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    The Trump-Musk feud exposes America’s wealth-hoarding crisis | Gabriel Zucman

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    As the world watches Donald Trump and Elon Musk publicly fight over the sweeping legislation moving through Congress, we should not let the drama distract us. There is something deeper afoot: unprecedented wealth concentration – and the unbridled power that comes with such wealth – has distorted our democracy and is driving societal and economic tensions.Musk, the world’s richest man, wields power no one person should have. He has used this power to elect candidates that will enact policies to protect his interests and he even bought his way into government. While at the helm of Doge, Musk dramatically reshaped the government in ways that benefit him – for instance, slashing regulatory agencies investigating his businesses – and hollowed out spending to make way for tax cuts that would enrich him.Musk is just one example of the ways in which unchecked concentration of wealth is eroding US democracy and economic equality. Just 800 families in the US are collectively worth almost $7tn – a record-breaking figure that exceeds the wealth of the bottom half of the US combined. While most of us earn money through labor, these ultra-wealthy individuals let the tax code and their investments do the work for them. Under the current federal income tax system, over half of the real-world income available to the top 0.1% of wealth-holders (those with $62m or more) goes totally untaxed. As a result, billionaires like Elon Musk and Jeff Bezos have gotten away with paying zero dollars in federal income taxes in some years, even when their real sources of income were soaring.On the other side, millions of hard-working Americans are struggling to make ends meet. Their anxiety is growing as tariffs threaten to explode already rising costs.A broken tax code means unchecked wealth-hoarding. The numbers are staggering: $1tn of wealth was created for the 19 richest US households just last year (to put that number into perspective, that is more than the output of the entire Swiss economy). That was the largest one-year increase in wealth ever recorded. I have studied this rapidly ballooning wealth concentration, and like my colleagues who focus on democracy and governance, I am alarmed by the increasingly aggressive power wielded by a small number of ultra-wealthy individuals.The good news is, hope is not lost. We can break up this dangerous concentration of wealth by taxing billionaires. There is growing public support for doing just this, even among Republican voters. A recent Morning Consult poll found that 70% of Republicans believed “the wealthiest Americans should pay higher taxes”, up from 62% six years ago.With many of Trump’s 2017 tax cuts for the wealthy set to expire this year, legislators have an opportunity to reset the balance driving dangerous wealth-hoarding. Rather than considering raising taxes on middle-class Americans or even households earning above $400,000, they must focus on the immense concentration of wealth among the very top 0.1% of Americans. This would not only break up concentrated wealth, but also generate substantial revenue.One mechanism for achieving this goal is a wealth tax on the ultra-wealthy. The Tax Policy Center recently released an analysis of a new policy called the Five & Dime tax. This proposal would impose a 5% tax on household wealth exceeding $50m and a 10% tax on household wealth over $250m. The Five & Dime tax would raise $6.8tn over 10 years, slow the rate at which the US mints new billionaires, and reduce the billionaires’ share of total US wealth from 4% to 3%.While breaking up dangerous wealth concentration is reason enough to tax billionaires, this revenue could be invested in programs that support working families and in turn boost the economy. Lawmakers could opt for high-return public investments like debt-free college, helping working families afford childcare, expanding affordable housing, rebuilding crumbling infrastructure, and strengthening climate initiatives.Ultimately, taxes on the ultra-rich could transform American society for the better and grow the economy by discouraging unproductive financial behaviors and promoting fair competition – leading to a more dynamic and efficient system.Critics will inevitably claim such a tax would stifle economic growth or prove too challenging for the IRS to implement. But in our highly educated nation, the idea that growth and innovation comes from just a handful of ultra-wealthy individuals does not withstand scrutiny. And while there are challenges for administering any bold proposal, America has always been up for a challenge.After witnessing the consequences of billionaire governance firsthand under this administration, Americans understand what’s at stake. We are seeing how unchecked, astronomical wealth has corrupted American democracy and stifled the economy. It’s not too late to act. Now it’s time for lawmakers who care about the country’s future to embrace solutions that empower everyone, not just the few at the top.

