Category: Uncategorized

Jacoby in The Washington Monthly: Trump Provokes Fear in the Western Alliance

Posted on by Alex Terr

Donald Trump’s push for peace in Ukraine has left the West aghast and with good reason. The man expected to pull America off the world stage seems determined to have a hand in every conflict. The candidate who campaigned on fear of World War III is set on upending the rules that prevented it for 80 years. The self-styled master negotiator is giving away the game before it begins, ceding Moscow’s main demands before Vladimir Putin even agrees to come to the table. Long-time American allies—including in all the capitals of Europe—have been left out of talks about Ukraine.

The outcome in Ukraine is to be determined, but what is certain is the damage to the international order—perhaps permanent damage. Tensions between Washington and Europe dominated this weekend’s Munich Security Conference, and on Monday anxious European leaders will gather in Paris to plan a collective response.

The administration’s diplomacy is inscrutable. First, Secretary of Defense Pete Hegseth said one thing—that there could be no return to Ukraine’s prewar 2014 borders, no Ukrainian membership in NATO, and no American peacekeeping troops in Ukraine. John Coale, America’s deputy envoy to Ukraine, said the opposite: the U.S. had not ruled out NATO membership or restoring Ukrainian territory. Then, Vice President J.D. Vance dramatically shifted the tone, threatening increased sanctions on Russia and sending U.S. troops to Ukraine, as Secretary of State Marco Rubio tried to reassure Kyiv, declaring that the U.S. has “a stake in Ukraine’s long-term independence.”

Read more in The Washington Monthly. 

Republican Budget Resolutions Would Massively Increase Deficits

Posted on by Alex Terr

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

Republicans have spent the last four years decrying deficits during the presidency of Joe Biden and pledged to start bringing those deficits down when they took control of Congress. But those promises proved hollow when the House and Senate Budget Committees both advanced competing budget resolutions this week. Although they differed greatly in their details, both were designed to pave the way for Republicans to pass budget-busting policies on a party-line basis, the biggest of which would be an extension and possible expansion of the Tax Cuts and Jobs Act (TCJA) they passed in 2017.

The budget resolution passed by the House Budget Committee on Thursday would give the Ways & Means Committee the ability to spend $4.5 trillion on tax cuts over 10 years in a filibuster-proof reconciliation bill. It would also give other committees the ability to increase spending by another $300 billion. But the resolution only calls on other committees to identify $2 trillion of offsetting spending cuts, meaning the Republican reconciliation bill is likely to add more than $3 trillion to the national debt over the next decade after including the cost of interest. If passed, this reconciliation bill would add more to deficits than any other bill passed through the filibuster-proof reconciliation process in history.

Supporters of the House budget resolution tried to deflect from their fiscal hypocrisy by claiming that economic growth stemming from tax cuts would generate up to $3 trillion in additional revenue. House Budget Chair Jodey Arrington even went so far as to claim that these savings made their resolution effectively a “balanced budget” in yesterday’s markup. But these figures are farcical: even the most ideologically sympathetic groups find that less than one-seventh of TCJA’s cost could be offset by economic growth. In fact, the official scorekeepers at the nonpartisan Congressional Budget Office estimate that extending TCJA’s non-business tax cuts would actually reduce economic growth and lose additional revenue.

The Senate GOP’s budget resolution was seemingly more measured, calling for “only” $342 billion in new spending on defense, immigration enforcement, and energy. However, while Senate Republicans claim that this spending will be fully paid for, the resolution is light on details and does not specify from which committee(s) offsets will come. Moreover, Republican senators have made clear that, should their budget be adopted, it would only be the first of two. A second resolution would be used to clear a path for a separate tax cut bill, which is likely to be even more fiscally irresponsible than the one proposed by House Republicans.

With federal deficits already hovering near $2 trillion for several years in a row, it is fiscally irresponsible to continue piling on debt for unpaid-for tax cuts. As we saw during the Biden administration, unchecked deficits can exacerbate inflation and raise costs for American households. It was this very bout of inflation that helped propel Republicans to victory this past November. If they successfully implement either the House’s or the Senate’s reconciliation instructions, Republicans will be solely responsible for any price increases it might cause, and would completely abdicate any pretense of being the party of fiscal responsibility.

Deeper Dive

Fiscal Fact

U.S. inflation rose 0.5% in January — the fastest monthly increase since August 2023 — and was driven by higher costs in groceries, gasoline, and housing. Several components of Trump’s economic agenda, including tariffs and deficit-increasing tax cuts, are likely to put further upward pressure on inflation over the coming months.

