Category: Uncategorized

Marshall for The Hill: Trump 2.0 is a Runaway Dump Truck Only Voters Can Stop

Posted on by Alyssa Brown

President Trump is having a grand time playing chicken with the U.S. economy, risking our prosperity to force other countries to submit to his protectionist diktats. It’s put him right where he wants to be — at the center of world attention.

But his vendetta against trade is alarming U.S. consumers, businesses and investors, and reawakening public doubts that he knows what he’s doing.

Most Americans don’t see the point in picking fights with friendly trade partners like Canada. Private sector leaders are aghast at Trump’s on-again, off-again threats to impose suffocating “reciprocal” duties on all imported goods.

While pausing those tariffs to stop the U.S. bond market from melting down, Trump has imposed an equally arbitrary 10 percent tariff on most of our trading partners. He’s also gone nuclear on China, raising tariffs to an absurd 245 percent and goading Beijing into levying massive retaliatory duties on U.S. exports.

Read the full piece in The Hill. 

PPI Statement on President Trump’s Attacks on Fed Independence

Posted on by Alyssa Brown

WASHINGTON — Today, Paul Weinstein Jr., Senior Fellow at the Progressive Policy Institute (PPI), issued the following statement in response to President Trump’s latest attacks on Federal Reserve Chairman Jerome Powell and the independence of the central bank:

“President Trump’s social media post claiming Federal Reserve Chairman Jerome Powell is ‘always TOO LATE AND WRONG,’ and his ‘termination cannot come fast enough!’ would be laughable if not for the fact that President Trump is clearly setting the stage to challenge the central bank’s independence in federal court. Under Powell’s leadership, the Fed has successfully brought down inflation from historically high levels while keeping the economy from falling into recession.

“Chairman Powell yesterday simply and factually observed that higher tariffs are likely to raise consumer prices and slow growth, which Trump himself has acknowledged in admitting that tariffs will cause ‘pain.’ Given President Trump’s reckless economic policies, including his misguided attempt to usurp Congress’ Constitutional tax authority and impose tariffs by decree, an independent Fed in control of monetary policy is more important than ever. Hopefully, Members of Congress and the federal courts will defend it.”

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

###

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

Trump’s Tax Plans Could Make Future Tax Seasons Even More Complicated

Posted on by Alyssa Brown

For many, annually navigating a tax code they overwhelmingly feel is unfair and complex is a frustrating experience. But the Trump administration’s many new tax pledges — including no taxes on tips, auto loan interest, overtime pay, and more — could make it even worse. If enacted, they would provide only limited benefits to working Americans, while further complicating the tax code with arbitrary exemptions and loopholes.

Tax breaks should always strike a balance between the benefits they are creating and the costs they impose. While tax provisions can be used for laudable goals — including stimulating investment, promoting retirement savings, or reducing poverty — excessive or poorly designed exemptions can erode the tax base, create loopholes, and increase the cost of compliance for taxpayers and administrators. To be worthwhile, a tax break should deliver more in benefits than it costs in complexity. Trump’s various proposals don’t come close.

Trump argues that his “no tax” proposals are intended to alleviate the cost burden of middle and lower income Americans, but few would receive significant benefits. Most tipped workers already pay little to no income tax, so the exemption would do almost nothing for them. And worse, a broad tax exemption could even give high-earners a new way to game the system by reclassifying their wages as tips. Moreover, providing tax exemptions based on how people earn their paychecks inherently leaves many working Americans behind. While a waitress might qualify for tax exemptions on tip or overtime income, a truck driver or teacher wouldn’t.

But while most Americans receive few benefits from Trump’s “no tax” proposals, they will still be stuck with the costs. Since enacting these broad exemptions drastically shrinks the tax base, taxpayers who are unable to qualify for special treatment would be left to shoulder a greater share of the overall tax burden. Even if this doesn’t lead to immediate tax increases, the lost revenue from these expensive proposals would add to the national debt, crowding out vital government programs, driving up borrowing costs, and forcing an even larger tax hike in the future.

