
US senators approve $9 billion of Elon Musk's federal cuts
The upper chamber of Congress green-lit the measure in what was seen as the first test of how easily lawmakers could usher into law savings sought by Elon Musk's Department of Government Efficiency (DOGE) -- in the aftermath of the tech mogul's acrimonious exit from the government.
Despite the cutbacks' unpopularity in some sections of both parties, the Republican-led Senate passed the measure with 51 votes for and 48 against in a session that went more than two hours past midnight.
The version of the text passed in June by the House of Representatives sought to eliminate $400 million in funding allocated to health programs, including the PEPFAR global AIDS relief fund created by then-president George W. Bush.
But defunding PEPFAR -- which has saved an estimated 26 million lives -- was seen as a nonstarter among a handful of moderate Republican senators, and the proposal was dropped.
South Carolina Senator Lindsey Graham told AFP the bill was consistent with Trump's promises to cut spending.
'I've been a big fan of the foreign aid accounts... I'm a big hawkish guy, but you need foreign aid. You need soft power,' he said.
'But when you start spending money on a bunch of junk, and liberal programs disconnected from the purpose of the aid package, it makes it difficult on a guy like me.'
The bill now goes back to the House for final approval, with lawmakers up against the clock. Congress, which had already allocated the money, has to approve the cuts by Friday or the White House must spend the cash as originally intended.
Legislation to claw back money already approved by Congress -- known as a 'rescissions package' -- is extremely rare, and no such measure has passed in decades.
'Surrendering powers'
Around a dozen Republicans had voiced concerns about allowing the White House to dictate spending cuts, placing them in the crosshairs of Trump, who last week threatened to withhold his endorsements from any rebels.
The vote was the first in what Republicans have touted as a potential series of packages codifying the spending cuts made by DOGE.
Musk was tapped by Trump to lead the task force after the tech billionaire spent $290 million helping him get elected.
The SpaceX and Tesla boss boasted that he would be able to save $2 trillion in federal spending -- but left the White House under a cloud in late May as he feuded with Trump over deficits and spending.
DOGE acknowledges that it has saved taxpayers just $190 billion -- and fact checkers even see that claim as dubious, given previous inaccuracies in its accounting.
The rescissions package slashes around $8 billion in foreign aid, with much of that approved for humanitarian organization USAID, one of DOGE's first targets.
Around $1 billion is to be taken back from the Corporation for Public Broadcasting, which helps fund National Public Radio (NPR) and the Public Broadcasting Service (PBS), as well as more than 1,500 local radio and television stations.
Conservatives often accuse PBS and NPR of bias, and Trump signed an executive order in May to cease federal funding for both networks.
Democrats say cutting the funding will not meaningfully reduce the deficit, but instead dismantle a trusted source of information for millions of Americans.
'It is yet another example of the spirit and ideals of our Constitution being undermined in a terrible way. We are a nation that believes that (Congress) has a real role,' New Jersey Senator Cory Booker told AFP.
'And this is a bunch of my colleagues in thrall of the president, surrendering the powers of us, and the urgency for us to work together and do it in a bipartisan way to improve budgets.'
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


New Straits Times
an hour ago
- New Straits Times
Republicans seek to rename opera house after Melania Trump
WASHINGTON: Republicans in the US House of Representatives sought Tuesday to rename the opera house in Washington's John F. Kennedy Centre for the Performing Arts after First Lady Melania Trump. The Republican-led House Appropriations Committee voted to advance language that would condition funding for Washington's premier cultural institution on the name change as it debated the 2026 budget. Idaho congressman Mike Simpson, who introduced an amendment to call the venue the "First Lady Melania Trump Opera House," said it was an "excellent way to recognise her support and commitment to promoting the arts." The move marked the latest front in President Donald Trump's hostile takeover of the Kennedy Centre, after he fired board members in February and appointed himself chairman, and replaced its longtime president with ally Richard Grenell. Trump, who accused the institution of being too "woke," also picked White House chief of staff Susie Wiles, deputy chief of staff Dan Scavino and Second Lady Usha Vance to serve as trustees. The president was met with cheers and boos at the centre in June as he attended an opening night performance of hit musical "Les Miserables." Republicans have been keen to flatter Trump and help the president cement his legacy in his second term, including by introducing legislation to rename the capital region's Dulles International Airport after him. There have also been efforts in Congress to replace Benjamin Franklin with Trump on the US$100 bill, to carve Trump's likeness on the iconic Mount Rushmore, to name a national holiday after him and to reimagine Washington's Metro train service as the Trump Train. The Kennedy Centre change was added to legislation principally providing 2026 funding for the Department of the Interior and the Environmental Protection Agency. But the 2,364-seat theatre – the second-largest at the Kennedy Centre complex – would only get its new designation if the change was approved by both chambers of Congress. Republicans hold 53 seats in the Senate and spending bills require 60 votes to pass, meaning Democrats may be able to strip the name change out of the text before any final vote.


