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Politico
02-07-2025
- Business
- Politico
Trump's Political Realignment Is Missing in the Megabill
In the service of pushing his tax-and-spending megabill over the finish line, Donald Trump has spent recent days cajoling, threatening and meeting with lawmakers. His message to them was simple. 'It's a great bill,' the president explained at a Florida event Tuesday. 'There is something for everyone.' Perhaps there is, but the so-called Big, Beautiful Bill is still missing one key element — an overarching plan to create and lock in a durable Republican coalition. It's an astonishing oversight. Over the past decade, Trump has unleashed the tectonic forces of political realignment. He has torn his party down to the studs and then remade it in his image. He has splintered the Obama coalition and accelerated a class-based political reordering that stands to upend nearly a century of convention. His most recent win was marked by a more racially and ethnically diverse voter coalition than in his two prior campaigns. These are accomplishments most presidents have only dreamed of. Yet the centerpiece of Trump's legislative agenda does almost nothing to harness any of it in the service of a permanent MAGA governing majority. He is spending every last cent of his political capital on a bill marked by its lack of ambition and vision. It suggests real limits to the MAGA revolution, either because the coalition is inherently brittle or because of the stiff challenges Trump still faces in transforming the GOP, even as he utterly dominates it. This was the moment to announce the arrival of what could be a multi-ethnic working-class coalition. The time to deal a crowning blow to a feckless opposition party that remains convinced the only thing holding it back is ineffective messaging. Instead, the White House produced a domestic policy bill that could have just as easily been produced by any generic Republican administration. There's no Nixon-goes-to-China policy surprise, no dramatic break from the familiar. Nothing bold to suggest the unique populist coalition he has assembled or to cement it in the decades ahead. Its signature idea, tax relief, is meaningful — and shouldn't be minimized — but that's always been a core GOP tenet. So has a generalized commitment to growth and prosperity. Spending on border security addresses a critical need, but isn't inherently additive. Much of the bill smacks of a reassertion of decades-old Republican policies and an embrace of party orthodoxy. It is easily caricatured as a giveaway to the wealthy that also slashes health care, a pinata for Democrats to bash and ride back to a House majority. One astute conservative student of the realignment likened the legislation 'to a death march through a series of choices that nobody really wanted to be making.' '[It's] not something that has an especially coherent logic to it or much prospect of actually accomplishing the things that I think people want,' Oren Cass, founder of the think tank American Compass and a leading advocate of conservative economic populism, told POLITICO Magazine recently. The failure to imbue the legislation with more of a Trumpist ideological throughline may be due to a few factors; perhaps it's Trump's well-known aversion to wonky policy details, or the fact that most Republican lawmakers are still loyal to the Reaganite economic policy they came up with even as they now publicly bow to Trump. But whether the sprawling bill is ultimately judged a policy success or failure, it lacks an original vision to hold together the constituencies Trump has improbably knitted together — tax relief, border spending, safety net cuts and Biden policy rollbacks aren't a theory of the case. Sure, it has a few Trumpian frills that nod to the president's populist campaign pledges, but they are largely small-bore and were scaled back by senators anyway. 'No tax on tips' became a temporary tax deduction on tips, for instance. The brief musings about a tax hike on upper-income earners quickly were extinguished by opposition from Republicans on Capitol Hill. Decades from now, no one will point to this legislation as a key building block of a lasting Republican coalition. It's more likely to be remembered for the estimated $3.3 trillion it is set to add to the national debt. The legislation isn't just a missed opportunity. It's also a striking departure from the more disciplined efforts to reshape and reckon with an evolving party that happened in the last Republican administration before Trump. When George W. Bush occupied the White House, Karl Rove, his political architect, pursued a master plan to lock in the party's newly emerging coalition and ensure its viability over the long haul. The creation of Medicare Part D, the program's new prescription drug benefit, was designed to blunt the Democratic advantage on health care issues. Immigration reform, which failed, was a nod toward consolidating Bush's gains with Latino voters. The Iraq debacle made the efforts moot, but some of the residual effects of Rove's work remain visible today: the GOP's edge in the exurbs, its dominant position among evangelicals, the party's gains with Catholics. If anything, the megabill threatens to peel off some of the new constituencies of the ascendant Republican coalition or give them cause for concern. The Medicaid spending cuts stand to hit working class people of color and in rural America hard, from the Trump Belt of Appalachia to the Southwest. The income tax cuts and expanded childcare tax credit will be warmly welcomed, but wealthier Americans will benefit more. It's revealing that there is no quarter of the new coalition that is wildly enthusiastic about the package. Polling suggests Americans largely disapprove of the megabill, though there is support for some of its individual provisions. More important, from the standpoint of the future of the MAGA coalition, are findings like this one: According to a June Washington Post-Ipsos poll on the bill, non-white, non-college graduates — an important part of the new coalition — oppose it by a 41 percent to 18 percent margin. Without voters like them, it isn't really much of a realignment. Trump and his allies in GOP leadership are still working to nail down the final votes, but passage seems likely sooner or later. In the unlikely event that the whole thing collapses and Republicans have to start from scratch, it would obviously be a humiliation for the party. But it would also be an opportunity — a rare second chance for Trump to design legislation in a way that actually moves the realignment forward.