Further Reading

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

Manno for Merion West: When Student Disengagement Meets Worker Disengagement, and a Solution

Posted on by Max Sherrill

Student engagement in K-12 schools drops dramatically as young people move from middle through high school. Evidence for this decline in involvement and enthusiasm—dubbed the engagement cliff—comes from the Gallup Student Poll of young people in grades five through 12, which began in 2009. This engagement cliff can be seen in recent Gallup polling on Gen Z 12- to 18-year-olds and in a Brookings Institution and Transcend analysis describing a parent perception gap in student engagement.

Unfortunately, the problem of disengagement is not limited merely to middle and high school students. Gallup polling of workers paints a similar picture of today’s worker disengagement that it calls “the great detachment.”

To be sure, record-high levels of student and worker disengagement from school and work are disturbing trends. However, these trends may be the symptoms of a rational response by students and workers to problems in their environments that must be solved. One solution lies in developing an economics of identity based on the hope cycle.

Keep reading in Merion West.

Untapped Expertise: HBCUs as Charter Authorizers, Part 2

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. Lester McCorn, a graduate of Morehouse College and President of Paine College in Augusta, GA.
The group discusses Paine’s role in preparing African-American K-12 students for college, as well as what it would mean for schools like Paine to create schools on campus as an authorizer of public charter schools.

Extra tariff costs for Valentine’s Day in 2026: $2.5 billion?

Posted on by Max Sherrill

FACT: Extra tariff costs for Valentine’s Day in 2026: $2.5 billion?

THE NUMBERS: Valentine product tariffs, now and (maybe) in 2026 – 

  2025  2026? 
Corset: 23.5% 43.5%?
Rose:   6.5% 26.5%?
Chocolate (boxed confectionery)   5.6% 25.6%?
Gold jewelry with diamonds   5.0% 25.0%?

WHAT THEY MEAN:

Having dropped his campaign-era “stabilize prices and quickly bring down costs,” Mr. Trump’s plan — short form, “there may be some pain” — appears to be threatening tariffs against all and sundry: Colombia, steel, Canada, medicine, small packages, China, etc. We did predict this, and will look at the industrial side in a week or two in light of recent experience. (In short, with steel and aluminum in the news, the main result of the 2018 steel and aluminum tariffs appears to be a ~10% drop in U.S. use of the two metals.) But this Valentine’s eve, here’s a seasonal forward look at what lovers might expect.

The National Retail Federation predicts $27.5 billion in Valentine’s Day spending this year: $14.8 billion on the long-stemmed reds, the dark chocolate, the bling, and the scraps of silk, plus $6.8 billion on cards and evenings out and $6.9 billion on other miscellaneous gifts and entertainment. Using NRF’s predictions and administration hints at a worldwide 20% tariff, the “some pain” program seems likely to raise next year’s V-Day costs by about $2.5 billion. Here’s an explanation, starting with some practical background on tariff payments and how they affect retail prices, and then a look at the four standards:

A tariff is a tax on purchases of goods from abroad, paid by the U.S. buyer — a business or an individual — to Customs and Border Protection. For industrial buyers like auto parts manufacturers or home-builders, the check is part of production cost. For retailers like florists and lingerie shops, it’s part of the “landed cost” from which they mark up to the store price. Taking the hypothetical sweater example in PPI’s Joint Economic Committee testimony last month, and converting appropriately for the season:

Consider a container of $100,000 worth of these sweaters corsets, hypothetically valued at $10 each, arriving at the Long Beach container port from Vietnam this week for a retailer’s Christmas Valentine selection.  As the cranes move the container from ship to truck, the buyer reports the arrival to Customs and Border Protection and writes the agency a $19,700 $23,500 check, reflecting the 19.7% 23.5% tariff assigned to the sweaters corsets under HTS line 61051000 62123000. The price increase works like this:

Corset purchase from manufacturer

$100,000

Shipping bill from maritime carrier

    $5,000

Retailer’s MFN tariff payment to CBP

  $23,500

Total “landed cost”: 

$128,500 

The buyer then marks up from this $128,500 “landed cost” to profit a bit on each article.  In this case, the 23.5% tariff raises the landed cost, and a few days later, the cash register price, by about 22.8%. Dumping another 20% tax on top of this — another $20,000 check — raises the landed cost to $148,500, meaning tariffs would hike store prices by 46%.  Assuming tariffs raise store prices by a similar 90% of the actual tariff rate (though in practice this would vary based on freight costs — likely a bit higher for land cargo, and a bit lower for air freight):

Roses: Valentine flower spending is $2.9 billion, roughly a tenth of NRF’s $27.5 billion total.  February being a winter month, America’s 11,600 florists buy abroad: about two-thirds of the roses come from Colombia, and most of the rest from Ecuador. Colombian blooms get no tariff — there’s a free trade agreement — while buyers of Ecuadoran roses pay 6.5%. The florists pay about $140 million for flowers in the January/February season, and write CBP tariff-payment checks totaling about $7 million. Had Mr. Trump followed through on his 50% tariff threats against Colombia three weeks ago, they would have taken a $70 million hit, and the store price of a dozen long-stemmed reds would likely have jumped from the roughly $90 current national average to around $125 or $130. Next February, a 20% overall tariff would raise flower prices by perhaps $500 million.

Chocolate: All commercial chocolate ultimately comes from abroad — mostly from West Africa. Patterns are complex, with U.S. chocolatiers buying lots of cocoa beans and paste to make candy and syrup, retailers bringing in boxes of high-end European confectionery, and the chocolate trade regime a maze of sugar and dairy quotas as well as tariffs. To simplify, chocolate confectionery has a 5.6% tariff and import value of $1.3 billion last year. A 20% new tariff might cost buyers $220 million for confectionery only, or $400 million if it hits early enough to raise U.S. manufacturers’ bean, butter, and paste costs.

Diamonds: Jewelry purchases come to $6.5 billion. As with chocolate, virtually all gems come from abroad — diamonds mainly from kimberlite pipes beneath Botswana and South Africa, and colored stones variously from Colombia (emeralds), Thailand and Sri Lanka (sapphires), and Thailand, Cambodia and Myanmar (rubies). Uncut gems are duty-free, while jewelry usually has tariffs from 5.0% to 6.5%, depending on the metal involved. A 20% tariff might hike costs by a billion dollars, depending again on whether it hits early enough to hit New York diamond-cutters as well as jewelry retail.

Lingerie: Lingerie spending by NRF’s estimate will be about $1.6 billion. Asian seamstresses stitch most of the ladies’ underwear worn in the United States, with China providing half and Indonesia, Sri Lanka, Thailand, Vietnam, and Cambodia most of the rest.  Trade policy is puritanically tough here, with underwear tariffs averaging 13% — nearly six times the overall U.S. 2.4% average — and (as we’ve earlier noted with strong disapproval) quietly taxing women’s at 15.5% and men’s only 11.5%. With annual lingerie tariff charges already about $650 million, a new 20% tariff might raise prices by $1 billion.

In sum: In love gifts as in industrial metals, the likely outcome is higher prices, then less purchasing. Money isn’t everything, of course. If they’re priced out of higher-cost roses and jewelry next February, younger and lower-income couples can still exchange cards and remind each other that “it’s the thought that counts.” But they might also want to know who’s responsible.

FURTHER READING

The USITC on steel and aluminum.

… NRF’s 2025 V-Day forecast.

PPI background:

December testimony to the Joint Economic Committee on likely impacts of tariff hikes.

On tariffs and prices, from last August: “Trust Alice, not the Queen.”

And our four principles for response to tariffs and economic isolationism. TL/DR:

  • Defend the Constitution and oppose attempts to rule by decree.

  • Connect tariffs and trade policy to growth, work, prices and family budgets, and living standards.

  • Stand by America’s neighbors and allies.

  • Offer a positive alternative.

More on flowers:

Our Valentine’s look last year at rose trade.

And 2025 advice from the Society of American Florists.

More on gems: 

Still duty-free for now — the Bangkok Gem and Jewelry Fair opens next week.

You probably can’t afford this one even without a tariff — the Motswedi, a 2,492-carat Botswana diamond found last summer.

More on chocolate:

Top-end French chocolatier Valrhona.

Ghana’s Cocoa Board on chocolate history worldwide and in West Africa:

And an underwear reprise:

Washington Post writer Catherine Rampell on our 2023 V-Day blast against the unfair, gender-biased U.S. underwear tariff system.

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.

PPI Calls for a Pragmatic, Cost-First Approach to Clean Energy Transition

Posted on by Alex Terr

WASHINGTON — Across the country, particularly in major cities, there is a stark disparity in energy infrastructure. Many predominantly Black and Latino neighborhoods have older homes that lack energy-efficient, cost-effective appliances, further straining communities already disproportionately impacted by poverty, discrimination, and underinvestment.

Today, the Progressive Policy Institute (PPI) released a new report, Energy Costs Come First: A New Approach to Environmental Justice, authored by Elan Sykes, examining the disproportionate energy burdens faced by low-income Black and Latino communities. The report provides a critical analysis of how current climate and energy policies exacerbate economic hardship for these communities and outlines a pragmatic path forward — one that prioritizes affordability, clean energy deployment, and regulatory reforms to enable rapid progress for all Americans in the energy transition.

“Too many communities of color in the U.S. are stuck with outdated energy infrastructure and sky-high energy bills,” said Elan Sykes, author of the report and Director of Energy and Climate Policy at PPI. “The clean energy transition represents an opportunity to fix this, but we must do it in a way that actually benefits the people who need it most — by lowering costs and emissions while ensuring a reliable, affordable supply of energy.”

