Marshall for The Hill: Economic Populism From Both Parties Fails Working Americans

President Trump’s startling win in 2016 ushered in a new era of economic populism. Ever since, both parties have been vying to offer a new economic deal to blue-collar Americans, whose earning power had been declining for decades.

They could use a new deal. According to the Federal Reserve, real median earnings for non-college workers fell 14 percent over the past 40 years, while those for workers with a bachelor’s degree or higher have grown by 14 percent.

Opportunity in America looks very different to people on opposite sides of the diploma divide. Whereas non-college workers contend with downward mobility, the highly educated rise into tonier precincts of upper-middle-class affluence.

This disparity disfigures our society, and populists across the political spectrum are right to want to redress it. Unfortunately, they have proved better at posturing as working-class tribunes than at tangibly improving their lives.

Keep reading in The Hill.

House Republicans Pass ‘One Big Beautiful Bill’ Despite Several Big Red Flags

From our Budget Breakdown series highlighting problems in fiscal policy to inform the 2025 tax and budget debate.

This piece originally appeared in Forbes and was written by PPI’s Ben Ritz.

House Republicans passed their “One Big Beautiful Bill Act” early Thursday morning in defiance of several warnings that it would have big negative consequences for the United States: bigger budget deficits, bigger borrowing costs, and bigger regressive wealth transfers than any other partisan reconciliation bill in history.

The bill would add more than $3 trillion to budget deficits over the next decade — a figure that would swell to more than $5 trillion if the nominally temporary policies within it are made permanent, as leading Republicans have made clear they intend. The timing could hardly be worse: Just last week, Moody’s became the final major credit-rating agency to downgrade U.S. government debt. Their rationale was clear: Washington’s failure to “reverse the trend of large annual fiscal deficits and growing interest costs” has eroded confidence in America’s long-term fiscal trajectory. Since the announcement, yields on 20- and 30-year Treasury bonds even reached 5% —a threshold rarely seen over the past few decades.  

Rising yields have big consequences for the federal budget. Already, the federal government spends more on interest payments than on Defense or Medicare, making it the second-biggest line item in the budget after Social Security. If the “One Big Beautiful Bill” becomes law, interest costs over the next decade could be roughly $2.7 trillion bigger than the official scorekeepers at the Congressional Budget Office currently project. Within 30 years, not only would interest costs more than double as a share of economic output, but the national debt would grow to levels so big that CBO’s economic forecasting model could no longer function.

The effects on federal finances aren’t the only “big” problems with this bill. The bill’s main offsets come from big cuts to spending on anti-poverty programs, such as Medicaid and SNAP. Earlier this week, the Congressional Budget Office published an analysis showing the bill would increase after-tax incomes for people in the top 10% by roughly the same proportion as it would cut after-tax incomes for people in the bottom 10% —a big regressive transfer of wealth from the poorest Americans to the richest.

Read the full analysis in Forbes. 

Deeper Dive:

Fiscal Fact:

If the No Tax on Tips Act that passed the Senate this week becomes law, it could cost around $120 billion over 10 years — freeing up Republicans to enact more tax cuts for the rich of equal size in their “One Big Beautiful Bill” without paying for it. Furthermore, the bill would only provide a tax cut for the 2% of households that have a tipped job, while doing nothing for the millions of working-class families that don’t (besides saddling them with the costs). 

Other Fiscal News:

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

 

Ritz for Forbes: House Republicans Pass ‘One Big Beautiful Bill’ Despite Big Red Flags

House Republicans passed their “One Big Beautiful Bill Act” early Thursday morning in defiance of several warnings that it would have big negative consequences for the United States.

The “biggest” thing about the bill (beyond its 1,118-page length) is the more than $3 trillion that the Committee for a Responsible Federal Budget estimates it would add to budget deficits over the next decade. That figure would swell to more than $5 trillion if the nominally temporary policies within it are made permanent, as leading Republicans have made clear they intend. No matter which measurement is used, this bill would be — by far — the biggest deficit increase in a partisan bill passed through the budget reconciliation process in U.S. history.