    Gabriel Zucman is professor of economics at the University of California Berkeley and the Paris School of Economics More

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      Trump and Musk trade barbs as rift over tax and spend bill erupts into open

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      A public feud erupted between Donald Trump and Elon Musk on Thursday, with the president saying he was “very disappointed” by the former adviser’s opposition to his top legislative priority, and Musk firing back that Trump would not have won election without his financial support.The falling-out came days after Musk had stepped down as head of Trump’s “department of government efficiency” (Doge) and then pivoted to attacking the One Big Beautiful Bill, which would extend tax cuts, fund beefed-up immigration enforcement and impose new work requirements for enrollees of federal safety net programs.While the Tesla CEO has focused his complaints on the price tag of the bill, which the non-partisan Congressional Budget Office estimates will add $2.4tn to the deficit over the next decade, Trump accused him of turning against it because of provisions revoking incentives for consumers to purchase electric vehicles.“I’m very disappointed in Elon. I’ve helped Elon a lot,” Trump said, adding that “he knew every aspect of this bill. He knew it better than almost anybody, and he never had a problem until right after he left.”“Look, Elon and I had a great relationship. I don’t know if we will any more,” the president said.Musk responded almost immediately on X, saying that the president’s comment was “false”, and “this bill was never shown to me even once”. He then pivoted to personal attacks on Trump, after praising him just days earlier in an Oval Office appearance to mark the end of his time leading Doge.“Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate,” he said, responding to a video of Trump’s remarks. “Such ingratitude.”The tech boss’s criticism has become the latest obstacle facing the One Big Beautiful Bill , which the House of Representatives approved last month by a single vote.The Senate this week began considering the bill, not long after Musk commenced the barrage of tweets over its cost, which he warned would undo Doge’s efforts to save the government money by cancelling programs and pushing federal workers out of their jobs. Musk said he believed the initiative could reduce spending by $1tn, though its own dashboard shows it has saved less than 20% of that amount since Trump was inaugurated.The House speaker, Mike Johnson, spent weeks negotiating with his fractious Republican majority to get the bill passed narrowly through his chamber, and on Wednesday said he had been trying to speak with Musk about his concerns. In an interview with Bloomberg TV on Thursday, he called the Tesla CEO “a good friend” and said the two had exchanged text messages ahead of a call he expected to take place that morning.View image in fullscreen“I just want to make sure that he understands what I think everybody on Capitol Hill understands. This is not a spending bill, my friends, this is a a budget reconciliation bill. And what we’re doing here is delivering the America first agenda,” Johnson said.“He seems pretty dug in right now, and I can’t quite understand the motivation behind it,” the speaker added.Later in the day, Johnson told reporters at the Capitol that the call did not take place, but that the disagreement “isn’t personal”. On X, Musk publicly questioned Johnson’s resolve to cut government spending, prompting the speaker to reply that he “has always been a lifelong fiscal hawk”.The Senate’s Republican leaders have shown no indication that they share Musk’s concerns. Instead, they are eyeing changes to some aspects of the measure that were the result of hard-fought negotiations in the House, and could throw its prospects of passage into jeopardy.One issue that has reappeared is the deductibility of state and local tax (Salt) payments, which the tax bill passed under Trump in 2017 limited to $10,000 per household. House Republicans representing districts in Democratic-run states that have higher tax burdens managed to get a provision increasing the deduction to $40,000 into the One Big Beautiful Bill act.But there are almost no Republican senators representing blue states. The majority leader, John Thune, said after a meeting with Trump on Wednesday that his lawmakers were not inclined to keep that provision as they negotiate the bill.“We also start from a position that there really isn’t a single Republican senator who cares much about the Salt issue. It’s just not an issue that plays,” Thune said.That could upset the balance of power in the House, where Republicans can lose no more than three votes on any bill that passes along party lines. More

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      Elon Musk attacks Trump’s ‘big beautiful’ tax bill as ‘outrageous’ and says it will cause deficit to grow to $2.5tn – US politics live

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      Good morning and welcome to the US politics live blog. I’m Tom Ambrose and I will be bringing you all the latest news lines over the coming hours.We start with news that Elon Musk, the billionaire tech entrepreneur, opened a new rift with Donald Trump by denouncing the US president’s tax and spending bill as a “disgusting abomination”.Musk’s online outburst could embolden fiscally conservative Republican senators – some of whom have already spoken out – to defy Trump as they continue crucial negotiations on Capitol Hill over the so-called “one big, beautiful bill”.“I’m sorry, but I just can’t stand it anymore,” Musk wrote on his X social media platform on Tuesday. “This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it.”Musk, who had previously voiced criticism of the proposed legislation, quipping that it could be big or beautiful but not both, added on X: “It will massively increase the already gigantic budget deficit to $2.5 trillion (!!!) and burden America citizens with crushingly unsustainable debt.”He continued: “Congress is making America bankrupt.”A top donor to Trump during last year’s election campaign, Musk departed the White House last week after steering its so-called “department of government efficiency” (Doge) with the stated mission of slashing fraud and abuse within federal departments. He has argued that the Republican bill will undermine Doge’s work and drive the US further into debt.For the full report, see here:In other developments:

      Republican firebrand Marjorie Taylor Greene has drawn widespread criticism from Democratic colleagues for admitting that not only did she not read Donald Trump’s tax and spending bill before voting for it, but she would have voted against it had she read thoroughly.The White House gloated on social media about the arrests of the wife and five children of Mohamed Sabry Soliman, the suspected Boulder attacker, and joked about providing them with “six one-way tickets”.

      In the 48 hours since the firebomb attack in Boulder, Colorado, on a demonstration in support of Israelis held hostage in Gaza, Republicans politicized the attack, attempting to blame Democrats, including the state’s multiple Jewish leaders.

      Democrats denounced the Trump administration’s “cruel” decision to rescind health department guidance issued in the wake of the 2022 Dobbs decision, striking down the right to an abortion, that required hospitals to provide abortions to women in medical emergencies even in state’s with local bans on the procedure.

      Millions of legal immigrants may be left unable to work after the US Social Security Administration quietly instituted a rule change to stop automatically issuing them social security numbers.

      A US judge on Tuesday ruled the US Bureau of Prisons must keep providing transgender inmates gender-affirming care, despite an executive order Donald Trump signed on his first day back in office to halt funding for such care. More

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      US budget chief calls fears that cuts to benefits will lead to deaths ‘totally ridiculous’

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      The White House budget director Russ Vought on Sunday dismissed as “totally ridiculous” fears expressed by voters that cuts to benefits in the huge spending bill passed by the House will lead to premature deaths in America.Donald Trump’s One Big Beautiful Bill act, now awaiting debate in the US Senate, will slash two major federal safety net programs, Medicaid, which provides healthcare to poor and disabled Americans, and the Supplemental Nutrition Assistance Program (Snap), which helps people afford groceries, which will affect millions of people if it becomes law.Vought, director of the office of management and budget (OMB) and a key figure in Project 2025, the rightwing manifesto created to guide a second Trump term, defended the bill in an appearance on CNN on Sunday morning, also defending the lacerations to the federal workforce under Elon Musk’s so-called “department of government efficiency” (Doge).Vought was asked about a town hall meeting in Iowa last week hosted by the senator Joni Ernst where, when fielding questions about proposed cuts to Medicaid, a constituent yelled out that as a result people were going to die.Ernst responded, to jeers: “People are not – well, we all are going to die. For heaven’s sakes, folks.”Then, after the exchange went viral online, she posted a sarcastic non-apology video on Saturday, saying: “I made an incorrect assumption that everyone in the auditorium understood that yes, we are all going to perish from this Earth. So I apologize. And I’m really, really glad that I did not have to bring up the subject of the tooth fairy as well.”When Vought responded on CNN’s State of the Union politics show about such concerns over cuts to health insurance and grocery subsidies leading to premature deaths, he said: “It’s totally ridiculous. This is ‘astroturf’. This bill will preserve and protect the programs, the social safety net, but it will make it much more commonsense.”Astroturfing is slang for pretending criticism is coming from the grassroots when, in fact, it is being orchestrated by interested parties.Some advocacy groups have said loss of Medicaid insurance and food stamps will cause great hardship.“These cuts won’t just hurt – they will kill,” the head of the Ohio Nurses Association said, while the American Academy of Pediatrics said the bill would result in “hungry kids” and impossible choices for many families. The American Hospital Association has warned that rural hospitals could close.On the same CNN show on Sunday, the senator Chris Murphy, Democrat of Connecticut, condemned Vought’s and Ernst’s remarks, saying: “Everyone would rather die in old age than at 40.” Murphy said people losing health insurance in order to continue tax cuts for the richest would lead to more deaths and that the bill is “an absolute disaster” and will add to the US deficit.“It’s just unreal the amount of gaslighting this administration is doing,” he said.Fellow Democrat and Georgia senator Raphael Warnock told NBC’s Meet the Press on Sunday that he is in favor of work but that a work-reporting requirement in the bill, as a condition of Medicaid, “is very good at kicking people off their healthcare coverage, it’s not good at incentivizing people to work”. He added that if passed, the legislation would result in “a workforce that’s sicker and poorer” and damage to the US economy.The House speaker, Mike Johnson, who got the bill through the chamber last month but faces a greater challenge from some fellow Republicans in the Senate, told NBC that the bill does not include cuts to Medicaid but instead would strengthen the system and result in reductions in “fraud, waste and abuse”.The House minority leader and New York Democratic representative Hakeem Jeffries predicted that the bill would not pass the Republican-controlled Senate.“Hospitals will close, nursing homes will shut down and people will literally die,” he warned. More