The report focuses on Boston and the broader New England region as a case study, revealing how energy policies, infrastructure constraints, and regulatory barriers have compounded energy insecurity in predominantly Black neighborhoods. Key findings include:

  • Higher Energy Burdens for Black Households: Data shows that energy costs, as a share of household income, increase in proportion to the share of Black residents in a given Boston neighborhood.

  • Infrastructure Bottlenecks Driving Up Costs: Due to legal and regulatory hurdles, New England remains cut off from lower-cost energy sources, forcing vulnerable communities to rely on expensive and dirtier fuels like diesel and imported liquefied natural gas (LNG).

  • Flawed Climate Strategies Worsening Inequality: Activist-driven policies focused on blocking new energy infrastructure — without adequate replacement solutions—have made electricity and heating even less affordable for working-class families.

  • Lessons for National Policy: The dynamics seen in New England are not unique. Across the U.S., a failure to balance climate ambition with affordability is alienating working-class voters and exacerbating economic inequality.

The report highlights how federal, state, and local permitting laws — intended to protect the environment — are instead being weaponized to delay clean energy projects, prolong dependence on expensive fossil fuels, and drive up costs for the very communities that environmental justice advocates seek to protect.

PPI’s recommendations include:

  • Permitting Reform to Accelerate Clean Energy Deployment: Congress and state governments should streamline approval processes for renewable energy projects, grid expansion, and natural gas infrastructure to lower costs and improve reliability.

  • Targeted Energy Assistance for Low-Income Families: Expand and modernize programs like the Low Income Home Energy Assistance Program (LIHEAP) and Weatherization Assistance Program (WAP) to better serve households struggling with high energy burdens.

  • Creation of Community Energy Hubs: Establishing local institutions to provide consumers with trusted information on energy efficiency, clean energy options, and financial assistance programs.

  • A Balanced, Technology-Neutral Approach: Instead of rigid fossil fuel bans, policymakers should support an energy mix that includes nuclear, wind, solar, geothermal, and natural gas to ensure both emissions reductions and cost stability.

The report also warns that Republican efforts to dismantle clean energy policies, combined with Democratic policies that exacerbate affordability issues, risk deepening political alienation among working-class Black and Latino voters — a shift that was evident in the 2024 elections.

With the Biden administration’s historic clean energy investments now facing potential rollbacks under a second Trump presidency, PPI urges policymakers to adopt a pragmatic, affordability-first approach to the clean energy transition — one that accelerates progress while keeping energy bills manageable for working families.

Read and download the report here.

PPI’s Energy and Climate Solutions Initiative links two vital and inseparable national goals: assuring abundant and affordable energy for Americans while lowering U.S. and global greenhouse gas emissions to combat climate change. These goals must be pursued in tandem because we won’t be able to build majority support for climate action if Americans fear it will lead to higher energy costs at home or free-riding by the world’s major carbon-emitters. Only by tackling both sides of the energy and climate equation can U.S. leaders break today’s political deadlock between climate deniers and fossil prohibitionists and create a politically sustainable strategy for America’s clean energy transition.

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. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on X.

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

Energy Costs Come First: A New Approach to Environmental Justice

Posted on by Alex Terr

Click here for State by State data.

EXECUTIVE SUMMARY

Across the United States, too many communities of color lack access to reliable and affordable energy. Facing the dual problems of inadequate infrastructure serving their neighborhoods and being more likely to live in older, less energy-efficient housing on average, low-earning Black and Latino families are forced to spend higher shares of their smaller incomes on energy compared to wealthier and better-connected neighborhoods around them. As a consequence, they face painfully high energy bills and experience energy insecurity at double the level of white households. This burden is a woeful legacy of poverty, discrimination, and underinvestment in poor urban neighborhoods.

This legacy also includes aging energy and transportation systems like coal-fired power plants and highways that release disproportionate concentrations of harmful local pollution in disadvantaged communities, exacerbating health issues that compound with widespread financial and energy poverty. The clean energy transition offers a historic opportunity to relieve these burdens by replacing older and dirtier resources with new technologies and expanding electricity grids, transit systems, and dense urban housing to meet growing needs. Unfortunately, this opportunity has not yet been taken.

Instead, the green left has pursued a transition strategy that exposes vulnerable communities to higher, less predictable prices while obstructing reforms that would enable faster and wider deployment of clean energy projects. In the name of environmental justice and climate urgency, activists and decisionmakers have urged the abolition of all fossil fuels and used procedural barriers to obstruct new fossil infrastructure. But as explored in this paper, the strategy of procedural obstruction backfires when it adds interminable delays to clean energy projects and prolongs the life of coal- and oil-fired power plants.

Energy prices emerge from a complex mix of geography, markets, and policy choices, which are hard to isolate. This report focuses on Boston and the regional grid of New England more broadly as an initial case study of the special energy burdens of low-income communities. Connected to the rest of the continental U.S. by the state of New York, elected leaders and green activists have combined to lock Boston and New England into a status quo energy system that cuts off access to renewable energy sources like wind, solar, and hydropower as well as domestic natural gas capacity. By opposing local substation upgrades, transmission lines for hydropower imports from Quebec, and pipelines bringing Appalachian shale gas across Pennsylvania and New York, politically powerful elites in one of America’s most progressive regions are using federal laws like the National Environmental Policy Act (NEPA), the Clean Water Act, and state laws like the Massachusetts Environmental Policy Act (MEPA) to subject their lower-income neighbors to unnecessary price volatility and prolonging reliance on coal and oil. When global gas markets are disrupted, as in the 2022 Russian invasion of Ukraine, this import dependence exposes isolated New England to severe price spikes. To make up for the winter power shortfall, Boston and its surrounding areas are forced to use dirtier and more expensive energy resources, burning diesel and imported gas to power the grid and heating homes with fuel oil.

The cost of these spikes does not fall evenly on all New England communities. This paper tracks community impact using the metric of energy burden, or average monthly residential energy costs divided by median household income for a given location, to identify which people and places are hit hardest. According to data from the Census compiled by the Department of Energy’s LEAD (Low-income Energy Affordability Data) tool, the rate of energy burden in a given Boston census tract rises in clear proportion to the share of households identifying as Black. This paper includes an appendix with data for the energy burden in every district represented by a member of the Congressional Black Caucus for further examination. Future reports will examine energy burdens in other communities, starting with a study of congressional districts with significant Latino populations.

The statistical relationship between Black population share and higher energy burdens holds true for Black communities across the country. LEAD’s data definitively show that census tracts with high shares of Black households are more likely to experience higher energy burdens than their neighboring tracts even across states with wide variation in energy infrastructure, resource mix, and housing types in a remarkably strong pattern. These are the results when utopian demands of green activists and environmental groups for a rapid phase-out of fossil fuels — which still supply 83 percent of America’s primary energy and vary in carbon intensity — take precedence over local families’ struggles to pay their electricity and heat bills.

Boston is exemplary, but not unique. National activist groups like the Sierra Club, 350.org, and the Center for Biological Diversity argue for the same policies regionally in New England as they do in policy debates across the country. This includes not just state and local fights over individual projects but also federal policy discussions in Washington, where they sent a joint letter to then-Majority Leader Senator Chuck Schumer (D-N.Y.) opposing federal energy permitting reforms in June 2024. If these activist approaches continue to dominate the Democratic party’s environmental justice and climate policy conversations, low-income voters who do not share their priorities may continue their exodus from the party.

The main challenge facing Democrats is to build broader public support for a more pragmatic energy transition. To win a new hearing among working-class voters, Democrats must discard the utopian visions of Green New Dealers and their failed strategy of trying to scare working-class voters into supporting the premature abolition of fossil fuels. As PPI polling shows, most working-class voters are neither abolitionists nor climate deniers, with 54% majority support for a combination of old and new resources, including nuclear, wind, solar, geothermal, and natural gas, to power our growing economy while reducing greenhouse gases.

On the other extreme, Trump’s so-called “energy dominance” agenda would devastate U.S. clean energy industries and dismantle crucial methane mitigation programs that incentivize oil and gas producers to prevent waste. Such an abrupt shift would not only cede ground to Chinese clean technology producers in global markets, counter to stated administration goals on trade and manufacturing, but would also hurt consumers by depriving them of access to the cheapest and cleanest resources available.

Instead, policymakers should embrace a pragmatic environmental justice vision that brings down costs and emissions by enabling wide and rapid deployment of clean energy technologies and the infrastructure needed to support them. This infrastructure push would include relieving regulatory bottlenecks on clean electricity development, transmission and distribution grid upgrades. It would also include the natural gas pipeline and generation capacity needed to support them, enabling the connection of significantly more clean energy resources to consumers and helping to bring down costs.

Pairing this shift with bolstered subsidies for low-income households and introducing innovative frameworks for community engagement hosted at newly established Community Energy Hubs (see PPI Policy Recommendations below) would ensure that disadvantaged Black households would stand to gain improved access, lower costs, and a more concrete sense that the energy transition is working for them. On top of changes to the federal energy policy landscape, state and local policies that remove barriers not just to the development of clean energy infrastructure but also restrictions on dense housing, mass transit, and multimodal streets would help ensure that Black communities that face concentrated poverty and generations of infrastructural discrimination are not left exposed to the elements by inadequate insulation, higher utility bills on lower incomes, or lack of policy support.

POLICY RECOMMENDATIONS IN BRIEF

  • Congress, State legislatures, and local governments should enact all-of-the above permitting reforms to accelerate the development of electricity grid expansion, clean energy generation, supply chains for clean energy technologies, low-carbon mass transit and dense housing construction, and the natural gas capacity needed to support the grid while displacing coal and fuel oil combustion.
  • Congress must also maintain and strengthen LIHEAP and WAP to ensure that households can afford energy services in acute crises and gain access to efficiency upgrades.
  • State governments should establish pilot Community Energy Hubs that serve as a consumer-facing resource to ease transaction costs and close information gaps on available resources and technologies for homeowners, renters, landlords, workers, and small business owners.

Find the full State by State data here.

Read the full report.

Jacoby for The Bulwark: What USAID Really Did in Ukraine

Posted on by Max Sherrill

Amid the tide of bilge—lies, personal smears, conspiracy theories, and other drivel—offered by the Trump administration in the last two weeks as an alleged rationale for shutting down USAID and ending America’s decades-long tradition of foreign aid, one legitimate question stands out: How exactly is foreign aid in America’s interest? Or, to put it another way: How and to what extent do we benefit from spending money to improve conditions and better lives in other countries?

Consider USAID’s portfolio in Ukraine, which expanded sharply after Russia’s invasion in 2022—from $200 million in 2021 to $16 billion in 2023, adding up to some $35 billion in the past three years. USAID has served as the primary funnel for America’s nonlethal support for Ukraine, now the agency’s largest recipient worldwide.

The expansion of assistance to Ukraine originally enjoyed strong bipartisan support. According to a public “exit memo” by Biden administration USAID Administrator Samantha Power, the agency leveraged a three-to-one match by other donors, including the private sector and allied countries. Funding was spread across an array of projects, from humanitarian aid for elderly residents holding out in the rubble of ruined frontline cities to digital innovation designed to reduce corruption and keep government services running.

Keep reading in The Bulwark.

New PPI Report Analyzes the “Wageless Boom,” Immigration, and the 2024 Election

Posted on by Alex Terr

WASHINGTON — Real wages were well below historical trends going into the 2024 election, despite strong economic growth. At the same time, the latest job release from the Bureau of Labor Statistics shows that foreign-born workers now account for more than 19% of U.S. employment, up sharply in recent years.   

A new report from the Progressive Policy Institute (PPI), titled “Real Wages, Immigration, and the Election,” explores how the combination of weak real wages and the historic jump in immigration in 2023 and 2024 became a major factor in the 2024 election outcome. Authored by Dr. Michael Mandel and Andrew Fung, the report argues that voters were not misinformed about the economy, as some political analysts suggested. Instead, they accurately recognized that their real wages had fallen behind pre-pandemic trends.

“Our research shows that real wages were far weaker than expected,” said Michael Mandel, PPI Vice President and Chief Economist. “That reality shaped voter attitudes in 2024, and Democrats were unprepared for the backlash.”

Key findings include:

  • Real wages fell during the post-pandemic inflationary surge, but unexpectedly did not fully recover when inflation abated, leading to what the report calls a “wageless economic boom.”
  • Legal immigration is a clear positive for the country in the long run. But foreign-born workers accounted for nearly 90% of total employment growth from 2019 to 2024, suggesting a short-term connection between stagnant real wages and the jump in immigration. 
  • Democrats misread the political landscape by touting indicators such as job creation and GDP while failing to address voters’ economic discontent about wage growth.

“Real wages need to be at the center of economic policymaking and political strategy,” said Andrew Fung, PPI Policy Analyst. “If voters feel they’re falling behind financially, no amount of strong GDP numbers or job gains will change their minds.”

With the 2024 election serving as a wake-up call, Democrats must recalibrate their economic message — focusing on real wage growth and cost-of-living improvements — to regain trust among working-class voters.

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. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on X.

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

Real Wages, Immigration, and the Election

Posted on by Alex Terr

INTRODUCTION

In retrospect, the Biden Administration ran an unprecedented political economy experiment: What happens when a massive jolt of investment spending runs into historic levels of immigration? The outcome turned out to be an odd and confusing mixture of good news and bad news that no one expected. Gross domestic product and employment both soared well above pre-pandemic forecasts. These strong headline macroeconomic indicators gave many Democrats a false sense of security going into the 2024 election.

But despite the unanticipated strength of hiring, real wage growth slowed to a crawl. In its August 2019 economic outlook, the Congressional Budget Office had forecast that private sector wages and salaries, adjusted for inflation, would rise by about five percentage points over the next five years. In fact, by this measure, real wages did not rise at all from 2019 to 2024 — a “wageless economic boom” that soured many voters on Democratic candidates.

Real wages surged during the early days of the pandemic, fell during the inflationary period, and then started to climb again. But, surprisingly, the gap between the projected real wage and the actual real wage did not narrow in 2023 and 2024.