New Straits Times
2 hours ago
- New Straits Times
Nikkei, EU stocks surge as US-Japan trade deal avoids the worst
SYDNEY: Japanese shares surged to a one-year high on Wednesday as the country struck a trade deal with the United States that lowers tariffs on its autos, while also reviving hopes for a EU-US agreement that boosted European stock futures. President Donald Trump on Tuesday said a trade deal with Tokyo will include Japan paying a lower-than-threatened 15 per cent tariff on shipments to the US It followed an agreement with the Philippines that will see the US collect a 19 per cent tariff rate on imports from there. Trump also said representatives from the European Union were coming for trade negotiations on Wednesday. That stirred hopes for a deal with Europe, even as the EU was reportedly refining countermeasures in case of a deadlock before the August 1 deadline. EUROSTOXX 50 futures jumped 1.3 per cent, while Germany's DAX futures climbed 0.6 per cent. "Expectations for a breakthrough (on the US-Japan talks) were low, so Trump's announcement delivers a mild upside surprise — providing near-term relief for Japanese equities," said Charu Chanana, chief investment strategist at Saxo. "Strategically, the deal allows Japan to sidestep immediate tariff escalation, while Trump's attention shifts elsewhere." Japan's Nikkei bolted 3.7 per cent higher as shares of automakers surged on news the deal would cut the US auto tariff to 15 per cent, from a proposed 25 per cent. Mazda Motor rallied 17 per cent, while Toyota Motor jumped 13.6 per cent. South Korean automakers also rallied as the Japan deal fuelled optimism over potential progress in tariff negotiations between South Korea and the United States. Analysts noted the trade deal reduced a major risk to the fragile Japanese economy, providing more scope for the Bank of Japan to raise interest rates to fight inflation. That slugged the bond market, with yields for 10-year JGBs rising a whopping 8.5 basis point to 1.585 per cent. There were also reports Japanese Prime Minister Shigeru Ishiba would soon step down to take responsibility for the ruling coalition's defeat in Sunday's upper house election. The political uncertainty reversed an early trade-inspired rise in the yen and helped the dollar nudge up 0.2 per cent to 146.95 . Saxo's Chanana said Ishiba's departure could set the stage for leadership more aligned with pro-market policies and closer US ties. "His exit is also seen as clearing a path for continuity in Japan's accommodative fiscal and monetary stance." EXTENDED DEADLINES In another positive development, US and Chinese officials will meet in Stockholm next week to discuss an extension to the August 12 deadline for negotiating a trade deal, Treasury Secretary Scott Bessent said. Chinese blue-chips rose 0.7 per cent and Hong Kong's Hang Seng index gained 0.8 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan added 1.0 per cent. Wall Street was more restrained with S&P 500 futures up 0.2 per cent, while Nasdaq futures added 0.1 per cent. US corporate earnings reports were showing signs that Trump's trade war was hitting profit margins. General Motors tumbled 8.1 per cent after the automaker reported a US$1 billion hit from tariffs to its quarterly results. Investors are now awaiting results from Tesla and Google's parent Alphabet - two of the Magnificent 7 stocks that have driven much of the market rally fuelled by AI optimism. In the foreign exchange market, the dollar consolidated having slipped overnight in line with Treasury yields. The dollar index was a shade firmer at 97.45, after losing 0.4 per cent on Tuesday in its third session of declines. The euro dipped 0.1 per cent to US$1.1737, after rising 0.5 per cent the previous day. The European Central Bank is expected to hold rates steady on Thursday after eight consecutive rate cuts, with the prospect of steeper-than-expected US tariffs looming. Benchmark 10-year US Treasury yields ticked up 2 basis points to 4.36 per cent, after slipping 3 bps overnight. While Trump continued to lash out at Federal Reserve Chair Jerome Powell for not cutting interest rates, Bessent said there was no need for Powell to step down immediately and could stay until next May if he chose. Investors have been worried the politicisation of the Fed could ultimately lead to rates being cut too far, fuelling inflation and pushing up long-term borrowing costs. In commodity markets, Spot gold prices eased a touch to US$3,422 an ounce. Oil prices nudged higher, helped by rising prices for diesel in the US where stockpiles are at their lowest levels for this time of the year since 1996. US crude rose 0.4 per cent to US$65.60 per barrel, while Brent was at US$68.88 per barrel, up 0.4 per cent.