Furthermore, when numerous exemptions add layers of complexity to the tax code, it becomes more difficult for taxpayers to understand what they owe and for administrators to ensure the law is being followed. This creates opportunities for individuals and businesses to avoid taxation, whether through intentionally exploiting loopholes or unintentionally misinterpreting complex rules. A complicated tax code also becomes more difficult for the IRS to enforce, resulting in a larger “tax gap” — the difference between taxes owed and taxes actually collected — which both costs the federal government billions in lost revenue and undermines the fairness of the tax code

As Congressional Republicans begin to craft major tax legislation enabled by the budget resolution they passed last week, they should aim to craft a tax code that is simpler, fairer, and easier to navigate – not one that is even worse than the status quo.

Deeper Dive

Fiscal Fact

During the busiest time of the year, the Trump administration has laid off or bought out roughly one-third of IRS staff, with plans for even more layoffs in the future. This will disrupt the agency’s progress in both modernizing its systems and improving its customer service and enforcement capabilities.

Further Reading

Other Fiscal News

More from PPI & The Center for Funding America’s Future

New PPI Report Urges Bold Action to Counter China’s Growing Capabilities in Space

Posted on by Alex Terr

WASHINGTON — For more than half a century, American leadership in space has been a cornerstone of national security, economic growth, and global influence. But according to a new report from the Progressive Policy Institute (PPI), that leadership is on the verge of slipping away.

Today, PPI released a new report, “Competing for the Upper Hand in the Ultimate High Ground: The Modern Space Race Between the U.S. and China,” authored by Mary Guenther, Head of Space Policy at PPI. The report delivers a stark warning: China is moving aggressively to overtake the United States in space — and unless policymakers act swiftly, America could lose its competitive edge within the next 5 to 15 years.

“Space is no longer just about exploration — it’s the infrastructure of everyday people’s life and warfare,” said Guenther. “Our phones, our financial system, our military all depend on it. And right now, China is investing big, moving fast, and playing to win.”

In the report, Guenther outlines four ways America can change course to retain the high ground in space:

  1. Invest in America’s Space Programs: Congress must boost funding for NASA, space technology R&D, and national security space programs. As a share of the federal budget, NASA funding is at historic lows — even as its mission portfolio has expanded dramatically.
  2. Modernize Outdated Space Regulations: Space companies face a tangled web of regulatory hurdles that slow down innovation. Modernizing these rules — while maintaining the safety of the uninvolved public and national security — is essential to supporting a competitive U.S. space industry.
  3. Harness Private Sector Innovation: China’s advantage is state control. America’s advantage is its private sector. But to leverage it fully, the government must provide clear acquisition strategies, reward innovation, and remove artificial barriers to market entry.
  4. Rebuild and Expand International Partnerships: Just as the Apollo program inspired allies worldwide, America’s modern space efforts should continue to be a tool of diplomacy and soft power — especially as China courts new partners through its own space programs.

Space leadership is no longer a niche concern — it is a national imperative. As the report makes clear, space underpins nearly every aspect of American life, from the economy to national defense. The global space economy is projected to triple to $1.8 trillion by 2035, with high-paying American jobs and critical technological innovation on the line. U.S. military operations depend on space-based communications, navigation, and intelligence to maintain a strategic edge. And in the fight against climate change, space-based monitoring remains essential for tracking environmental shifts and managing scarce natural resources.

“This isn’t science fiction — it’s a geopolitical reality,” said Guenther. “China understands that space dominance will drive future prosperity and power. The U.S. led the first space race. But maintaining that lead requires political will and strategic investment.”

Read and download the report here.

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.

 

###

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

Competing for the Upper Hand in the Ultimate High Ground: The Modern Space Race Between the U.S. and China

Posted on by Alex Terr

INTRODUCTION

China’s main space policy goal is to usurp the United States’ leadership position in space by 2045 — and it increasingly looks like a goal they’ll meet. This development would have dire implications for America’s national security, global position, and economic growth. Indeed, the Office of the Director of National Intelligence has stated, “Chinese space activities will increasingly erode the national security, commercial, and global influence advantages that the United States has accrued from its leadership in space.”

