Category: Uncategorized
GOP’s “Big Beautiful Bill” Would Undermine Economic Stability
Much has been written about the great harm Republicans’ “One Big Beautiful Bill” (OBBB) would do to the federal government’s finances and the financial well-being of low-income Americans. But less appreciated is how adding trillions of dollars to the deficit during a time of high price pressures, and making major cuts to safety-net programs that help cushion the economy during downturns, would undermine economic stability.
When the country enters a recession and demand from the private sector drops, deficit-financed spending is an essential tool governments use to help fill the void and restore the economy to full strength. Conversely, policymakers should rein in deficits to prevent inflation and restore the country’s fiscal reserve when the economy has recovered. Last year, the economy grew at a healthy 2.4% annual rate. Although President Trump’s counterproductive trade policies have threatened to reverse this trend, the nation’s unemployment rate has so far remained stable around 4.2% — a historically low level. Meanwhile, the inflation rate remains stubbornly above the Federal Reserve’s 2% target after years of rising prices. Normally, this would be the perfect time for Congress to cut deficits, clamp down on inflationary pressures, and put debt on a sustainable path.
But despite campaigning against the fiscal excesses and inflationary policies of the Biden administration, Republicans’ OBBB pours fuel on the fire by pumping trillions of dollars into the economy when they’re not needed. In addition to extending the already-unaffordable tax cuts passed in President Trump’s first term, this bill tacks on expensive new provisions such as eliminating taxes on overtime and tips. Moreover, many of these provisions are temporary, supercharging the short-term impact on our deficit at precisely the time when our nation needs the opposite: nearly three-fourths of the House bill’s roughly $3 trillion deficit increase would occur in just the first four years after passage.
Yet in addition to sabotaging the government’s ability to fight inflation now, OBBB would also make it more difficult for the government to fight future economic downturns. Pointlessly piling on debt now can make it harder for the government to borrow more during a recession when it’s actually needed. And some of the few policies Republicans have included to reduce the cost of the bill would undermine programs that are most helpful in supporting the economy through those recessions, such as the Supplemental Nutrition Assistance Program (SNAP).
SNAP is a strong “automatic stabilizer” because spending on benefits increases automatically when the U.S. economy slips into recession, as falling incomes cause more people to become eligible for support. An integral feature of SNAP is that administrators may also waive the program’s work requirements when an area “does not have a sufficient number of jobs,” which often occurs during a recession. Under federal rules, various geographic areas can demonstrate their eligibility for these waivers through several criteria, including averages of unemployment rates, eligibility for special unemployment benefits, and more, ensuring that benefits are not stalled when needed the most.
OBBB removes this flexibility. States would only be able to request waivers for counties, while the only acceptable metric to prove a weak labor market would be an unemployment rate above 10%. For context: During the worst of the Great Recession, the national unemployment rate only hit 10% in a single month, while 40% of counties never reached that threshold at all. In addition, the House bill includes new cost-sharing requirements for states, which would require states to pay up to 25% of SNAP’s cost depending on the state’s payment error rate (the Senate has proposed limiting cost-sharing to 15% in its version of the bill).
Although reducing improper payments is certainly an admirable goal, this legislation undermines that effort by cutting federal support for SNAP administrative costs. And taken together, OBBB’s changes would be especially detrimental during recessions. Because most states are legally not permitted to run budget deficits, they are forced to make painful budget cuts when revenues fall during downturns. At the same time, payment error rates for SNAP and other similar programs tend to rise as states scramble to process a new wave of applications. Thus, the GOP cost-sharing requirements would force states to shoulder a growing share of SNAP costs when they can least afford it, likely leading to spending cuts that prolong recessions.
Republicans might claim that these fears are overblown because Congress is free to change SNAP’s waiver and cost-sharing requirements during a crisis (as it has done in the past). However, requiring Congress to pass legislation to unlock SNAP leaves the program vulnerable to political gridlock, and undermines its ability to automatically stabilize the economy. Moreover, if these requirements are suspended during future recessions, they will fail to generate the savings that Republicans claim will pay for their costly tax cut and make the bill’s deficit impact that much worse. By piling on debt during a time of high prices and low unemployment, while making it needlessly more difficult to fight future downturns when the situation is reversed, OBBB undercuts any argument one could make that Republicans are the party of fiscal responsibility and stable economic growth.
Deeper Dive:
- Proposed SNAP Cuts Would Permanently Undermine Recession Readiness and Responsiveness, by the Brookings Institution
- Potential Effects on the Supplemental Nutrition Assistance Program of Reconciliation Recommendations Pursuant to H. Con. Res. 14, as Ordered Reported by the House Committee on Agriculture on May 12, 2025, by the Congressional Budget Office
- Trump’s Bill Slashes the Safety Net That Many Republican Voters Rely On, by the New York Times
- Senate Referee Appears Open to Revised GOP Proposal to Cut Federal Food Assistance Spending, by The Hill
Fiscal Fact:
The tax portion of the Senate’s reconciliation plan would cost $4.2 trillion over 10 years — roughly $500 billion more than the House’s legislation. However, if all the tax policies in both bills were made permanent, the Senate version would cost $400 billion less than the House bill (which would cost $5.2 trillion over 10 years). Importantly, the Senate bill’s price tag is expected to grow once Senate Republicans reach a deal to increase the cap on the state and local tax deduction, and none of these cost estimates include additional interest on the debt that the legislation would rack up.