The Star
2 hours ago
- The Star
Trump piles up trade deals as Asia agrees to open up to American goods: Analysis
AUSTIN: It's no easy feat to catch Washington's formidable trade lobbies and relentless, scoop-hungry journalists off guard. Yet on Tuesday (July 22), US President Donald Trump managed to do exactly that. On a day when experts and analysts were poised to dissect a potential deal with the Philippines, awaited after President Ferdinand Marcos Jr's visit to the White House, Trump blindsided everyone by announcing a 'massive' deal with Japan. 'We just completed a massive deal with Japan, perhaps the largest deal ever made,' he said on his social media platform Truth Social. 'Japan will invest, at my direction, $550 billion dollars into the United States, which will receive 90 per cent of the profits. This deal will create hundreds of thousands of jobs - There has never been anything like it,' he added. US$550 billion is S$703 billion. Confirmed by Japan's chief negotiator Ryosei Akazawa, the deal slashes US tariffs on imports from Asia's second-largest economy to 15 per cent, well below the 25 per cent threat that loomed after the July 9 tariff pause ended. Japan will also accede to a key White House demand and open its market to American cars, trucks, rice and certain other agricultural products. In a win for Japan's powerful carmakers, their exports to the US will attract lower tariffs of 15 per cent from the current 25 per cent. The announcement stole the thunder from the Philippines deal, which had been previewed only hours earlier on Truth Social. Trump said the Philippines exports to the US will be subject to a 19 per cent tariff - higher than the 17 per cent initially proposed in April but lower than the 20 per cent threatened earlier in July. In contrast, the Philippines will levy zero tariffs on US goods. Threaten steep tariffs to make others buy more and invest more On the same day, further details emerged on the July 16 agreement with Indonesia, South-east Asia's largest economy. Key provisions included the elimination of nearly all Indonesian tariffs on US goods and a 19 per cent US tariff on Indonesian exports, with certain goods containing content from 'nonmarket economies', read China, to be tariffed at 40 per cent. It was also agreed that Indonesia would provide critical minerals to the US and would purchase Boeing aircraft and American farm products. Such details are still missing from the first deal struck by the Trump administration with a South-East Asian nation, Vietnam, in early July. While negotiations are reportedly still underway, Trump's July 2 Truth Social post revealed key terms of the Vietnam deal, including a 20 per cent tariff on Vietnamese imports to the US and a 40 per cent tariff on transshipped goods, in exchange for Hanoi's commitment to eliminate all tariffs on American exports. Within the span of a month, thus, the White House has unveiled deals not only with Asia's second-largest economy but also with three key Asean economies. For the Asian partners yet to strike deals, such as India and Singapore, these deals set a precedent and create pressure to negotiate similar terms to avoid punitive tariffs and maintain strong trade relations with the US. High-level talks between the US and South Korea talks are scheduled for July 25, with Seoul considering politically sensitive concessions, for example in agriculture and autos, to avert steep US tariffs, which currently stand at 25 per cent but have been postponed to Aug 1. As part of a broader US effort to reset global trade relationships, it would seem that Mr Trump's aggressive tariff strategy is delivering some visible results. All four deals share a common goal: opening markets to American goods to cut trade deficits and support domestic industries. Two other trends are also clear: Trump's steep tariff threats have been effective, and despite falling short of the promised 90 deals in 90 days, analysts are noting a surprising surge in agreements. 