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Trump fights complicate latest budget brawl between McKee and Neronha. Here's why.

Trump fights complicate latest budget brawl between McKee and Neronha. Here's why.

USA Today13-02-2025

Trump fights complicate latest budget brawl between McKee and Neronha. Here's why.
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RI governor, legislators announce 2025 bills to ban assault weapons
Tuesday's news conference centered on bills to ban the purchase, sale and ownership of the military-style firearms categorized as "assault weapons."
The attorney general asked for $3.65M budget boost to hire 13 new employees
Neronha took issue with McKee denying his budget ask in 2023
Dispute comes as Neronha's office leads state court cases against President Trump's orders
Rhode Island Attorney General Peter Neronha and Gov. Dan McKee are at odds over the state budget again, this time as Neronha spearheads the Ocean State's opposition to President Donald Trump's agenda.
In his annual request to state budget writers last fall, Neronha asked for a $3.65-million increase in his office's budget for the year starting July 1.
The extra money would allow him to add 13 new employees, including additional prosecutors, and bring it closer in line with staffing levels in other states, he said.
"In the last budget cycle, my office kept our budget request to the absolute minimum, with no new requested [Full-time Equivalent positions] and a modest increase in our base budget," Neronha wrote in his request to McKee. "This year, it is essential that we increase our staff and budget to keep pace with the needs of Rhode Islanders ‒ and to ensure this Office is positioned to meet its statutory, ethical and legal obligations."
Neronha argues he needs more money to fight Trump administration's actions
Not long after Neronha submitted his request, Trump won the 2024 presidential election, raising the probability of litigation between the state and federal government.
That did not convince McKee to give Neronha more money, however. In the budget McKee proposed to lawmakers last month, staffing levels for the attorney general's office were kept flat, as they were for most state agencies in a year of diminished federal resources and a projected revenue deficit.
Neronha's request "for additional [full-time equivalent employees] was not presented in the context of addressing a new administration in Washington, D.C.," state Budget Office spokesman Derek Gomes wrote in an email. "The governor's office recognizes that the Office of the Attorney General can bring forward a request to the General Assembly, and the governor's office will monitor it, as it does with all budget-related items during the legislative session."
When McKee told reporters he would stand by unauthorized immigrants threatened by Trump administration deportation sweeps, Neronha took to the social media platform Bluesky.
"The best way for the governor to stand up for the people of Rhode Island is to give my office the resources we need to protect Rhode Islanders and their interests, as other govs have done," Neronha posted. "We are already litigating v. Trump overreach – and only we can do that. Instead he rejected our request."
Neronha's office is part of four lawsuits challenging Trump administration actions and is leading the 22-state suit to block a federal funding freeze in the U.S. District Court in Rhode Island. The other suits challenge cuts to National Institutes of Health funding, ending birthright citizenship and access to private information for Elon Musk's Department of Government Efficiency.
Neronha spokesman Timothy Rondeau said the attorney general's office is evaluating "numerous opportunities" to file amicus briefs on federal cases, fielding a "barrage of outreach" from constituents, helping "navigate the fallout" from executive orders and "issued guidance with respect to ICE in schools."
What does Neronha want?
What would the state get for the extra $3.65 million Neronha requested in his budget for next year?
Four new prosecutors, including two to handle drunken driving cases
One victims services advocate
A new three-employee Charities Unit to investigate philanthropies
One attorney and one paralegal to bolster the Open Government Unit
Two new Information Technology employees and one "eDiscovery Management" specialist
New software for cybersecurity, body worn cameras and eDiscovery
Complex litigation expenses for health care, energy rate reviews, and gun cases
McKee's budget for next year includes $51.6 million for the attorney general's office, up from $46.5 million approved by lawmakers for the current year and nearly the $52.5 million Neronha asked for.
But the extra money in the budget would not pay for the new hires Neronha wants, but rather the 5% pay raises the McKee administration awarded state workers last year, which were not included in the budget passed by lawmakers over the summer.
Not the first budget brawl between departments
This isn't the first time Neronha has asked for a budget boost and been denied by McKee. In 2023 Neronha's requested a $2-million increase to pay for, among other things, a new cold case unit. After McKee didn't include it in his budget, state lawmakers added it to the state's final end of session spending plan. (McKee's office noted that they had included extra funding for the attorney general in 2022.)
McKee and Neronha have also clashed over issues including the eviction of a State House homeless encampment, enforcement of an apartment lead abatement law and the investigation of McKee's contracts to friendly education nonprofit the ILO Group.
Now Neronha's request for a bigger budget is once again in the General Assembly's hands.
"The Attorney General has discussed these issues with the Speaker, and is very grateful to both the Speaker and the Senate President for the support they have given our Office over the years to expand our capacity to help Rhode Islanders," Rondeau wrote in an email on the budget.

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LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!). WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT! THANK YOU FOR YOUR ATTENTION TO THIS MATTER!" A variety of market observers quickly weighed in hours after Tuesday evening's unveiling to suggest that the deal may not have a lot of meat on the bones — but at least relations are no longer moving in the wrong direction. The talks perhaps underscored how unlikely a comprehensive trade deal is anytime soon, noted AGF Investments Greg Valliere, "but at least relations may not worsen as talks continue throughout the summer." Both sides promised additional talks in the weeks or months ahead, but none have yet been scheduled. Veronique de Rugy, a professor at the Mercatus Center at George Mason University, suggested the talks continued to show China's leverage. "China is hurting, yes—but they still hold the upper hand on critical resources, and they know how to use them." Any lessening of tensions — and freer flow — of these mineral resources in China would be a significant boost to the global economy with China holding outsized leverage in both the reserves and processing capacity of these key building blocks for everything from computers to electric vehicle batteries to medical devices. Likewise, the US offering concessions on export controls would be a significant move after years where successive US administrations have wielded these controls — especially around the design and manufacture of semiconductors — by saying they need to be tight on China for national security reasons. Read more here. May's Consumer Price Index (CPI) report will be released on Wednesday and its expected to show that prices rose a bit faster than in April. Yahoo Finance's Allie Canal breaks down what to look out for and how President Trump's tariffs are impacting what consumers are now paying for goods and services. Read more here. Now that the US-China trade truce is back on track, both sides are keen to ensure it stays that way. China's Vice Premier He Lifeng said both sides need to now 'show the spirit of good faith in abiding by their commitments and jointly safeguard the hard-won results of the dialogue.' Bloomberg News reports: Read more here. Reuters reports: Read more here. Despite the US-China trade truce resuming the pain from President Trump's tariffs remains in China, especially among small exporters. Reuters reports: Read more here. Japan warned Wednesday that tariffs threaten its economic growth, the government said in a monthly report. Reuters reports: Read more here. Reuters reports: Read more here. Reuters reports: Read more here. A federal appeals could said on Tuesday that President Trump's sweeping tariffs can continue for now. This is a significant win for Trump, who introduced tariffs back in March and declared "Liberation Day," as he saw them as a way to free the US from what he called unfair trade practices. Bloomberg News reports: Read more here. Early summer sales for Inditex, the owner of fashion retailer Zara, came in weaker, as the company missed expectations for first quarter sales on Wednesday. President Trump's tariffs have impacted consumer demand in the US and other major markets. Reuters reports: Read more here. After weeks of back and forth, the US and China have agreed on a framework to implement the Geneva consensus that helped ease tariffs. The breakthrough came after two days of talks in London, including a marathon session on Tuesday. US Commerce Secretary Howard Lutnick said both sides had to "get the negativity out" before making progress. 'Now we can go forward to try to do positive trade, growing trade,' he said. As part of the deal, Beijing has promised to speed up shipments of rare earth metals, a crucial component for global auto and defense industries. Washington will ease export controls. This marks the first sign of movement on key issues. The proposal will now be presented to President Trump and China's Xi. Still, the discussions also did little to resolve a long-standing issue: China's trade surplus with the US. 'Markets will likely welcome the shift from confrontation to coordination,' said Charu Chanana, chief investment strategist at Saxo Markets. 'We're not out of the woods yet — it's up to Trump and Xi to approve and enforce the deal.' The meeting was set up after a phone call between the two leaders, following weeks of each side accusing the other of breaking the Geneva commitments. Both countries had used chips, rare earths, student visas and ethane as bargaining tools. Josef Gregory Mahoney, a professor at East China Normal University, said trust, not money, has been the biggest casualty of the trade war. 'We've heard a lot about frameworks,' he said. 'But the fundamental issue remains: Chips versus rare earths. