be devastating because there are 500,000 Haitians' at risk of losing their legal right to stay in the U.S. in August., Orozco said. 'Haiti's dependence on remittances is significant in a moment where … the state has already collapsed, and income basically depends on remittance flows. So the implications of these are far more complex.' But Haiti's remittance flows, which surpassed $4 billion last year according to its central bank, are not the only ones that risk taking a hit should the tax provision pass. Central American nations with economies weakened by years of instability and insecurity also will be hurt. Orozco cites the case of Guatemala, where he recently examined 15 years' worth of data through 2024. A 1% increase in remittances, Orozco said, led to a 15% increase in the country's GDP. 'Remittances have increased an average of 13% for the past 15 years,' he said. 'If remittances were to fall 10%, you will have an economic recession in Guatemala, because a 1% decrease will decelerate the Guatemalan economy substantially for more than four months.' The decline, he said, would be much more severe in Honduras, where a 1% increase in remittances increased the GDP by 33%. In both Central American nations, remittance income accounts for 30% of private consumption and any decline will have a direct effect on gross domestic product, GDP, Orozco said. 'You will have a big blow in these countries' economies,' he said. On Wednesday, Orozco was part of a conversation about the effects of the legislation on family remittances. Fellow panelists Kathy Tomasofsky, the executive director of Money Services Business Association, and Marina Olman-Pal, chair of the Legal & Regulatory Affairs Committee of the Financial & International Business Association, said many questions that remain about the legislation. The Senate version appears to focus on cross-border transfers that are initiated in cash and being sent to family members, Olman-Pal said. Transfers funded with debit or credit cards appear to be excluded in the Senate version. The original tax got scaled back from 5% to 3.5%. While the House version required senders to be U.S. citizens, the Senate version expands the universe to include those with social security numbers that allow them to work. It also offers more exemptions ,such as individuals using debit and credit cards to transfer money abroad. In the version released by the Senate Finance Committee on Monday, the tax must be collected by the remittance company and paid quarterly to the Treasury Department. 'For an American citizen, a green card holder that has that Social Security information, you are going to now have to complete a form and hand over that information to your cashier in order to affect the transfer,' said Tomasofsky. 'The business company, that small business, is going to have to set up a procedure to collect the information, to store that information. There are concerns about privacy.' Tomasofsky said the industry has made significant strides in the last 20 years, but the new reporting system could have an adverse effect on small grocery stores and businesses. For example, a company that only does 500 transactions a month may opt to get out of the business after deciding it's not worth the extra compliance. 'I'm not certain that it's going to provide any benefit to anyone in the long run because of it,' she said. Olman-Pal said while social security numbers are protected under federal and state law, there is a risk associated with increased collection. She agrees with Tomasofsky that the cost of banking could also go up as a result of the legislation's new requirements. 29 bills on taxing remittances The motivation for such legislation varies depending on the proponent. Some say it's intended to discourage unauthorized migration. Some others say it's a means to raise revenue, while some proponents accuse migrants of not paying taxes and say it's a way to tax them indirectly. Orozco and the others caution against all of these assumptions, noting that studies show that migrants, regardless of immigration status, do file taxes and in some cases the money they send home has discouraged migration to the U.S. Still, this past year, 18 states have proposed 29 different bills on taxing remittances, Tomasofsky said. In all but one instance, Tomasofsky said, the industry was able to push back 'by demonstrating how many unintended consequences there are in this bill, and the states have not moved those bills forward.' But this is the first time that the push to tax remittances, which already come with high fees, has reached a level where there appears to be political appetite for approving it. 'The motivations may be political, but everything is about the fine print, the content of what you try to come up with, and the adverse effect that it can have, the backfiring effect,' Orozco said. To underscore his point, he brought up the case of Ghanaians living in Europe and an analysis of the global money transfer market and the relationship between stiff regulations and higher transaction costs. As a result of the stiffer controls on the origination and destination of remittances, nationals of Ghana in Europe, for example, turned to informal channels, Orozco said. 'Statistically, for a 1% increase in the transaction cost the use of informal fund transfers will increase by 6% but also, there is a cost element to it,' he said. 'Immigrants don't have an infinite amount of resources. They have a very limited income capacity that in the U.S. averages to about $3,300 a month.' 'If your transaction cost goes from 3 to 6% or 6.5%, you're actually spending 1% of your monthly income just to pay those costs. And what typically people do is send less money,' Orozco added. 'So you will see one side going informal, and another side who may pay the tax but send less money.'