'I was very surprised to hear this deal announced today,' Dr William Chou, the deputy director of Hudson Institute's Japan Chair, told The Straits Times. The US$550 billion on top of Japan's current US$860 billion foreign direct investment in the US would make Japan the top investor in the US, head and shoulders above any other country, he noted. Will there be purchase, investment agreements in deal with China? The deals with Asian partners have also attracted the notice of those monitoring US-China trade. 'There was a lot of attention on what would come out of these deals, especially (with) Vietnam, on transshipment and rules of origin. Unfortunately, the devil is in the details and we don't have any details,' said a source who spoke on the condition of anonymity because he advises American companies engaged in business with China. But the Japan agreement signals that the US is expecting purchase agreements in trade deals and that has high significance for a highly anticipated visit to China by Trump, he added. During a press conference alongside Marcos, Trump hinted at a visit to China 'not too far into the future' to meet Chinese President Xi Jinping. But no firm date has been set yet and Chinese imports could be subject to tariffs higher than 50 per cent unless new agreements are reached. 'Many of us are wondering if there will be a focus on purchase agreements similar to phase one trade deal with China in Trump's first term.' The huge investment component in the Japan deal has also sparked the idea that a deal with Beijing might involve large investment commitments from China. 'President Trump in the Oval Office has welcomed Chinese investment in the US. This is obviously in contrast to the hawks in his administration and in Congress, but Trump is ultimately the one that determines China policy,' said the source. However, Dr Chou said a direct geopolitical implication of the flurry of trade deals - with Japan, Indonesia, Vietnam, the Philippines, and likely soon South Korea - is expected to be for China. He said it meant that China can no longer use trade as a wedge issue between the US and Indo-Pacific countries. 'Given the White House's desire to negotiate a good deal with China - and in the wake of China's use of rare earths as economic coercion in the past few months - these trade deals by the White House strengthen Washington's negotiation position with Beijing,' Dr Chou noted. 'I think the administration's demonstration of its priorities, the 10 per cent baseline and long-term frameworks for balanced trade, have become increasingly clear to trading partners,' he said. 'Combined with Trump's willingness to live with tariffs, and the news of customs duties of US$27 billion last month, it provided impetus for trading partners to strike a trade deal,' he added. Customs duties fetched about US$27 billion in June, three times higher than in the same month of 2024, after Trump levied across-the-board 10 per cent tariffs on imports in April on top of other selective duties. On an annual basis, tariff collections have totaled US$113 billion, rise of 86 per cent over last year. Minimising imports doesn't augur well for any economy Less impressed was Frank Lavin, senior fellow at the Hoover Institution, a veteran trade negotiator and former ambassador to Singapore. 'It is hard to fully understand Trump's ultimate goals because at times he talks about the trade balance, at times he talks about reciprocity of tariff rates, at times he talks about re-shoring American manufacturing, and at times he talks about increasing tariff revenue to the US Government,' Lavin said. 'There are any number of contradictions among those four goals,' he said. For instance, if the goal of high tariffs is to boost US manufacturing by disincentivising imports, tariff revenues will fall in tandem with declining imports. It seems that his over-riding goal is a form of mercantilism, attaining greater market access for US firms, and reducing market access to foreign firms. 'It is not clear how this will help the US economy,' he said. Economists believe that maximising exports while minimising imports in an interconnected global marketplace does not augur well for any economy, regardless of its size. Such policies risk economic inefficiency, trade wars and shortchange consumers. - The Straits Times/ANN