Category: Uncategorized
Ritz and Kilander for Forbes: Consecutive Continuing Resolutions Could Lead To Deep Spending Cuts
Disagreements over the future of pandemic-era health insurance subsidies are threatening to prevent Congress from passing a continuing resolution (CR) needed to prevent a government shutdown on Wednesday. But all the focus on health care has drawn attention away from the effects of the CR itself, which could lead to lawmakers unintentionally imposing some of the deepest spending cuts in modern history.
Congress is supposed to pass 12 appropriations bills each year to fund the roughly 30% of government spending that doesn’t operate on autopilot. When lawmakers fail to pass a new appropriations bill before the previous one expires, they use CRs to temporarily continue government funding using the previous year’s funding levels and policy directives. From 1998 to 2011, CRs covered about one-third of the average fiscal year. But Washington’s dependence on them has risen in recent years: the federal government has been funded by a CR nearly half the time since 2011. And in four years — 2007, 2011, 2013, and 2025 — a CR lasted the entire year, meaning Congress simply declined to pass an appropriation bill.
Now, Congress may rely on a year-long CR yet again to continue avoiding the plethora of policy issues more directly related to the appropriations process than the expiring health-insurance subsidies (which are considered mandatory spending not normally part of the appropriations process). That approach would be unprecedented because Congress has never before gone two consecutive years without passing any original appropriations bills. And there are serious consequences to operating the government at funding levels set more than 18 months ago.
The Union Podcast: Episode 12
PPI Proposes Pragmatic Plan to Reform ACA Premium Tax Credits and Curb Skyrocketing Health-Care Costs
WASHINGTON — As partisan disagreements over extending pandemic-era premium tax credits (PTC) threaten a government shutdown next week, the Progressive Policy Institute (PPI) today released a pragmatic plan to protect families from steep premium hikes while reining in unsustainable federal spending on health care.
“A Pragmatic Path Forward on Premium Tax Credits,” authored by Tim Sprunt, Policy Analyst at PPI’s Center for Funding America’s Future, and Ben Ritz, PPI’s Vice President of Policy Development and Director of the Center for Funding America’s Future, charts a fiscally responsible middle path between Democrats who want to make pandemic-era subsidy expansions permanent and Republicans who want to let them expire abruptly.
PPI’s analysis finds the 2021 expansion of the Affordable Care Act (ACA) premium tax credits provided critical benefits during the COVID-19 pandemic and corrected structural problems with the original design, such as a “benefit cliff” that discouraged work among upper-middle-income households. However, the expansion also made the ACA significantly more regressive and would cost $380 billion if continued for the next decade, showering unnecessary benefits to high-income households while doing nothing to address the underlying drivers of rising health-care costs.
“Democrats must stop reflexively seeking to extend every Biden-era fiscal policy, no matter how poorly designed, and Republicans must stop seeking to cut support for American health care at every available opportunity,” said Sprunt. “PPI’s proposal offers a pragmatic path between the two extremes.”
Specifically, PPI proposes to gradually move from the pandemic PTC structure to one that splits the difference between it and the structure originally established by the ACA. Free coverage would be permanently preserved for families at or below 100% of the federal poverty level, while higher-income households would eventually be required to pay premiums roughly halfway between the pandemic-era expansion and the original ACA. This structure would also permanently smooth the benefit cliff that significantly increased premiums for anyone just outside the original PTC’s eligibility range.
PPI’s proposed PTC would cost roughly half as much as a permanent expansion of the pandemic PTC. But crucially, PPI’s proposal would fully pay for these targeted subsidies by pairing them with real reforms to attack the drivers of rising health-care prices. These reforms include:
- Cracking down on Medicare Advantage upcoding: Adopting key provisions of the bipartisan No UPCODE Act would save at least $125 billion over 10 years by preventing insurers from inflating risk-adjustment payments.
- Expanding site-neutral payments: Curtailing the practice of paying hospitals more than independent clinics for identical services could save Medicare $175 billion over the next decade and discourage the consolidation of providers that leaves all Americans with fewer health-care choices.
“PPI’s proposal shows pragmatic Democrats are serious about cutting medical costs rather than simply increasing government spending,” said Ritz.
Read and download the new proposal here.
Launched in 2018, the Progressive Policy Institute’s Center for Funding America’s Future works to promote a fiscally responsible public investment agenda that fosters robust and inclusive economic growth. To that end, the Center develops fiscally responsible policy proposals to strengthen public investments in the foundation of our economy, modernize health and retirement programs to reflect an aging society, transform our tax code to reward work over wealth, and put the national debt on a downward trajectory.
The Progressive Policy Institute (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. Learn more about PPI by visiting progressivepolicy.org.
Follow the Progressive Policy Institute.
###
Media Contact: Ian O’Keefe – iokeefe@ppionline.org
A Pragmatic Path Forward on Premium Tax Credits
INTRODUCTION
Democrats have made extending a pandemic-era expansion of the Affordable Care Act’s (ACA) premium tax credit (PTC) their central demand in this year’s government funding negotiations, going so far as to threaten a government shutdown next week if Republicans do not attach it to a short-term funding bill. The pandemic PTC served an important purpose in the midst of the COVID-19 pandemic, helping reduce the cost of health insurance for households that did not have coverage through their employer or another government program at a time when workers were at heightened risk of losing their jobs or experiencing a medical emergency. It also corrected some long-standing problems with the PTC’s original structure, such as a “benefit cliff” that discouraged earnings by cutting benefits off altogether for households that made even one dollar more than the income eligibility limit.
Allowing the expansion to expire immediately in its entirety, as most Republicans propose to do, would be deeply damaging: the Congressional Budget Office (CBO) estimates that more than 4 million Americans could lose their health insurance when the pandemic PTC expires, while the Kaiser Family Foundation (KFF) estimates that out-of-pocket premium payments for enrollees on the individual insurance exchange marketplaces would rise by more than 75%.
But reflexively continuing the policy in its current form, whether through repeated temporary extensions or outright making it permanent, would also be unwise. The pandemic PTC provides substantial subsidies for households higher up the income ladder that go far beyond the program’s original intent. The extension is expensive, costing more than $20 billion per year — a cost Democrats never proposed to sustainably pay for, despite the national debt already being at historic heights. The tax subsidies it provides for a small slice of the population are significantly more costly than the tax subsidies from which most Americans benefit through employer-sponsored insurance. And perhaps worst of all, the pandemic PTC pumps more money into a broken and costly health-care system while doing nothing to tackle the true drivers of high prices.
PPI proposes a pragmatic path forward between these two extreme positions. Our proposed framework would gradually transition into a new PTC structure somewhere between the original PTC and the pandemic PTC — one that eliminates the benefit cliff without showering unnecessary tax subsidies on high-income households. Moreover, we propose to pair this policy with other changes that more than offset its cost to the federal budget while reducing the price of health care for taxpayers and patients alike.
THE PANDEMIC PTC MAKES THE ACA MORE REGRESSIVE AND EXPENSIVE
The original PTC was created by the ACA in 2014 to ensure that Americans who did not receive health insurance from the government or their employer could still afford quality health insurance. The ACA established thresholds for affordable health insurance based on income: for an American at the Federal Poverty Level (FPL), that affordability threshold could be just 2% of their income, while a middle-income American could be asked to pay up to 10%. If the cost of a benchmark plan exceeded this affordability threshold, enrollees with household incomes below 400% of FPL would receive a premium tax credit to make up the difference, which they could use to purchase any insurance plan on the ACA’s individual marketplace exchanges.
Even before the pandemic, the PTC had been unintentionally expanded through the practice of “silver-loading.” Insurers raised the cost of their middle-tier “silver” plans, which serve as the benchmark plans for PTC calculations, even though costs for both cheaper “bronze” and premium-tier “gold” plans on the exchanges remained unchanged. This practice increased PTC payments across the board, meaning households shopping on the exchanges could purchase a higher-quality plan using a smaller share of their income than the affordability threshold dictated.
The American Rescue Plan Act (ARP) passed during the COVID-19 pandemic then made the PTC significantly more costly — and less progressive — by lowering the affordability threshold across the board and making all households eligible for the PTC regardless of income for 2021 and 2022. The Inflation Reduction Act (IRA) extended this pandemic PTC expansion for an additional three years, but the policy is set to expire at the end of this year.
On the positive side, the pandemic PTC expansion fixed one of the greatest problems with the original PTC, whereby recipients could lose several hundred dollars of tax credits if they earned just one dollar over the 400% of FPL eligibility limit. It also made health insurance significantly more affordable during a once-in-a-century pandemic in which many people faced the sudden loss of income and insurance, along with higher medical risk.
But the pandemic PTC was never designed as a thoughtful long-term policy. Median-earning households are now expected to pay only two-thirds what the original ACA intended them to pay for a benchmark plan, and households with income below 150% of FPL are expected to pay no premium whatsoever. Even worse, the combination of a low benchmark premium cap with no eligibility limitation results in very high-income households receiving subsidies that were never intended for them when the ACA became law. In New York City, for example, couples with no children earning 1,000% of FPL — more than double the original PTC’s eligibility limit — are currently eligible for a PTC of more than $3,000 per year.
Those costs all add up: today, the average annual subsidy for the 7% of Americans who are covered by ACA exchange plans is $6,600 per person. That’s more than three times the tax subsidy that benefits people with employer-sponsored insurance, who make up more than half the population. These costs were worth the benefits during a global public health emergency, but they make little sense to continue as permanent policy — especially since supporters never determined a way to pay for them at a time when the government is running $2 trillion annual budget deficits.
Yet Democrats have rallied around legislation to extend the pandemic PTC permanently, which would cost approximately $380 billion over the next 10 years. At a minimum, they — and even a few Republicans — have argued in favor of extending the expiring subsidies for one year at a cost of $23 billion. But nobody has offered a coherent rationale for why it would make more sense to phase down subsidies next year than this year, especially considering that it is a midterm election year. A one-year extension with no adjustments or strings attached now simply sets the stage for more extensions in the future as a backdoor attempt to make the policy permanent.
Democrats must move beyond the desire they’ve shown in recent years to reflexively extend expiring pandemic-era policies that were never designed as long-term solutions. There is a better approach that prevents sharp premium hikes for families and eases into a more sustainable long-term policy while permanently fixing the benefit cliff and leaving health care more affordable for families than it was before the ARP.