The timing could hardly be worse. Just last week, Moody’s became the final major credit-rating agency to downgrade U.S. government debt, following similar actions by S&P in 2011 and Fitch in 2023. Their rationale was clear: Washington’s failure to “reverse the trend of large annual fiscal deficits and growing interest costs” has eroded confidence in America’s long-term fiscal trajectory and they “do not believe that material multi-year reductions in mandatory spending and deficits will result from current fiscal proposals under consideration.”

Read more in Forbes. 

Republicans Surrender the War on Cancer

As we near President Donald Trump’s July 4 goal to have his big, beautiful bill, there has been plenty of debate and pushback within the republican party regarding how to handle Medicaid and state and local tax (SALT) deductions. In stark contrast, Republicans — outside of Senator Susan Collins calling them “very troubling” — have been nearly silent regarding the president’s proposed cuts to the National Institutes of Health (NIH) and cancer research. It appears Republicans will acquiesce to the president on these cuts and, a half-century after President Richard Nixon declared a war on cancer, Republicans will surrender that war.

In 1937, the U.S. formally declared its intent to be a leader in cancer research when President Franklin D. Roosevelt signed the National Cancer Act, which created the National Cancer Institute (NCI). In the succeeding nearly 90 years, presidents and Congresses led by both Democrats and Republicans have recommitted to the promise of finding a cure for cancer. This consistent bipartisan support has created better diagnostic tools to find cancer sooner, a better understanding of how cancer metastasizes, and how to target different cancers. Since the early 1990s, the U.S. has made major strides in survival rates of cancer. In addition, the U.S. has increased access to palliative care to treat the whole person, not just the disease, and introduced concurrent care for children to ensure patients, families, and communities are supported through a cancer diagnosis. Much of these improvements in care were from U.S. innovation through partnerships between academic centers, life sciences companies, private foundations, and the federal government. The majority of the support is through funding from the NIH and NCI which has made the U.S. the international leader in funding cancer research.

Regardless of improved prognosis and better support, we are still in search of a cure for cancer so a diagnosis remains scary. The U.S. needs to continue to push forward with innovative treatments and research. However, President Trump has repeatedly committed to cutting science and innovation funding at the NIH, NCI, the Department of Health and Human Services, and the Centers for Disease Control and Prevention. This is in addition to the devastating and haphazard cuts to NIH grants by Elon Musk and DOGE. These federal cuts to cancer research have already stopped current research and will cause the U.S. to lose its place as the leader in cancer research. Where are the Congressional Republicans to push back on the cuts to NIH and NCI? Do they not realize this research helps all Americans, including them, their staff, and their constituents? Cancer does not discriminate based on political party, being a leader in cancer research is good for all Americans.

Representative Sean Casten (D-Ill.) recently spoke on the House floor about the federal cuts to research after hearing from a constituent whose son is fighting cancer. Casten was appropriately indignant when he stated: “Republicans fear Trump more than they fear cancer.” At first, this statement seems incredulous since cancer’s impact touches so many, it is hard to find an American who has not been impacted — whether experiencing it themselves, by their family, or in their community. Approximately 40% of people will be diagnosed with cancer in their lifetimes and, in 2024 alone, almost 15,000 children were diagnosed with cancer. Surely, Republicans do not fear losing their job more than cancer, right?

Although private foundations and the life science industries may increase their funding of cancer research, it will not be enough to make up for the nearly $8 billion the federal government provides. Nor will this replace the unique and necessary perspective of the federal government. So who picks up the mantle and leads in this space? On May 5, the European Union and France announced an over half-billion-dollar initiative to do just that. French President Emmanuel Macron and European Commission President Ursula von der Leyen announced the initiative would fund research and bring foreign scientists to Europe. American scientists have already signaled they are likely to take advantage of an opportunity like this. This investment as the U.S. divests from research is going to have devastating impacts on generations of Americans. Americans will no longer be the first to access groundbreaking treatment or better diagnostics and once scientists leave the U.S. for other opportunities it is going to take a herculean effort to convince them to return.