Straits Times
25-06-2025
- Business
- Straits Times
US will not sanction Russia yet, Rubio tells Politico
FILE PHOTO: U.S. Secretary of State Marco Rubio speaks at the American Compass fifth anniversary gala at the National Building Museum in Washington, D.C., U.S., June 3, 2025. REUTERS/Nathan Howard/File Photo U.S. Secretary of State Marco Rubio told Politico that the United States will not impose further sanctions on Russia yet, and still wants room to negotiate a peace deal. "If we did what everybody here wants us to do, and that is come in and crush them with more sanctions, we probably lose our ability to talk to them about the ceasefire and then who's talking to them?," Rubio told Politico in an interview on the sidelines of the NATO summit. Rubio added that President Donald Trump will "know the right time and place" for new economic measures against Russia, and that the administration is working with Congress to make sure they allow Trump the appropriate flexibility, Politico reported. "If there's an opportunity for us to make a difference and get them (Russia) to the table, we're going to take it," Rubio said. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
The Star
25-06-2025
- Business
- The Star
US will not sanction Russia yet, Rubio tells Politico
FILE PHOTO: U.S. Secretary of State Marco Rubio speaks at the American Compass fifth anniversary gala at the National Building Museum in Washington, D.C., U.S., June 3, 2025. REUTERS/Nathan Howard/File Photo (Reuters) -U.S. Secretary of State Marco Rubio told Politico that the United States will not impose further sanctions on Russia yet, and still wants room to negotiate a peace deal. "If we did what everybody here wants us to do, and that is come in and crush them with more sanctions, we probably lose our ability to talk to them about the ceasefire and then who's talking to them?," Rubio told Politico in an interview on the sidelines of the NATO summit. Rubio added that President Donald Trump will "know the right time and place" for new economic measures against Russia, and that the administration is working with Congress to make sure they allow Trump the appropriate flexibility, Politico reported. "If there's an opportunity for us to make a difference and get them (Russia) to the table, we're going to take it," Rubio said. (Reporting by Rishabh Jaiswal in Bengaluru; Editing by Andrew Heavens)
Atlantic
23-06-2025
- Business
- Atlantic
Trump's Worst-Possible Economic Plan
When President Donald Trump won a second term, the question wasn't whether his economic policy would be different from the first-term version, but how. Two factions have vied to steer the administration's agenda: Conservative populists came with a plan to roll back globalization and empower the working class. And the tech right brought a vision of an accelerated future driven by innovation and disruption. Vice President J. D. Vance announced in March that 'as a proud member of both tribes,' he believed that 'this idea that tech-forward people and the populists are somehow inevitably going to come to loggerheads is wrong.' Trump would blend the two visions into a new synthesis that would simultaneously lift up his downscale voting base and unleash technological progress. Three months later, the product that has emerged is not a better iteration of the original Trumponomics, which consisted largely of conventional Republican policy, but a worse one, much worse. It has managed, amazingly, to abandon the two tribes' most attractive proposals while retaining the least-appealing elements of each. It discards the futuristic ambition of the tech right while preserving its social Darwinism. It leans into the closed-off nostalgia of the populist right while ignoring populists' impulse to help workers. One measure of the dismal result of the administration's agenda is the slew of projections about the fiscal and economic effects of its tariffs and the megabill racing through Congress. The policies, in combination, amount to an enormous transfer of resources from people at the bottom of the economic scale to those at the top. The Yale Budget Lab projects that the bottom four-fifths of the income distribution would be made poorer by the combined tariffs and megabill, while only the most affluent would come out ahead. That is an incredible result for an administration that is increasing the national debt. Jonathan Chait: The largest upward transfer of wealth in American history Various economic models disagree as to whether the megabill would have no effect on economic growth or actually inhibit it. Again, this would be a normal outcome for a plan that would shrink the deficit, but it's a difficult result to pull off when you are pumping stimulus into the economy. The perverse consequence of Trump's plan to tariff foreign trade, cut taxes for the affluent, and take health insurance from some 10 million Americans is a smaller pie, divided less equally. You might suspect that Republicans reject the assumptions behind such projections. Indeed they do. Yet it's not as though Trump's economic plan has satisfied the president's own coalition. Elon Musk, the foremost spokesperson for the tech right, lambasted Trump for blowing out the deficit while cutting support for solar and battery technology (at least, he did before Trump bullied him into silence). Oren Cass, the chief economist at the right-wing think tank American Compass and a leading advocate for populist conservatism, denounced Trump's legislation