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      Trump confirms he’ll be negotiating his signature tax bill after Musk criticism

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      Donald Trump said he will be negotiating his signature tax bill after Elon Musk publicly criticised the president’s spending plan, saying it “undermines” cost-cutting efforts that the world’s richest man once spearheaded.Speaking to reporters on Wednesday, Trump acknowledged the bill “needs to get a lot of support” in Congress, adding “we have to get a lot of votes”. The president also said he was “not happy about certain aspects of it, but I’m thrilled by other aspects of it” and confirmed he would be negotiating the legislation.The remarks come after Musk said he was “disappointed to see the massive spending bill, which increases the budget deficit … and undermines the work that the Doge team is doing” in comments made to CBS as part of a longer interview due to run on its Sunday morning programme this weekend.Musk had been leading the “department of government efficiency” (Doge) since January, which was given the task of cutting state spending. He later announced in April he would be stepping back from the Trump administration after Tesla’s earnings plunged, and spending millions of dollars in a supreme court race that his Republican candidate ultimately lost.Musk now appears to be hitting out at Trump’s One Big Beautiful Bill Act, which was narrowly approved last week by the House of Representatives.The bill pushes ahead with a number of Trump’s campaign promises, including extending tax cuts for individuals and corporations and ending clean energy incentives enacted under Joe Biden.It also involves about $1tn (£741bn) in cuts to benefits aimed at supporting struggling households, including a health insurance scheme for low-income families, Medicaid, and Supplemental Nutrition Assistance Program (Snap) food stamps.However, the bill also funds the construction of a wall along the border with Mexico, as well as staff and facilities for mass deportations of undocumented immigrants. Even when taking cuts into account, the bill is expected to add about $2.3tn to the deficit, according to the non-partisan Congressional Budget Office.Musk told CBS: “I think a bill can be big, or it can be beautiful. But I don’t know if it can be both. My personal opinion.”The comments will fuel rumours of a growing rift between the billionaire and the US president, whom Musk helped bankroll last year. In total, Musk’s super political action committee donated $200m to Trump’s presidential campaign before the November election, which many credit with helping to return Trump to the White House.Musk also has business interests at stake, with Trump’s bill due to end a $7,500 tax credit for electric vehicles and to impose a $250 annual registration fee for owners. The Tesla boss has previously called for an end to those incentives, although that was months before the EV maker’s earnings started to wobble.skip past newsletter promotionafter newsletter promotionLast month, Tesla reported a 71% drop in first-quarter profits to $409m, compared with $1.39bn in the same period in 2024. Tesla’s stock has also suffered, with the company losing about a quarter of its market value since Musk took a top spot in Trump’s administration at the start of the year.Musk’s criticism is likely to fuel opposition by hardline Republicans, who threatened to block Trump’s legislation as it passes through the US senate unless the president rolls out deeper cuts that would reduce the national debt. One key senator, Rand Paul from Kentucky, told Fox News Sunday that the bill’s cuts were “wimpy and anaemic” and would “explode the debt”.However, Trump has already been treading on politically sensitive territory by supporting a bill that makes big cuts to programmes he promised to protect. He pledged multiple times on the campaign trail last year that he would not touch basic safety nets, including Medicaid.Some of the president’s “make America great again” supporters, including the former White House strategist Steve Bannon, have also warned against such a move, with one Missouri senator, Josh Hawley, saying that cutting health insurance for the working poor would be “politically suicidal”. More

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      Top Republicans threaten to block Trump’s spending bill if national debt is not reduced

