Ainsley and Mattinson for The Observer: Do our leaders really care about us? To keep us on side they must prove they do

A few weeks ago, Sam Freedman wrote in The Observer about the challenges facing the centre right. After listening to hundreds of voters and senior strategists in the US, Germany, Australia and the UK for new research for the Progressive Policy Institute, it is hard not to conclude that centre left parties are facing their own difficulties too.

The findings should make every politician deemed part of the status quo sit up and take notice. You could say it is a plague on all your mainstream parties.

Voters around the world have never been more disaffected, especially those from the struggling working classes. Previously thriving and optimistic that their kids could “better themselves”, many now feel beleaguered; neglected by “tired” political parties that once championed their cause. In Germany, voters asked to imagine the Social Democratic Party (SPD) as a drink chose stale coffee, contrasting with the populist AfD, seen as “an energy drink” , “fresh, ready to provide a much needed shake-up”.

Read more in The Observer.

Tariffs are taxes paid by Americans

FACT: Tariffs are taxes paid by Americans.

THE NUMBERS: U.S. GDP growth –

2025* 1.8%?
2024** 2.8%
2023 2.9%
2022 2.8%
2021 6.1%
Average 2010-2024 2.4%

International Monetary Fund projection, April 2025
** 2021-2024 growth rates from BEA

WHAT THEY MEAN: 

Mr. Trump’s April 2 tariff decree, claiming a “national emergency” related to trade balances, imposed (a) a 10% tariff on almost all the coffee, TV sets, automobile parts, shirts, and other things American buy from abroad, and (b) higher rates up to 50% on things from 57 specific trading partners, from Bosnia and Jordan to the European Union.  Following a bond-market rout on April 9, the administration “suspended” these latter rates for 90 days — i.e., today — in the hopes of making “deals”. Monday’s extension of this deadline to August 1st for at least some countries comes with renewed threats, similar though not always identical to those of April 2. (They range from 25% to 40% this time, and cover 14 countries: Kazakhstan, Cambodia, Tunisia, South Africa, Japan, Korea, Indonesia, Bangladesh, Thailand, Serbia, Bosnia, etc.).  These may all be struck down in a few weeks, as on July 31 the Court of Appeals will hear arguments on the May 28 lower-court opinion declaring the entire April 2 decree, and therefore anything using it as a base, illegal. If that doesn’t happen, here’s a look at the likely impacts, through the lens of a “deal”  the administration announced (perhaps prematurely) last Thursday:

Big picture first: Last April, the International Monetary Fund cut its U.S. growth estimate by nearly a point, from a 2.7% guess in mid-January to 1.8%. (In dollars, this means about $200 billion less U.S. output, with an original $730 billion in growth falling to $535 billion.) Excluding the -2.2% contraction in the pandemic year 2020 as an anomaly, a 1.8% growth year would be the U.S.’s lowest in 15 years. Or, more recently, it’s a point below the 2022-2024 average.  The Commerce Department’s Bureau of Economic Analysis, which does the U.S. government’s GDP-estimating, reports a -0.5% contraction in this year’s first quarter, so the IMF seems on track or even a bit optimistic.

Trade “deals” and anti-growth: The administration’s description, posted last Thursday, of a ‘trade deal’ with Vietnam — as of this morning, the only one reported so far among countries targeted in the April 2 decree — helps explain the impact of trade policy on these forecasts:

“Vietnam will pay the United States a 20% tariff on any and all goods sent into our territory, and a 40% tariff on any transshipping. In return, Vietnam will do something that they have never done before, give the United States of America total access to their markets for trade. In other words, they will ‘open their markets to the United States,’ meaning that, we will be able to sell our product into Vietnam at zero tariff.”

The first two sentences aren’t true. “Vietnam” won’t pay anything, and its government made much larger “access” offers to join the Trans-Pacific Partnership in the 2010s.  This “deal’s” nature and lifespan (even if the Court of Appeals doesn’t scrap it next month) are likewise uncertain, as neither the White House nor the U.S. Trade Representative Office has posted any actual text. But assuming that at least the “20%” (cut back from a 48% April 2 rate) and “40%” figures are correct, and that it isn’t swiftly terminated, here’s the likely impact of “deals” of this sort.

1. Vietnam won’t pay any of this. Americans buy about $130 billion worth of goods from Vietnam each year, mainly consumer goods found in retail stores and groceries: TV sets, laptops, and smartphones; shoes and clothes; furniture; seafood, coffee, canned tropical vegetables, and so on. Imposing a 20% tariff on them does not mean that “Vietnam” as a country, or the Vietnamese government, or Vietnam-based companies, will pay anything.  The ones who pay are the buyers — American retailers, food wholesalers, grocery stores, and so on  — who will write checks to CBP for 20% of their cargoes’ value when furniture and clothes dock at Long Beach, or laptops and coffee arrive on the incoming tide at New Orleans.

