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Trump's 'big beautiful bill' is projected to add $3.4 trillion to the debt, budget office says

Trump's 'big beautiful bill' is projected to add $3.4 trillion to the debt, budget office says

CNBC3 days ago
President Donald Trump's "big beautiful bill," which he signed into law this month, will add $3.4 trillion to the U.S. national debt over the next decade, according to a new report published Monday by the nonpartisan Congressional Budget Office.
The report found that the law, which Republicans passed along party lines, will also "increase by 10 million the number of people without health insurance" by 2034.
The budget office scrutinized the final version of the bill after Republicans made a series of last-minute changes to cobble together the votes needed in the Senate; it passed by a vote of 51-50. That revised version subsequently passed the House on a vote of 218-214. Trump enacted it on July 4.
The 887-page package extends Trump's 2017 tax cuts while providing tax deductions for tips and overtime pay for the next four years. It includes hundreds of billions of dollars in new spending for the military and to carry out Trump's mass deportation agenda. And it pays for some of that with cuts to Medicaid, SNAP benefits (which help low-income families purchase groceries) and clean energy funding.
The analysis found that the law's net spending cuts of $1.1 trillion are outstripped by the $4.5 trillion in decreased revenue, compared to if the measure had not passed.
Republican leaders said passing the "big, beautiful bill" was essential to averting a tax hike at the end of this year, when much of Trump's 2017 tax law was slated to expire.
Recent surveys show the bill is unpopular with Americans. Democrats are leaning heavily into attacks on the bill as a tax cut that disproportionately benefits the wealthy, paid for in part with spending cuts that harm the working class.
Some Republicans and White House allies, meanwhile, are casting the bill as a tax benefit for "working families," highlighting the move away from taxes on tips and overtime in particular. Speaker Mike Johnson, R-La., predicted that voters will "reward" Republicans for the bill in the midterm elections.
"This is a bill that was written for hard working Americans, middle and lower class earners in particular, and they will feel the effects of that in the economy, and they'll have higher wages and more opportunity and more economic growth, and that's a major factor in a midterm election. And the border will be secure. We'll have American energy dominance going again," Johnson told NBC News earlier this month after it passed.
Asked if he has any concerns that it will cost the GOP seats in the 2026 midterm elections, Johnson responded, "No concerns at all. In fact, it's going to gain seats for us. We're that confident."
The CBO also found that the law, which includes changes to the Affordable Care Act, will reduce average premiums for the standard "benchmark" ACA plan by about 0.6% in 2034.
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South Korea Weighs US Investment Pledge to Trim Auto Tariff
South Korea Weighs US Investment Pledge to Trim Auto Tariff

Yahoo

time23 minutes ago

  • Yahoo

South Korea Weighs US Investment Pledge to Trim Auto Tariff

(Bloomberg) -- The US and South Korea have discussed creating a fund to invest in American projects as part of a trade deal, similar to an agreement Japan struck Tuesday with President Donald Trump, people familiar with the matter said. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US Why the Federal Reserve's Building Renovation Costs $2.5 Billion The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom The scope of the discussions was not immediately clear, but the US has been seeking pledges totaling hundreds of billions of dollars. The talks remain fluid, the people said, speaking on condition of anonymity to discuss details of the negotiations. Japan's deal saw the country agree to backstop a $550 billion fund in exchange for dropping a threatened 25% tariff to 15%. The discount also applied to automobiles, an important export for the Asian country's economy. The South Korea talks are similarly focused on reaching a 15% tariff rate, including for autos, one of the people said. The deal may also include a pledge by South Korea to purchase more goods in key sectors, one of the people said, again echoing the Japan pact, which included an agreement to purchase Boeing Co. planes and agriculture products. The White House declined to comment. The South Korean trade ministry also declined to comment. Commerce Secretary Howard Lutnick said he would meet with South Korean officials on Thursday. In a CNBC interview, Lutnick argued Tokyo's agreement put pressure on Seoul to accept similar terms. 'You could hear the expletives out of Korea when they read the Japanese deal,' Lutnick said. 'The Koreans, like the Europeans, very much want to make a deal.' Trump has threatened to impose a higher general tariff of 25% starting Aug. 1, in addition to the existing levies on vehicles, vehicle parts and steel that are straining ties between Seoul and Washington. A Korean trade delegation is in Washington this week for talks, according to the Asian nation's finance ministry, and Trade Minister Yeo Han-koo is set to meet with US Trade Representative Jamieson Greer as part of those discussions. However, a planned '2+2' dialogue that was scheduled for July 25 with Yeo and Finance Minister Koo Yoon-cheol alongside Greer and Treasury Secretary Scott Bessent was postponed and will be rescheduled, the Korean side said. Lutnick has suggested a $400 billion figure in talks with South Korea, one of the people said. Lutnick presented that same number to Trump as part of talks with Japan but the US president eventually negotiated the fund up to $550 billion. South Korea is preparing to propose at least $100 billion in US investment pledges, Yonhap News reported, citing unidentified sources. The funds were secured through consultations with the nation's conglomerates, including Samsung Electronics Co., SK, Hyundai Motor Co. and LG Electronics Inc., and could grow if government support is added. Seoul had planned to unveil a $100 billion offer during the now-postponed July 25 talks, according to Yonhap. While smaller than Japan's pledges, South Korea's economy, at less than half the size of Japan's, makes matching the same dollar-value pledges a significant challenge for Seoul. Some South Korean companies have already made significant investment pledges in the US. The chairman of Hyundai visited the White House in March to announce a $21 billion investment plan that includes an expansion of vehicle production in Georgia and a new steel plant in Louisiana. The deal with Japan threatens to create a competitive advantage for that country's automakers if Seoul is unable to reach a similar agreement. 'This really puts a lot of pressure on South Korea. If they can get 15%, I'm sure they'd be thrilled but they are in a different position than Japan,' said William Chou, deputy director of the Japan Chair at the Hudson Institute, a conservative think tank. That notion was echoed by the White House on Wednesday. 'We're in a situation where, for example, German cars, are going to be at a disadvantage now, to Japanese cars, because it's a 25% tariff on German. Same thing with Hyundais from South Korea,' White House trade adviser Peter Navarro said Wednesday on Bloomberg Television. Navarro said the Japanese deal was best interpreted as the president 'doing a synergistic whole deal with the rest of the world.' 'This is just one part of that chess game,' he said. Trump, speaking at an artificial intelligence event earlier Wednesday, suggested that he would not go below 15% as he sets so-called reciprocal tariff rates — while also indicating he would reward nations that removed trade barriers on US exports. 'The tariff is very important, but the opening of a country, I think, can be more important if our businesses do the job that they're supposed to be doing,' Trump said. 'Such openings are worthy of many points in tariffs.' --With assistance from Heesu Lee, Jennifer A. Dlouhy, Derek Wallbank and Yuko Takeo. (Updates to include Lutnick comments starting in sixth paragraph) Burning Man Is Burning Through Cash Elon Musk's Empire Is Creaking Under the Strain of Elon Musk It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan A Rebel Army Is Building a Rare-Earth Empire on China's Border What the Tough Job Market for New College Grads Says About the Economy ©2025 Bloomberg L.P. Sign in to access your portfolio

I'm a Banking Expert: 7 Mistakes I See People Make When Setting Up Their Bank Accounts
I'm a Banking Expert: 7 Mistakes I See People Make When Setting Up Their Bank Accounts

Yahoo

time23 minutes ago

  • Yahoo

I'm a Banking Expert: 7 Mistakes I See People Make When Setting Up Their Bank Accounts