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      Donald Trump has been warned by fiscal hawks within his own party in the US Senate that he must “get serious” about cutting government spending and reducing the national debt or else they will block the passage of his signature tax-cutting legislation known as the “big, beautiful bill”.Ron Johnson, the Republican senator from Wisconsin who rose to prominence as a fiscal hardliner with the Tea Party movement, issued the warning to the president on Sunday. Asked by CNN’s State of the Union whether his faction had the numbers to halt the bill, he replied: “I think we have enough to stop the process until the president gets serious about spending reduction and reducing the deficit.”Trump has invested a large portion of his political capital in the massive package. It extends the 2017 tax cuts from his first administration in return for about $1tn in benefits cuts including reductions in the health insurance scheme for low-income families, Medicaid, and to Supplemental Nutrition Assistance Program (Snap) food stamps.The bill squeaked through US House by just one vote on Thursday. It now faces a perilous welcome in the upper legislative chamber.Sunday’s admonitions from prominent senators angered by the failure to address the budget deficit bodes ill for Trump’s agenda given the tightness of the Republicans’ congressional majorities. The Senate majority leader, John Thune, can afford to lose only three votes from among his party’s 53.Thune has indicated that changes to the bill might be needed to bring refuseniks on side. That in turn could present the House speaker, Mike Johnson, with a headache.The House will have to approve any changes made in the Senate under the process of budget reconciliation, which allows spending packages to be fast-tracked through Congress avoiding a Senate filibuster of 60 votes. The final contents of the bill will need to be blessed by both chambers, with Democrats almost certain to vote unanimously in opposition.The House speaker renewed his plea to his Senate colleagues on Sunday to go lightly with him. He encouraged them on CBS News’s Face the Nation “to make as few modifications as possible, remembering that I have a very delicate balance on our very diverse Republican caucus over in the House”.But Senate budget hawks do not appear to be in the mood for compromise. Ron Johnson estimated that the bill would add up to $4tn to the federal deficit, a calculation that is broadly in line with the latest analysis from the Congressional Budget Office (CBO).Johnson added a rare note of personal criticism of Trump from a congressional Republican. He said that while Trump might not be worried about the national debt, “I’m extremely worried about that.”He added: “We are mortgaging our children’s future. It’s wrong. It’s immoral. It has to stop.”Another key Tea Party senator, Rand Paul from Kentucky, has also been vocal over the deficit. He laid into the spending cuts contained in the big beautiful bill, telling Fox News Sunday that in his view they were “wimpy and anemic” and would “explode the debt”.Other influential Republican senators have been expressing concern about the number of Americans who would lose access to health coverage as a result of the legislation’s cuts to Medicaid. According to the CBO, almost 8 million people would be thrown off the benefit.Speaker Johnson tried to dismiss the concern, telling CBS News that 1.4 million of those vulnerable people were “illegal aliens receiving benefits” – and a further 4.8 million were able-bodied individuals choosing not to work and “gaming the system”.An analysis by the non-partisan FactCheck.org found that the claim that 1.4 million undocumented migrants were on Medicaid was false. People living in the US without immigration papers are not eligible for the federal program other than to receive emergency medical treatment.More than 1 million undocumented immigrants are in danger of losing health benefits as a result of Trump’s cuts – but this assistance is provided by states and has nothing to do with Medicaid.Any reduction in Medicaid would be politically awkward for Trump, who promised repeatedly on the campaign trail last year that he would not touch basic safety nets such as Medicaid, Medicare and social security. The president’s loyal supporters in the Maga (“Make America great again”) movement have cautioned against the move.Steve Bannon, who served as chief White House strategist in Trump’s first administration and remains a persuasive voice within the movement, recently told listeners to his War Room podcast: “You got to be careful, because a lot of Maga is on Medicaid.”Josh Hawley, the Republican US senator from Missouri, recently said that “slashing health insurance for the working poor” would be “politically suicidal”. More

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      The US credit rating has been downgraded. But there’s an easy fix for our debt | Robert Reich