This erosion of American leadership could occur in the next five years as China is on track to reach parity with United States space power in most areas by 2030. In some areas, like positioning, navigation, and timing (the American Global Positioning Service, for instance), China already has superior capabilities.2 However, in most areas, like low-Earth orbit satellite broadband service and rendezvous and proximity operations, China still lags the United States, though China is working expeditiously to change that status quo.

Yet, Congress has not yet taken substantial action to address this, nor did the Biden administration. There were a number of pieces of space legislation introduced last Congress, but there was only one bill that passed into law that addresses this issue and it was narrowly focused. Space has a long-standing reputation for having strong bipartisan support. Yet we are seeing Republicans double down on their support for the sector while Democrats have gone quiet and focused on maintaining the status quo rather than encouraging the exciting innovations in this arena. The Trump administration firings have touched NASA, but to date, they have been glancing blows rather than the sucker punches experienced by other agencies. That said, while it remains to be seen how Trump’s tariffs on items like aluminum that are vital to the space industry, potential plans to slash NASA’s budget 20% and fights with nations that are traditional United States partners will play out for space, the impact is unlikely to be positive. Democrats must start to show up to the conversation and push for change via thoughtful, pragmatic solutions if the nation is to maintain competitiveness in the space domain.

There is still time to take action to invest in U.S. competitiveness and maintain American space leadership. This report will outline why space leadership matters to the nation, the state of play for strategically significant space capabilities, and recommend solutions for turning things around. These solutions must be undertaken in tandem as there is not a silver bullet. Experts believe China’s space investments may have already surpassed the United States’ when adjusted for purchasing power parity, though given the general opacity of Chinese government spending estimates that exact figure varies. Increased investment in targeted portions of American space programs remains vital, but more money alone won’t be enough. We must:

  • Maintain stability in existing space programs and make additional investments that will help us go further and faster — both today and into the future;
  • Enact regulatory reforms to minimize the number and duration of steps space companies need to take to get authorization for their activities without sacrificing crucial national priorities like the safety of the uninvolved public;
  • Continue American international engagement and partnering with other nations; and
  • Harness the private sector as efficiently as possible, which is vital to American success in space.

Read the full report.

Trump tariffs more likely to shrink than enlarge U.S. manufacturing industry

Posted on by Alex Terr

FACT: Five-eighths of U.S. imports are “business inputs,” three-eighths “consumer goods.”

THE NUMBERS:  Imports of U.S. goods by type, 2024 –

U.S. GDP. 2024 $29.185 trillion
All goods imports:   $3.270 trillion
Consumer goods:   $1.225 trillion
“Capital goods”:   $1.113 trillion
“Intermediate” goods:   $0.534 trillion
“Raw materials”:   $0.327 trillion

WHAT THEY MEAN:

Reviewing the likely effects of this month’s Trump administration tariffs on the U.S. space industry this week, PPI space expert Mary Guenther has a blunt warning:

“The ever-evolving tariff regime … will raise the cost of making rockets and satellites in the U.S., limit industry access to core inputs and materials, and encourage boycotts of American products and services abroad.” 

Some background, then we can place her judgment against the administration’s view that tariffs mean ‘more manufacturing industry’:

The Trump administration’s “reciprocal” tariff system launched at midnight last Wednesday. Greeted icily by the stock and bond markets the next morning, it lasted about 5½ hours before “pausing” just after lunch. It and may or may not resurface in July. The April 2 decree which created it, though, imposed not one but two new tariff systems. The second is still in place, though with big holes punched into it with a sudden Friday-night exemption for semiconductors, smartphones, TVs, and some other IT manufacturers. (This is roughly 22% of U.S. imports from China, and 10% of all imports, and may last or itself be replaced by a “national security” tariff in a month.) Assuming the administration sticks with v.3 for a while, or returns to v.2, here are the basics:

1.  Contents: The April 2 decree imposes
(a) a 10% tariff on all goods imports from countries other than China, Canada, and Mexico, except energy and (provisionally) the IT manufactures noted above;
(b) a 125% tariff on everything Chinese-made other than the IT goods (which, since the February Canada/Mexico/China decree remains in effect, makes a total rate of 145%, except the IT goods at 20%), and
(c) an exemption for Mexican- and Canadian-made goods entering under the still-surviving “USMCA.” Separate March decrees put 25% tariffs on cars, auto parts, steel, and aluminum, and the administration has threatened though not yet imposed similar 25% tariffs on medicine, lumber, copper, and semiconductor chips.
As a final note (d), the Congressionally authorized, Constitutionally legitimate tariff system is still in place and averages about 1.5%.

Tentatively assuming that the 145% tariff on Chinese goods means near but not total collapse of trade, while imports continue from the rest of the world, the likely overall U.S. average rate would then likely range from 15% to 20%.  In U.S. history, these rates resemble those of the Hoover administration from 1930-32.  Or, looking around the world today rather than backward through American history, the U.S.’ “peer” tariff economies would be countries such as Iran, Venezuela, Congo, and Chad in the 12% to 20% tariff range. (See below for a couple of tables.)

2. Impacts: What sort of impact would this tariff system have? In a “macro” sense, Yale BudgetLab estimates GDP growth cut by -1.1%, and prices up by 2.9%. More immediately, families buying clothes, groceries, appliances, flowers, and cars can expect prices to rise. (This won’t surprise them: the most recent UMichigan consumer-confidence survey reveals the highest inflation expectations since 1981.) But as Ms. Guenther implies and the numbers above show, imports of business inputs – “intermediate goods” like chemicals and metals, raw materials like energy and metal ores, and capital goods such as power equipment — are substantially larger than imports of consumer goods. So the Trump tariffs are likely to raise U.S. production costs even more than they raise mall and grocery prices.

This is why the administration’s view of tariffs that tariffs, in some way, make manufacturing companies larger seems so blinkered and naive. Taking automobiles as an example, the administration’s 25% tariff on cars would raise prices and push Americans to buy locally made cars. But its identical 25% tariffs on metals and parts (and depending on which administration official is speaking, on semiconductors too), plus its 10% tariffs on wiring, paint, glass, and so on, and its 125% tariff on any auto-related things made in China, will also make it much more expensive to build cars in the United States. So the likely outcome is that Americans will import fewer cars, and also buy fewer U.S.-made cars, while U.S.-made cars get more expensive abroad and also risk retaliation. That points to a smaller U.S. auto sector. The same goes for refrigerators, motorcycles, washing machines, planes, and the space industry’s rockets, satellites, guidance systems, specialized sensors and computers, and so on.

With this in mind, some specially protected “manufacturing sectors” might gain. But U.S. manufacturing in general will have higher costs and probably get relatively smaller. The earlier round of Trump tariffs provides some guidance here: per a 2023 U.S. International Trade Commission study, the 2018 steel and aluminum tariffs over three years raised the two metals’ output by $2.2 billion, but simultaneously shrank the U.S. auto parts, machinery, toolmaking and other metal-using industries by $3.5 billion. On a larger scale, since the metals and “301” tariffs on Chinese goods in 2018/2019, manufacturing has fallen from 10.9% to 9.9% of U.S. GDP.  Real manufacturing output growth and employment totals, meanwhile, have slowed from the annual $40 billion and 100,000 net jobs averages of the post-financial crisis Obama years to $30 billion and 30,000.

So: Good that the administration listened to the financial markets’ frank advice last week and, at least for now, abandoned its “reciprocal tariff” plan. They should keep listening — to markets worrying about macro impacts, to Guenther and other industry experts describing likely impacts on firms and industries, and to public opinion contemplating price shocks. All of them, in their different ways, are saying very similar things.

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.

