Thriving Southern Cities Face Economic Threat From Funding Cuts
North Carolina's Research Triangle shows how federal efforts to curb spending are unleashing economic uncertainty in communities across the US.
The same economic anchor that propelled North Carolina's Research Triangle into one of America's most thriving economies now risks becoming a liability.
Major academic institutions in the community have helped lure businesses of all sizes — and the jobs that come with them — to Raleigh, Durham and Chapel Hill, transforming an economy once reliant on industries like tobacco and textiles into a leading science and technology hub.
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TechCrunch
35 minutes ago
- TechCrunch
Stripe's first employee, the founder of fintech Increase, sort of bought a bank
It's an open secret in the fintech world that the founder and CEO of startup Increase, Darragh Buckley, has been trying for years to 'buy a bank,' as one person familiar with the landscape told TechCrunch. A couple of weeks ago, he basically succeeded. He bought a big enough stake in Twin City Bank to trigger a public disclosure of the transaction by the Federal Research Board. Such share purchases are then subject to FDIC approval. Twin City is a small community bank in Longview, Washington, about an hour north of Portland, Oregon. The stake had to be in excess of 10% to trigger the disclosure. Buckley confirmed the deal to TechCrunch but declined to say how big of a stake he purchased. Whether he owns 11% or, say, 51%, we understand he is not the sole owner. Still, anything upwards of 10% makes him a major shareholder. (For comparison, public companies have to disclose all ownership stakes of 5% or more.) The assumption in the industry was that Buckley wanted a bank to further the ambitions of Increase, his banking-as-a-service (BaaS) startup, multiple sources told TechCrunch. What's particularly wild is that a mysterious entity — most likely one of Buckley's competitors — was so opposed to this deal that it hired an agency to pitch the press on writing negative stories about it and him. But, Buckley told TechCrunch, this was actually his third investment in a Washington community bank and his interests are not what his competitors think. Techcrunch event Save $450 on your TechCrunch All Stage pass Build smarter. Scale faster. Connect deeper. Join visionaries from Precursor Ventures, NEA, Index Ventures, Underscore VC, and beyond for a day packed with strategies, workshops, and meaningful connections. Save $450 on your TechCrunch All Stage pass Build smarter. Scale faster. Connect deeper. Join visionaries from Precursor Ventures, NEA, Index Ventures, Underscore VC, and beyond for a day packed with strategies, workshops, and meaningful connections. Boston, MA | REGISTER NOW This is not an effort for Increase to own the bank, he said. 'Twin City Bank is, and will remain, a community-focused bank,' he said. Silicon Valley finds a banking shortcut Increase offers an API platform that allows financial services to be programmatically served. It performs tasks like automated clearing house transactions, wires, real-time payments, etc. Increase's customers are largely other fintechs like Ramp, Check, and Pipe. As Stripe's first employee, Buckley has 'a great reputation as an engineer among his peers,' one person in the fintech industry told TechCrunch. Even some BaaS competitors refer business to Increase when they can't handle it themselves. Like most fintechs, Increase partners with (and shares revenue with) FDIC-insured banks to offer such regulated services. Obtaining banking licenses themselves is difficult and expensive. Even Chime, which offers checking and savings accounts and recently had an IPO, is not an FDIC-insured bank but has banking partners. In Increase's case, it works with Grasshopper Bank and First Internet Bank of Indiana. (Buckley said he has no personal investment in either one.) However, BaaS is a crowded, competitive market. That's led a small number of them to find a workaround to stand out: buying small community banks directly and doing away with banking partners. The biggest example of this is William Hockey, co-founder of Plaid, whose current fintech, Column, bought Northern California National Bank for $50 million in 2021. Another example is a Kansas City bank called Lead, bought and led by former Block executives Jackie Reses, Lead's CEO, and Ronak Vyas, CTO. The dangers of fintech partnerships Buckley insists he has no plans to turn Twin City into his company's personal partner bank or to swell its revenues with lots of fintech partners like Increase's customers. The latter, he knows, can be dangerous. For example, Evolve Bank, a partner to many fintechs from Affirm to Stripe, was the target of a large ransomware attack in 2024. This was shortly after the Federal Reserve System issued a cease-and-desist consent order to Evolve over problems it found with the bank's risk management systems. Evolve was ordered to implement pages of compliance fixes. (The bank was also associated with the meltdown of BaaS startup Synapse.) 'Twin City Bank shouldn't support sponsor banking,' Buckley explained, referring to banking partnerships with fintechs. 'Sponsor banking requires very specific capability and capacity to supervise partners safely and soundly. Only specialized banks should do it.' So why make such a big investment if not to benefit Increase? Because he likes community banks. They are the underdogs of the banking world. 'There's perhaps a prevalent view in the financial technology industry that community banks can't grow on their own. But community banks' strength is their relationships and knowledge,' he said. If Buckley's plan for the bank ever changes, his BaaS competitors will be watching. As for the mysterious entity hoping to stop him: it's too late. He said he received the FDIC's 'non-objection for control' approval and the deal has already closed.