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      On Friday, the credit rating of the United States was downgraded. Moody’s, the ratings firm, announced that the government’s rising debt levels would grow further if the Trump Republican package of new tax cuts were enacted. This makes lending to the US riskier.Moody’s is the third of the three major credit-rating agencies to downgrade the credit rating of the United States.So-called “bond vigilantes” have already been selling the US government’s debt, as the Republican tax package moves through Congress. They’re expected to sell even more, driving long-term interest rates even higher to make up for the growing risk of holding US debt.Some rightwing Republicans in Congress are using the Moody’s downgrade to justify deeper spending cuts in Medicaid, food stamps and other social programs that lower-income Americans depend on.But, hello? There’s a far easier way to reduce the federal debt. Just end the Trump tax cuts that mainly benefit the wealthy and big corporations – and instead raise taxes on them.I’m old enough to remember when the US’s super-rich financed the government with their tax payments. Under Dwight Eisenhower – hardly a leftwing radical – the highest marginal tax rate was 91%. (Even after all tax credits and deductions were figured in, the super-rich paid way over half their top marginal incomes in taxes.)But since the Reagan, George W Bush and Trump 1 tax cuts, tax rates on the super-rich have plummeted.So instead of financing the government with their taxes, the super-rich have been financing the US government by lending it money.skip past newsletter promotionafter newsletter promotion(You may have heard that the US’s debt is held mainly by foreigners. Wrong. More than 70% of it is held by Americans – and most of them are wealthy.)This means that an ever-increasing portion of the taxes from the rest of us are dedicated to paying ever-increasing interest payments on the debt – payments that go largely to the super-rich.So when the debt of the United States is downgraded because Trump Republicans are planning another big tax cut mainly benefiting the rich and big corporations, most Americans could end up paying in three different ways:

      They’ll pay even more interest on the growing debt – to the super-rich.

      They’ll pay higher interest rates on all other long-term debt. (As higher rates on treasury bonds waft through the economy, they raise borrowing costs on everything from mortgages to auto loans.)

      The debt crisis will give Republicans even more excuse to do what they’re always wanting to do: slash safety nets. So many Americans could lose benefits they rely on, such as Medicaid and food stamps.
      The “bond vigilantes” are not the cause of this absurdity. Neither is Moody’s or the other credit-rating agencies. Nor, for that matter, is the growing national debt.What’s the underlying cause? Just follow the money. It’s the growing political power of the super-rich and big corporations to lower their taxes at the expense of most Americans.

      Robert Reich, a former US secretary of labor, is a professor of public policy emeritus at the University of California, Berkeley. He is a Guardian US columnist. His newsletter is at robertreich.substack.com More

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      Why is Trump considering raising taxes on millionaires? | Alex Bronzini-Vender