2. You will pay. The buyers’ tariff payment, in turn, is included in the bill you pay in the store. This is because these buyers add it to the bills they’ve paid to their Vietnamese supplier and to the shipping company carrying across the Pacific to the United States. The result is the “landed cost” from which they mark up to cover costs — wages, building rent, transport, maintenance, marketing, etc. — and leave a profit margin. If the product doesn’t sell, the store takes the loss; if you buy it, you cover their tariff cost. Using the hypothetical example of a container carrying 1,000 Vietnamese-made wooden chairs valued at $100 each, here’s the arithmetic:

Costs for shipment Under MFN tariff rate Under Trump “deal”
Payment to vendor: $100,000 $100,000
Tariff rate 0% 20%
Tariff payment:            $0   $20,000
Payment to shipping company     $5,000     $5,000
= Total landed cost $105,000 $125,000
* * * * * * * * *
Cost per chair
Import value of chair $100 $100
Tariff payment per chair     $0   $20
Landed cost per chair $105 $125
Markup  x 2  x 2
Store sale price $210 $250
Your bill
Add 5% state sales tax   +5%   +5%
Payment $220.50 $262.50

Notes: The average import value of a wooden Vietnamese chair last year was $106; the table uses $100 for simplicity.  The $5000 payment to the shipper is based on typical current container rates for a Ho Chi Minh City-to-Los Angeles transit. The markup is purely hypothetical; real-world markups vary by company and product. State sales taxes range from 0% to 7.25%, the 5% is a rough average.

So the administration’s “deal” here is for you to pay $42 more for a chair.  Fundamentally, you’re out $42, the federal government gets $20 in tariff money, and your state government gets $2 in sales tax.  The remaining $20 mostly evaporates as “deadweight loss.” Looking back to the IMF’s forecasts, and scaling this up for U.S. trade in general:

Family price impacts: Spread across the country and all consumer goods, retailers will lose some business as they try to sell higher-priced chairs; buyers such as yourself will pay more; and the country will lose some GDP as more twenties vanish around the country.

Producer impacts: Where most Vietnamese imports are “consumer” goods like the chairs, shoes, and TV sets, Canada’s product mix is heavy on energy, fertilizer, and natural resources. The EU’s tilts toward medicines, cars, chemicals, and industrial inputs.  Retailers, groceries, and restaurants do buy a lot of Canadian and European goods, and with higher tariffs, they’d pay more and charge more. But the impact of tariffs on Canadian and European goods — that’s fully a third of all U.S. goods imports last year — will fall relatively harder on American manufacturers, farmers, hospitals, and building contractors. Facing higher costs, these businesses would lose some competitiveness vis-à-vis imports and especially as exporters. Their higher production costs, meanwhile, would raise inflationary pressure on the “producer price” side and give Federal Reserve economists some extra reason to avoid interest rate cuts.

So: as the IMF’s forecasts and the BEA’s reporting to date both suggest, the likely effect of “deals” like this one will be somewhat lower living standards and a drop in growth rates.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

  • Defend the Constitution and oppose rule by decree;
  • Connect tariff policy to growth, work, prices and family budgets, and living standards;
  • Stand by America’s neighbors and allies;
  • Offer a positive alternative.

PPI’s Ed Gresser testifies on tariffs at the Joint Economic Committee, December 2024; PDF version here.

Macro background:

The IMF’s April World Economic Outlook update.

The Bureau of Economic Analysis’ most recent GDP report shows a drop of 0.5% in January-March 2025.

Legal outlook:

The White House’s April 2 tariff decree.

The Court of International Trade’s unanimous May 28 opinion ruling it unconstitutional.

… our look at the C.I.T. decision.

Next up, with oral argument coming July 31, the Court of Appeals brief from the Liberty Justice Center.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

Manno for The 74: Survey Finds Teens Worldwide Are Lost in the Transition After High School

Teenagers around the world are adrift as they near high school graduation. They are deeply interested in future careers, but their expectations are outdated, and they have little awareness of their actual professional options.

That’s the message of a new reportThe State of Global Teenage Career Preparation, by the Organization for Economic Co-operation and Development. The report surveys approximately 690,000 15- and 16-year-old students from more than 80 countries, including the United States. Here are five key insights from the report:

  • Roughly 4 out of 10 students are unclear about their career expectations, double the number from about a decade ago.
  • Almost half (49%) agree (35%) or strongly agree (14%) that school has done little to prepare them for adult life.
  • There’s a gender gap in students’ aspirations to work in sectors like information technology and health care. For example, around 11% of boys report that they will work in information technology at age 30, compared with 1.5% of girls.
  • Job preferences focus on a few, well-known professions, such as teaching, psychology and sports. For example, around half of girls and 44% of boys report that they expect to work in one of just 10 jobs, with little change in career preferences since 2000.
  • The majority of young people don’t get connected to workforce professionals who can help them understand the opportunities available to them. Only 35% report attending a job fair, and just 45% visited a workplace.

Read more in The 74.

PPI Comments on the Public Inquiry to Identify Unfair and Anticompetitive Practices and Conduct in the Live Concert and Entertainment Industry

The Progressive Policy Institute is filed comments in response to the U.S. Department of Justice (“DOJ”) and Federal Trade Commission (“FTC”) Request for Information (“RFI”) on the “Public Inquiry to Identify Unfair and Anticompetitive Practices and Conduct in the Live Concert and Entertainment Industry” (Docket No. ATR-2025-0002), issued May 7, 2025.

Read the comments here. 

 

New PPI Report Calls for Federal Action to Staunch the Professionalization of Intercollegiate Sports

WASHINGTON —U.S. college athletes will return to pre-season training amid growing turmoil in intercollegiate sports, including skyrocketing NIL deals and massive changes in how athletes are recruited, transferred, and compensated. A new report from the Progressive Policy Institute (PPI) finds that the settlement in the House v. NCAA antitrust case officially marks the end of amateurism in college sports. The report calls on Congress to enact comprehensive federal legislation to safeguard the welfare of college athletes and the institution of intercollegiate athletics.

Authored by Diana Moss, Vice President and Director of Competition Policy at PPI, “Antitrust’s Death Knell for Amateurism and College Sports: A March Madness Case Study” analyzes a decade of NCAA men’s Division 1 basketball tournament data to assess the sea-change in college athletics and the likely sweeping consequences of the House v. NCAA settlement. The settlement requires payment of damages for denied “name, image, and likeness (NIL)” and allows Division 1 schools to share billions of dollars in revenue with student athletes for the next decade. The agreement, finalized in June 2025, fundamentally reshapes the economics, competitive structure, and culture of college sports.

“This settlement effectively semi-professionalizes high-revenue college sports, and the consequences are already rippling across athletic departments nationwide,” said Moss. “While antitrust has done its work to protect student-athletes in an important labor market, we must confront the reality that a federal legislative solution is now required to manage the broader public policy questions at stake.”

Moss finds that changes in March Madness outcomes since the early 2020s reveal troubling trends that the House v. NCAA settlement has already accelerated:

  • High-budget, high-seed programs increasingly dominate March Madness outcomes.
  • “Cinderella” stories, or lower-seeded schools advancing deep into the tournament, are vanishing.
  • Top basketball programs have ramped up spending, while smaller programs are slashing expenses and may cut programs entirely.
  • Schools in prominent power conferences are coming to dominate the tournament and may further consolidate, potentially creating an intercollegiate “super-league.”

Moss concludes that these shifts threaten the long-term viability of many collegiate sports, widen disparities between schools, and jeopardize athlete welfare. It calls for federal legislation that, among other requirements, prohibits any antitrust exemption for the NCAA, ensures federal preemption of the patchwork of state NIL laws, establishes clear guidelines for completion of a student athlete’s education and protection of their health and safety, sets forth a more equitable system of sharing NIL across Division 1 athletes, and prohibits the classification of student athletes as employees of an educational institution.

“The House settlement is not the final buzzer — it’s the tip-off for a new, more volatile era in college sports,” said Moss. “Absent thoughtful federal action, U.S. intercollegiate athletics risks losing not only competitive balance but the very notion of the student-athlete.”

Read and download the report here.

Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI.

###

Media Contact: Ian OKeefe – iokeefe@ppionline.org

Antitrust’s Death Knell for Amateurism and College Sports: A March Madness Case Study

EXECUTIVE SUMMARY

Over the last decade, the National Collegiate Athletic Association (NCAA) has struggled with the legality of policies that restrict athlete compensation, particularly for “name, image, and likeness (NIL).” In the aftermath of losses in antitrust lawsuits and mounting legal and political pressure, the NCAA allowed student athletes to profit from their NIL beginning in 2021. House v. NCAA (2021) is perhaps the highest profile antitrust class action case involving NIL, where a recently finalized settlement will bring sweeping change to intercollegiate sports.

The House v. NCAA settlement requires colleges and universities, among others, to pay damages for previously restricted NIL and compensate student athletes through a complex revenue-sharing system over the next decade. The major beneficiaries of the settlement are athletes in high-revenue, Division 1 men’s football and basketball, and women’s basketball programs. The reality, however, is that the financial penalties will have an impact on schools across all Division 1 programs.

Many of the headline-grabbing changes in college sports, including cutting low-revenue programs and increased use of the transfer portal, predate the recent House v. NCAA settlement. But schools also made changes in anticipation of the final settlement, which enshrines a semi-professional model of high-revenue college sports and puts it on steroids. For example, NIL values are skyrocketing, the NCAA’s transfer portal is clogged with student athletes, coaches are resigning, expenses for top college basketball programs are in the eight-figure range, and athletic directors are being replaced with general managers.

This transformation will have spillover effects on everything from high school recruiting, to the viability of the Olympic development program, and the health, safety, and education of young adults. More broadly, the House v. NCAA settlement brings an end to the principle of “amateurism” that has guided the NCAA’s approach to intercollegiate athletics for the last 90 years. This Progressive Policy Institute (PPI) white paper makes the case for why the impact of the House v. NCAA settlement on intercollegiate sports creates a public policy problem that warrants a federal legislative solution.

There is no doubt that antitrust enforcement is an important tool for protecting competition in labor markets for student athletes. But the impact of the House v. NCAA settlement makes clear that it is not the appropriate forum for managing policy around college sports in the U.S. PPI’s analysis unpacks a decade of data from the March Madness men’s basketball tournament to examine the impact of the NCAA’s NIL policy and anticipated fallout from the settlement. The implications of the analysis can be extended to other high-revenue college sports. Major takeaways that highlight the magnitude of change in the March Madness tournament include:

  • Top basketball programs at schools in the most prominent conferences have come to dominate March Madness over the period 2015-2025.
  • The “Cinderellas,” or lower-ranked schools that unexpectedly make deep runs into the tournament, are disappearing.
  • Steadily rising men’s basketball program budgets increasingly drive success in the competition.

These results support PPI’s recommendations for comprehensive federal legislation that mitigates the adverse effects of the House v. NCAA settlement and reframes a model of U.S. college sports under a modern version of amateurism that makes the welfare of student athletes the most important priority.

Read the full report. 

Jacoby for Washington Monthly: Ukraine Infantry Adapts to More Menacing Drones

The simple farmhouse north of Kharkiv—Ukraine’s second-largest city, just 20 miles from the Russian border—serves as the base of operations for an infantry company of the Ukrainian 13th National Guard Brigade, known as Khartia. One room is filled with bunk beds, and the walls are hung with helmets and body armor. In the yard, sacks of food and crates of ammunition sit under a laundry line dangling fatigues and T-shirts. But this is more than just a soldier’s billet. The main activity here is planning—a new kind of detailed forethought required by drone warfare.

Both Russian and Ukrainian use of drones has changed dramatically since the war began nearly three and a half years ago. Unmanned aerial vehicles (UAVs) now come in all shapes and sizes. Both sides use widely diversified drone arsenals for scouting and striking enemy forces. Long-range drones terrorize Ukrainian cities and destroy oil depots deep inside Russia. Others with shorter ranges buzz overhead, night and day, on the front line.

These smaller drones, ever-present eyes and weapons in the sky have transformed the battlefield, creating a six-to-12-mile “gray zone” between Russian and Ukrainian lines. It’s a deadly no man’s land where no one dares risk exposure. Even tanks and armored vehicles hesitate to cross the desolate territory for fear of drones. Instead, small groups of attacking Russians dash in on motorbikes, drawing fire to expose Ukrainian positions. And virtually everything the foot soldiers of Ukraine’s infantry once knew about fighting—assault and defense—has changed.

Read more in Washington Monthly.

The People Who Brought You Bill Clinton Want to Introduce You to the ‘Colorado Way’

“We tried moving to the left under Biden. … It really helped shrink the party’s appeal,” PPI president and founder Will Marshall told me a few days after the retreat. “What will work in a deep blue district is one thing. What will work in swing states and swing districts is something else altogether.”

PPI’s own polling and focus groups with non-college voters over the last three years showed a more moderate or even conservative outlook on issues like immigration or policing, Marshall explained. That’s why they went to Denver: Marshall and others at PPI believe the key to the party’s future success is to be found in the unique combination of libertarian ideals, progressive programs and pocketbook-focused governance that has become a hallmark of western liberalism. The pragmatic approach, they say, reflects the growing number of unaffiliated voters in the country.

PPI’s plan to take the strategy sessions national has a compelling pedigree: After Democrats’ dismal 1988 election showing — when George H. W. Bush beat Democrat Michael Dukakis with nearly 80 percent of the electoral college vote — PPI went to the American South looking for answers. Marshall and other PPI strategists held similar sessions that grew into the bones of the influential New Democratic movement. Involved in those strategic discussions was a little-known governor named Bill Clinton.

Read more in Politico.

Passage of ‘One Big Beautiful Bill’ Renders Republican Deficit Hawks Extinct

Republicans have sent their “One Big Beautiful Bill” to President Trump’s desk and it’s hard to overstate the consequences. Not only will the bill be one of the most regressive transfers of wealth from society’s poorest to its richest in recent memory, but it will also add trillions of dollars to our national debt and hurt our economy. By passing this obscene budget-busting bill with near-unanimous support from their members in Congress, Republicans have proven that their party’s deficit hawks have gone extinct.

According to analysis from the Yale Budget Lab, the bill’s deep cuts to safety-net programs such as SNAP and Medicaid will reduce annual incomes for the bottom 20% of Americans by roughly $700 per person. But the savings from these cuts won’t be used to pay down the national debt or improve the programs for the people who need them most — rather, they will help offset tax cuts that will increase average after-tax incomes for individuals in the top 1% by roughly $30,000. The bill also guts pro-growth investments in the clean energy transition while propping up coal production and other conservative special interests with new giveaways, such as expansive new aid for wealthy farmers and large tax deductions for whaling boats.

Despite the bill’s large cuts, it would add roughly $4.1 trillion to the national debt over the next ten years.  Moreover, if ostensibly “temporary” policies in the bill are eventually made permanent without offset — as Republicans have made clear they had no trouble doing when writing this bill— the cost would swell to $5.5 trillion, making it more expensive than every COVID stimulus bill combined. This is not only the most expensive bill ever passed using the filibuster-proof reconciliation process, it is also the first one to permanently increase budget deficits outside the 10-year window. This unprecedented outcome was only possible because Senate Republicans effectively invoked the “nuclear option” to blow up budget enforcement mechanisms, which will open the floodgates for future Congresses to add trillions more to the national debt with barebones majorities.

The explosion of federal debt will have lasting consequences for Americans. In the short term, deficit spending by the federal government will increase by up to $632 billion in a single year, putting upward pressure on inflation rates that have remained stubbornly above the Federal Reserve’s 2% target. Increased government borrowing will also put upward pressure on already elevated interest rates, making everything from mortgages to car loans more expensive for ordinary families. Over the long term, higher rates will make it more expensive for businesses to finance new investments, slowing innovation and job creation. The federal government already spends roughly a trillion dollars each year on interest payments – more than it spends on national defense or Medicare. Now those costs will grow even faster, putting them on track to rival Social Security as the single-largest line item in the federal budget within 20 years. Instead of being used to fund investments in America’s future, taxpayer dollars will be almost exclusively used to pay for previous obligations.

Perhaps what is most remarkable is that this massive assault on our country’s fiscal integrity was only made possible by the people pretending to be its loudest defenders. For years, self-identified “deficit hawks” in the House GOP conference repeatedly called the deficit an “existential threat.” And even though they relied on completely fake growth assumptions to argue that $2.5 trillion of tax cuts would pay for themselves, these representatives insisted they would not support legislation that included any additional tax cuts without offset. They went so far as to get a commitment from House Speaker Mike Johnson that he would step down if he passed a bill that crossed this red line. Yet when the Senate sent them a bill that blatantly violated their agreement, these “fiscal hawks” quickly folded under pressure and rubber-stamped it.

Compare that to what happened just four years ago under the Biden administration. President Biden’s full “Build Back Better” agenda, while no model of fiscal responsibility, would have added less than $3 trillion to budget deficits over the first 10 years if it had been permanently enacted. Even though they used budget gimmicks to do it, Democratic deficit hawks in the House ensured the reconciliation bill advancing this agenda was scored as roughly deficit-neutral under traditional accounting. And when Democratic deficit hawks in the Senate forced party leaders to strip out those gimmicks, the bill eventually became something that actually reduced deficits. While deficit hawks may be endangered within the Congressional Democratic Party, today it is clear they are functionally extinct on the Republican side.

Deeper Dive: 

Fiscal Fact: 

As President Trump’s chaotic and destructive economic policies have shaken investor confidence in the first half of 2025, the U.S. dollar has lost over 10% of its value relative to foreign currencies — the worst such decline in more than 50 years. A weaker dollar results in more expensive imports, lower spending power when traveling internationally, and higher borrowing costs for both the American people and their government.

Other Fiscal News:

More from PPI and the Center for Funding America’s Future:

Ryan for Newsweek: Kathy Hochul’s Balanced and All of the Above Energy Approach Can Be a Blueprint for Democrats

In today’s hyper-polarized political landscape, common sense often feels like a radical act. That’s why Governor Kathy Hochul’s (D-N.Y.) embrace of a balanced, all-of-the-above energy strategy deserves more than polite applause. Governor Hochul can create a model for Democrats across the country.

Natural Allies for a Clean Energy Future, a group I co-chair, conducted polling last month from showed a strong majority of New Yorkers want energy that is reliable and affordable. Sixty-six percent of New York voters, including 74 percent of state Democrats, oppose efforts to block natural gas. This isn’t a red or blue issue. It’s a kitchen table issue. It’s time Democrats leaned into it.

Energy policy doesn’t happen in a vacuum. It’s the backbone of everything we care about—economic growth, national security, public health, and affordability. Nowhere is this more apparent than in New York—a state whose infrastructure powers not just the local economy, but vital national assets.

Read more in Newsweek. 

Senate Republicans Go Nuclear to Blow Up the National Debt

Senate Republicans on Monday took the dangerous step of “going nuclear” to pass their One Big Beautiful Bill in violation of the rules governing the filibuster-proof reconciliation process — and the fallout will add trillions of dollars to the national debt.

The reconciliation process, which was designed to fast-track policies needed to help Congress hit its budget targets, does not allow lawmakers to increase deficits outside the 10-year scoring window. These rules have always been enforced by measuring how enacting provisions in the legislation would affect the federal budget relative to a “current law baseline,” which is a scenario defined in statute and generally assumes laws are left unchanged. Senate rules require 60 votes to waive this restriction. 

Republicans couldn’t find a politically palatable way to pay for the trillions of dollars in tax cuts they wanted to make permanent, so they instead decided to make those tax cuts appear free by scoring against a “current policy” baseline, which assumes every policy in effect today is extended in perpetuity — even if the law as written would have them expire. But it gets worse: to enact new tax cuts without paying for them, Senate Republicans scheduled those provisions to expire within the 10-year window and scored them as temporary. The result is a Frankenstein scorekeeping system in which no consistent accounting is used, and legislation is assumed to cost whatever the majority wishes it did. 

While the Senate GOP’s “official” score of the bill using this Frankenstein accounting shows they would reduce deficits, traditional scoring against the current law baseline would show it adding more than $4 trillion to the deficit over 10 years (including higher interest payments) — and the cost would swell to $5.5 trillion if all the “temporary” provisions were made permanent. Notably, if the bill were measured in a way that treated the scheduled expirations of both new and existing policies consistently, it would violate the rules of reconciliation by permanently increasing deficits relative to either a current policy or a current law baseline. 

The Senate’s parliamentarian, who is responsible for interpreting the chamber’s rules, almost certainly would rule against the GOP’s attempt to use their Frankenstein score for enforcement purposes. Any effort to circumvent the parliamentarian’s official interpretation of the rules – whether by firing her, overruling her, or formally changing the 60-vote supermajority requirement with just 51 votes — would be invoking a “nuclear option” that fundamentally changes the character of the Senate. 

Senate Republicans insist they found an alternative to going nuclear by asserting the Senate Budget Committee chairman has unilateral authority to determine scores — something they argue Senate Democrats did in their 2022 budget resolution. But the two situations are not remotely the same: Senate Democrats used their authority to consistently assume discretionary spending for both the IRS and Head Start continued at baseline levels, when the original CBO score was inconsistent. Moreover, Democrats made sure the move was blessed by the parliamentarian ahead of time, whereas Republicans actively prevented the parliamentarian from making any ruling. 

The fact that Republicans prevented the parliamentarian from weighing in before voting to break their own rules with a simple majority vote, rather than overruling her directly, is a distinction without a difference. Republicans have gone nuclear with their chicanery and destroyed the Senate’s budget enforcement mechanisms.

The fallout will radiate throughout fiscal policy for years to come. Not only will the national debt be up to $5.5 trillion larger 10 years from now than it would be without the “One Big Beautiful Bill,” but there will be little to stop future Congresses from doing the same thing that Republicans did this week: adding trillions more to the debt while claiming they are doing the opposite.

The U.S. Needs 8,000 Tons of Cobalt a Year, and Produces 300 Tons

FACT: The U.S. needs 8,000 tons of cobalt a year, and produces 300 tons.

THE NUMBERS: Cobalt reserves known as of 2024, worldwide* –

World 11.00 million tons
Democratic Republic of Congo   6.00 million tons
United States   0.07 million tons
All other countries   5.30 million tons

U.S. Geological Survey, Mineral Commodity Surveys 2025

WHAT THEY MEAN: 

Last March, Marco Rubio, the Secretary of State, announced cancellation of 5,200 U.S. Agency for International Development contracts — all but about 1000 of them – claiming that the projects they underwrote “did not serve, (and in some cases even harmed), the core national interests of the United States.” A PPI guest post today by former USAID economist Kevin Ward looks at one of these projects: an effort to secure American manufacturers’ supply of the “critical mineral” cobalt through a transport project in the Democratic Republic of Congo. Ward’s story illustrates the work USAID professionals actually do — often technical, designed for shared benefit, sometimes entailing personal risk — and also casts an ironic light on Mr. Rubio’s line about national interests and things that don’t serve, or sometimes even harm, them:

As a point of departure, the experts at the U.S. Geological Survey consider a mineral “critical” when it is (a) “essential to the U.S. economy and national security,” and (b) “ha[s] supply chains that are vulnerable to disruption.” Reliable access for American industry to these minerals is thus widely thought (including by the Trump administration) a “core national interest.” USGS’ official list has 50 of them, from arsenic and antimony to zinc and zirconium, complete with their uses, sources, production levels, trade flows, and availability in the U.S..

Cobalt, a bluish metal selling for $33,335 per ton on the London Metal Exchange today, is No. 10 on the list. Used for centuries for stained glass and deep-blue paints, it meets USGS’s two “critical” tests because it is (a) necessary for the heat- and wear-resistant ferroalloys used for aircraft engines, and the lithium-ion batteries that run smartphones and electric vehicles, and (b) in short supply. American factories need about 8,000 tons of cobalt each year, but the lone U.S. source is the Eagle Mine in Michigan, a mainly copper-and-nickel operation which also produces about 300 tons of cobalt, and is set to close in four years.

So most cobalt must come from somewhere else, and one country in particular has a lot. The Democratic Republic of Congo (in central Africa along the eponymous river, formerly Zaire, home to 84 million people) has 55% of the world’s 11 million tons of cobalt reserves, and produces 75% of the world’s 290,000 tons of annual mining output. But as Ward explains, geopolitical uncertainty makes this source “vulnerable to disruption”:

“Though the DRC is the world’s largest cobalt producer and the second largest copper producer, its mineral supply chains are tightly controlled by China: Chinese companies own the country’s largest mines, its local processing operations, and the railroad that takes its minerals to China for additional processing.”

This is where USAID came in. The contract Ward was working on last winter was clearing the way for American businesses to get access without relying on Chinese middlemen:

“To counteract China, USAID supported the growth of a copper processing industry in the DRC and various projects along the Lobito Corridor: an infrastructure initiative connecting the Copperbelt to Angola’s Port of Lobito, increasing access to the U.S. market. As part of that effort, I kicked off a new USAID activity in January of 2025 to help refurbish the railroad from the DRC’s Copperbelt to the Angolan border — a key segment of the Lobito Corridor.”

In sum, a modest U.S. investment would restore a dilapidated railroad outside Chinese control, running from mining areas in the interior to the coast through Angola. Railcars carrying cobalt along it could sell their cargo to American manufacturers. This was one part of a five-year, $235 million program, with additional financial backing from a third U.S. agency (the Development Finance Corporation) and several dozen USAID technical people on the ground. Not a luxury posting for them, to put it mildly — see the State Department’s “Level 4, Do Not Travel” advisory for civilians and CDC’s health warnings about endemic cholera, meningitis, etc. But the job is part of a mission to serve a widely agreed U.S. interest in reducing, or perhaps eliminating, a risk of supply shock for thousands of large American manufacturers, and is the sort of work USAID people regularly do. Ward laconically explains the project’s current status:

“[W]ork came to an abrupt stop on January 20, 2025.”

So: By canceling this particular project, the administration more or less concedes a Chinese monopoly on the largest supply of a critical mineral. In a few years, even designing such projects may be harder: per its 2026 budgeting, the administration hopes to cut USGS by 40%, so by 2027 the government may lack experts on critical mineral reserves and production. The administration is, though, offering a baffling substitute: Mr. Lutnick’s Commerce Department is proposing “national security” tariffs on critical minerals — that is, taxes of 25% or so on essential things not in sufficient supply at home. In practice, this is a chance for American auto, aircraft, and battery companies to pay $41,670 per ton of cobalt, rather than the $33,335 their overseas competitors pay.

Lots more stories like this among the other 5,199 cancellations, of course. So, in a sense, Mr. Rubio is right to say that some people are going around doing things that “do not serve (or even harm) the core national interests” of the United States. He won’t have to look hard to find them.

FURTHER READING

PPI’s four principles for response to tariffs and economic isolationism:

  • Defend the Constitution and oppose rule by decree;
  • Connect tariff policy to growth, work, prices and family budgets, and living standards;
  • Stand by America’s neighbors and allies;
  • Offer a positive alternative.

Kevin Ward on USAID’s Lobito Corridor railway project.

PPI’s February defense of the American foreign assistance tradition —  ideals, interests, and aid — from Herbert Hoover’s World War I famine relief program through JFK’s launch of USAID to PEPFAR‘s HIV/AIDS prevention and treatment, the Millennium Challenge Corporation, and Feed the Future in the 21st century.

New Ukraine Project Director Tamar Jacoby on USAID in Ukraine.

… & Mr. Rubio in March.

Cobalt and critical minerals:

The U.S. Geological Survey explains the “critical minerals” concept and lists the 50 critical minerals.

… and summarizes the cobalt-mining world. The mine outputs in 2024:

World: 290,000 tons
Democratic Republic of Congo 220,000 tons
Indonesia   28,000 tons
Russia     8,700 tons
Canada     4,500 tons
Australia     3,600 tons
United States        300 tons
All other countries   24,700 tons

Cobalt prices at the London Metal Exchange.

… the Eagle Mine in Michigan’s Upper Peninsula is the sole U.S. cobalt producer.

… & the Commerce Department solicits ideas on how American firms can pay more.

The Royal Society of Chemistry’s interactive Periodic Table of the Elements has physical properties and uses for all 118 elements, with cobalt at atomic number 27.

Democratic Republic of Congo:

The Development Finance Corporation announces Lobito Corridor plans, December 2024.

The Democratic Republic of Congo Embassy.

The State Department’s travel advisory has some blunt advice for civilians –  “Do not travel to the Democratic Republic of Congo due to Armed Conflict, Crime, Civil Unrest, Kidnapping, and Terrorism” – and the CDC has guidance on avoiding cholera, meningitis, schistosomiasis, malaria, and other ailments.

The Commerce Department’s guide for U.S. businesses in the DRC is a little more upbeat: “opportunities for firms with a high tolerance for risk and familiarity operating in complex or fragile environments”.

The Labor Department’s International Labor Affairs Bureau has been supporting work to reduce and eliminate child labor in DRC mining, including for cobalt specifically. Perhaps not much longer: as with USGS, the administration hopes to cut ILAB by about 40% this year, and confine its work mostly to issues linked in some way to “trade enforcement”.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

Read the full email and sign up for the Trade Fact of the Week.

New PPI Report Asserts Democrats Must Reclaim Obama’s Vision of American Identity

WASHINGTON  —  A new report from the Progressive Policy Institute (PPI) warns that Democrats have strayed from former President Barack Obama’s unifying vision of American national identity — and paid a steep political price. In How Democrats Have Lost Sight of Obama’s Vision of American National Identity,” PPI contributor Ian Reifowitz contends that the party’s embrace of identity-based rhetoric and policies has alienated working-class voters of all races while failing to deliver electoral gains among communities of color.

Reifowitz, a historian and longtime observer of Obama’s political philosophy, traces how the 44th president’s inclusive and aspirational message helped build a multiracial coalition and win decisive victories. By contrast, he argues, Democratic leaders in the post-Obama era — most notably during the Biden administration — have too often leaned into the race essentialist worldview popular among progressive academics and elite institutions, emphasizing division over universal solutions and common purpose.

“Barack Obama offered Democrats a winning formula: an inclusive patriotism rooted in both realism and hope,” said Reifowitz. “My report shows that abandoning that vision has not only weakened the party’s appeal to working- and middle-class voters — it’s also left a vacuum that demagogues are eager to fill. It’s time to reclaim the idea of America as a unifying force.”

The report details how this shift coincides with declining Democratic support among key demographic groups, including nonwhite and working-class voters, and critiques the left’s overreliance on divisive frameworks such as equity mandates, race-based preferences, and pessimistic historical narratives. Reifowitz calls for a return to a politics that balances acknowledgment of past injustices with belief in America’s capacity for renewal and unity.

The report reinforces the mission of PPI’s American Identity Project and follows the announcement earlier this week of a new advisory group co-chaired by former Treasury Secretary Lawrence H. Summers and New York Times columnist David Brooks. The project seeks to revitalize the civic traditions that sustain American democracy and promote unity in an age of polarization.

“We are proud to publish this splendid report as part of PPI’s larger effort to help Americans escape the thicket of racial identity politics that is so pronounced on both the left and right,” said Richard D. Kahenberg, Director of the American Identity Project. “Ian Reifowitz reminds us of how far many Democrats have moved away from Barack Obama’s powerful, unifying story of America, and the importance of reinvigorating that vision today.”

Read and download the report here.

 

Founded in 1989, PPI is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Find an expert and learn more about PPI by visiting progressivepolicy.org. Follow us @PPI.

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Media Contact: Ian O’Keefe – iokeefe@ppionline.org

Real Mineral Security Requires Foreign Assistance

Following a near-total freeze on foreign assistance, the Trump Administration is moving fast to shut down USAID, with plans for the State Department to manage its few remaining assistance programs by July 1.

Ironically, this rash decision will frustrate one of the Trump Administration’s most ambitious foreign policy goals: reducing America’s reliance on China for critical minerals. Along with pausing major programs on health and humanitarian assistance, the Administration shuttered programs that my colleagues at USAID and I had specifically designed to move global mineral supply chains out of Chinese control.

These programs ended at a time when China had already begun leveraging its dominant role in several critical mineral supply chains against the United States. In response to the Biden Administration’s export restrictions on semiconductor technology, China restricted exports of alimony, graphite, germanium, and gallium. More recently, in response to the Trump Administration’s new tariffs, China added new export restrictions for seven rare earth elements, creating severe shortages for American manufacturers.

Mineral security is but one of the many bipartisan foreign policy goals set back in closing USAID. The Administration’s rushed review process failed to identify many programs that were already aligned with its interests — let alone those that could have been easily realigned. As the State Department considers how to use its foreign assistance budget, it should look first to what was lost.

USAID’s approach to critical minerals

Historically, the focus of USAID’s minerals work had been on promoting transparency and accountability in resource governance, which increases opportunities for citizen engagement and limits opportunities for corruption. For example, USAID has long supported the Extractive Industry Transparency Initiative to increase public disclosure on exploration, production, revenue distribution, and ownership. Other initiatives included formalizing illegal mining operations, improving traceability, and increasing enforcement of labor and environmental standards.

These efforts helped deliver economic development to mineral-rich countries, but they also leveled the playing field for American companies competing for foreign contracts. Whereas American companies would risk legal enforcement and public backlash for engaging in corruption or tolerating illegal or otherwise unsavory activity in their supply chains, Chinese companies operate abroad with significantly less scrutiny back home. It is therefore in the interest of American companies that rules and regulations abroad be consistent with those of the United States.

In recent years, USAID’s focus on breaking China’s stranglehold on critical mineral supply chains became more explicit. For example, during the last Administration, USAID expanded its programming in the Copperbelt region of the Democratic Republic of the Congo (DRC). Though the DRC is the world’s largest cobalt producer and the second largest copper producer, its mineral supply chains are tightly controlled by China: Chinese companies own the country’s largest mines, its local processing operations, and the railroad that takes its minerals to China for additional processing.

To counteract China, USAID supported the growth of a copper processing industry in the DRC and various projects along the Lobito Corridor: an infrastructure initiative connecting the Copperbelt to Angola’s Port of Lobito, increasing access to the U.S. market.

As part of that effort, I kicked off a new USAID activity in January of 2025 to help refurbish the railroad from the DRC’s Copperbelt to the Angolan border — a key segment of the Lobito Corridor. The activity would have provided the government of the DRC with a financial model and a stakeholder analysis, helping to accelerate the refurbishment, improve the project’s development outcomes, and mitigate the risk that stakeholders would block the project. And though the project would have also increased access to the DRC’s critical minerals for American manufacturers, the work came to an abrupt stop on January 20, 2025.

What is missing from the Trump Administration’s approach?

The Trump Administration’s foreign policy on critical minerals seems focused on negotiating rights to mineral reserves, from Ukraine to Greenland to the DRC. Presumably, once the U.S. obtains these rights, the U.S. Development Finance Corporation (DFC) would invest taxpayer dollars alongside private capital to mine, process, and transport critical minerals.

DFC, a U.S. government agency first authorized in 2018, is an important part of America’s foreign policy toolkit. Its various financial tools, including loans, equity investment, and political risk insurance, mobilize capital into strategically important projects that would not otherwise attract sufficient investment. In fact, a $553 million loan from DFC to the Lobito Atlantic Railway in 2024 served as the backbone for billions in investment into the Lobito Corridor.

However, DFC financing alone will not achieve the Administration’s desired outcome. There are two functions once held at USAID that are necessary complements to DFC’s investments: transaction support and policy reform.

Transaction Support: Since DFC has a modest overseas presence, USAID often served as its “boots on the ground.” This relationship was codified with a step-by-step manual on how USAID should support DFC transactions. In the sourcing phase, USAID staff’s combination of technical expertise and in-country connections allowed them to identify promising opportunities for DFC financing. And once DFC invested in a project, USAID engaged with stakeholders at all levels — including those in mining regions located far from capital cities — to make DFC’s investments successful.

To fill the gap in transaction support left by the dissolution of USAID, the State Department or DFC itself will have to significantly expand overseas staff with strong development expertise related to the mining industry and extensive in-country networks, likely drawing from former USAID staff.

Policy Reform: In addition to supporting DFC’s work on specific investments, USAID benefited all DFC transactions through programs that improved the policy environment for international investment. More competitive bidding processes allow DFC-backed companies to win contracts, while clear and consistent regulations reduce policy uncertainty throughout the lifetime of an investment.

Moreover, mining under a stronger policy environment has a much lower risk of further damaging America’s global reputation. If a local government fails to enforce environmental regulations or to properly manage its own revenue from the mining project, blame will inevitably fall to the mining company and its investors (such as the U.S. government through DFC). China’s reputation has already suffered this fate in many countries, and it is in the American interest to differentiate itself as the preferred partner.

As with transaction support, the U.S. government will need to build the capacity to help countries implement policy reforms that align with American foreign policy interests, particularly in the mining sector. That capacity existed at USAID, and it can be brought back.

Conclusion

The humanitarian consequences of USAID’s sudden demise have already garnered significant attention in the media. And, while many important programs have been cut, the Administration has decided to keep some of the most prominent life-saving programs.

But the public outcry over USAID has yet to emphasize how foreign assistance also promotes American economic strength, including by reducing our dependence on China for critical minerals. The integration of some USAID’s functions into the State Department presents an opportunity for advocates to refresh their message, perhaps triggering a more comprehensive review of past programs that could salvage some of the development expertise and networks lost with USAID.