PPI proposes to gradually move towards a reworked PTC structure that is more progressive and fiscally sustainable than the pandemic PTC, yet more fair than the original ACA. In 2026, households with incomes under 300% of FPL should be eligible for the same enhanced subsidies created by ARP. But the affordability threshold should continue to rise for higher earners rather than being capped at 8.5%. This will result in higher-income households gradually receiving lower subsidies as their income rises, and will fully phase out subsidies at lower income levels than they do today.
Then, over the next two years, the beginning of the phase-in for higher affordability thresholds would gradually move from 150% of FPL in 2026 to 100% of FPL in 2028. This compromise offers free health insurance for families in poverty while requiring modest contributions from middle-income households that can afford it and tapers off support for high-income households that don’t need it. Policymakers can choose at this point whether they would make the new subsidy structure permanent or let voters decide its future in the 2028 elections. Based on modeling from the Committee for a Responsible Federal Budget, we estimate this proposal will cost roughly $200 billion over 10 years if made permanent, relative to allowing the pandemic PTC to expire at the end of this year.
CONGRESS MUST TACKLE THE REAL DRIVERS OF HEALTH COSTS
The other flaw with simply extending the pandemic PTC is that it doesn’t address the real problem of rising health-care costs, which have dramatically increased over time relative to the size of the economy. In 1963, health-care costs represented 5% of Gross Domestic Product (GDP). In 2025, they are projected to reach 18.5% of GDP. Today, the average cost of health care in the United States is estimated to be more than $16,500 per person, which historically has been nearly twice as much as the average cost of health care per person in other wealthy countries.
Expanding subsidies for a small slice of the population without tackling the drivers of high health-care costs will only fuel further price increases. When government assistance covers a larger share of premiums, insurers and providers face less pressure to control spending, allowing them to charge more knowing that taxpayers will pick up the bill. Prices climb in response, and costs to families and the federal budget escalate. It would therefore be both good policy and good politics to ensure that Americans who benefit from the PTC keep their health insurance while also confronting the structural reasons behind rising health-care costs.
Fortunately, there are smart reforms that policymakers can and should pair with any PTC expansion to both offset their cost to taxpayers and tackle the root causes of rising health-care costs. One place lawmakers should start is Medicare Advantage, which allows seniors to receive their Medicare benefits from private insurers rather than the federal government. While this program was originally intended to save money, it now costs taxpayers tens of billions of dollars per year because of loopholes that allow insurance companies to inflate their government reimbursements without increasing the quality of their care.
Through Medicare Advantage, insurance companies are paid based on the number of seniors they cover, plus an adjustment for enrollees’ “risk scores,” based on their health history. This mechanism was designed to compensate insurers for covering sicker, more expensive seniors. But insurers have manipulated the system through a practice called upcoding, which entails inflating patients’ risk scores with questionable diagnoses in order to make them appear sicker than they really are. Insurers use a variety of tactics to increase risk scores, including pushing patients to complete health risk assessments with company-employed providers and combing through patients’ medical records in chart reviews to look for diagnoses that doctors never reported.
In order to curb these overpayments, Congress should adopt key provisions from the bipartisan No UPCODE Act, introduced by Senators Cassidy (R-La.) and Merkley (D-Ore.). The first provision would block insurers from inflating risk scores with diagnoses from chart reviews and health risk assessments, unless they are confirmed in a medical setting, and the second would modify the risk adjustment formula to increase parity with traditional Medicare. Combined, these two changes would save $125 billion over 10 years, enough to offset more than half the cost of our PTC proposal. And if lawmakers went further to tackle all the causes of Medicare Advantage upcoding, they could increase their savings to $600 billion, enough to fully pay for our PTC and also begin to address our ballooning federal deficit. Forcing Medicare Advantage plans to boost profits through innovation rather than upcoding could unlock efficiencies from which non-Medicare patients could also benefit.
Expanding the use of site-neutral payments would tackle another perverse incentive currently built into Medicare. Every year, Medicare pays billions more for services performed in a clinic connected to a hospital than it does for similar services performed in a freestanding clinic. One report estimates that payments for preventative exams provided in a hospital outpatient department were 51% higher than payments provided in a freestanding physician’s office.
Since hospital systems still receive higher Medicare reimbursements when providing services in their lower-cost clinic settings, hospital systems are incentivized to buy up freestanding physicians’ offices so they can charge higher reimbursement rates. This swift trend toward consolidation and anti-competitive monopoly structure significantly increases costs to both taxpayers and patients, who are left with fewer cost-effective options for seeking care.
To address this problem, policymakers should work towards equalizing reimbursement rates between outside physician offices and hospital outpatient departments. CMS has some statutory authority to implement site-neutral payment policies and recently proposed ambitious reforms to advance site neutrality as well as other cost-saving measures for beneficiaries. But enacting legislation similar to a bipartisan bill introduced in 2023 would further expand site-neutral payments and could save taxpayers $175 billion over 10 years.