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      “I actually love the concept,” Donald Trump recently told Time magazine of a proposal circulating within his cabinet to raise taxes upon those earning over $1m. “I don’t want it to be used against me politically, because I’ve seen people lose elections for less, especially with the fake news.”Few presidential administrations have killed sacred cows at a faster rate than that of Donald Trump. But this really is shocking: a sitting Republican president praising a proposal to raise taxes upon the wealthy, adding only the slight caveat that it would be adversely spun by those in “the fake news”. A tax increase, Trump apparently believes, would be tenable as policy but not as politics.Trump says something similar of almost every idea thrown his way, and commentators have long observed that the surest way to change the president’s mind is to be the last person who spoke to him. Perhaps more interesting than Trump’s judgment on the issue, then, is that leading members of his cabinet have endorsed a similar tax hike. Longtime anti-tax activists are panicked. As the Lever recently noted, there’s every reason to believe that serious cracks are appearing in the Republican anti-tax coalition.First: why? The proposal itself is a brainchild of the conservative American Compass thinktank, which, in a June 2024 white paper, proposed raising taxes upon the wealthy to pay down the American national debt. “The constituency and base of the Republican party is shifting,” Oren Cass, American Compass’s founder, told the Atlantic in April. To extend Trump’s 2017 tax cuts by simply adding $5tn to the American national debt would be, in Cass’s words, “pathetic, embarrassing, and outright cheating”.Steve Bannon, like Cass, has long fretted about the contradiction between the Maga movement’s populist posture and its upwardly redistributive governance. “This is a 1932-type realignment, if we do this right,” Bannon told Semafor in December. “You have to break that mindset that stock buybacks are fine, that crony capitalism is fine, and the tax breaks for the corporations are fine, then you’re going to squander a unique moment in history.”The proposal’s origins might be among the movement’s heterodox policy impresarios, but – more confusingly – its potential backers within the White House aren’t just self-styled economic populists like JD Vance. Those reportedly open to the idea also include mainstream conservatives like Russell Vought, director of the office of management and budget and a stalwart of the Heritage Foundation, and Scott Bessent, a former hedge fund manager and Trump’s treasury secretary.Their voices confound the expectation that the party’s “realignment” wing is driving the breakdown of the Republican consensus on tax-cutting. Instead, it’s something much more prosaic: the Trump administration’s economic team has realized that an abnormally large slice of the American debt needs to be refinanced this year.Trump administration officials hoped that, following Trump’s “liberation day” tariff announcement, investors would seek safety from a faltering stock market by shifting capital into US treasury bonds. Such a move, they reasoned, would drive bond prices up and yields down – since bond yields fall when prices rise, as the fixed interest payments become less attractive relative to the purchase price. Lower yields, in turn, would ease the government’s borrowing costs.And for a moment, it seemed the plan was working. The 10-year yield dipped, and Trump touted it as validating his tariff strategy. But the movement didn’t hold. Rather than rotating into bonds, investors fled both equities and treasuries, spooked by inflationary pressure from tariffs, fiscal instability and rising geopolitical risk. The result was a sharp drop in demand for government debt, a spike in yields and a higher cost of borrowing – precisely the outcome the White House had hoped to avoid.The Trump administration’s one weird trick to refinance at lower costs than necessary failed. Now, the Republicans have two remaining options: cut spending, or cut the tax-cutters loose.What does that portend for the future of American conservatism? Whether or not the Trump administration follows through on raising taxes on the wealthy – it likely won’t – the fiscal compact that’s underpinned American conservatism has, at least in the near term, become unsustainable.skip past newsletter promotionafter newsletter promotionSince the presidency of Ronald Reagan, conservatives have largely managed to slash taxes on the wealthy without pursuing correspondingly deep austerity measures. Public debt has made up the difference. “Reagan proved deficits don’t matter,” Dick Cheney reportedly told the treasury secretary as the Bush administration sought a second round of tax cuts in 2003. But, at least over the next year, deficits will very much matter. And however the Republicans choose to resolve their impasse, a critical flank of the Trump coalition – either the wealthy or the party’s increasingly working-class base – will need to pay.If the Republican fiscal bargain is breaking apart, the GOP will need another way to unify its increasingly disparate base. The Democrats have long suffered from a similar issue: the statistician Andrew Gelman observed in 2007 that the real mystery of Americans’ voting behavior wasn’t that working-class voters were drifting towards the GOP – an overstated effect at the time – but that rich and poor alike were casting their lot with Democrats. The Democrats resolved this, but to mixed results. Rather than take on the deeper structural questions of economic inequality, they focused their campaigns on defending existing programs like social security and Medicare, advancing measured reforms in the name of racial justice, and protecting rights to abortion and same-sex marriage.Perhaps the crack-up of the tax-cutting coalition will lead the Republican party to attempt that compromise a l’envers. Just as the Democrats sidestepped thorny economic issues by rallying around the defense of widely accepted civil rights, the GOP could turn away from its longstanding economic bargain – the one that has defined its politics since Reagan – and instead double down on its campaign to undermine those same rights. In deepening its abuses against noncitizens, racial and sexual minorities, and activists on behalf of Palestinian rights, the Trump administration might perceive itself as restoring purpose to a party sorely lacking it.It’s too soon to tell. What is certain, however, is that the tax-cutting coalition as we know it has become deeply unsustainable. Tax-cutting once unified the Republicans. But, in forcing Trump to choose between taxing the top or deeper austerity for the bottom, it now threatens to blow it apart.

      Alex Bronzini-Vender is a writer living in New York More

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      While Trump slashes jobs, his golf trips are costing taxpayers millions | Mohamad Bazzi