Other Fiscal News:
- A Running List of Policies Rejected From the Republican Megabill, by The New York Times
- Republicans Rebel Against Messy and Uncertain Tax-Bill Play, by Semafor
- Senate GOP Dealt Major Blow on Medicaid Cuts in Megabill, by Politico
- Trump Considers Naming Next Fed Chair Early in Bid to Undermine Powell, by the Wall Street Journal
- House GOP Passes First Funding Bill of Fiscal 2026, by The Hill
More from PPI and the Center for Funding America’s Future:
- “Trump Accounts” Are a Promising Start, But Flaws Remain, by Alex Kilander
- The High Cost of Republican Medicaid “Savings,” by Alix Ware
- The Case for a Targeted AI Moratorium, by Andrew Fung
- Senate Changes to House Reconciliation Bill Are a Mixed Bag, by Ben Ritz and Nate Morris
- It’s The Early 1990s Bond Market Again, by Paul Weinstein Jr.
- 80% of American Hourly-Wage Workers are in ‘Services,’ by Ed Gresser
“Trump Accounts” Are a Promising Start, But Flaws Remain
Although Republicans’ “One Big Beautiful Bill” (OBBB) remains deeply problematic as a package, one of its few positive provisions would create individual savings accounts for American children with many similarities to a policy proposed by PPI earlier this year. Currently known as “Trump Accounts,” these investment vehicles would provide every child born between 2025 and 2028 with a tax-deferred account and an initial $1,000 seed contribution from the federal Treasury. The proposal is a surprisingly good first step towards helping America’s youth build wealth and access opportunity, but it needs improvements to fully achieve its policy goals.
Children born into low-wealth families typically start life at a significant disadvantage, lacking both financial resources and access to other tools that promote long-term economic security. Meanwhile, their high-income peers can often rely on family to get ahead — helping them to pay for college, buy a home, or make lucrative professional connections. Proposals to establish investment accounts for children aim to address this gap by giving every child a foundation on which to build a more stable financial future.
Trump Accounts would make some limited progress towards this goal due to several good design features. First, the program is nearly universal: nearly all American children born between 2025 and 2028 would be eligible to receive a one-time $1,000 contribution into a tax-deferred investment account, which reduces the administrative hurdles of more complex eligibility criteria. The accounts would be invested into broad index funds, which avoids both the risk of speculative investments and the limitations of investing only in government bonds. Limiting withdrawals before age 30 to activities such as higher education, homeownership, or starting a business encourages beneficiaries to use funds for building wealth or expanding economic opportunities. Lastly, by subjecting qualified withdrawals to capital gains taxes — which only apply to individuals who have annual incomes over $63,000 and couples who earn twice that amount — policymakers prevent these accounts from becoming a regressive tax shelter that primarily benefits wealthy families.
But while they are a credible start, Trump Accounts fall short in several critical ways. Although the accounts provide an initial government contribution to all children, they offer no mechanism to supplement savings for low-income families, who are the least likely to have additional funds to contribute to the account. Therefore, it provides the same amount of support to low-income children, who need it the most, as it does to wealthy children, who don’t need it at all. Furthermore, the accounts lack any material support to help account holders build financial literacy and other skills needed to grow modest account balances into long-term wealth.
Perhaps the biggest flaw is that there is very little reason under current law for families to put additional contributions into Trump Accounts, given the existence of other savings accounts with greater tax advantages. For example, 529 plans are savings accounts that offer generous contribution limits and completely tax-free growth if withdrawals are used for education. Trump accounts, on the other hand, only delay taxes on the sale of assets until money is withdrawn from the account. As long as families can contribute to 529s, there is no incentive to use or save with the relatively less tax-advantaged Trump accounts.
These flaws could all be mitigated by incorporating more elements of the Child Opportunity Accounts (COAs) previously proposed by PPI. Like Trump Accounts, COAs would start with a seed contribution at birth, but go further by providing ongoing, income-based contributions throughout a child’s life. By the time they reach adulthood, a low-income child would have tens of thousands of dollars saved in their account — compared to just a few thousand in a Trump Account.
COAs also incorporate financial education directly into the account structure to help beneficiaries get the most bang for their buck. Account portals would include information on investing, budgeting, and other financial management topics to help owners build up their knowledge of basic concepts. Before beneficiaries can access funds at younger ages, they would be required to complete a basic financial literacy assessment. This simple requirement ensures that young adults have the tools they need to not just wisely use their account savings, but also grow them over time.
Policymakers could both offset the cost of additional supplemental contributions (or other provisions of OBBB) and make the accounts more useful by phasing out the use of 529 plans, which PPI proposed in a comprehensive budget blueprint last year. Because the taxes from which 529 accounts are exempt only apply to higher-income households, and because the highest-income households would pay a higher rate, the tax benefit of 529s is quite regressive: more than 70% of tax benefits go to households in the top 7% of the income distribution. By removing them as an option and using the savings to improve Trump accounts, policymakers can shift federal subsidies away from high-income households and toward those who truly need them.
If the goal is to give every child a fair shot at building a secure financial future, we need policies that not just account for the different resources they need, but also give them the skills and knowledge essential for a successful financial future. As Senate Republicans grapple with their bill’s astronomical cost and regressivity, incorporating these elements of PPI’s previous proposals would be a small, positive step to improve their bill and redirect federal resources to those who need them most.
New PPI Report Finds GOP’s Medicaid Cuts Reckless and Wasteful
WASHINGTON — As President Trump’s “Big Beautiful Bill” moves through Congress, one section included in the legislation will not only skyrocket the cost of living for many working-class Americans, but will also impact how they receive critical care. As part of the One Big Beautiful Bill Act, Congressional Republicans are presenting an $880 billion cut to Medicaid that will kick more than 8.6 million Americans off the program and slash critical health care funding in the communities that need it most.