CONCLUSION
Instead of threatening to shut down the government over an outdated pandemic-era program, Democrats should be pressuring Republicans to meet them at a pragmatic middle-ground — one that permanently corrects the structural flaws of the original ACA in a fiscally responsible way. Doing so would signal to the American people that Democrats are serious about cutting medical costs rather than simply increasing government spending. PPI’s fix offers a balanced path forward: scale back the costly and regressive pandemic PTC expansion, smooth the benefit cliff, and pair any new spending with meaningful savings from reducing health-care costs. This combination of targeted assistance and real cost control would deliver more lasting affordability than another costly extension of overpriced subsidies.
Ainsley in BBC News: What lessons can Starmer learn from world leaders on fighting Reform?
Claire Ainsley, who was Sir Keir Starmer’s policy chief when he was in opposition, is now overseeing a project on centre-left renewal at the Progressive Policy Institute, and her advice is to grow the “seeds of doubt” about Reform in the electorate’s minds in the three years between now and the election.
She believes that while people are happy to cast a protest vote, they currently question whether Reform are really a government in waiting – so challenging them on whether their policies hold together, or whether their numbers add up, is a way of undermining their support.
But it does also mean doing more to tackle the core issue. She says the party leadership realised “the previous set of answers on immigration were not going to wash with the British public that want to see action”, and says she was encouraged by Home Secretary Shabana Mahmood’s promise that “nothing is off the table” in tackling illegal migration.
But tackling Reform isn’t just about immigration. Ms Ainsley says it’s about people feeling worse off and not feeling they have got a fair deal on the economy, and a sense that other people are getting treated better than them.
Gresser for The Wall Street Journal: Howard Lutnick Suggests Condensed Milk Is Made of Metal
Memo to Howard Lutnick and his Commerce Department: When you find yourself saying that milk is made of metal, it’s a sign that you’ve gone wrong somewhere. That’s essentially what the department has done by applying steel and aluminum tariffs to canned condensed milk.
This bizarre tariff scheme comes from a mid-August Federal Register notice announcing that goods in 407 different product categories “will be considered as steel or aluminum derivative products.” Anyone buying these goods from abroad must pay a 50% tariff on the metal they contain.
This is the latest chapter in the long saga of steel and aluminum tariffs. In 2018 the first Trump administration put a 25% tariff on most steel and a 10% tariff on most aluminum. The tariffs failed to reshore American manufacturing: According to U.S. Geological Survey data, the U.S. makes less aluminum and less steel than in 2017. The tariff onslaught has continued in the second Trump term. This March, President Trump added more steel and aluminum products to the list, reinstated the 25% steel tariff, and raised the aluminum tariff to 25%. In June he raised the rates to 50%, and in July he added copper.
Read more in The Wall Street Journal.
Americans are buying 22 tons of Ukrainian honey daily
FACT: Americans are buying 22 tons of Ukrainian honey daily.
THE NUMBERS: Vessel calls at three Ukrainian Black Sea ports —
| Ship calls | Deadweight tonnage | |
| 2024 | 2,705 | 79.9 million dwt |
| 2023 | 759 | 32.4 million dwt |
| 2022 | 1,028 | 38.2 million dwt |
Lloyd’s List, Feb. 2025. The ports are Odesa, Chornomorsk, and Yuzhni.
WHAT THEY MEAN:
A cautious International Monetary Fund mid-year evaluation of Ukraine’s economic outlook balances risk and ‘resilience’ this June:
“Russia’s war continues to take a devastating social and economic toll on Ukraine. Nevertheless, macroeconomic stability has been preserved through skillful policymaking as well as substantial external support. The economy has remained resilient, but the war is weighing on the outlook, with growth tempered by labor market strains and damage to energy infrastructure. Risks to the outlook remain exceptionally high and contingency planning is key to enable appropriate policy action should risks materialize.”
The Fund’s bottom-line April projection was 2.0% GDP growth this year; the June outlook is a slightly brighter “2 to 3 percent.” This is by no means a boom, and a point below Poland’s 3.2%; but it’s also noticeably above the Fund’s 1.5% guess for Russia, the 1.3% and 1.4% for neighboring Hungary and Slovakia, and also the 1.8% for the United States.
Ukrainian-economy background on this, shifting from the Fund’s “macro” world of growth, employment rates, and fiscal balances to the “micro” world of defense factories, seaports, and farm exports.
Industry: Ukraine’s industrial economy is evolving rapidly, as the war helps create a high-tech military industry and to an extent diminishes the centrality of the large “oligarchy” iron, steel, and grain industries Ukraine inherited from the Soviet era. PPI’s Kyiv-based New Ukraine Project Director Tamar Jacoby explains:
“The 2022 invasion reinvigorated a domestic defense industry that had atrophied beyond recognition since Soviet times. Thousands of IT technicians and engineers dropped whatever they were doing in peacetime to join the defense sector or enlist in the army and provide technical support on the front line. Today, some 700 defense manufacturers employ more than 300,000 technicians and sustain scores of other companies making weapons components and dual-use products.”
These are mostly start-up businesses — state-owned firms accounted for 80% of defense production in 2022, and now less than 30% — and they produce quite a lot. Per Jacoby, since 2022, Ukraine has multiplied its artillery-shell production about 25-fold, and upped drone production from fewer than 2,500 drones to a likely 4.5 million this year. The economic effect is to enlarge Ukraine’s world of small tech-oriented manufacturing, and (relatively) shift GDP away from large state-owned heavy industry plants. On the military side, it has underwritten a stunning and continuing naval success: without a single capital ship of its own, Ukraine used home-designed drones to sink a third of the Russian Black Sea Fleet’s 74 ships by the end of 2023 and has forced the rest to shelter out of range in the east ever since.
Farm Exports and Rural Economy: This naval victory in turn reopened Ukraine’s main Black Sea trade route by the end of 2023. The Lloyd’s List ship arrival figures, showing vessel calls quadrupling in 2024, mean both steady flows of consumer goods into Ukraine and export income for industrial and rural communities.
Early that year, we cited honey as a kind of bellwether. This is a traditional Ukrainian standard: UN Food and Agriculture Organization stats found prewar Ukraine the world’s fourth-largest honey producer, with 200,000 professional beekeepers plus another 200,000 part-timers and hobbyists, 2.3 million bee colonies, and about 70,000 tons of honey produced for sale annually. (For context, the U.S. last year had about 120,000 professional and part-time beekeepers. They managed 2.6 million colonies and produced 69,500 tons of honey.) By the end of 2024, Americans had bought a record 12,300 tons of Ukrainian honey. This year’s total will probably be a bit lower, but still above the pre-war averages:
| Quantity | Value | |
| 2025? | 8,500 tons? | $18.0 million? |
| 2024 | 12,300 tons | $24.9 million |
| 2023 | 4,100 tons | $10.9 million |
| 2022 | 4,400 tons | $14.4 million |
| 2021 | 6,000 tons | $12.8 million |
| 2020 | 11,100 tons | $19.0 million |
| 2010-2019 average | 7,300 tons | $17.2 million |
Estimates for 2025 based on January – July U.S. Census totals.
Back to Macro: The honey figures — and those for iron and sunflower oil are similar — illustrate some of the IMF’s “resilience” in practice. Export income is flowing to Ukraine’s beekeepers. The manufacturing, packaging, and transport services needed to collect honey and package it for sale abroad work, and financial systems likewise. And busy seaports are supporting large-scale commodity trade, with cargo flows doubling the levels of 2022 and 2023.
This doesn’t negate the high risks the IMF mentions, nor the Ukrainian government’s challenges in covering wartime budgets. But it does show Ukraine’s economy holding up well, from soldiers at the front to naval specialists keeping the Russian fleet in port, the creativity and rapid growth of drone-design labs and factories, to beekeepers and sunflower farmers on the land.
FURTHER READING
From PPI:
Kyiv-based Tamar Jacoby directs PPI’s New Ukraine Project, with in-depth research and regular reporting on Ukrainian daily life, the mood at the front, industrial evolution, anti-corruption programs, and more. Recent samples:
- Ukraine’s new military industry.
- Mr. Trump’s Alaska fiasco.
- At the front in March.
And our February Trade Fact on the Ukrainian cause, the Trump administration and Vladimir Putin, and the principles underlying successful American foreign policy: Isolationism and appeasement are dangerous.
Ukraine economy:
From the International Monetary Fund, basic Ukraine-economy stats and the mid-year 2025 evaluation.
Lloyd’s List tallies ship arrivals at Odesa, Chornomorsk, and Yuzhnyi.
Politico/EU reports on Ukrainian farming in wartime, oligarchs v. startups, and economic reform.
EU statisticians track Ukraine-European trade flows.
And Germany’s Kiel Institute monitors U.S., European, UK, and other aid programs.
Some “sweetness and light”:
Our March 2024 look at Ukrainian beekeeping, honey, the war, and Black Sea trade.
Agricultural specialist and translator Alisa Koverda explains Ukraine’s beekeeping culture and its wartime adaptation in 2022.
The UN’s Food and Agricultural Organization has worldwide data, and USDA has a U.S. closeup.
… and Фундація Жінок Пасічниць (Fundatsiya Zhinok Pasichnish for non-Cyrillic readers; translated, Foundation of Women Beekeepers), with honey contacts and beekeeping tips.
And last:
Special note: We’re proud to note that this Trade Fact is the 200th in our revived series. We are grateful to PPI’s generous supporters for their commitment to our values and work, and we thank friends and readers in the U.S. and worldwide for your ideas, reactions, and occasional critiques.
Read the full email and sign up for the Trade Fact of the Week.
Kahlenberg for Washington Monthly: The College Board Capitulates to Trump
Donald Trump has opened a new, terribly ill-advised battle in his war on affirmative action. His target is no longer just racial preferences, an issue where Trump had strong public support. Instead, Trump’s new enemy appears to be racial diversity itself—something most Americans support in educational settings when it is achieved by giving a break to the economically disadvantaged of all races. A Trump Department of Justice memorandum, for instance, has declared that “criteria like socioeconomic status, first-generation status, or geographic diversity must not be used” if a university’s goal is to further racial integration on campus.
Given the president’s appalling history on matters of race, this development, while troubling, is not particularly surprising. What is mystifying is that a pillar of the higher education establishment recently went along with Trump. Earlier this month, the College Board, which administers the SAT, announced it would stop making a tool called Landscape available to colleges, which is designed to help identify high-achieving low-income students of all races. The organization cited as its reason the way in which “federal and state policy continues to evolve around how institutions use demographic and geographic information in admissions.”
The decision represents the worst kind of capitulation. Landscape, as the College Board noted, “was intentionally developed without the use or consideration of data on race or ethnicity.” Instead, it allowed colleges to consider a student’s achievement in light of the socioeconomic makeup of his or her neighborhood and high school. Neighborhood factors included median family income, typical educational attainment, the share of families headed by a single parent, and crime rates. High school factors included the share of students eligible for subsidized lunch, the proportion taking AP exams, and the average SAT score. The idea was that if a student does pretty well academically despite these educational challenges, they have something special to offer.
Marshall for New York Daily News: How Citizens Can Fight MAGA Cancel Culture
The outbreak of political and corporate cowardice in America since Donald Trump’s return to the White House is reaching epic proportions.
ABC’s short-lived suspension of “Jimmy Kimmel Live!” is just the latest example. With some honorable exceptions — I never thought I’d be cheering for Harvard — almost every public or private entity seems to be caving in to Trump’s dictates.
The president is engaging in a kind of Godfather cosplay, turning the executive branch into a Mafia-style extortion racket. Nice little network you’ve got there; it’d be a shame if something bad were to happen to it.
His consiglieri in this case was FCC Chairman Brendan Carr, who threatened to yank the broadcast licenses of ABC’s affiliates that carry the Kimmel show. “We can do this the easy way or the hard way” he warned them.
Carr knows better. In 2019 he declared: “The FCC does not have a roving mandate to police speech in the name of the ‘public interest’ ” He was right then, and his willingness now to act as Trump’s censor is craven hypocrisy.
Manno for The 74: New Report Reveals the Struggle Worldwide to Prepare Young People for Work
Too many countries send young people into adulthood without the skills or support they need to thrive at work. That is the central warning of Education at a Glance 2025, the latest in the Organisation for Economic Co-operation and Development’s annual series of global education reviews.
This year’s edition devotes particular attention to career education, workforce readiness and the critical transition from grades 10-12 — what the report calls upper-secondary schooling — into employment or further study. The findings are stark: While some countries provide clear pathways from classroom to career, many — including the United States — leave too many teenagers unready for the next stage of life.
Released each autumn since 2010, the report compares data from 38 member nations and about a dozen partner economies. The current version covers more than a billion students worldwide. It is filled with tables and charts on topics from preschool enrollment to the wage premium for education and training beyond high school, including diplomas, academic degrees and vocational certificates — all of which it groups under what it calls tertiary education.
How Governors Can Empower All Students, ft. Governor Jared Polis
Jacoby for Forbes: Kyiv’s E-Points Drone Marketplace—An Amazon For Frontline Units
The tall, bearded officer, code-named Prickly—like all Ukrainian fighters, he uses a call sign to protect his identity—is proud as a peacock of what he has done in six months at the helm of his frontline drone unit, and he gives some of the credit to Kyiv’s new “e-point” system, Army of Drones Bonus.
He and several of his men explain how the system works in an interview near a former farmhouse in eastern Ukraine. The yard is littered with military equipment and junk, including the farmer’s much-worn living-room furniture, now arranged around a makeshift fire pit. Several stray cats and a mangy dog come and go as we talk. “We’ve improved our performance by a factor of 10,” the commander boasts. “We know that thanks to the drone points system, which measures how many men we kill and how much equipment we destroy.”
After more than three and a half years of fighting, drones have transformed the battlefield in Ukraine. Every operation depends on uncrewed platforms, either to carry out the mission or protect soldiers. Units work with an increasingly varied drone arsenal—large and small devices, powered by rotors and fixed wings, guided by radio waves and fiber optic cable. Kyiv and Moscow are locked in a deadly technology race, constantly competing to counter the other side’s latest developments, and things change so fast that an wounded fighter returning to the front after just a few months away can no longer recognize his unit’s tactics. Estimates suggest that unmanned aerial vehicles are responsible for up to 80% of battlefield casualties.
Read more in Forbes.
Marshall for The Hill: How Democrats Can Get Their Economic Mojo Back
President Trump’s political rise has been a stress test of American democracy — maybe the most serious we’ve faced since the Civil War. To prevent irreparable damage to our economy, our social cohesion, and the rule of law, our country needs a bigger, stronger Democratic Party.
Yet U.S. voters see the opposition party as weak and rudderless. Whether measured in terms of electoral competitiveness, public approval ratings or party registration, Democrats have hit a political nadir.
You don’t have to be a partisan Democrat to think that’s bad for the country — not just for the world’s oldest political party. Robust electoral competition is our best defense against populist demagogues who seek to monopolize political power.
But the party coalition has shrunk over the last decade as Democrats traded breadth of public support for youthful intensity and ideological zeal. By tailoring their governing agenda mainly to the specifications of liberal-left college grads, they have alienated voters without degrees and made themselves uncompetitive in a growing number of states.
How does a failing party turn itself around? By owning its mistakes and dramatically changing course.
Read more in The Hill.
Stablecoins Will Lessen Community Lending
After the recent passage of the GENIUS Act, stablecoins — digital assets used for transactions and pegged to the value of the dollar — are expected to become a more common financial tool. The stablecoin market has grown from about $12 million in 2020 to just over $250 billion today.[1] After the Genius Act, JP Morgan projects that it could hit $500 to $750 billion in the next few years.[2]
The law includes many guardrails on stablecoins, with the non-ironic intention of protecting the stability of today’s financial structure. One important issue is whether deposits will flow out of existing banks into stablecoins. That could have significant consequences, including fewer community lending obligations and less credit and investment for small businesses, farmers, and homeowners across the country.
In August, the GENIUS Act became the first major U.S. law focused on the regulation of “payment stablecoins.” The bill is designed to enhance consumer protection, promote innovation, create confidence in the stablecoin marketplace, and protect the financial system.
Payment stablecoins have the following characteristics:
- Means of Payment/Settlement: Its primary purpose is to function as a medium of exchange for settling transactions.
- Stable Value: The issuer is obligated to convert, redeem, or repurchase the stablecoin for a fixed amount of monetary value (e.g., U.S. dollar).
- Reserve Requirements: Issuers are typically required to maintain reserves backing outstanding payment stablecoins on at least a 1:1 basis. Stablecoins can also be pegged to other international currencies, such as the Euro, the Yen, or the Yuan.
In addition to the above, payment stablecoins are prohibited from paying interest/yield solely for holding or using the coins or tokens. There are a number of rationales for this ban.
First, payment stablecoins are by law not securities, commodities, or traditional deposits, and as such face far lighter regulation. If they were allowed to accrue interest, they would more closely resemble the above, but without the financial regulation that protects consumers and the broader financial system. For example, deposit accounts at banks are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC), while stablecoins are not. This means that if used by customers to store their savings, those customers would not be insured against loss should the stablecoin issuer go bankrupt or default.
Second, policymakers were concerned about oversaturation of supply. There is already considerable competition in the depository marketplace — almost 9,000 banks and credit unions are currently in operation in the U.S. In recent years, that number has declined significantly due to consolidation and, in part, because of a decline in demand. The growing number of nonbank financial institutions has also diminished the demand for insured depository institutions.
Third, the authors of the law wanted to prevent financial instability and the outflow of deposits from insured depository institutions that are more highly regulated and an essential source of lending to communities, small businesses, and homeowners. Technology that allows consumers to bypass banks — otherwise known as disintermediation — could threaten lending to key business sectors that, in turn, could hurt economic growth and innovation.
Yet despite efforts to protect commercial banks and credit unions from the significantly less regulated stablecoin sector, it is not difficult for crypto companies and others to skirt around the prohibition.
For example, some companies, like Coinbase, are exploring ways to offer rewards to stablecoin holders, emphasizing that such rewards are not technically “interest” and are offered for reasons other than merely holding the stablecoin itself. The company already offers a 4.10% reward rate for customers who hold the popular stablecoin USD Coin, also known as USDC. The coin’s issuer, Circle, shares interest revenue from the assets that back USDC with Coinbase. Because of the potential to circumvent the new law, a significant amount of the $18.5 trillion in deposits at U.S. banks and credit unions could flow out of insured depository institutions and into payment stablecoins. A Treasury report from April 2025 estimates that roughly $6.6 trillion in deposit outflows could occur with higher usage of stablecoins (particularly if issuers could offer yields similar to bank accounts), representing a 36% decrease in the total amount of bank deposits.[3]
This level of outflows would be incredibly challenging for banks to weather. Traditional FDIC-insured depository institutions would be forced to compete for an increasingly scarcer amount of funds. This chasing of deposits would be potentially good for depositors in the short term, as banks would be forced to offer higher yields on savings and checking accounts. But over time, this would lead to considerable consolidation within the industry as banks either merge or declare bankruptcy — with smaller community banks likely bearing the brunt of the impact.
This, in turn, would undermine an important source of economic dynamism: community lending. Community banks use deposits to originate approximately 60% of all small business loans and 80% of agricultural loans nationally. The decline in the number of small banks, more scarce deposits, and reduced competition amongst credit providers will all lead to less credit for households, local businesses, and farmers. In many areas, less lending will lead to fewer jobs. For example, small businesses are important employers in rural areas, employing 62% of all workers.[4]
This impact will be especially acute in rural and low-income areas with few credit options, since an outflow in deposits will hinder lending for the Community Reinvestment Act (CRA). Under the CRA, banks are encouraged to meet the credit and community development needs of their entire communities, especially low- and moderate-income (LMI) neighborhoods. Banks are evaluated on their performance in providing loans, investments, and services to these communities, and these evaluations are used when they apply for mergers or other changes to their deposit facilities.
Especially since the Clinton administration’s 1995 reforms to the law, CRA has dramatically increased lending, investment, and basic banking services to underserved communities. The evidence shows that the changes made to CRA coincided with a rise from $1.6 billion in 1990 annual commitments to $103 billion in 1999. Over that roughly same period, the number of CRA-eligible home purchase loans originated by CRA lenders and their affiliates rose from 462,000 to 1.3 million.