TD Bank's inaugural Financial Preparedness Report revealed that 44% of Americans think about their financial preparedness daily, but 36% of respondents reported being unconfident that they had enough savings to cover unexpected bills that could arise. While planning for the unexpected can be challenging, it's essential to start by ensuring that your finances are correctly set up with your banking accounts. What are the most common and costly mistakes that people make when setting up their accounts? GOBankingRates spoke with banking experts to find out the mistakes that you want to avoid to ensure that your banking setup aligns with your financial goals. Check Out: Read Next: Mistake 1: Leaving All of Their Funds in One Account 'The mistake that is most likely to happen to people when they establish their bank accounts is putting everything under the same roof,' said Ryan McCallister, a banking expert and founder of F5 Mortgage. 'They operate their spending, savings and bills as well as emergency funds out of one checking account, and this makes it difficult to tell where money is actually going.' You want to ensure that every banking account serves its own purpose so you don't get confused about what's happening with your money. By having all of your funds in one account, you can easily spend more money than you intended to or touch your savings without realizing it. McCallister suggests dividing your accounts by purpose: One account to pay fixed bills One to spend One to save Learn More: Mistake 2: Not Understanding the Purpose of an Account Another common mistake when setting up a bank account is not understanding its purpose. McCallister stated that it's vital that you understand the significance of every account within your complete financial picture. You don't want to make the mistake of opening multiple accounts to chase a promotional rate or some bonus. Before you open any kind of banking account, make sure you need and want the account — that it plays a designated role in your finances — so you don't have your funds spread out over random accounts. Mistake 3: Not Automating Finances McCallister stressed that people tend to neglect automation. They use memory to send money to savings or to pay bills and this can result in late payment or inaccurate savings. When setting up a banking account, you also want to take out the guesswork about budgeting by automating transfers. This basic setup performed at the early stages can spare you headaches and overdraft charges in the future. Mistake 4: Not Setting Up Overdraft Protection 'Overdraft protection can prevent declined transactions or costly overdraft fees when your balance runs low,' said Denise Romanelli, assistant vice president of corporate social responsibility and certified financial counselor at TruMark Financial Credit Union. 'You can typically link a savings account, credit card or line of credit to your checking account so funds are automatically transferred to cover shortfalls.' Since every financial institution has different policies on overdraft handling, you want to ensure that you know what you're signing up for. You'll want to take some time to understand the terms before opting in or making a decision about overdraft protection. Mistake 5: Not Maximizing Digital Banking Tools for Security and Convenience Romanelli pointed out that digital tools can help you manage your money more efficiently and securely, but that many consumers will forget to set these up when opening a new bank account. She added, 'Start by setting up real-time alerts for things like low balances, large transactions or direct deposits. These notifications help you monitor activity instantly and spot suspicious charges early.' Some of the digital banking tools you want to look into are: Mobile deposit to deposit checks without visiting a physical branch to save you time in the future. Two-factor authentication (2FA) for your financial institution mobile app or online portal for an extra layer of security. Free credit scores and reports to see where you stand with your overall financial picture. Spending tracker and budgeting insights to know what's happening with your money. Leveraging these features can help you avoid late fees, stick to a budget and stay in full control of your finances. Mistake 6: Not Naming Beneficiaries Romanelli warned that failing to name beneficiaries when setting up bank accounts could lead to serious issues. 'Naming beneficiaries is a key step when opening your account because it ensures your funds are passed directly to your chosen individuals without going through probate, saving time and legal hassle,' she said. While it's important for traditional bank accounts, you also want to designate beneficiaries for digital investment platforms and savings apps as well. Handling this aspect is an important part of overall financial planning. Mistake 7: Ignoring the Fine Print A final pitfall when setting up a banking account is the failure to read the fine print of the account. McCallister noted that individuals often open accounts without reviewing the minimum balance, monthly charges and transaction limits. Those little fees slowly erode your balance, and you didn't even see them coming. This is why it's crucial that you read the terms and never use accounts that charge you to access your own money. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 How Far $750K Plus Social Security Goes in Retirement in Every US Region Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck This article originally appeared on I'm a Banking Expert: 7 Mistakes I See People Make When Setting Up Their Bank Accounts Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Are Fancy Credit Cards Still Worth the Cost?
Are Fancy Credit Cards Still Worth the Cost?