What happened? The obvious answer is inflation. Rising prices for food, energy, housing, and other essentials created a cost-of-living crisis, which eroded real wages. As PPI has written, the surge in inflation was at least partly due to high levels of government spending, including Biden’s hallmark investment legislation.

But government spending alone doesn’t explain the inability of wages to keep up with rising prices, which had such an impact on the election. All other factors being equal, after the initial inflationary shock, strong job growth and lots of job openings should have allowed workers to negotiate higher wages with employers. Instead, wages showed a weak response to inflationary pressures.

So why did real wages not rebound faster in 2023 and 2024? The Federal Reserve’s attack on inflation by raising interest rates is likely part of the cause. But GDP growth stayed strong, and the economy never came close to recession.

Given the timing, one important potential contributor to the real wage slowdown is the historic surge of immigration in 2022, 2023, and 2024, which added millions of new workers to the labor market in a short period of time. New estimates from the Census Bureau, released in December 2024, confirm that foreign-born immigration soared to over 2.5 million in 2023 and over 3 million in 2024.

BLS data shows that foreign-born workers accounted for 89% of employment growth from 2019 to 2024. And a May 2024 paper from the Federal Reserve of Kansas City draws a link
between immigration and wages, at least for the post-pandemic period:

….Industries and states that experienced larger increases of immigrant workers tended to see more deceleration in mean hourly earnings growth rates between 2021 and 2023.

Let’s be very clear. PPI believes that, in the long run, increased legal immigration represents a clear positive for the country in both the economic and social sense. We strongly support expanding pathways for legal immigration to help meet America’s future demographic, workforce, and innovation aspirations, while taking sustained action to minimize illegal immigration in a manner consistent with our values. This balance is necessary for keeping America the vibrant, resilient, and robust culture and nation it is today.

However, it’s increasingly clear that Democrats made a huge political mistake in the 2024 election by not acknowledging the short-term economic impacts of historic levels of immigration. This policy brief will draw connections between the time path of real wages, the unexpected immigration surge of 2023 and 2024, and the outcome of the 2024 elections. We will not be discussing here whether the Biden Administration should have followed different investment spending or immigration policies. These are complicated questions that require weighing a variety of short-term and long-term benefits and costs.

Rather, our goal is to offer a possible explanation of the divergence between the rosy headline macroeconomic indicators in 2024 and the consistent negativity of voters about their economic prospects. This negative real wage shock amplified voter concerns about issues such as immigration, trade, technology, and housing. Immigration is especially important for understanding the election.

We can’t say for certain that the weakness in wage growth in recent years was caused by the latest surge in foreign immigration. Whether or not immigration was responsible for slow wage growth during this period, voters do not think like economists. As such, it is not surprising that many made a connection between the immigration surge and the weakness in real wages, given what they see in their daily lives.

This analysis has several political implications. First, voters were not suffering from misinformation when they blamed Biden for the economy. People knew that their real wages and real incomes were below pre-pandemic trends, and they resented the Democrats telling them how well they were doing.

Second, Democrats likely were held accountable not simply for the 2021-22 inflationary surge but for the inability of real wages to recover back to trend in 2023 and 2024. Third, this analysis offers insight into what could have been done better and how Democrats can avoid the same pitfalls moving forward. In particular, Democrats need to use real wages to help set a political context for policy goals. This time, the issues were government spending, inflation, and immigration. In the next election, the key issues may be different. But taking changes in real wages seriously will help align Democrats with the concerns of working Americans.

Read the full report.

Jacoby for Washington Monthly: As Ukraine Fights, Echoes of Historic Meetings in Yalta and Helsinki Abound

Posted on by Alex Terr

The anniversary of the Yalta Conference, which ended 80 years ago this week in a Soviet-occupied Crimean resort on the Black Sea, has a special significance in central and eastern Europe—and not just because it took place in a Ukrainian city that Russian soldiers once again occupy.

At the time, in the U.S and allied countries, the agreement between Franklin D. Roosevelt, Winston Churchill, and Josef Stalin was hailed as a historic breakthrough, one step away from the end of World War II and proof positive that the U.S. and the Soviet Union would continue to cooperate in the postwar era. The countries in what would soon be known as the Soviet sphere of influence felt no such euphoria. They understood right away, as Americans would learn in coming months, that the upshot of the conference was to cement Soviet control over a broad swath of eastern Europe—countries from Ukraine to Estonia, more than a thousand miles north.

It’s an anniversary that holds important lessons for Donald Trump, unlikely as it is that he is reading history as he prepares to sit down with Vladimir Putin and perhaps once again carve up the territory in this much-contested corner of Europe.

Read more in the Washington Monthly. 