In a new report for the Progressive Policy Institute (PPI), Alix Ware, Director of Health Care Policy, argues that the proposed Medicaid cuts harm working Americans trying to make ends meet, force rural and underresourced hospitals to close, and push more people to rely on emergency rooms for routine care. Titled “The High Cost of Republican Medicaid ‘Savings,’” Ware’s research dives into how the GOP cuts don’t actually save Americans money or make the program more efficient, instead excluding people from getting the necessary health care they need to survive.
“These cuts aren’t about efficiency — they’re about shifting costs onto working families while giving the wealthiest Americans a tax break,” said Ware. “The bill adds bureaucracy, guts coverage, and penalizes states for innovation, all under the false promise of ‘savings.’”
Key takeaways from the report include how, in its current form, the One Big Beautiful Bill Act:
- Removes 8.6 million Americans from Medicaid;
- Threatens the stability of hospitals in rural or underserved communities, many which will have to close or reduce hours;
- Creates harmful work requirements for many recipients who already meet the requirements to be eligible for the program;
- Forces Americans to go to emergency rooms for routine visits that cost more money and make hospitals more inefficient, or forgo medical treatment altogether;
- Eliminates state Medicaid expansion programs that have saved millions; and
- Reduces access to preventative care as red tape makes it difficult to schedule the necessary appointments to get the help they need before it’s too late
Ware argues that instead of pursuing reckless cuts that restrict Medicaid coverage for those who need it most, Congress should focus on improving the program’s efficiency by eliminating unnecessary red tape — such as work requirements that most recipients already meet — and streamlining paperwork to save both time and money. States, Ware says, have been at the forefront of Medicaid innovation, like Oregon and Maryland, where pragmatic legislators have controlled care costs and made it easier for people to access affordable care — reducing the need for costly emergency room visits for routine health issues.
“The U.S. health system is a complicated mess,” said Ware. “Instead of restricting health care for people who cannot afford it, lawmakers from both parties should seek bipartisan consensus on provisions that reduce inefficiencies while increasing access to coordinated and comprehensive care like Coordinated Care Organizations that reduce emergency room visits, and the Total Cost of Care Model that lowered costs and improved the quality of care.”
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
The High Cost of Republican Medicaid “Savings”
Congressional Republicans are disingenuously presenting their $880 billion Medicaid cut in the budget reconciliation bill as an enormous savings to Americans. But this cut in federal health care spending will have very different repercussions for all Americans, regardless of whether they have Medicaid, Medicare, or private insurance.
The GOP’s “one, big, beautiful bill” will kick 8.6 million Americans off Medicaid, leaving them no recourse but to forgo medical treatment or go to hospital emergency rooms — absolutely the most expensive way to deliver care in America. We know from experience that most will choose the emergency room if they have no insurance.
The Republican plan will also reduce access to health care when hospitals close, and worse health outcomes when people delay care. The National Rural Health Association warns that “drastic cuts…will force many rural facilities to reduce or cut service lines or close their doors entirely, impacting access to care for everyone who lives in the community.” If fewer people seek medical help in the early stages of an illness or injury for even a short period, diminished patient flows will put safety net hospitals at risk for closing. If these facilities close, many Americans, particularly in rural parts of the country that voted heavily for President Trump, will be harmed.
Some House Republicans were so concerned with the threat to “the viability of hospitals, nursing homes, and safety-net providers nationwide,” they sent a letter to House Republican leadership. The letter acknowledged, “Many hospitals — particularly in rural and underserved areas — rely heavily on Medicaid funding, with some receiving over half their revenue from the program alone. Providers in these areas are especially at risk of closure, with many unable to recover.” Despite these dire concerns, Trump demanded their compliance, and eventually they capitulated.
The U.S. is already an outlier compared to similarly wealthy countries, spending nearly double per capita on health expenditures than the average of other similar countries. Switzerland is the closest in per capita spending at $9,688 compared to the $13,432 the U.S. spends. The U.S. spends a larger percentage of its GDP on health expenditures as well. Despite spending so much more, the U.S. has lower life expectancy, higher age-adjusted mortality rate, and a higher premature death rate. In the U.S., 26.8 patients out of every 100 patients skip a medical appointment due to cost, compared to an average of 7.0 in comparable countries. It is unacceptable for the U.S. to be falling this far behind. Congress needs to address this gap, but kicking millions off of Medicaid is not the way to do it.
Instead of reforming the system to reduce inefficiencies and drive down costs, Republicans are imposing changes that will force the middle and working classes to pay more. Health care, a necessity that already eats up too much of the average working family’s income, is therefore slated to become even more expensive — all so the rich can enjoy a tax cut.
Read the full report.
Jacoby for Washington Monthly: At NATO Summit, Allies Avoid Tensions with Trump
The young European officials and defense experts gathered for an informal dinner at an international conference in Europe earlier this month were caustic and unequivocal. “NATO is dead,” one member of parliament from a Central European country declared bluntly. “Why are we bothering to keep up the pretense?”
Others at the table nodded in agreement—no discussion needed. Whether or not Donald Trump someday makes good on his threat to pull out of the alliance, he has already rendered it all but toothless by suggesting, again and again, that he might not defend a NATO member under attack. For skeptical Europeans like the young officials at dinner, it’s a terrifying moment, leaving a largely defenseless Europe to face an aggressive, revanchist Russia. “We should stop wasting energy on NATO,” another parliamentarian, from a second country, agreed. “We need to focus on building an alternative.”
This week, there was none of that skepticism at the annual NATO summit in The Hague. Trump cast a shadow over the meeting even before he arrived, once again raising doubts about his willingness to defend Europe and comply with Article 5 of the NATO charter, stipulating that an attack on one is an attack on all. “Depends on your definition,” Trump told reporters on Air Force One. “There are numerous definitions of Article 5.” The only time Article 5 has been invoked in the past was when allies rushed to help prosecute the war in Afghanistan after 9/11.
AI and the Future of Local News
In the face of prevailing industry headwinds, many local news outlets around the country have shuttered. Their continued overreliance on an advertising-based revenue model, a vestige of the pre-internet times, leaves them vulnerable to further decline. Just in the last year, 130 more newspapers folded — a rate of two and a half a week — leading to a total loss of over 7,000 newsroom jobs. At the same time, others who took note of changing consumer preferences for the digital over print format saw a net increase of 105 outlets. To not just survive, but thrive in today’s fast-moving news media landscape, where consumers lean towards new formats such as short-form video, local outlets must embrace a tech-forward attitude. This means adopting the newest tools on the block, including AI, that advance newsroom productivity and capacity for producing high-quality, public interest journalism.
Building networks of trust among communities and sustaining vibrant information ecosystems are non-negotiables for healthy democracies. When local news deserts proliferate, communities experience diminished civic engagement: lower voter turnout, fewer contested races, and poorer public participation. It’s no secret either that the loss of reliable sources of information exacerbates urban-rural polarization. National news media rarely covers localities, and even less so when they are located in rural areas. Simultaneously, the most prolific outlets are also often the least attuned to the situation on the ground in most of working America, undermining valuable discourse in overlooked communities.
Reversing these trends requires an honest reckoning with the multi-faceted challenges that local newsrooms face. Their tenuous fiscal situations leave them under-resourced on several fronts. Local reporters must juggle multiple beats at a time, covering city council hearings, school board meetings, and small business openings, all the while performing serious investigative work. This workload makes devoting the requisite attention to unearthing and covering scoops well extremely difficult. Understaffing also inhibits other critical newsroom functions, such as fact-checking, translating, and distributing published stories. Without these supporting activities, local news risks its journalistic credibility and loses reach into communities. The shift to digital further exposes key skill deficiencies in local newsrooms, namely expertise in audience analytics and web design, that inhibit their ability to cater to relevant audiences. That’s especially important at a time when more young people are turning to social media for information that was once the bread and butter of a local newsroom — restaurant recommendations, classifieds, community events, and sporting fixtures.
Given the status quo, local newsrooms should welcome artificial intelligence as a tool for increasing high-quality coverage. AI holds enormous potential for local outlets because it excels at many functions that newsrooms currently lack due to budget cuts. For one, AI thrives when tasked with pattern recognition, which is highly useful for investigations that require journalists to process large datasets, such as troves of municipal documents. Another area of strength is AI’s aptitude for automating already standardized tasks like translation. For local outlets that serve multilingual audiences, accessible translations may meaningfully increase public engagement with existing coverage.
AI may also help newsrooms scale their digital presence to better deliver content in the format that most audiences now prefer, including generating audio and video versions, summaries, and visual explainers. When local news media are able to engage well with their audiences online, their reach significantly expands. AI can help local newsrooms level the playing field in the face of upstart new competitors (like news creators on Instagram), and the larger hedge fund-owned conglomerates (who can invest in digital expertise and apportion the cost across multiple mastheads).
Indeed, it’s clear that newsroom productivity and the development of new capabilities are critical issues given new competitive dynamics and shifting consumer expectations. Consumers have a preference for new formats, as shown by the rise of TikTok as a source of news and the continuing long-term decline in consumers’ use of publisher-owned and operated platforms (e.g., websites and apps) in favor of social media.
At the same time, due to staffing shortages, local reporters have a lot more on their plates than in the past. For example, local reporters covered an average of 3.8 different levels of government in 2000 (e.g., cities, counties, school boards, special districts, townships), which increased to 10 different levels of government in 2020. When they are already spread so thin, building trustworthy sourcing, chasing new leads, parsing through troves of documents, or otherwise pursuing time-consuming investigations becomes a near impossibility.
With the acknowledgement that local newsrooms are under-resourced, AI can play a crucial role in expanding their investigative capacity. Tools like LocalLens, an AI-powered application launched in 2023 that automatically transcribes and summarizes local government meetings, allow journalists to cast their net far and wide for potential story ideas. LocalLens has also helped reporters connect with sources, such as student speakers at school board meetings, whom they might not have found on their own. Another example is the Associated Press’ 2024 launch of LocalLede, which uncovers relevant regulations from over 430 federal agencies for local jurisdictions. LocalLede can serve as a useful starting point for writing stories, flagging new federal announcements like changes to Earned Income Tax Credit (EITC) thresholds. Other AI tools have further enriched investigative journalism, helping reporters process large amounts of public records, including campaign finance disclosures, civil complaints, and municipal budgets.
AI tools also streamline repetitive tasks, allowing local news outlets to redirect limited resources to where they are needed most. Their pervasiveness in copy editing at major publications, for fact-checking and grammar and style corrections, should serve as a model for local newsrooms that still perform these tasks by hand. Natural language-processing-based services like Otter.ai save reporters countless hours whenever they need written transcriptions after conducting interviews. AI has also shown promise in automating translation work. When wildfires swept across Los Angeles in January 2025, the Boyle Heights Beat used a beta version of English-to-Spanish translation GPT to make their coverage and social media updates available to Spanish-speaking members of the community.