Along these lines, applause for two new bills, introduced last week, to safeguard the U.S. economy and defend the Constitution:

House Ways and Means Democrats call for canceling the April 2 decree and the February decree relating to Canada and Mexico, and for requiring Congressional votes of approval for any new “emergency” or  “national security” tariffs.

Finance Committee Ranking Member Sen. Ron Wyden (R-Ore.) and Rand Paul (R-Ky.), likewise.

Current tariff rates:

The actual U.S. tariff schedule. It is not a very good system, but is Congressionally authorized and Constitutionally legitimate.

… the Trump administration’s April 2 tariff decree.

… the April 9 version.

… and the April 11 “Clarification of Revisions, as Amended.”

Backwards through history:

The U.S. International Trade Commission has U.S. tariff rates (trade-weighted) from 2024 back to 1891.

Around the world: 

The WTO’s Tariff Profiles 2024 makes it easy to look up and compare tariff rates (simple average, trade-weighted average, by sector, etc.).

… and the World Bank has an even easier interactive comparative table (though with “trade-weighted” tariff rates only) by country from the World Bank.

And a couple of tables:

1.  An educated guess at this week’s U.S. tariff rate, placed against tariff rates abroad and in U.S. history:

United States (Trump v.1 “reciprocal,” April 2, 2025)    30.0%??
Bermuda 29.5%
United States (Hoover administration, 1932) 19.8%
United States (Trump v.2, April 9, 2025) 18.0%??
Chad 16.8%
Republic of Congo 15.2%
United States (Trump v.3, April 12, 2025) 15.0%??
Venezuela 12.8%
Ethiopia 12.7%
Iran 12.1%
Zimbabwe 11.4%
Egypt 10.4%

 

European Union 2.7%
U.S. (2024) 2.4%
China 2.2%
Japan 1.9%
U.S. (2016) 1.5%
Singapore 0.0%

* WTO Tariff Profiles 2024 when available; World Bank database for Egypt, Iran, Venezuela, Ethiopia, Zimbabwe, and Chad. Bermuda’s average tariff rate is the highest known current rate.

  2.  And an attempted breakdown of imports by current tariff type (though policy has been changing unpredictably).  Using last year’s $3.27 trillion in imports as a base, and assuming the semiconductor, smart-phone, TV, etc., exemption stays on:

Chinese-made: 145% on $345 billion.

“National security” (232): 25% on about $500 billion in cars, auto parts, steel & aluminum, likely also medicines, copper, and lumber.

China partial exemptions: 20% (for now) on $96 billion in Chinese-made semiconductors, TVs, smartphones, semiconductor manufacturing equipment, and solar technology.

April 2 decree “worldwide”: 10% on about $1.2 trillion in Asian but non-Chinese, European, Latin American and Caribbean, Middle East, African, and Pacific goods.

0%: About $820 billion in “USMCA” goods, plus all energy, plus $200 billion worth of exempted and non-Chinese-made semiconductors and other IT goods.

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.

Gresser in CNN: ‘Pink tariffs’ cost women more than $2 billion a year

Posted on by Alex Terr

“Most manufactured apparel and footwear are classified by gender in the US Harmonized Tariff Schedule (HTS), which sets out the tariff rates for all categories of merchandise imported into the United States. Tariff rates on women’s clothing were, on average, 16.7% in 2022 — 2.9 percentage points higher than the 13.6% average tariff rate for men’s clothing, according to Gresser.”

Read more in CNN.

Manno for AEI: The Growth of Earn-and-Learn Apprenticeship Degrees: Expanding America’s Mobility and Opportunity Structure

Posted on by Alex Terr

Key Points

• Earn-and-learn work-based education through apprenticeships is a promising and growing pathway to good jobs and other opportunities.
• To be successful, any effort to expand apprenticeship programs will have to brand and market them as genuine and effective pathways to jobs and opportunity.
• By valuing both educational and employment outcomes, the new apprenticeship degree paradigm makes the nation’s opportunity infrastructure more flexible and pluralistic.