Waiting until 2026 or 2028 for a Congress or administration who believes in science again is not enough as every day nearly 5,500 Americans are diagnosed and 1,600 die from cancer. They need the trials and research to continue now and in their communities. For individuals enrolled in the trials stopped or delayed by Trump and DOGE, I imagine they would not say they “didn’t get anything out of it,” as Trump indicated. If Congressional Republicans acquiesce to Trump and further cut research, Representative Casten will be completely right about them fearing Trump and losing their job more than they fear cancer. They will have surrendered the war on cancer and that will be devastating for all Americans.

Polling: U.S. public is against Trump tariffs by about 60%-36%

FACT: Polling: U.S. public is against Trump tariffs by about 60%-36%.

THE NUMBERS: Negative/positive* views of Trump administration tariffs in recent polls –

Negative Positive
CNN/SRS (April 17-24) 55 28
New York Times/Siena (April 21-24) 55 40
NPR/Marist (April 21-23) 58 34
Washington Post/ABC News (April 18-22) 64 34
Fox News (April 18-21) 58 33
NBC News (April 11-20) 61 39
Pew Center (April 7-13) 59 39
Economist/YouGov (May 9-12) 53 30

* Topline averages across all respondents. Polling questions differ slightly: Pew, Fox, NBC, NPR/Marist, and Washington Post/ABC ask whether respondents “approve” or “disapprove” of Mr. Trump’s handling of tariffs. CNN asks whether respondents view the tariff increases as “good policy” or “bad policy,” NYT/Siena whether respondents “support” or “oppose” the tariff increases, and Economist/YouGov about whether tariffs will hurt or help the U.S. economy. 

WHAT THEY MEAN:

The Tariff Act of 1930, nicknamed “Smoot-Hawley” for the Congressional authors Reed Smoot and Willis Hawley, passed in June,  during the second year of the Herbert Hoover presidency.  The oldest living American — Pennsylvanian Naomi Whitehead, planning for her 115th birthday this fall — was then nineteen. A few thousand more Americans aged 105 years and above join her with personal memories of the event. No one else remembers a general U.S. tariff increase —​​ so for the other 337 million Americans, the experience is new.

Ms. Whitehead’s “greatest generation” concluded in the early 1930s that tariff increases had been a bad idea, and their decision guided policy for the next 80 years. What are the other 337 million 21st-century Americans thinking now, as they monitor administration tariff decrees and revisions, assess its various slogans — “new golden age,” “Production Society,” “Liberation Day,” “two dolls are enough for a girl,” “WalMart should eat the tariffs” — and look for local price and employment impacts? A stream of major media April polls provides an interim snapshot as their opinions form:

The polls — CNN/SSRS, Fox News, Washington Post/ABC News, New York Times/Siena, Pew Center, NBC News, NPR/Marist, Economist/YouGov — suggest three areas of broad consensus: high awareness of the tariff increases; an overall negative view of them; and alarm about the cost of living. The “crosstabs” and “internals,” meanwhile, suggest convergence among some groups whose views on trade policy have differed in previous 21st-century polls — college and non-college, urban and rural, high- and low-income — and apparently widening opinion gaps by race and ethnicity, and by political affiliation. A summary:

Consensus 1: Wide Opposition to Tariff Increases. Averaging the polls, about 60% of the public is negative about the Trump administration’s tariff increases, and 36% is positive. Results vary a bit by poll, but not drastically: the Washington Post/ABC’s 64%-33% split is the most negative response, and the New York Times/Siena 55%-40% division least.

Consensus 2: Prices and Cost of Living are a Top Concern. The polls likewise agree on the high priority the public currently places on prices and cost of living. In CNN/SSRS, for example, 58% of respondents cite cost as the “biggest economic problem facing [my] family,” and 9% mention tariffs specifically. NBC News likewise, asking respondents which economic problem they consider most serious, finds 44% citing “inflation and the cost of living,” while “taxes and take-home pay” and “jobs and unemployment” trail behind at 10% and 7%. Economist/YouGov has an additional insight: asking whether tariffs will help or hurt the U.S. economy in general, and then the respondent’s own personal finances, they get a 53%-30% hurt/help judgment for the national economy, and a sharper 53%-16% divide on personal finance. And a different sort of survey, last Friday’s University of Michigan consumer confidence report, shows very high awareness of tariffs and their link to price increases:

“Tariffs were spontaneously mentioned by nearly three-quarters of consumers, up from almost 60% in April; uncertainty over trade policy continues to dominate consumers’ thinking about the economy.”