For local newsrooms falling behind in their digital offerings due to the lack of technical expertise on staff, AI provides a means to catch up with larger counterparts. THE CITY, a non-profit outlet that covers all boroughs of New York City, currently offers AskNellie, an AI assistant that answers readers’ questions ranging from rent regulations to upcoming elections by connecting them with previous coverage. In 2024, the publication previously used artificial intelligence to create an online map of its areas of coverage, which provided transparency to audiences about whether or not they were sufficiently documenting underserved communities. ARLNow, a local Northern Virginia outlet, increased online engagement through publishing an automated daily newsletter, which they lacked the staff to compile before using AI to do so.
While artificial intelligence has the potential to significantly improve local news media, it is important to approach its rollout with prudence. Failing to think through the specifics of applying AI to specific use cases will result in conspicuous misfires. For example, shortly after launching AI-authored high school sports coverage at several of its local news outlets, including the Columbus Dispatch in 2023, newspaper conglomerate Gannett pulled the project due to widespread backlash from readers for poor quality post-game summaries. Also in 2023, at CNET, editors had to issue numerous corrections to financial advice articles written by AI that contained obvious factual errors. Sports Illustrated showed poor judgment in November 2023 when the publication added fake journalist names and profiles to AI-generated content. When used judiciously, AI is a valuable tool for revitalizing local outlets, bringing them into the modern news media landscape, but it cannot be applied as a blanket solution without thoughtful consideration.
Ultimately, local news must keep up with the times. Embracing AI enables local outlets to make the most out of their limited resources — continuing to produce high-quality investigations, reach larger audiences, and put out competitive digital offerings. While local newsrooms may not completely reverse their decline anytime soon, adopting a tech-forward attitude will at least help them take steps in the right direction, ensuring that they can serve as more robust informational backbones for local communities who rely on their coverage.
80% of American hourly-wage workers are in ‘services’
FACT: 65 million of America’s 80 million hourly-wage workers are in “services.”
THE NUMBERS: Americans at work, 2024* –
| 2024 | Change 2018/2024 | |
| Total employed | 161.35 million | +5.59 million |
| Salaried and other non-wage workers | 81.00 million | +6.51 million |
| Hourly-wage workers | 80.35 million | -0.92 million |
| … hourly-wage in health | 12.90 million | +0.54 million |
| … hourly-wage in retail | 10.86 million | -0.44 million |
| … hourly-wage in manufacturing | 8.45 million | -0.96 million |
| … hourly-wage in restaurants | 7.26 million | -0.07 million |
| … hourly-wage in construction | 5.62 million | +0.12 million |
* Bureau of Labor Statistics, Current Population Survey.
WHAT THEY MEAN:
The paradox at the core of the Trump administration’s tariff decrees: for American working life to improve, they argue, working-class living standards must fall. (Three TVs are too many for a working family, two dolls per girl should be enough, no price would be too high for locally-made toasters, etc.) Put more sympathetically, the administration’s claim is that while tariffs raise prices for families, they will offset this by shifting workers out of their current jobs into factories.
This may or may not be what workers actually want — as PPI President Will Marshall noted last week, polling suggests workers look more to tech industries than factories for next-generation jobs. Either way, seven years of experience with Mr. Trump’s first-term tariffs (imposed from early 2018 to late 2019), and several months’ experience with this spring’s larger decrees, provide some evidence as to whether tariffs actually do this. Two definitions, then the data from the Bureau of Labor Statistics:
Working Americans: According to the BLS, 161.4 million Americans were employed last year. Half of them, 80.35 million, earned their income in hourly wages. (As opposed to annual salaries, executive profit-sharing arrangements, investments, professional fees, etc..) About 80% of hourly-wage Americans — 65 million of the 80.35 million— work in “services” jobs: waiting tables, stocking grocery shelves, replacing brake-pads, trimming hair, cleaning halls, and running hospital admissions desks. The other 20%, 15.3 million people, are in “industrial” or “goods-producing” work in factories, farms, construction sites, mines, and logging and fishing jobs. Here’s a rundown with some more detail:
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* “Other services” is a miscellaneous BLS category including personal care work such as hair salons and beauty parlors, repair shops, dry-cleaning and laundry, funeral homes, non-profits, and others.
Tariffs: Tariffs are taxes on purchases of goods (whether consumer products, raw materials, or industrial inputs) from a foreign supplier. Their effects on goods-producing industries and their employees are complex: they give some manufacturers, mining companies, and farmers “protection” from foreign competition, harm others by raising production costs and diminishing exports, and give many a confusing mix of both things. But for workers in the services industries — again, seven eight hourly-wage workers in every eight — tariffs just mean higher prices.
If the administration is right, new opportunities in factory jobs might offset some of their losses. But since there are so many more workers in services than goods production, it would take lots of job-shifting for working America to gain on net. And in fact we aren’t seeing any such job shifting at all — since 2018, hourly-wage manufacturing employment has been at best flat and has more likely shrunk. Three perspectives from the BLS, on total employment, job openings, and hourly-wage jobs:
(a) Manufacturing employment been flat since 2018, and down 88,000 this year. BLS’ monthly “Employment Situation” reports found about 12.7 million manufacturing workers in 2018. This was about 1.2 million above the 11.5 million jobs at the financial-crisis low in early 2010, reflecting slow but steady growth during and just after the Obama administration. In 2024, they found 12.8 million manufacturing jobs, suggesting that job creation had slowed. The most recent report, for May 2025, is once again at 12.7 million, down 88,000 over the past year with losses concentrated in metal-using industries such as farm equipment, auto parts, and machinery.