Today, CRA continues to benefit communities around the nation. For example, there have been nearly $5 trillion in CRA-qualifying mortgages and small business loans made from 2010 to 2024, according to an analysis by the National Community Reinvestment Coalition. In 2023 alone, CRA lending accounted for roughly $387 billion in small business and community development loans.[5] Furthermore, this is a substantial portion of all lending that depository institutions do in these areas, accounting for nearly 77% of outstanding small business loan dollars and 35% of outstanding farm loans.
Yet unlike deposits at banks, stablecoins have no community lending obligations. While it is not certain exactly how much damage a one-third decline in deposit levels would do to CRA’s vital source of credit, history does give us a reason for concern. At the end of 1980, money market mutual fund assets were only about $135 billion. Today, that number is closer to $5 trillion, making it second only to banks among financial intermediaries. The main advantage mutual funds had in the early years was the industry’s ability to offer higher interest rates than banks because of regulatory limits on insured depository institutions. This led to explosive growth throughout the decade and a substantial level of deposits shifting from banks and thrifts into money market mutual funds, weakening these institutions and undermining the goals of CRA. While successful reforms in the 1990s helped soften the impact, the underlying shift in deposits nevertheless cut the amount of funds available for investment in underserved communities.
CONCLUSION
To ensure financial stability, policymakers have a responsibility to ensure that the GENIUS Act’s prohibition on interest-bearing stablecoins is effective. The delineation between payment stablecoins and stablecoins that would offer interest was carefully thought out and was placed into the law for a reason — to protect large outflows of deposits from insured depository institutions that are the backbone of lending to small businesses and homeowners. The Federal Reserve and other regulators should proceed cautiously as they develop regulations to implement the GENIUS Act, heeding Congress’s mandate to balance the innovation and efficiency gains that stablecoins offer with protecting deposits and the critical lending they enable. Finally, Congress may want to revisit and enact legislation that closes any loopholes created by the GENIUS Act that would undermine insured depository institutions and the communities they serve.
[1] Rafael Nam, “Why There’s So Much Excitement Around a Cryptocurrency Called Stablecoin,” National Public Radio, July 15, 2025, https://www.npr.org/2025/07/15/nx-s1-5467380/crypto-stablecoin-genius-act-congress
[2] “What to Know About Stablecoins,” JP Morgan, September 4, 2025, https://www.jpmorgan.com/insights/global-research/currencies/stablecoins.
[3] Dylan Toker and Gina Heeb, “Why Banks Are on High Alert About Stablecoins,” Wall Street Journal, July 18, 2025, https://www.wsj.com/finance/currencies/why-banks-are-on-high-alert-about-stablecoins-2f308aa0?mod=Searchresults&pos=2&page=1.
[4] Michelle Kumar and Justice Antonioli, “Small Businesses Matter: Increasing Small Business Access to Capital in the Digital Age,” Bipartisan Policy Center, April 29, 2024, https://bipartisanpolicy.org/report/small-businesses-matter-capital-access/.
[5] “Findings from Analysis of Nationwide Summary Statistics for 2023 Community Reinvestment Act Data Fact Sheet,” Federal Deposit Insurance Corporation, 2023, https://www.fdic.gov/findings-analysis-nationwide-summary-statistics-2023-community-reinvestment-act-data-fact-sheet.
Amazon, Alphabet, Meta, and Microsoft Lead $403 Billion Surge in U.S. Investment, PPI Finds
WASHINGTON — Today, the Progressive Policy Institute (PPI) released its annual Investment Heroes report, “Investment Heroes 2025: The Shape of the AI-Enabled Economy,” revealing a sharp rise in domestic capital investment by large U.S. companies, led by a wave of AI-driven spending. The top 25 firms invested an estimated $403 billion in the U.S. economy in 2024 — an increase of 23% over the previous year — outpacing the 5.3% growth in overall nonresidential investment.
Amazon tops the Investment Heroes 2025 list for the sixth consecutive year with $63.6 billion in U.S. capital expenditures, followed by Alphabet ($41.1 billion), Meta ($36.1 billion), and Microsoft ($26.5 billion). These four tech giants alone accounted for $167 billion in domestic investment, up nearly 66% from 2023.
“The AI-enabled economy is reshaping corporate investment priorities,” said Dr. Michael Mandel, PPI’s chief economist and co-author of the report. “This year’s Investment Heroes reflect a fundamental shift, with leading firms building out the physical and digital infrastructure needed to power next-generation AI.”
The report identifies four key investment trends defining the AI-enabled economy:
- Tech leaders are massively expanding data centers and purchasing AI-supporting hardware.
- Broadband providers AT&T, Verizon, Comcast, and Charter invested $65 billion in 2024, maintaining strong capital spending on their fixed and wireless broadband networks and providing the connective tissue of the AI-enabled economy.
- Power utilities are scaling up future capital spending plans to meet the rising energy needs of data-intensive applications.
- Manufacturers are cautiously increasing domestic investment amid policy uncertainty, including new tariffs.
“AI adoption is not just a software story; it is also an investment story,” said Andrew Fung, co-author and senior economic and tech policy analyst at PPI. “Companies are putting real money into hard assets that anchor AI growth here in the United States.”
The report also notes that capital expenditures by big tech firms reached an annualized rate of $360 billion in the first half of 2025, marking a 73% jump year-over-year.
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 O’Keefe – iokeefe@ppionline.org