CBS News
39 minutes ago
- CBS News
House passes "big, beautiful bill," sending it to Trump's desk in 218-214 vote
Washington — The House on Thursday passed the signature piece of legislation of President Trump's second term, approving a massive bill that includes trillions of dollars in tax and spending cuts while ramping up funding for defense and the administration's immigration agenda. The lower chamber voted 218 to 214 to approve the measure, with two Republicans — Reps. Thomas Massie of Kentucky and Brian Fitzpatrick of Pennsylvania — joining all Democrats in opposing the bill. The Senate passed the legislation, dubbed the "big, beautiful bill," earlier this week. The House vote tees up President Trump to sign the bill as early as Friday, coinciding with the July 4 holiday. The vote came after a marathon overnight session that saw GOP leaders overcome internal opposition to advance the bill, paving the way for final passage. Republican members who balked at many of the changes the Senate made to the legislation eventually relented and voted to pass it. House Democratic Leader Hakeem Jeffries tried to delay the inevitable by speaking on the floor for 8 hours and 44 minutes, setting the record for the longest House speech in U.S. history. He called out Republicans for the bill's deep cuts to Medicaid and food assistance programs, highlighting the Americans who he said would suffer because of the bill. Before the vote, Speaker Mike Johnson said the bill will "make this country stronger, safer and more prosperous than ever before, and every American is going to benefit from that." "We've had spirited debate, we've had months of deliberation, and now we are finally ready to fulfill our promise to the American people," Johnson said. "That's what we are doing today." The nonpartisan Congressional Budget Office estimates the bill would add $3.4 trillion to federal deficits over the next 10 years and leave millions without health insurance, due to the cuts to Medicaid and programs under the Affordable Care Act. It would also dramatically increase funding for immigration enforcement, a key priority for Republicans and the president. GOP opposition melts away House members vote on President Trump's tax bill at the Capitol on July 3, 2025. ALEX WROBLEWSKI/AFP via Getty Images The final vote came after House GOP leadership scrambled Wednesday and into the wee hours Thursday to shore up support for the measure ahead of a key procedural vote. Although Johnson spent weeks pleading with his Senate counterparts not to make any major changes to the version of the bill that passed the lower chamber by a single vote in May, the Senate made a number of tweaks that irked House members on a number of fronts — from its cuts to Medicaid to its impact on the deficit. Johnson acknowledged that the Senate bill's changes "went a little further than many of us would've preferred," though he repeatedly urged that the final product was largely what the House had signed off on in May. The Senate-passed bill includes steeper Medicaid cuts, a higher increase in the debt limit and changes to the House bill's green energy policies and the state and local tax deduction. Other controversial provisions that faced pushback in both chambers, including the sale of public lands in nearly a dozen states, a 10-year moratorium on states regulating artificial intelligence and an excise tax on the renewable energy industry, were stripped from the Senate bill before heading back to the House. Potential holdouts, including moderates and members of the conservative House Freedom Caucus, met with Mr. Trump on Wednesday as the White House pressured House Republicans to vote for the bill. The vote on the key procedural hurdle began around 9:30 p.m. Wednesday and didn't wrap up until about 3:20 a.m. Thursday. Five House Republicans initially voted no on the vote setting the rules for debate on the measure, which would have been enough to tank the vote. But the vote remained open as GOP leaders worked to shore up support, allowing lawmakers to change from no to yes. Johnson told reporters that Mr. Trump was "directly engaged" with skeptical members to get them onboard. "Members wanted to hear certain assurances from him about what's ahead, what the future will entail, and what we're going to do next, and all of that," Johnson said. "And he was very, very helpful in that process." Mr. Trump ramped up the pressure over Truth Social as a handful of Republican holdouts didn't appear to be budging, declaring: "FOR REPUBLICANS, THIS SHOULD BE AN EASY YES VOTE. RIDICULOUS!!!" "What are the Republicans waiting for??? What are you trying to prove??? MAGA IS NOT HAPPY, AND IT'S COSTING YOU VOTES!!!" Mr. Trump wrote shortly after midnight. The House ultimately voted 219 to 213 to advance the bill in a key victory for Republican leaders, who won the support of about a dozen GOP opponents to the rule. And when the vote finally came to an end, Fitzpatrick was the sole Republican opposed. He would also vote against final passage. Johnson told reporters that the breakthrough came amid help from the president, along with lengthy listening sessions with the bill's opponents, "making sure that their concerns were addressed." "A lot of people had to take the time to thoroughly go through the Senate's changes to our bill and that's fine," Johnson said. "That was necessary to get them to yes." , and contributed to this report.