Narrowing Gap: Education. Earlier 21st-century polling typically found college-educated Americans more “pro-trade” and high-school diploma holders less. The gap remains in these polls, but has narrowed as non-college Americans (especially African Americans and Hispanic) shift toward a more negative view of tariffs. NPR/Marist’s college-educated Americans, for example, disapprove of Trump’s handling of tariffs by 67% to 32%, and their non-college respondents agree by a somewhat smaller 57% to 43%. In CNN/SSRS likewise, college-educated Americans consider the tariffs “bad policy” by 64-23% and non-college by a smaller 50%-30% margin.

Widening Gap: Race and Ethnicity. On the other hand, past polls rarely showed wide racial and ethnic differences on trade (though Hispanic and Asian Americans at times seemed more “pro-trade” than white and African American respondents). In April’s polls, white respondents are somewhat less negative about Trump administration tariffs than other Americans (though majorities still oppose), and African American opinion is intensely critical. Fox News, for example, has white respondents opposing 56%-35%, African Americans 71%-21%, and Hispanics 60%-31%. Washington Post/ABC likewise finds white Americans disapproving 56%-42%, African Americans 86%-13%, and Hispanics 72%-26%. New York Times/Siena is the outlier, with white respondents opposing by only a small 49%-46% plurality, while African Americans oppose by 75%-16%, Hispanics by 61%-28%, and “other” (presumably combining Native American and Asian American opinion) by 61%-31%.

Widening Gap: Political. The partisan divide in these polls, on the other hand, is much wider than before. Previous 21st-century trade polls did usually find Democrats and liberals more “positive” about trade than Republicans and conservatives — i.e., either more likely to support trade liberalizing agreements and WTO rules, or more negative about tariffs and protectionism — but the April polls report much larger gaps. Democrats oppose the Trump administration’s tariffs overwhelmingly and in some polls almost unanimously, while Republicans favor them by somewhat smaller margins. Political independents are much closer to Democrats. A four-poll comparison:

  • Washington Post/ABC:  Democrats “disapprove” of Mr. Trump’s tariffs by 96% to 4% and independents by 70%-28%, while Republicans “approve” by a 74% to 25% margin. Also note: 83% of Republicans “approve” of Mr. Trump’s policies overall and 15% “disapprove,” suggesting less enthusiasm for the tariffs than for other administration policies.
  • NPR/Marist: Democrats disapprove 90% to 7% and independents 64%-28%; Republicans approve by 73% to 20%.
  • Fox News: Democrats disapprove 88%-7%, and independents 73%-19%: Republicans approve 63%-23%.
  • CNN/SRS: Democrats consider the tariffs “bad policy” by 90%-3% and independents 58%-18%; Republicans “good policy” by 64%-16%.

So: As to whether this generation of Americans will draw the same conclusions that Ms. Whitehead’s reached in the 1930s, it’s still probably too early to tell. Democrats do seem to have made up their minds, but more general opinion may not set hard until late summer or fall. But as people ponder the first general tariff increase since the Hoover era, and watch its price, employment, and other local impacts, polling does make two things pretty clear: (1) the initial judgment is quite negative, and (2) with the administration’s “new golden age,” “production society,” and “Liberation Day” rhetoric having failed, its ‘window’ to shape opinion may soon close.

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.

Polling links:

Economist/YouGov (May 9-12)

CNN/SSRS (April 17-24)

New York Times/Siena (April 21-24)

NPR/Marist (April 21-23)

Washington Post/ABC News (April 18-22)

Fox News (April 18-21)

Chicago Council on Global Affairs (April 18-20)

NBC News (April 11-20)

Pew Center (April 7-13)

Some more crosstabs:

Youth v. Age: Pre-2025 trade polling typically found younger people more “pro-trade” than their elders. This hasn’t changed in April polls, though no age group supports the tariffs. NBC News has 18-29-year-olds “disapproving” by 72%-28%, and over-65s by 57%-44%. New York Times/Siena finds nearly identical splits of 71%-28% for youth and 54%-38% for age.