as 'a death march through a series of choices that nobody really wanted to be making.' Vance's prediction that the populists and the tech right could come together turned out to be, in a way, correct. The two factions quietly agree that Trump's plan is a failure. The effort to change the Republican Party's economic program has been going in fits and starts for the better part of two decades. Starting in George W. Bush's second term, a clique of reform conservatives, or 'reformicons,' critiqued the party's attachment to tax cuts for the rich as a political drag that fit poorly with its growing share of working-class voters. They derided the tax-cut fetish as 'Zombie Reaganism,' a mindless adherence to an obsolete program. Yet they failed to make headway, precisely because Republicans believed, with theological certainty, that Ronald Reagan had discovered the eternally correct set of economic policies in the late 1970s, and that questioning their efficacy amounted to heresy. The internal debate seemed to die down—until Trump emerged with his claim that every previous Republican, including the sainted Reagan, had been a total loser. At times, Trump made populist rhetorical gestures that resembled elements of the reformicon plan (promising to raise taxes on the rich, rein in Wall Street, and give everybody terrific health insurance). When he took office in 2017, however, he fell back on the old formula. After Trump's first term ended in defeat, his supporters set out to ensure that they would not squander their next opportunity. Most of the intellectual energy went toward building up authoritarian power that would overwhelm the hated 'deep state,' as well as the judiciary, the media, and other forces that Trump loyalists blamed for undermining him. At the same time, his partisans sought to supply a second Trump administration with authentically Trumpian policies. The populist version is laid out in a new book edited by Cass, The New Conservatives: Restoring America's Commitment to Family, Community, and Industry. The authors lament the squandered potential of Trump's first term, which could boast only another regressive tax cut as its sole major domestic-policy accomplishment was. Rather than continue lavishing such gifts on the affluent, Cass and his colleagues argue, the new administration should tax the rich more heavily and give the working class a break. The policies they favor would combine protection of key domestic enterprises with an industrial policy to create good-paying jobs for blue-collar workers. The alternative vision floated by the tech right is more amorphous, as you might expect from supremely confident billionaires unburdened by deep familiarity with public policy. The general thrust is a desire to cut the deficit by slashing social-insurance programs, while supercharging economic growth by encouraging high-skilled immigration and investing heavily in science. Each tribe's plan has its merits and drawbacks. The strength of the populist program is its emphasis on low-income workers and its willingness to tax the rich. Its weakness is its static impulse to restore a 20th-century economy. The reverse holds true for the tech right: Its strength is its emphasis on dynamism, and its weakness is its social-Darwinist-infused hostility to the safety net. Trump might have chosen one approach or the other, or—per Vance—tried to blend their best features. Instead, he did the precise opposite: He made scientists leave the country and put in doubt the future of hundreds of high-tech factories while exploding the deficit, jacking up inequality, and taking medical care from millions. Amazingly, in the most obvious area of overlap between the populists and the tech right—government support for a domestic battery industry, which would be vital for powering AI, drones, and other key products—Republicans have imposed deep rollbacks. The House version would cut battery production by three-quarters in coming years, eliminating manufacturing jobs and strangling this tech incubator. And by cutting funds for green energy, the House bill would raise energy prices by 7 to 9 percent, according to different projections. Trump's determination to crush low-carbon energy sources at any price was exemplified by his recent order to reopen antiquated coal plants in Michigan, which forced consumers to pay higher electric bills simply to subsidize coal. The perversity of this outcome is almost impressive. Trump is not even mortgaging the future for the benefit of cheap, dirty energy. He is combining short-term pain with even greater long-term pain. The collapse of the attempt to reform Republican economic policy under Trump has been so swift and complete that we can already discern causes for the failure. I propose four. First, Trump, flushed with victory, rashly attempted to speedrun versions of both reform visions via executive order. DOGE was the tech right's turn at the wheel. Trump gave Musk virtual carte blanche to remake the federal government. Rather than pursue a coherent reform agenda, Musk appeared to fall for a series of conspiracy theories, alienated Trump's Cabinet, and wound up kneecapping some of the federal government's tiniest but most cost-effective functions. In the process, he failed to generate any meaningful fiscal savings or operational improvements. One could envision a tech right–driven government overhaul that accomplished something useful, but Musk's blundering resulted in fiasco. In tandem with all of that, Trump