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ERRATUM: When we described the Trump Accounts yesterday, we made an error in describing the policy, writing that the use of the funds was limited from the age of 18 to 30. In the final version that was passed by Congress and signed by the President, no distributions are permitted from the Trump account before the beneficiary turns 18, but thereafter, the account is treated and taxed the same way as a traditional IRA. We apologize for the error.
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Now that the OBBB is passed, the next item on Congress's agenda is the rescissions bill.
In case you don't already know, rescission is a process that allows Congress to cancel funds it previously appropriated but that the federal government has not yet spent. Under the Congressional Budget and Impoundment Control Act (CBA), if a president wishes to cancel spending already provided by Congress in that year's annual discretionary spending bills, the president can send a message to Capitol Hill proposing program funds to be rescinded. The process gives Congress 45 days to act on the rescission request. And, crucially, rescission bills are not subject to the 60-vote threshold needed to advance most legislation in the Senate; instead, they only require a simple majority to pass.
President Trump's rescissions package has already passed the House, and the Senate is now taking it up after having finished with the OBBB.
In terms of budget, the bill is small: $9.4 billion, mostly made up of foreign aid and public broadcasting.
In political terms, however, the bill is very important. It represents two of the major promises or actions by the President.
Foreign aid, of course, was very prominently gutted by DOGE, exposing a lot of fraud and nonsense in the process, including a system of multiple layers of sub-contractors that ensured only a small fraction of the funds reached their intended targets. But it also created a lot of angst about worthy or putatively-worthy programs, such as PEPFAR, which also have supporters in the Republican Party.
As for public broadcasting, cutting funding to public broadcasting has been a promise made by essentially every Republican Presidential candidate in this writer's lifetime, a promise never fulfilled. And in the intervening time, problems of media bias have only gotten worse, particularly at NPR and PBS. Trump's identity as the candidate who fulfills his promises, in marked contrast with his establishment Republican predecessors, would be greatly enhanced by the passage of this bill.
On the merits…
When it comes to programs like PEPFAR, the obvious solution is to provide some sort of bridge funding with a hard deadline which would allow those programs to get funding from other sources. These sources are available and plentiful: the UN and its constellation of affiliated international do-goodery organizations, the EU, various European countries, as well as private foundations and individuals. If these programs save so many lives, and provide such good value for each donor dollar, they should have no problem finding alternate sources of funding…
When it comes to public broadcasting, we have often said that our preferred option would be to keep it, maybe even increase its funding, but totally replace the current personnel with people of high taste and sensibility aligned with the Administration. Alas, that was always a pipe dream. As we said, there is a broader political point here: for decades, Republicans have run on defunding public broadcasting, and for decades they failed to keep that promise, and now President Trump has an opportunity to finally make good.
The bill should pass.
Policy News You Need To Know
#AndrewJackson — Lower-level Federal courts are going further and further in their separation from law and assertion of naked power. Indira Talwani, a District Judge at the District Court for the District of Massachusetts, just blocked the OBBB's provision to defund Planned Parenthood. If you care to read the order (PDF), it's a joke. There simply isn't, and can't be, a constitutional justification for blocking a change in a budget item that was voted on by Congress and signed by the President. This can't go on forever. Judges must be arrested and prosecuted for contempt of court.
#FDA #Biotech — Very exciting announcement from Joe Lonsdale: "The Abundance Institute, in partnership with Stand Together, is raising $4 million to place a strike team of 15-20 AI-native software engineers, data scientists, and product leaders inside the FDA to accelerate the FDA's latest AI initiatives and bring outsider perspectives on new areas to iterate on fast. These leaders will remain Abundance employees, but under the Intergovernmental Personnel Act they can sit desk‑to‑desk with reviewers, wire modern data pipes into legacy silos, and automate the mind‑numbing paperwork that turns months into years." The FDA's overregulation of biotech has put the US at a serious disadvantage vis-à-vis China. We look forward to finding out how this effort pans out.
#Trade — A new step in the trade war (Liberation Year?): President Trump has written letters to 14 nations, including Japan and South Korea, telling them that they face tariffs of at least 25% starting next month, unless they conclude trade deals with the US.