(b) Fewer open manufacturing jobs: A second BLS survey, “Job Openings and Labor Turnover”, reported about 500,000 open factory jobs at any given time in 2023 and 2024. The precise figure for January 2025, just before Mr. Trump’s first 2025 tariff decree, was 513,000 open jobs. Since then, job openings have contracted each month, to 381,000 in May. Except for three anomalous pandemic months in early 2020, this is the smallest number of open jobs in eight years.
(c) Fewer hourly-wage manufacturing jobs, but more salaried manufacturing jobs. Within manufacturing, meanwhile, companies appear to be hiring more very high-skill employees and fewer line-type workers. BLS’ annual “Current Population Survey” (which counts differently and gets somewhat larger numbers) reports a net loss of 700,000 manufacturing jobs from 2018 to 2024, from 15.7 million to 15.0 million. Within this overall total, hourly-wage work has fallen sharply — down nearly a million, from 9.41 million to 8.45 million jobs — but salaried and other non-wage employment has grown by nearly 300,000. This suggests structural change, with factories relying relatively less on human labor, and relatively more on computers, robots, and human experts such as engineers and software professionals.
So: Lots of factors affect employment, and disentangling the effects of the post-2018 tariffs from those of business cycle fluctuations, technological change, the COVID-19 pandemic, and other things isn’t easy. But the last decade’s experience gives little credence to administration arguments that higher tariffs mean more manufacturing work. Calling the claim “fool’s gold,” Marshall has a different approach, amplified last week by an in-depth paper from PPI’s Deanna Ross and Bruno Manno on apprenticeships and skill development. That is, recognize the premium businesses of all kinds are placing on expertise, understand that college degrees shouldn’t always be needed for these jobs, and help non-college workers qualify for the higher-skill jobs (in any industry) where most hiring seems to be going on:
“[A] new national commitment to guaranteeing ‘high skills for all.’ Non-college Americans, a majority of the electorate, need a more robust alternative to college: A post-secondary system of work-study opportunities that enable young people to get in-demand skills, credentials, and work experience quickly and affordably.”
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 on workers, career paths, and better non-college opportunities:
PPI President Will Marshall on workers, job aspirations, the error in promising more factory jobs, and the right path for policy.
Out on June 12, Director of Workforce Development Policy Deanna Ross and Senior Advisor Bruno Manno on apprenticeships, alternatives to college, and opportunity for non-college workers.
And PPI’s poll of non-college Americans last year, with material on jobs, trade, politics, foreign affairs, and more.
Data:
The Bureau of Labor Statistics’ database.
… their monthly “Employment Situation” reports.
… annual summaries from the Current Population Survey.
… and the Job Openings and Labor Turnover survey, with tallies of monthly and annual job openings, hiring, layoffs, and quits.
Public opinion:
Bowling Green State University has a late-April look at opinion in Ohio, with agreements and divergences among Ohioans vis-à-vis tariffs:
“Tariffs and the U.S. as a country”: Asked about the effect of Mr. Trump’s tariffs on the United States as a whole, respondents with and without college degrees differed. Those with college degrees thought the effects negative by 55%-34%. Non-college Ohioans split more evenly: 46% thought tariffs would hurt the country, and 40% that they would help.
“Tariffs and people like me”: This gap nearly closed when the question turned to personal impact. College-educated views didn’t change much: 56% said the tariffs would “hurt” them, and 24% thought tariffs would “help,” and 20% were unsure. Non-college Ohioans were almost as pessimistic — that is, far more likely to say that tariffs would hurt them individually than that they would be bad for the country — with 48% believing tariffs would “hurt” them and only 27% “help,” while 27% weren’t sure.
Union households: Respondents in labor union households were especially negative: 62% thought the tariffs would hurt them, and only 21% thought they would help.
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 Progressive Economy 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.
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Strikes Without Competent Diplomacy Risk Open-Ended Conflict in the Middle East
Set aside the questionable legality and debatable wisdom of the air strikes ordered by President Trump this past Saturday against Iranian nuclear facilities. Ignore, for a moment, the technical prowess displayed by the U.S. military as well as Trump’s more recent attempts to force a cease-fire between Israel and Iran by shouting loudly on social media. Focus instead on the question of what, exactly, the United States hoped to accomplish with this strike — and how likely it is that the Trump administration will be able to actually attain its stated goals related to Iran’s nuclear program.
But Trump himself has repeatedly muddied the waters about what he seeks to achieve with his Iran policy in general and these strikes in particular. The strikes themselves appear to have been narrowly focused on three key Iranian nuclear facilities, and high-level administration officials like Vice President JD Vance, Secretary of Defense Pete Hegseth, and Secretary of State and acting National Security Adviser Marco Rubio, took to the Sunday talk show circuit to assert that the United States did not seek to overthrow Iran’s odious regime through military force. Later that day, however, President Trump wrote a social media post that seemingly called for regime change in order to “MAKE IRAN GREAT AGAIN.”
Taking Vance, Hegseth, and Rubio at their words and presuming limited policy objectives focused on curtailing Tehran’s nuclear program, it’s hard to see how this president and administration can actually achieve their goals. American bombs may well have severely degraded Iran’s nuclear capabilities, and it remains to be seen just how severely those capabilities have been degraded — but right now, they do not appear to have been destroyed.