worked with his populist trade adviser Peter Navarro to impose a set of global tariffs, on the erroneous premise that the trade deficit amounted to per se evidence of unfair foreign-trade practices. The 'Liberation Day' tariffs overreached, generating a stock-market blowback that Trump couldn't tolerate, causing him to fall back on lower across-the-board tariffs that have served little strategic purpose. No really smart way to use trade to revive manufacturing, as the populists had hoped, may have been available to Trump—but there were less dumb ways. In both cases, Trump opted for speed and unilateral authority instead of care and legislative consultation; ham-fisted management by his ill-chosen staff did the rest. A second source of failure is that Trump prioritized political control above any other objective, including economic outcomes. His slashing attacks on the bureaucracy, including deep cuts to scientific and medical research, incapacitated agencies that play a vital role in the economy. After paying lip service to the tech right's hope for more high-skilled immigration, Trump not only abandoned the goal but also created a brain drain with his war on universities. In every case where Trump could choose between building human capital and punishing his enemies, he selected the latter. Third, the deliberations among Republicans in Congress and the White House have revealed the hold that Zombie Reaganism retains over the party. The fiscal gravity of Trump's tax cuts is so huge that it has pulled every other aspect of the party's economic program into its orbit. Republicans have taken politically toxic votes to cut Medicaid and SNAP benefits because those cuts were needed to offset the cost of making Trump's tax breaks permanent. The same dynamic drove Republicans to pull spending on batteries and green-energy manufacturing. Republicans have not so much embraced these trade-offs anew as assumed them to be self-evidently good. No senior Republican elected official has advocated for letting the Trump tax cuts expire. Although many of them complain about deficits, they've blamed spending, not tax cuts—despite the fact that the megabill is slated to reduce spending. The final and most profound reason that Republicans failed to revise their economic program is the corrosive influence of the Trump personality cult. However strongly the populist wing wants to expand the party's appeal by jettisoning unpopular policy baggage, it is committed above all to elevating Trump. Although populists such as Steve Bannon and Josh Hawley might warn of the dangers of cutting Medicaid, or urge their party to raise taxes on the rich, they have neither the leverage nor any willingness to press their complaints. The source of their political authority is loyalty to MAGA before all else, and they know that dissenting from Trump on any policy matter is a ticket to political exile—as the tech right has already discovered. Ardent Trump supporters horrified by his trade war have had to couch their dismay in obsequious pleading. Even Musk, after briefly entertaining the notion that he was free to argue with Trump in the way that Trump argues with people, shrank into humiliating contrition, adopting the tone of a defrocked Soviet official apologizing at his show trial to Stalin. Remaking an economic strategy is an intellectual endeavor, one that is inherently fraught in the atmosphere of conformity and obfuscation that Trump has cultivated. The Republican Party's economic philosophy was long trapped in mindless dogma. But rather than escaping it, the GOP has exchanged one cult for another.
Straits Times
22-06-2025
- Politics
- Straits Times
US urges China to dissuade Iran from closing Strait of Hormuz
FILE PHOTO: U.S. Secretary of State Marco Rubio speaks at the American Compass fifth anniversary gala at the National Building Museum in Washington, D.C., U.S., June 3, 2025. REUTERS/Nathan Howard/File Photo US urges China to dissuade Iran from closing Strait of Hormuz WASHINGTON - U.S. Secretary of State Marco Rubio on Sunday called on China to encourage Iran to not shut down the Strait of Hormuz after Washington carried out strikes on Iranian nuclear sites. Rubio's comments on Fox News' "Sunday Morning Futures with Maria Bartiromo" show came after Iran's Press TV reported that the Iranian parliament approved a measure to close the Strait of Hormuz, through which around 20% of global oil and gas flows. "I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil," said Rubio, who also serves as national security adviser. "If they do that, it will be another terrible mistake. It's economic suicide for them if they do it. And we retain options to deal with that, but other countries should be looking at that as well. It would hurt other countries' economies a lot worse than ours." Rubio said a move to close the strait would be a massive escalation that would merit a response from the U.S. and others. The Chinese embassy in Washington did not immediately provide comment. U.S. officials said it "obliterated" Iran's main nuclear sites using 14 bunker-buster bombs, more than two dozen Tomahawk missiles and over 125 military aircraft. The strikes mark an escalation in the ongoing Middle Eastern conflict. Tehran has vowed to defend itself. Rubio on Sunday warned against retaliation, saying such an action would be "the worst mistake they've ever made." He added that the U.S. is prepared to talk with Iran. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