Atlantic

time23 minutes ago

  • Atlantic

Are Fancy Credit Cards Still Worth the Cost?

I don't mean to shock you, but being a coal miner at the turn of the 20th century was not super fun. The work was dangerous, unpleasant, and low paid. The industry was extractive and poorly regulated. The people who ran it could be irresponsible and indifferent to human suffering. Also, the shopping was abysmal —when you wanted groceries or new clothes, you generally had to buy whatever was available at the company store, often using scrip: fake money issued by your employer as credit against a future paycheck. Even if you felt like you had consumer choice, you were really locked into a closed system run by one company, your life weirdly governed by something sort of similar to—but fundamentally different from—actual money. I was thinking of the coal miners because Chase recently changed the terms on its highest-end consumer credit card, the Sapphire Reserve. Most notably, the annual fee increased by nearly 45 percent, from $550 to $795. That hike was theoretically to be offset by an increase to the card's rewards, which are now purportedly worth $2,700 annually, offered not in the form of legal tender but rather as a long and complex list of credits, many of them issued in the conditional tense. For example, you can get $500 off stays at hotels—if those hotels are on a special list picked by Chase, and if you book for at least two nights. And the credits are actually meted out in chunks, so to get the full reward, you need to book two different stays: one in the first half of the year, the other in the second. You also get a host of similarly caveated coupons to Chase's corporate partners—Apple, StubHub, DoorDash, Lyft, Peloton. The line item advertising $300 in DoorDash promos reads like an ancient riddle: You can get up to $25 off each month, though only $5 can be used on restaurant orders, and $20 can go to two separate grocery or retail orders. (I have omitted the asterisks, of which there are many.) It is technically possible to save money—if you can figure out how to do it. To be clear, being a coal miner in 1903 was pretty different from being a high-net-worth individual in 2025. But not completely different: As coal mines did for their miners, today's credit-card issuers have essentially invented their own fiat currency—'points,' usually—that can be redeemed only within their apparatus, for rewards the company has designated, at an exchange rate that it can change at will. Three out of every four credit cards are now rewards cards: They are how Americans, especially rich ones, shop. As the cards get more popular, though, reaping their benefits is becoming harder and more like homework. Last year, the Consumer Financial Protection Bureau reported a 70 percent increase in complaints about points-issuing credit cards since 2019: The agency found card issuers hiding complex redemption requirements in fine print, forcing borrowers to use janky proprietary portals to book rewards travel, and failing to resolve technical glitches or customer-service issues, among other things. The report concluded that 82 cents out of every dollar in rewards that American credit-card holders earned in 2022 went unclaimed at the end of the year—a 40 percent increase since 2019. In effect, credit-card companies are selling consumers a book of coupons they are unlikely to use. The Sapphire Reserve is a fascinating product. It costs money, but it's not exactly something you buy. You can't sell it, because it has no inherent market value. But it comes packaged like a $10,000 watch and is advertised via perplexing billboards designed to make the card look like a high-fashion accessory, which maybe it kind of is. At any rate, the message is not subtle: This is a fancy card for fancy people. It enables the purchase of luxuries, and is itself a luxury. When the Reserve was introduced, in 2016, the highest-status credit card on the market had been the American Express Centurion, which you may know from rap music and James Bond as the Black Card, and which was available by invitation only. The Reserve, though, required only decent credit and a willingness to shell out for a sizable annual fee. It kicked off a new era in spending money: 'That's where we really saw this premium-card market go mainstream,' Nick Ewen, a senior editorial director at the credit-card-review website The Points Guy, told me. The Reserve, and cards like it—most notably Capital One's Venture X and American Express's Platinum—had high fees, high rewards, and high-spending customers who dined out and traveled a lot. Like the Centurion, they signaled exclusivity, but in a different way: The Black Card's conspicuous consumption largely involved shopping; the new cards were for consumers who prioritized experiences. They advertised by using imagery of hot urbanites at restaurants and on vacation, their lives rich with money but also adventure. 