Israel’s air campaign reportedly set Iran’s ability to build a nuclear bomb back just six months, while one former Trump administration official estimated that this past weekend’s American strikes “will likely set back the Iranian nuclear weapon program two to five years.” What’s more, the fate of Iran’s stockpile of near-weapons-grade highly enriched uranium — all 880 or so pounds of it — remains unaccounted for after being moved out of Tehran’s nuclear facilities ahead of anticipated American strikes. Making matters worse, the Trump administration lacks a realistic and credible diplomatic path toward any reasonable, stable endgame that serves American interests and constrains Iran’s nuclear program.
Indeed, Trump himself is the largest obstacle to such a path: he is an untrustworthy and mercurial interlocutor who constantly changes the outcomes he seeks, often overruling his own national security officials via flippant social media posts that declare policies opposed to those publicly articulated by his key advisors. As a result, it’s impossible to know what Trump really wants vis-à-vis Iran — indeed, there’s a good chance that Trump himself does not know what he wants beyond banner headlines and favorable coverage on Fox News — and therefore impossible for the United States to conduct actual diplomacy that might actually restrain (if not eliminate) Iran’s nuclear program.
Nor does it take much sympathy for Iran’s brutal regime to understand why it might not take Trump’s diplomacy all that seriously. After all, Trump tore up the 2015 nuclear agreement for no good reason in his first term and then attempted to negotiate a return to the deal once back in office. Israel launched its air campaign against the regime just before another round of talks to that end with Trump’s diplomatic envoy were scheduled to begin in Oman. He subsequently attempted to claim credit for the Israeli action before intervening in the conflict with his own set of strikes against Iranian nuclear facilities—an attack top American officials later claimed was strictly limited before Trump indulged in idle speculation about the need for regime change.
With this shifting set of goals and Trump’s ever-changing impulses, it’s difficult for Iran or any other interested party (such as the European Union or America’s Gulf partners) to put much stock in his administration’s diplomacy. Suppose the United States and Iran strike some sort of deal on Tehran’s nuclear program — what reason does Iran have to believe Trump will stick to it? A temporary accord may be possible, but such an agreement would not likely solve the problems posed by Iran’s nuclear program in any enduring way and may well be pursued by Iran as a way to open up space to recover and rebuild from the current Israeli and American air campaigns.
Put another way, the path to open-ended conflict between Iran and the United States appears much clearer than the route to a negotiated agreement that constrains Iran’s nuclear program. Think the Iraq no-fly zones of the 1990s on steroids, or a larger version of Israel’s own “campaign between the wars” in Syria during that country’s civil war. At minimum, strikes against Iranian nuclear targets every few years may be needed to keep Tehran’s nuclear program in check — and they may not do the job well enough. Trump himself likely has no real appetite for such a long-term military commitment, but that’s the course his rash decisions and poor policy choices may have set for the United States in the Middle East. We can hope that diplomacy will resume and prove successful when it comes to Iran’s nuclear program, but there’s very little reason to believe that Trump and his national security team will be able to get it right.
As America ought to have learned by now, wars — whatever their shape and intensity — are easy to start, but hard to finish.
New PPI Report Recommends Three-Year Moratorium on State-Level AI Regulation
WASHINGTON — As artificial intelligence (AI) rapidly reshapes the global economy, the Progressive Policy Institute (PPI) is calling on Congress to enact a temporary, three-year moratorium on state-level AI regulation to pave the way for a comprehensive federal framework.
In a new report, “The Case for a Targeted AI Moratorium,” Senior Economic & Technology Policy Analyst Andrew Fung argues that a patchwork of conflicting state laws risks stifling innovation, raising compliance costs, and repeating the federal failures seen in data privacy regulation.
The report details how more than 700 AI-related bills were introduced in state legislatures last year, with 26 states already enacting varied and often conflicting rules. These range from requirements for watermarking AI-generated content to limits on digital replicas and employment-related algorithms. According to Fung, this rapid and disjointed activity threatens to entrench a Balkanized regulatory landscape that increases burdens for businesses, confuses consumers, and reduces the likelihood of coherent national legislation. Fung draws a clear parallel to the U.S. experience with data privacy, where Congress’s failure to act early left Americans with inconsistent protections and companies facing billions in compliance costs.
The report arrives as Congress considers a reconciliation bill containing a provision for a 10-year moratorium on state AI laws. Fung opposes its inclusion in the reconciliation process and views that duration as excessive, but supports a shorter, strategic pause that would allow federal lawmakers time to craft thoughtful, uniform rules.
“Getting AI regulation right is essential to both U.S. competitiveness and consumer protection,” said Fung. “A short-term federal pause gives Congress breathing room to act before states lock in divergent and duplicative frameworks that would be nearly impossible to harmonize later.”
Drawing parallels to privacy regulation — where fragmented state laws derailed bipartisan federal efforts — the report highlights the dangers of legislative inertia. Already, more than 700 AI-related bills have been introduced in state legislatures, and 26 states have enacted varying rules, sowing confusion for innovators and regulators alike.
Key takeaways from the report include:
- A three-year moratorium on state AI regulation is recommended to give Congress time to develop a comprehensive federal framework.
- State-level AI laws are proliferating rapidly, with more than 700 bills introduced and 26 states enacting legislation as of Spring 2025.
- Fragmented state regulations create compliance challenges, suppress innovation, and increase the political difficulty of passing federal legislation.
- The U.S. experience with privacy regulation offers a cautionary tale: Congressional delays can entrench a patchwork of state laws that preclude national solutions.
- A short-term federal preemption can give Congress time to design a modern AI regulatory framework that balances innovation, competition, and consumer protection.
Drawing parallels to privacy regulation — where fragmented state laws derailed bipartisan federal efforts — the report highlights the dangers of legislative inertia. Already, more than 700 AI-related bills have been introduced in state legislatures, and 26 states have enacted varying rules, sowing confusion for innovators and regulators alike.
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
The Case for a Targeted AI Moratorium
INTRODUCTION
Tucked into the reconciliation “megabill” House Republicans passed last month is a provision calling for a 10-year moratorium on state-level AI regulation. The move puts federal preemption at the center of a fierce debate surrounding this evolving technology. While the Progressive Policy Institute has been highly critical of the GOP’s fiscally irresponsible bill, we hope the idea of a moratorium survives the legislative gauntlet.
PPI believes the budget reconciliation process should not be used to enact non-budget policies, such as a moratorium on state AI regulation, and is concerned that a 10-year freeze is too long. However, a shorter, three-year pause — enacted through regular order — would give Congress the opportunity to develop a comprehensive federal framework for regulating AI.
That’s in America’s national interest because with AI growing exponentially, it is essential to get regulation right. In the absence of federal action, the states are racing to enact their own
laws governing the uses of AI — hundreds of bills have been introduced on the topic in the last year alone. That could lead to a confusing mess of partial, duplicative, and conflicting rules, which could hamper AI development in the United States, while competitors for high-tech leadership, such as China, forge ahead.
A moratorium on state AI regulation is crucial because allowing states to choose their own regulatory approaches comes with high costs that harm both consumers and businesses. The recent history of privacy regulation in the United States, which resembles the trajectory of AI regulation today, holds important lessons about these costs. Much like AI today, as Congress stalled, dozens of states passed their own laws regulating privacy, each with its own approach and requirements. As this paper will explore, when Congress later attempted to pass federal privacy bills in 2022
and 2024, these efforts failed because of the proliferation of differing state laws, which made it difficult to reach a political consensus. As a result, citizens and businesses face a web of duplicative and costly state rules that still leave many Americans with no privacy protections.
The country’s experience with privacy regulation holds two important lessons for lawmakers looking to regulate AI. First, state-level regulation leads to balkanization, which directly stifles innovation and increases costs for all parties, all while leaving Americans in states without laws unprotected. Second, as Congress waits to act, the proliferation of state-level laws makes it increasingly difficult to build support for federal bills. As more states pass their own laws, legislators face mounting pressure to defend their state’s particular approach, increasing political opposition to a federal solution.
This paper will first consider the impact that AI is poised to have on the American economy and the state of AI regulation across the country today. Then, it looks back to the development of privacy legislation to examine how our previous failures can help us avoid making the same mistakes as we move to regulate AI.
Read the full report.
Ainsley for the New York Times: A Progressive Future Depends on National Identity
When Prime Minister Keir Starmer of Britain stepped before a lectern at 10 Downing Street last month, he made clear how misguided he thought the country’s immigration policies had been. He described its recent approach as a “one-nation experiment in open borders” that Britons never voted for. In its place, he announced a slew of measures to toughen border controls, raise skill requirements for immigrants and effectively end mass migration.
All this is coming from Britain’s center-left Labour Party, which long favored openness toward migrants. That reflected Labour’s modern base of urban progressive voters. Higher immigration was economically advantageous for them, in particular by holding down prices, and it was consistent with their humanitarian worldview.
The trouble is, these views tend to be at odds with the views of many working-class voters. Those less affluent voters have questioned the impact of mass migration for years, worried about its impact on housing, public services, wages and communities. The response of urban progressives in Britain, as in other parts of Europe and the United States, has often been to denounce working-class voters as narrow-minded or racist. It should hardly be surprising that voters responded by switching their political allegiances. Immigration, more than any other issue, symbolizes the wedge between center-left parties and their traditional class base.
Keep reading in The New York Times.
Ritz on SiriusXM POTUS Mornings with Tim Farley
Weinstein Jr. for Forbes: It’s The Early 1990s Bond Market Again
Three decades ago, a president squarely focused on middle-out growth realized, much to his frustration, that the best thing to do for the nation’s working class would hurt him politically — at least in the short term. The first Democrat to be elected president after Reaganomics had blown a hole in the deficit, Bill Clinton understood that high interest rates for borrowers — small businesses, home buyers, and ordinary consumers alike — were the primary barrier to broad-based prosperity. To bring those rates down in the service of more robust growth, he would have to do something voters of almost every stripe hate: pare back the federal government’s deficit by cutting spending and raising taxes.
He did exactly that, and the economic growth that followed meant Clinton left office boasting the only federal surpluses in recent history. The lessons of his success bear heavily on the political debate today in Washington because, for the first time in 30 years, the yawning gap between federal revenues and federal outlays is poised to emerge again as the prime barrier to domestic economic growth. And yet the Trump administration’s decision to put its head in the sand on this issue with its misnamed Big Beautiful Bill threatens to cut the nation’s working-class families off at the knees.
Ritz on SiriusXM POTUS: The Julie Mason Show
Ben Ritz talks on The Julie Mason Show about how the “Big Beautiful Bill” would hurt GOP constituents across the country.
Ritz on The New Liberal Podcast: Breaking Down the Big Beautiful Bill
What’s happening with Trump’s so-called Big Beautiful Bill? Jason Furman and Ben Ritz join the podcast to discuss the long run impact the bill would have, why Republicans are so comfortable blowing up the deficit, and whether the Biden administration’s mistakes are linked to the moment we’re in now.