#Housing #Opportunity — The WSJ has a new piece out on the difficulty of young people in getting on the housing ladder.
#Kids #BigTech — KOSA may be history, but the Supreme Court seems to be an ally of kids online. As the great Helen Alvaré writes for the Institute for Family Studies, "The Supreme Court recently issued two landmark opinions that lighten parents’ load in their efforts to maintain their children’s innocence: Mahmoud v. Taylor and Free Speech Coalition v. Paxton. Both decisions support parents’ ability to determine at what age and with what content their children will be exposed to certain materials about human sexuality." More: "In Mahmoud, the Court declared that public education involves direct, coercive interactions between the state and its young residents such that parents’ authority over their minor children has an important role." Meanwhile, "The Paxton Court held that the availability of parental oversight as an additional means of shielding children did not forbid the state from demanding age verification, even if this posed some incidental burden on adults’ access to the same materials."
#Energy — You may remember that JD Vance raised a few eyebrows when, as Vice Presidential candidate, on Joe Rogan's podcast, he raised the possibility that China might deal a devastating blow to the US electrical grid. DOE just released its Report on Evaluating US Grid Reliability and Security, in fulfillment of a Trump EO. The headline: "DOE’s analysis shows that, if current retirement schedules and incremental additions remain unchanged, most regions will face unacceptable reliability risks within five years and the Nation’s electrical power grid will be unable to meet expected demand for AI, data centers, manufacturing and industrialization while keeping the cost of living low for all Americans. Staying on the present course would undermine U.S. economic growth, national security, and leadership in emerging technologies."
#Fertility — A new NBER paper by Melissa Schettini Kearney and Phillip B. Levine asks perhaps the most important question of all: "Why Is Fertility So Low in High Income Countries?" Well? According to the authors, "the evidence points to a broad reordering of adult priorities with parenthood occupying a diminished role. We refer to this phenomenon as 'shifting priorities' and propose that it likely reflects a complex mix of changing norms, evolving economic opportunities and constraints, and broader social and cultural forces." Okay then.
#Boys — The New York Times wakes up to reality: "Growing up without a father at home, as one in five children do, particularly disadvantages boys, several studies have shown," writes Claire Cain Miller for The Upshot, their "data" blog.
#Life — Very interesting update from EPPC's Henry Olsen: Iowa has passed a new public education law which "requires schools to show students in grades five to twelve a video or ultrasound that depicts each stage of fetal development. Teenagers will learn about when the heart and brain develop, for example, and exactly how the unborn child goes from a fertilized egg to the crying human being that enters the world upon birth." In the post-Dobbs world where pro-lifers don't exactly know what to do now, changing hearts and minds in red and purple states is a start.
#Beauty #Conservation — "We have become great because of the lavish use of our resources. But the time has come to inquire seriously what will happen when our forests are gone, when the coal, the iron, the oil, and the gas are exhausted...," once said Theodore Roosevelt, the Great Conservationist. It's good that there are people in the Administration who share that understanding. Thus, the President's "Make America Beautiful Again Commission." Chaired by Secretary of the Interior Doug Burgum, it is tasked with conserving America's lands and waters, cutting regulatory "red tape", and driving "both conservation and economic growth." Specifically, the Commission's primary responsibilities include expanding access to public lands and waters for recreation activities such as hunting, fishing, hiking, biking, climbing, skiing, and running, while incentivizing voluntary conservation efforts and promoting active forest management through "gold-standard science." We look forward to following their work!
#Politics — Fun non-policy news item of the day: in 2024, the popular liberal Subway Takes podcast, which has 1 million followers on TikTok, had Kamala Harris on as a guest. The host and the DNC "mutually agreed" not to air it because her performance was so bad, and the host "didn't want to be blamed" for Harris losing the election. (Link)
Chart of the Day
Pro-AI influencer Prakash Ate-A-Pi produced this chart, with his annotation. It's certainly a striking picture. That being said, it should be taken with a grain of salt. "Output per hour" in the nonfarm business sector is notoriously difficult to measure accurately, especially for service sectors which are the ones that (currently) make the most use of AI.