Earn-and-learn work-based education through apprenticeships is a promising and growing pathway to good jobs and other opportunities—both for young people and for adults looking to switch careers. Those in apprenticeship programs earn a living by working, learn from mentors in the workplace and classroom, and receive an employer credential while taking on little to no student debt.

The recent popularization of the earn-and-learn model has spawned new forms of apprenticeships across the US, including apprenticeship degrees that combine work experience with the pursuit of a traditional college degree pathway. This work-based degree model aligns with Americans’ desire for more flexible, pluralistic pathways to opportunity. It also broadens the mobility and opportunity structure by recognizing and valuing diverse pathways to human flourishing beyond the pursuit of a traditional college degree.

Read the full report.

Manno for Real Clear Education: Earn and Learn Apprenticeships Create Opportunity for Young People

Posted on by Alex Terr

“Everyone wants to hire somebody with three years’ experience, and nobody wants to give them three years’ experience,” says Peter Capelli, management professor at The Wharton School. Many first-time job seekers confront this mismatch between work requirements and their ability to apply what they know to those demands. Analysts call this problem the job seeker’s experience gap.

K-12 schools, two- and four-year colleges, and workforce training programs can help young people overcome the experience gap through earn-and-learn apprenticeship programs. In addition to long-standing registered apprenticeships, new models are emerging, including youth apprenticeships, pre-apprenticeships, and apprenticeship degrees. National Apprenticeship Day is an opportunity to investigate this growing movement.

Read more in Real Clear Education.

Africa’s Digital Opportunity

Posted on by Alyssa Brown

INTRODUCTION

Africa stands at a remarkable crossroads of opportunity. Over the past two decades, the continent has not only experienced impressive economic growth but has also emerged as a global leader in digital transformation. Since the advent of the smartphone in 2007, Africa has made extraordinary strides in connectivity, innovation, and technological adoption. In 2007, fewer than 50 million Africans had mobile internet access; today, that number exceeds 600 million. Mobile money services, pioneered in Africa, now facilitate over $800 billion in transactions annually, transforming commerce and financial inclusion.

Africa’s economic trajectory further reinforces its promise. Led by Niger, African nations accounted for eleven of the world’s fastest-growing economies in 2024, with continent-wide GDP growth exceeding the global average by about one percentage point. Demographically, Africa is also the fastest-growing region, with the U.N. projecting that an additional one billion people will inhabit the continent by 2050. This growth presents both challenges and immense opportunities — particularly in the technology sector. By strategically investing in digital infrastructure, skills development, and regulatory frameworks that foster innovation, Africa can not only sustain its economic growth but also become a global technology powerhouse. But regulators and policymakers across Africa must foster this opportunity for growth with the right mix of regulatory frameworks and not make the mistakes others are making, such as the European Union.

Read the full report. 

Jacoby for Forbes: Can Europe Implement Its Ambitious New Rearmament Plan?

Posted on by Alex Terr

When Andrius Kubilius considers Europe today, he thinks about the U.S. in the late 1930s. The former Lithuanian prime minister, now European commissioner for defense and space, sees many parallels. Americans lacked a sense of urgency about Nazi aggression. The U.S. had few reserves of manpower or weaponry. Its arms industry had been weakened by years of underinvestment. Manufacturers, uncertain about future orders, hesitated to ramp up production capacity, and money was in short supply.

In the 1930s, President Franklin D. Roosevelt defied this apathy and inaction with the historic defense buildup known as the “Victory Program.” Eighty years later, Kubilius says, Western democracies face a different form of totalitarian aggression. But if America could do it then, Europe can and must do it now. “We have the same responsibility,” the commissioner wrote recently in a personal post, “to define and to implement our ‘Victory Plan.’ This is our moral task. For our grandkids to live also in peace.”

Kubilius is one of the architects of the European Union’s ambitious new rearmament strategy, ReArm Europe Plan/Readiness 2030, approved in principle last month by 26 of the continent’s 27 heads of state. Unlike in the U.S. where it now seems unclear to many whether Russia is a friend or foe, few Europeans are confused about the need for the initiative. Kubilius sums it up with one fact: as things stand today, Russia can produce more weapons in three months than all the NATO member states, including the U.S., can produce in a year.