Marshall for The Hill: Who Will Stand Up to Trump’s Un-American Rule by Decree?

Posted on by Max Sherrill

In just three weeks, President Trump has set an all-too-familiar tone for his White House sequel: chaotic, dishonest, bullying and contemptuous of the rule of law.

Only it’s worse this time because Trump erroneously believes his narrow victory last November — he won the popular vote by just 1.5 percent — has given him a mandate to rule the U.S. by decree.

He’s lashing out madly in every direction — threatening our neighbors with massive tariffs, bullying small countries like Denmark and Panama whose territory he covets, proposing to depopulate and take over Gaza and settling scores with the very government he heads, which he imagines to be his worst enemy.

Americans are witnessing a naked power grab that would shred the Constitution’s checks and balances, rob Congress of its most important powers, neuter the courts and create the imperial presidency that Richard Nixon dreamt of long ago.

Keep reading in The Hill.

Tariffs Are Bad Taxes

Posted on by Max Sherrill

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

Both on the campaign trail and in his time as president, Donald Trump has hailed tariffs as “the greatest thing ever invented.” There’s seemingly no problem these taxes on imports can’t solve: paying for his legislative agenda, closing trade deficits, exacting diplomatic concessions, and more. Yet, in reality, the tariffs Trump began enacting this week are bad tax policy that don’t raise much revenue but do raise costs for American businesses and households.

This week began with Trump announcing his intent to impose a 25% tariff on goods from Canada and Mexico and an additional 10% tariff on goods from China. The new tariffs on China went into effect on Tuesday, while those on Mexico and Canada were only temporarily delayed after last-second agreements with their respective leaders. Together, Mexico, China, and Canada make up a substantial amount of U.S. trade — roughly 44% of all imported goods — with important imports ranging from oil and lumber to computers and produce. And this is likely to only be the beginning of Trump’s trade wars, as he’s promised to impose similar measures on the European Union, which represents another 17% of imported goods.

There are plenty of serious problems with these aimless and destructive tariff policies. By targeting Canada and EU allies, the United States is eroding vital diplomatic partnerships at a time when it should be strengthening them to counter rising threats from Russia, China, and Iran. These unilateral tariffs also represent a blatant disregard for the U.S. Constitution, which clearly assigns the power to levy taxes to Congress, not the president. By circumventing the legislative process to impose sweeping tax hikes, Trump is concentrating power in the executive and diminishing the fiscal checks and balances essential for our democracy.

But beyond these grave concerns, tariffs are simply bad tax policy. One of Trump’s central justifications for the new tariffs is that they will raise revenue that can be used to offset cuts to other taxes — even suggesting that they could replace income taxes entirely. But estimates for this latest round of tariffs show that, if implemented, they would raise only $1.3 trillion over ten years. That is less than one-third of what it would cost to extend the expiring provisions of the Tax Cuts and Jobs Act over the same period. Even if Trump imposed tariffs on all imported goods at the revenue-maximizing rate — estimated to be around 50% — they would likely still be insufficient to finance the full Trump agenda that some Republicans have estimated could cost as much as $10 trillion, much less replace the roughly $35 trillion the income tax will raise over the next ten years.

Not only do tariffs raise less revenue than income taxes, they do so in a way that is less fair. The tariff schedule currently has over 11,000 different rates depending on the type of good, its composition, and the county of origin. This complexity invites special interest carveouts and results in disproportionately higher tariffs on the goods that lower- and middle-income households consume. For example, expensive silver spoons currently face much lower tariffs than steel spoons, and cheaper clothing made from polyester and wool faces higher tariffs than more luxurious counterparts such as silk or cashmere. Well-resourced lobbyists and businesses are already seeking to carve out their own exemptions from Trump’s new tariffs, leaving the remainder of Americans with higher tariff rates.

The American people will pay the price for such bad tax policy. Businesses that rely on imported goods or components would face higher input costs for production. These higher costs would then be passed down to consumers in the form of higher prices, raising the cost of everyday goods, from food to clothing to gas. Tariffs would also harm export-reliant industries — such as agriculture, energy, and manufacturing — by strengthening the dollar and inviting retaliatory measures, thereby lowering demand for American goods overseas. Overall, estimates suggest that these measures could hike taxes on the average American household by nearly $1,000 while the resulting decline in economic output could eliminate 330,000 jobs.

Rather than foster economic growth and prosperity, tariffs create economic uncertainty and chaos. If Trump continues to lean on them as his favorite policy tool, he will unnecessarily burden American households and cause massive economic disruptions for businesses. Instead of standing idly by to enable aimless trade wars, Congress should look to the alternative trade agenda recently outlined by PPI, which focuses on lowering costs for Americans, promoting the global competitiveness of U.S. industry, and strengthening vital partnerships abroad.

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