'What they did was they made it about your values,' Stephanie Tully, a consumer-behavior expert at the University of Southern California, told me. Wealth wasn't just about how much you had; it was about how you spent it. Literally. And spending is what card issuers are hoping you will do. The Reserves of the world generally make money not from the interest on unpaid balances but from transaction fees charged to businesses. In other words, these cards want you swiping. They encourage it by offering benefits—fat introductory bonuses, cash back on all kinds of purchases, ungettable restaurant reservations, access to airport lounges. Recently, they have gone beyond flat-rate rewards and added more and more complex, hyperspecific perks onto the pile, partnering with businesses that are happy to offer the card companies a discount in exchange for access to their customers. Card issuers have also increased their annual fees, presumably betting that people will either not notice or not care, and that they will happily trade real money for fake money, or at least the promise of it. Rewards make the consumer feel in control and empowered, as if they're making money even while they spend it. They reduce what behavioral economists call 'pain of payment': They make parting with your wealth feel fun, as if you are a video-game protagonist collecting magic stars, even when you are buying diapers or booking flights to a funeral. Rewards seem somehow different from normal currency. 'It's not your income minus your expenses; it's just this extra pool of money that has been accumulating through other things that you do,' Tully told me. 'It feels like free money'—like a windfall or winning the lottery, even if you paid hundreds of dollars for the right to earn the rewards in the first place. In a 2024 poll, 37 percent of rewards cardholders said they'd spend less on their cards if points weren't offered. In 2023, the CFPB received 1,200 complaints about credit-card rewards across a number of brands. Cardholders report that rewards are devalued, denied, disappeared, or fine-printed to oblivion, their actual redemption details dramatically different from their marketing materials. They are often subject to dynamic pricing; sometimes, a card's portal will glitch, and the number of points required to book a flight or hotel will spike. Sometimes, the airport lounge that a customer is theoretically entitled to is full, crowded with all of the other people who are also trying to maximize their rewards. Sometimes, dealing with it all is just too complicated—hence, all of the unredeemed credit-card points. Of course, nobody emails the government about how much they love their credit card, and an unredeemed point is not necessarily a wasted one. Still, Ewen has noticed that his readers—who presumably have a more sophisticated understanding of credit-card rewards than the average person—are having a hard time figuring out how to use theirs. People are so flummoxed by the logic puzzle of spending their points that they sit on them, something he called 'analysis paralysis.' But, he told me, that's not a great strategy, because card companies reserve the right to change terms whenever they want. Suddenly, points that were worth $300 might be worth much less. The Points Guy's official stance on rewards is 'earn and burn,' Ewen said: 'Points are not a long-term investment.' Ewen has 24 credit cards, and he loves to get the most out of them. Every year, he sits down and crunches the numbers to make sure he's made back his annual fee on each of his cards. This is both his job and his hobby—he's a points guy! But not everyone is. 'For some people, it absolutely is kind of like a game,' Tully said. But, she said, even for the people who don't think about credit-card points for a living, 'it can become a job almost.' Consumers, she continued, need to weigh 'how much time and effort they want to put into their credit cards when they're choosing what credit card to buy.' Fancy cards are like coupon books or miners' scrip, but they are also, in this sense, more like high-end gym memberships. The commodity they offer is access to a rarefied place, one where everyone else is attractive and competent, putting in the work and reaping the rewards. The product is a subscription to do more work—it's a tax on laziness or a deposit on your future self's conscientiousness. But it seems to me that credit-card companies, and gyms, know something consumers don't: Everybody thinks they'll be a more diligent person tomorrow.

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