Forbes
40 minutes ago
- Forbes
What Seniors Need To Know About Congress's Big Budget Bill
President Donald Trump and Speaker of the House Mike Johnson (R-LA) speak to the press about the ... More so-called "big, beautiful bill." (Photo by Mandel NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images) The massive 2025 budget bill, which Congress passed on July 3, would slash safety net programs for older adults, people with disabilities, and their family caregivers, though many of those cuts may not take effect for years. At the same time, the bill would lower taxes for some older adults. The measure would reduce Medicaid spending by nearly $1 trillion over the next decade, largely by cutting the federal payments for the program and imposing a work requirement on many recipients, perhaps including some family caregivers. It would block a Biden-era rule to require minimum staff to care for patients and residents of nursing homes while approving more spending to deport immigrants, which likely will make the current severe shortage of care workers much worse. It also would increase the standard deduction for older adults, but excludes a tax break for family caregivers once promised by President Trump and fails to enhance tax-free savings that can be used to pay for long-term care. Here is what some key provisions will mean for older adults and people with disabilities: Medicaid: About 7.2 million seniors and 4.8 million younger people with disabilities are enrolled in both Medicaid and Medicare. More than half of Medicaid dollars are spent on them. Medicaid is run by the states but about 70 percent of its funding comes from the federal government. The budget bill would slash Medicaid spending by nearly $1 trillion over the next decade. About $336 billion of those cuts would come from requiring states to impose work requirements on recipients, about $60 billion from increased paperwork faced by recipients, and about $120 billion from changes to so-called provider taxes, which effectively reduce federal contributions to the program. Work requirement: Older adults and young people with disabilities generally are exempt from the work requirements. But because the law is so vaguely written, family caregivers of older adults may not be. This would require low-income people to give up their Medicaid if they must leave a job to care for a loved one. In addition, experts expect that many eligible people will lose their benefits because they are unable to comply with onerous new paperwork requirements to prove they are exempt from the work rules. States must impose work requirements by December, 2026, right after that year's congressional elections. They may do so sooner or could request a reprieve from the federal government until 2028 under certain circumstances. Cuts to federal Medicaid contributions: The bill limits the ability of states to impose taxes on Medicaid providers, such as nursing homes and hospitals. That effectively will reduce the amount of Medicaid spending funded by the federal government, though the provider tax curbs will not take effect until 2028. Other changes limit federal contributions to states that expanded Medicaid under the 2010 Affordable Care Act. Those additional payments end on January 1. All these cuts in federal Medicaid payments will force states to either cut benefits, limit eligibility, or raise taxes to make up for the lost federal dollars. Since few states are likely to raise taxes, they'll be forced to limit Medicaid services in some way. Crucially, states are required by federal law to provide long-term care in nursing homes. They are allowed to provide home-based care—and all do-- but these are optional benefits and not required. As a result, states are likely to respond to cuts in federal Medicaid payments by either reducing their home and community-based care or by cutting their payments to nursing homes. Medicaid home and community-based care: Current law generally says states can provide home-based care only to people who otherwise would be living in a nursing home or other institutional setting. The bill gives states new flexibility to provide home-based care to people who do not need an institutional level of care, as long as they do not increase existing waiting lists for community care to do so. The bill includes a small amount of money for states to implement this expansion. But given the massive cuts in federal payments, it seems improbable that states will be expanding HCBS anytime soon. In addition, the provision would not take effect until 2028. Care workers: The bill would effectively repeal a Biden Administration rule aimed at requiring nursing homes to maintain minimum levels of staffing, including 24/7 RNs on site. Industry groups sued to block the rule and a federal district judge in Texas halted it. At the same time, the budget bill would increase spending by more than $100 billion for border security and the Trump Administration's efforts to deport immigrants. Trump's promised mass deportations will make the existing shortage of medical and direct care workers much worse, increasing costs for families. Taxes: The budget bill raises the standard deduction for older adults by $6,000. In 2025, a couple claiming the ordinary standard deduction, the current additional standard deduction for seniors, and the new standard deduction, could receive a total standard deduction of $46,7000. The senior deduction would be available even to those who itemize their deductions. The extra deduction would be available only through 2028. It replaces President Trump's campaign promise to exempt Social Security benefits from tax, an idea never seriously considered by Congress. The Tax Policy Center estimates that fewer than half of seniors would benefit from the higher standard deduction. Two other important tax provisions never made it to the final bill. A caregiver tax credit, which President Trump promised during the campaign, never was pushed by the White House and was not included in any version of the budget bill. And a House provision intended to double contributions to tax-free Health Savings Accounts was dropped. Those HSAs can be used to pay long-term care insurance premiums and for some care. The big budget bill will have profound effects on older adults, especially the poorest of them. But, at least in some states, they may not feel much of the impact for a while.