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      It’s no secret that Donald Trump loves to golf, especially at his own resorts. But Trump’s habit is costing US taxpayers tens of millions of dollars – even as he decries fraud and claims to slash waste in federal spending.Since he took office, Trump has fired tens of thousands of federal workers and tried to shut down agencies, part of his effort to unilaterally dismantle the government. He has also made seven trips to Florida and the golf courses he owns there.This weekend, Trump made his seventh visit to Florida and his sixth to his waterfront mansion and private club at Mar-a-Lago since his inauguration on 20 January. As Richard Luscombe noted in the Guardian last week, Trump’s frequent trips to his own properties not only cost taxpayer funds, but they benefit him directly – his businesses have charged the US government to house Secret Service agents and other White House staff. In other words, American taxpayers pay the Trump Organization for the right to protect Trump and his family.During Trump’s first term, his properties had a history of overcharging the Secret Service, by as much as 300% beyond the authorized government hotel rates, according to a report issued by Democrats in Congress last year. The report found that the Trump Organization charged the Secret Service as much as $1,815 a room per night to stay at the Trump International hotel in Washington DC – billing the US government significantly more than the hotel did for “rooms rented by the Qatari royal family and Chinese business interests”.It’s difficult to gauge exactly how much the Secret Service and other agencies spent at Trump properties, since various reports and audits focus on specific time periods instead of his full four years in office. The watchdog group Citizens for Responsibility and Ethics in Washington (Crew) estimated that the Secret Service paid nearly $2m to Trump-owned properties. Trump visited his properties an astounding 547 times during his first term, according to an analysis by Crew. That included 145 trips to Mar-a-Lago, 328 visits to Trump’s various golf courses and 33 visits to the Trump hotel in Washington, which his company sold in 2022 but is now negotiating to buy back.The cost to US taxpayers for Trump’s jaunts to Mar-a-Lago, which he calls his “winter White House”, far exceeds renting rooms for the president’s security entourage. A 2019 report by the Government Accountability Office (GAO), which examined four trips that Trump took to his Palm Beach resort during his first term, put the total cost at $13.6m, or about $3.4m for each visit. That includes flying Air Force One, along with a separate cargo plane that carries the presidential motorcade, between Washington and the Palm Beach international airport. With seven trips so far into his current term, the US government has likely already spent more than $23m on Trump’s golf outings.And that estimate doesn’t capture the full costs to taxpayers. The GAO report does not account for additional federal funds to reimburse local law enforcement agencies for protecting Trump while he’s in Florida. The Palm Beach county sheriff, Ric Bradshaw, has said that his department spends $240,000 a day to help the Secret Service protect Trump. Bradshaw recently asked county commissioners for $45m in additional funds to provide security for Trump’s visits through the rest of this year – and the county is asking Congress to reimburse those costs.Trump often conducted official business and brought other senior US officials on his golf-focused trips to his properties – and he is repeating this pattern early in his second term, when he has visited Mar-a-Lago nearly every weekend. Trump’s frequent trips to his golf clubs send the message to foreign leaders, business executives, lobbyists, Republicans in Congress, and others who want to curry favor with the Trump administration that his properties are open for business. Throughout his first term, Trump dodged accusations that he was violating the US constitution’s emoluments clause as his businesses accepted money from foreign governments or lobbyists connected to them. Trump’s businesses received $7.8m from at least 20 foreign governments during his first administration, according to a report issued by congressional Democrats last year, although a later analysis by Crew estimated that payments from foreign governments reached $13.6m.At Mar-a-Lago, business leaders were recently offered one-on-one meetings with Trump for $5m, while others paid $1m a seat for a small-group candlelight dinner with the president. Those funds seem to be going to Make America Great Again Inc, a Super Pac that spent more than $450m on Trump’s presidential campaign last year, and is now expected to raise funds for a presidential library that would be built after Trump leaves office.Previous US presidents enjoyed playing golf, including Barack Obama and George W Bush. In fact, as a private citizen, Trump mocked Obama dozens of times for leaving Washington to play golf during his presidency. In August 2016, during his first presidential campaign, Trump pledged he wouldn’t have much time to hit the greens. “I’m going to be working for you,” he told a rally in Virginia. “I’m not going to have time to go play golf.”Of course, Trump ended up spending far more of his first term as president playing golf than Obama had. And Trump’s problem is not how often he plays or how many weekends he takes off. Because Trump refuses to divest from ownership of his family business, his frequent golf outings go beyond questionable government spending – the president is enriching himself through payments that US agencies make to Mar-a-Lago and other Trump properties.The president is exempt from conflict of interest laws that ban federal employees from taking actions that would directly benefit them. Since the 1970s, US presidents have voluntarily abided by these laws, and put their financial holdings in a blind trust. But Trump refused to divest from his extensive business interests during his first term, creating a web of conflicts and potential corruption. Today, Trump is more emboldened to ignore US laws and norms set by past presidents, partly thanks to last year’s supreme court ruling that concluded that Trump has “presumptive immunity from prosecution for all his official acts”.Since taking office in January, Trump and his allies, especially the billionaire Elon Musk, rushed to dismantle many of the safeguards put in place after the Watergate scandal to monitor government corruption and punish officials involved in ethics violations. Trump fired 17 inspectors general who served as watchdogs over federal agencies, and he gutted a unit at the justice department that was created in 1976, after Watergate, to prosecute public corruption cases.In his first term, Trump did not suffer any consequences for playing a lot of golf – and using the presidency to enrich himself and his family. Now, he seems determined to spend even more time shuttling back and forth to his golf courses at taxpayer expense, with a chunk of that money going to his businesses.

      Mohamad Bazzi is the director of the Hagop Kevorkian Center for Near Eastern studies, and a journalism professor at New York University More