Read more in Forbes.

Guenther for The Hill: Trump’s tariffs may hold back his own ambitions in space

Posted on by Alex Terr

The space industry was ecstatic to get a shout-out in President Trump’s first Joint Address to Congress. It appeared to be a signal that his administration was going to prioritize space issues, as it had during Trump’s first term, when significant attention was paid to ensuring the competitiveness of the space industry.

Unfortunately, the ever-evolving tariff regime is set to have the opposite effect. It will raise the cost of making rockets and satellites in the U.S., limit industry access to core inputs and materials and encourage boycotts of American products and services abroad.

Kahlenberg in City Journal: Will Universities Embrace Class-Based Preferences?

Posted on by Alex Terr

Richard Kahlenberg is an old-school liberal, committed to narrowing the gap between rich and poor. He’s also one of the leading critics of racial preferences in college admissions, having served as an expert witness for the plaintiffs in Students for Fair Admissions v. Harvard, the Supreme Court case that effectively ended the practice. In his new book, Class Matters, Kahlenberg lays out the connection between these commitments.

Notably, Kahlenberg’s opposition to affirmative action doesn’t seem to be rooted in instinct or ideology. His concerns are practical. First, racial preferences divide the working class, making political solidarity harder to achieve. More significantly, the gatekeepers at selective colleges seem far more invested in race than in class—eliminating racial preferences, he argues, might finally force them to focus on economic disadvantage.

Citing studies of admissions data, Kahlenberg explains that, prior to Students for Fair Admissions, preferences for black applicants tended to be substantial, while those for lower-income students were minimal or nonexistent. Because wealthier students generally have stronger academic credentials—and can afford steep tuition—elite colleges became havens for a multiracial upper class, doing little to dismantle class barriers. Race-based affirmative action let these institutions achieve the aesthetic diversity they sought without making serious investments in financial aid.

Read more in City Journal.

Congressional Republicans Take Dangerous Step Towards Ending Budget Enforcement

Posted on by Max Sherrill

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

For months, Republican leaders have sought to direct the official scorekeepers at the Congressional Budget Office (CBO) to score their upcoming tax and spending bill against a “current policy” baseline. Unlike the standard “current law” baseline — which would force Republicans to grapple with the roughly $4.6 trillion that extending expiring tax cuts would add to the national debt over the next decade — a current policy baseline would make such legislation appear free. Senate Republicans had planned to make their case before the chamber’s parliamentarian to allow its use in the budget reconciliation process, which has strict rules about how much legislation can add to deficits. But late last week, Republicans abruptly dropped this plan, likely to avoid a negative ruling that derailed their efforts.  

Instead, they are now asserting an even broader power: claiming that the Senate Budget Committee Chairman has the final say in determining a legislation’s costs. Doing so would allow them to ignore the official, nonpartisan score provided by the CBO and simply fabricate their own budgetary score. Moreover, Senate Republicans are asserting that they can do this whether or not the parliamentarian has a chance to determine if such a move is permissible under Senate rules — effectively a “nuclear option” that would fundamentally reshape how the Senate works.  

Last week, PPI joined a dozen bipartisan budget experts — including four former Senate GOP staffers — to warn of the irreparable damage that this move would have on budget enforcement. The budget process depends on a credible and reliable accounting of a bill’s fiscal impact. If lawmakers can simply choose what counts as a cost and what doesn’t, this effectively nullifies all existing procedural mechanisms to enforce budget constraints. For example, budget rules currently prevent any bill passed using the filibuster-proof reconciliation process from adding to the deficit beyond the initial 10-year window. But this prohibition is one of many rules that becomes impossible to actually enforce if the chair can simply declare that a bill costs nothing and thus complies with them. 

Unfortunately, Senate Republicans are proceeding full-steam ahead despite the irreparable damage it would do to both their institution and the federal budget. And although a handful of self-proclaimed fiscal hawks in the House have expressed opposition to such costly shenanigans in the past, they ultimately folded and offered their approval by rubber-stamping the Senate’s budget resolution earlier today. If Republicans successfully pursue this plan to completion, they will be responsible not only for adding up to $5.8 trillion to the debt in the most expensive budget reconciliation bill ever passed but also for the tens of trillions of dollars they will open the door for future Congresses to add — all while pretending it costs nothing.

Deeper Dive

Fiscal Fact

Chinese imports to the United States, which make up nearly 17% of all U.S. imports, are now subject to a 54% 104% 125% tariff. This is likely the highest effective tariff rate ever imposed on a major U.S. trading partner.

Further Reading

Other Fiscal News

More from PPI & The Center for Funding America’s Future:

Read the full email and sign up to receive the Budget Breakdown.

Untapped Expertise: HBCUs as Charter Authorizers, Part 4

Posted on by Max Sherrill
On this episode of RAS Reports, Curtis Valentine, the Director of PPI’s Reinventing America’s Schools Project, and Naomi Shelton, CEO of the National Charter Collaborative, sit down with Dr. Said Sewell, the President of Morris College in Sumter, South Carolina.

They discuss Dr. Sewell’s path to becoming the 11th President of Morris College, as well as how he sees his role in enhancing student success and the broader role of HBCUs as a whole.

This episode is the 4th in a series titled Untapped Expertise: HBCUs as Charter Authorizers, based on the paper of the same title by Curtis Valentine and Dr. Karega Rausch, President and CEO of NACSA.

Listen to the full episode.

Moss for Competition Policy International: Reshaping Competition Policy for the U.S. Airline Industry

Posted on by Alex Terr

The U.S. passenger air service industry has been deregulated for 45 years. As consolidation, business models, and technology have shaped and reshaped the industry over time, the competitive dynamics in passenger service markets have deepened. A number of realities are drawing new attention to competition in passenger service markets.

First, disruption in markets that are upstream of passenger service, such as safety problems with the Boeing 737 Max aircraft, affects the stability and reliability of the air transportation system. Second, it is critical that consumers have access to multiple distribution channels to facilitate transparent airfare price comparisons that spur competition. Third, while antitrust enforcement in airlines has historically focused primarily on keeping airfares low by enforcing harmful mergers, newer priorities should focus also on promoting consumer access and choice.

This article focuses on the last of these issues, for a simple reason. The U.S. is home to both a geographically and economically diverse population. Airline mergers between 2005-2015 “de-hubbed” major cities in the Midwest that were part of the U.S. legacy carriers’ hub-and- spoke networks. De-hubbing has had reduced access for consumers, despite smaller carriers stepping into the void, in limited cases, to restore service.

The de-hubbing of key U.S. airports elevates the importance of a U.S. system that supports multiple passenger airline business models — full service legacy carriers, regional carriers, and ultra low-cost carriers (“ULCCs”) — and both hub-and-spoke and point-to-point networks. These models provide vital choice to a broad range of flying consumers, including those that do not live near major airports, in cities without a choice of airports, and with limited budgets for air travel.

Framing policy that supports consumer access to, and a choice of convenient and competitively priced airfares, will require significantly better or different coordination between the U.S. Department of Justice (“DOJ”) and U.S. Department of Transportation (“DOT”).4 This means holding the line on further consolidation and concentration in domestic passenger service markets. But competition policy in airlines also requires a focus on lowering barriers to entry for smaller, ULCC, and regional carriers. Moreover, policymakers should widen their lens to consider how DOT’s liberal policy of granting antitrust immunity (“ATI”) for some international alliance routes can adversely affect consumers that are “behind” and “beyond” major U.S. gateway hubs. Finally, recent events elevate the urgency around improving inter-agency coordination between DOJ and DOT so that disparate enforcement actions and policies do not undermine competition.

Read more in Competition Policy International.