As you know—indeed, if you're reading this, maybe you were in the room—President Trump dropped by the House today to give the GOP caucus what he called a "pep talk" and help them carry the One Big Beautiful Bill across the finish line.

The two biggest pieces of news related to this, apparently, are:

Trump flipping on SALT: The President seems to have concluded that raising the SALT cap is bad because it only benefits Democrat governors (true), further telling blue state Republicans that if they lose because of the SALT issue they would have lost anyway (maybe not true).

Protecting Medicaid: The President told the assembled Reps, quote, "Don't fuck around with Medicaid." Does that mean "don't touch it at all"? Or "be very careful when going after waste fraud and abuse"?

Other than that, the bill still looks like pretty much what has been signalled for the past few months:

TCJA Extension: You know this one

Signature Tax Cuts: Cuts on taxes on tips, overtime wages, and Social Security benefits for retirees are incorporated into the legislation, along with a deduction for auto loan interest on American-made vehicles.

Immigration and Border Security: The package allocates hundreds of billions of dollars to immigration enforcement and border security measures.

Defense Funding: Significant increases in military spending are included as part of the president's national security priorities.

Energy Policy: The bill contains provisions aimed at "unleashing American energy production" through additional energy leases and spectrum auctions. On this last score there are devils in the details. In particular, the IRA subsidy "phaseouts" aren't real phaseouts. Meanwhile nuclear energy credits, which actually make sense, are going out.

Fiscal Impact: The news there is still grim. According to the Committee for a Responsible Federal Budget, the bill could increase the national debt by approximately $3.3 trillion between 2025 and 2034 after considering interest costs. Hard to see where the touted spending cuts are going to come from if the Republicans "don't fuck with Medicaid."

Policy News You Need To Know

#Tax — More about the Big Beautiful Bill: this time the astute Kyle Pomerlau of AEI writes about Section 199A, the section of TCJA that was meant to equalize the tax treatment between pass-through businesses and C corporations. The Big Beautiful Bill increases the deduction for pass-through businesses. Pomerlau believes that's a mistake, which unfairly advantages pass-throughs. As the owner of a C corporation, we agree with him!

#Tax — More! The sharp people at the Tax Foundation, Daniel Bunn, Alex Muresianu, and William McBride tell us what they think is "the good, the bad, and the ugly" in the Big Beautiful Bill.

#Appointments — Eric Teetsel, CEO of the Center for Renewing America, has put out a call for President Trump to begin using recess appointments to fill out the Executive Branch. In doing so, he linked to this issue brief from Jeff Clark and Anthony Licata on the President's recess appointments power.

#TheScience — This recent speech by Director Kratsios of OSTP at the National Academy of Sciences outlines his vision for reinvigorating America's scientific enterprise through what he calls "Gold Standard Science." Kratsios identifies several challenges facing American science, including diminishing returns on research investments, administrative burdens on researchers, and ideological distortions to scientific inquiry. He argues that scientific progress has stalled in many fields despite increased funding, citing examples of fraudulent Alzheimer's research and pandemic policy decisions. Kratsios proposes a return to principles he considers fundamental to good science: reproducibility, transparency, interdisciplinary collaboration, skepticism, and a rejection of ideological conformity (specifically criticizing DEI initiatives). He emphasizes the need for creative funding mechanisms, reduced bureaucratic burdens on researchers, and partnerships between government, industry, and academia to restore America's scientific leadership and public trust in science. The speech frames this "Gold Standard Science" approach as essential to rekindling American innovation in the tradition of historical scientific achievements. Overall, a great speech.

#TheScience — Speaking of: timely and interesting NBER paper writing about "the tyranny of the Top Five," that is to say, the top five journals in economics. Publishing in the "T5" is crucial to career advancement in economics. "Pursuit of T5 publications has become the obsession of the next generation of economists. However, the T5 screen is far from reliable. A substantial share of influential publications appear in non-T5 outlets. Reliance on the T5 to screen talent incentivizes careerism over creativity." Yet another example of how the scientific process is broken.

#Telecoms — Former FCC Chairman, and now head of industry group CTIA, has an interesting op-ed in the WSJ about American competitiveness in 5G.

#ArrMatey #OceansAreNowBattlefields — Is this a joke? If so we apologize in advance for publishing a hoax. But if it is a hoax it's a good one. There's a funny X dot com account titled "Defense Analyses and Research Corporation," or DARC, which claims to be "a new kind of defense think tank" operating out of "Arlington, VA". The avatar, featuring the character Misato from the classic 1990s anime Neon Genesis Evangelion, lets you know this think tank may not be entirely serious. Anyway, serious or not, DARC just published a white paper. And white papers from think tanks, real or fake (and is there a big difference, really?), is our bread and butter! And this one, from "DARC Senior Fellow" "James Ray Williamson" (no idea if this is a real person or not) offers, actually, a very interesting solution to a very real problem. The problem is the armadas of Chinese fishing fleets that trawl international waters, deplete fish resources, and move on. The answer? Issuing letters of marque, of course. Honestly sounds like a good idea to us.

#Crypto — From Bloomberg's Steven Dennis: "Some drama on the Senate floor. During stablecoin vote the top crypto-friendly Dem, Kirsten Gillibrand, and Elizabeth Warren, the chief foe, got in a heated argument on the Democratic side of the chamber. A third of the Democrats siding with Gillibrand, two thirds with Warren." So that's happening.

#Politics #2024 #Realignment — Catalist usually produces the most comprehensive data and analysis on election results. Their analysis of the 2024 election is out.

#LGBT — Not far from here, in Loudoun County, an even more bizarre incident than we're used to when it comes to trans stuff: apparently, a group of male students was filmed, in the male locker room, by a female student who identifies as a boy. Now the boys are being investigated for Title IX violations. This madness needs to just stop.