“Economics of place”/regions. Past trade polls typically found regional and community divisions, with Northeastern and Western Americans more “pro-trade” than Southern and Midwestern respondents. These gaps seem to have diminished but haven’t disappeared. NYT/Siena finds Western opposition to tariffs are especially strong — 62%-28% — and Northeastern respondents oppose by 55-39%, while Midwesterners oppose by a less decisive 52%-42% and Southerners 52%-44%. NPR/Marist has stronger midwestern opposition: 63%-33% negative in the west, 60%-34% in the northeast, 61%-31% in the Midwest, and 53%-37% in the south.

“Economics of place”/community type. Likewise, past polling found some divergences by community type, with urban America somewhat more “pro-trade” than rural communities. (A bit surprising as rural America is especially export-reliant.) This gap, at least for now, is much smaller than before. NPR/Marist has rural America negative by 53%-39%, urban Americans by 63%-30%, and suburbanites by 57%-33%. Fox News finds somewhat less division: in the cities, 54% think the tariffs will “hurt” the American economy, while the countryside splits 52%-34%; suburbanites are a bit more negative, at 57% “hurt” and 30% “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 ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

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

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

Preparing Tomorrow’s Workforce, ft. Hans Meeder

On this episode of Radically Pragmatic, PPI’s Senior Advisor and Director of the What Works Lab, Bruno Manno is joined by Hans Meeder, Principal Consultant of Blue Crab Talent Strategy and Senior Fellow for Education and Workforce Innovation at YouScience

The two discuss Meeder’s new book, “Preparing Tomorrow’s Workforce: How to help every young person navigate their personal career path.” He explores how today’s youth can develop the critical Career Navigation Skills necessary to thrive in an evolving workforce shaped by AI, robotics, and automation.. By fostering these abilities, the book aims to help schools and communities create pathways for student success and long-term workforce readiness.

Meeder’s book can be ordered here.

Listen to the full episode.

Ainsley for Re:State: The Case for Remaking the State

PPI’s Claire Ainsley contributed to this essay collection on remaking the modern state for Re:State, a UK public services think tank.

The question of remaking the State is fundamental to the fight for democracy versus authoritarianism. Increasing numbers of citizens in developed democracies are starting to question the foundation of modern liberal democracy, as they continue to be expected to fund a state that they are becoming less sure is serving them.

This is particularly acute amongst younger people, the perhaps unexpected audience the right-wing populists are gaining traction with, who seek to exploit people’s discontent with a settlement
they are unconvinced works in their favour. If we are to inspire the next generation that this world is theirs and that we have to take shared responsibility for running it, then we have to think radically and urgently about what and who our State is for. Simply defending the status quo or proposing limited fixes just isn’t sufficient for the rupture that is occurring between those for whom the existing order works, and the many for Re:Think: Bold ideas to remake the State Re:Imagining the State whom it doesn’t.

We could start by fronting up what happened during the Covid-19 pandemic. The only explanation I can find for how little we want to talk about it now, to address the failings and learn from them, is that it is easier to bury the memory of a trauma than to relive it. But like all traumas, they find a way to resurface. An emotional long Covid is present in our classrooms and care homes, in the public services that are the State’s frontline, and in the people who rely on them most.

Read the full essay on Page 7-8 of Re:State.

Kahlenberg for American Affairs: Renewing the Democratic Party

The Democratic Party has lost its way. A party whose very purpose has been to fight for working families has forfeited their trust and confidence. The losses are most obvious among white working-class voters. In 1960, John F. Kennedy won white working-class (noncollege) voters but lost white college graduates by two to one. In 2024, Kamala Harris lost white working-class voters by over two to one (67 percent to 31 percent) while winning white college graduates solidly

The self-flattering story Democrats have told themselves is that rising white racism explains the defection of white working-class voters. But that simple story was always undercut by data showing white racism has declined, not increased, in recent decades. And the fable was further undermined in the 2024 election by the defection of many Hispanic, Asian, and black working-class voters as well. The Democratic advantage among nonwhite working-class voters has declined sharply by 37 points since 2012. In 2024, the only net increase for Democrats compared to 2020 was among whites.

The party has sunk so low that it cannot beat the man who infamously inspired his followers to attack the U.S. Capitol, sat by while they created mayhem, and would, once back in office, pardon the attackers. Republicans have had a higher identification rate among voters than Democrats for the last three years, something that hasn’t been true for almost a century. Only 29 percent of Americans view the Democrats favorably according to CNN, the lowest rate since CNN began asking the question more than thirty years ago.

What went wrong for the Democrats, and what can be done about it? There are many answers to the first question, but fundamentally, much of it boils down to this: at a time when the life prospects of Americans are increasingly shaped by economic class, not skin color or gender, Democrats have moved in the opposite direction and time and time again prioritized racial and gender identity. Restoring the primacy of working-class priorities, on issues of culture as well as economics, provides the central path forward for a Democratic Party that wants to build a durable majority and restore its identity as the party of working people.

Read more in American Affairs.

The Media’s Misguided Coverage of Smoke-Free Nicotine Products

Recent coverage regarding smoke-free nicotine products is more than just unfair – it’s irresponsible and damaging to public health. A recent story in the New York Post should be cheered by tobacco companies: its distortion of the facts will keep adult smokers using the most harmful nicotine delivery method – combustible cigarettes.

Unfortunately, this is par for the course when it comes to how the media covers cigarette alternatives such as nicotine pouches and heated tobacco products, which offer adults better options than continuing to smoke.

Critics of nicotine pouches often contend that they are not authorized by the U.S. Food and Drug Administration (FDA). This is false. The most popular nicotine pouch in the U.S., ZYN, recently received marketing authorization for all 20 of its products, including flavored varieties. In its January decision, the FDA noted that “these products offer greater benefits to population health” and “meet that bar by benefiting adults who use cigarettes and/or smokeless tobacco products and completely switch to these products.”

Another common misperception is that nicotine pouches are increasingly used by young people. But according to the U.S. Centers for Disease Control and Prevention’s latest National Youth Tobacco Survey, “youth nicotine pouch use did not show a statistically significant change from 2023” and remains low, at just 1.8 percent.

Heated tobacco products are another promising innovation that offer adults a better alternative to cigarettes. To be clear, IQOS is the only FDA-authorized heated tobacco product on the market in the U.S., and the agency acknowledges it significantly reduces the production of harmful chemicals compared to cigarette smoke.

Personally, I was a smoker with the lung capacity of someone 165 years old. I switched to heat-not-burn and now have the lung capacity of someone 50. Many other adult smokers have similar success stories – stories the media should cheer instead of sneer at.

The media has a responsibility to report the facts so the American public is fully informed about the realities of FDA-authorized smoke-free products, including their health benefits compared to smoking.

When the media fails to get the facts right, adult smokers pay the price. We can – and must – do better.

Guenther for Payload Space: Democrats Have Ceded Leadership on Space Policy

From President John F. Kennedy’s iconic call to “go to the Moon, not because it is easy” to President Barack Obama’s forward-looking directive to use commercial rides to orbit for cargo and crew, Democrats have historically been strong supporters of the space program.

Unfortunately, in the years since Obama left office, Democrats have dropped the ball on the matter. Republicans have used it to rile up their base with calls to showcase American superiority, and beat China on the off-world stage.

It’s not that Democratic members are silent on space. We still see lawmakers on the left celebrating major milestones in the space program, and vocally supporting the traditionally Democratic positions of promoting science funding and workforce development.

These are important things to support. But they’re a small subset of space-related topics that require attention as the space industry rapidly transforms.

Read more in Payload Space. 

Manno for Forbes: How Are Teachers Today Thinking About Education?

America’s K-12 teachers have experienced a notable upswing in morale but have serious concerns about K-12 schools. That’s the central message about what teachers are thinking from two polls of public school teachers from Education Week and the Pew Research Center and one poll of public and private school teachers from EdChoice/Morning Consult.

These one-point-in-time snapshots help us understand teachers’ views of their profession and K-12 education. As the school year draws to a close and we observe National Teacher Appreciation Week, it’s valuable to hear the voices of teachers, as challenging and unsettling as some of their perspectives may be.

Read more in Forbes. 

Loss of AAA Rating for U.S. Credit Underscores Grave Consequences of Trump’s Budget-Busting Bill

WASHINGTON — Today, Ben Ritz, Vice President of Policy Development at the Progressive Policy Institute (PPI) and Director of PPI’s Center for Funding America’s Future, issued the following statement on Moody’s decision to downgrade the U.S. credit rating from AAA:

“Even as all the other major ratings agencies downgraded U.S. credit over the past 15 years, Moody’s held firm in maintaining our government’s AAA credit rating. That today even Moody’s has lost its once-unshakable confidence in the sustainability of U.S. fiscal policy is more than a canary in the coal mine: America cannot afford a ‘big beautiful bill’ with policies that would add more than $5 trillion to our national credit card over the next decade if permanently enacted. No lawmaker who supports this budget-busting boondoggle or anything like it moving forward can call themselves a ‘deficit hawk’ ever again.”

Read more PPI analysis of the “Big Beautiful Bill” and its grave fiscal consequences:

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.orgFind an expert at PPI and follow us on Twitter.

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

The Data Center Boom

In a recent blog item, we estimated that in 2025, the five big tech companies — Amazon, Alphabet, Apple, Meta, and Microsoft — are projected to invest $240 billion in the U.S. in capital expenditures, primarily in AI-related data centers and equipment. Other large tech companies and investors are pouring huge amounts of money into new data centers as well. 

This tech and AI investment surge dramatically overshadows domestic investment from major manufacturing industries. For example, in 2023, the motor vehicle industry invested just $29 billion in U.S. structures and equipment, while the primary metals industry, including steel and aluminum, invested only $15 billion.

Indeed, data center construction is providing a much-needed boost to state economies. Consider Virginia, one of the leading locations for data centers. The 2024 report on “Data Centers in Virginia,” from the state’s Joint Legislative Audit and Review Commission, found that “the data center industry provides approximately 74,000 jobs, $5.5 billion in labor income, and $9.1 billion in Virginia GDP overall to the state economy annually.” That estimate was based on average spending by the industry between FY21 and FY23, prior to the AI boom. 

The Virginia report noted that data center revenue has allowed localities to lower real estate tax rates, construct new schools, and establish revenue stabilization or reserve funds. Moreover, “data centers are an attractive industry because they impose minimal direct costs on the provision of government services,” including local roads, and school systems. 

In recognition of the economic benefits of data centers, most states offer an exemption from sales tax for the equipment going into data centers. That’s analogous to the sales tax exemption most states offer for the purchase of manufacturing machinery to go into a factory. Texas, for example, exempts “certain items necessary to the operation of qualifying large data centers,” while also exempting “several types of items used in manufacturing products for sale, including materials that become part of the manufactured product” and equipment “necessary or essential to the manufacturing operation if it causes a physical or chemical change in the product being manufactured.”

Oddly enough, if more factories are built in a state where manufacturing machinery was exempt from sales tax, the nominal revenue loss from the sales tax exemption would rise, even as politicians would cheer. The same would be true if more data centers are built. 

This quirk in the accounting for tax expenditures can produce misleading headlines. For example, one recent report focused on the revenue loss from sales tax exemptions for data center purchases, highlighting Texas: “For example, in the space of just 23 months, Texas revised its FY 2025 cost projection from $130 million to $1 billion.” The report added: “We know of no other form of state spending that is so out of control.” 

But that’s an odd interpretation of good news. Clearly, the increase in the Texas projections was due to the AI boom, which added tens of billions of dollars in genuinely new data center construction in the state. This construction represents a true gain to the Texas economy, not a loss. For comparison, it should also be noted that the size of the sales tax exemption for machinery, equipment, and materials used in Texas manufacturing is projected to be $11.5 billion in FY25, and rising to $15 billion in FY30, reflecting the strength of manufacturing in Texas.

To summarize: A state sales tax exemption for data center equipment, like the one for manufacturing machinery, is designed to boost investment and jobs. Without the exemption, the investment in the state — and the contribution to the state economy — would be lower.

GOP Doubles Down on Deceptive Budget-Busting Tax Plan

From our Budget Breakdown series highlighting problems in fiscal policy to inform the 2025 tax and budget debate.

PPI warned last week that Republicans’ “Big Beautiful Bill” was shaping up to repeat and compound many of the problems that doomed Joe Biden’s “Build Back Better” plan in 2021, such as bloating the legislation with a partisan wishlist and relying on budget gimmicks to mask its outrageous costs. But as House Republicans unveiled and began marking up legislative text this week, the details proved to be even worse than anticipated.  

Republican lawmakers eagerly packed their big budget bill with niche giveaways and unrelated policies. To name just a few examples: there’s a $5,000 tax credit for conservative education activists to subsidize private (often religious) school enrollment, a tax break for gym memberships that mostly benefits the wealthy, and the seemingly random addition of “MAGA” savings accounts. And that’s just the Ways and Means Committee — other committees have tacked on their own miscellaneous riders, from a partisan rewrite of the farm bill in the Agriculture Committee to a moratorium on subnational AI regulation in the Energy and Commerce Committee. 

They also relied on even more budget gimmicks than expected to hide the legislation’s true cost. It was widely anticipated that Trump’s many campaign proposals, such as exempting auto loan interest payments, overtime income, and tips from income taxes, would be made temporary to lower the bill’s sticker price. But the bill included several additional tax cuts, such as an enhanced Child Tax Credit (for everyone but low-income families) and a larger standard deduction, which are also set to expire after only a few years. 

In reality, Republicans don’t intend to allow any of these provisions to ever expire. They used the same tactic to reduce the scored cost of the Tax Cuts and Jobs Act (TCJA) in 2017, only to now argue that preventing the scheduled expiration of that bill’s tax cuts should cost nothing at all because they are not creating “new” tax cuts. As a result, the debt impact of Republicans’ BBB would be substantially higher than they claim. While the “official” cost of the bill’s tax cuts is roughly $3.8 trillion over 10 years, they would actually cost around $5.3 trillion — plus as much as $900 billion in interest costs — if enacted permanently. 

These problems are only likely to grow worse as Republicans make changes needed to win over uncommitted votes. Blue-state Republicans in the House are demanding a far greater increase to the $10,000 cap on State and Local Tax (SALT) deductions than the $30,000 level included in the bill, which they called an “insulting” offer. A critical mass of members in both the House and Senate have opposed the bill’s rollback of clean-energy tax credits from the Inflation Reduction Act, which they say will kill emerging technologies and cost their constituents jobs. Many oppose the bill’s deep Medicaid cuts that would leave 7.6 million more Americans uninsured — with one senator referring to them as “morally wrong and politically suicidal.” Meanwhile, Conservative hardliners in both the House and Senate are still demanding deeper spending cuts that might be more fiscally responsible but could make the bill even more difficult for swing-district Republicans to support. 

Ironically, Republicans are repeating the same mistakes that helped sink President Biden’s BBB plan in 2021. That bill also relied on arbitrary expiration dates to cram in a disjointed wishlist of policy priorities, even if they risked exacerbating budget deficits and inflation. As a result, the version that passed the House in 2021 lacked a clear strategy and made it easier for critical lawmakers to walk away when inflation continued to worsen. Yet Republicans have taken this playbook to an even greater extreme by proposing a bill that would add roughly three times as much to the annual budget deficit in its worst year as Biden’s BBB would have — despite the fact that inflation remains a pressing concern for voters.

If Republicans continue down this road, their BBB could very well fall apart entirely as Biden’s did. However, if they do successfully manage to jam their partisan megabill through Congress, the fallout would be substantially worse: stuffing the tax code with a myriad of giveaways, cutting critical social services for working families, and risking another round of inflation by blowing up the budget deficit – leaving Americans to pay the price for years to come. 

Deeper Dive

Fiscal Fact

Uncapping the SALT deduction would provide nearly three-quarters of the benefits to households making over $430,000, with an average annual tax cut of roughly $140,000 for the top 0.1% of households.

Further Reading

Other Fiscal News

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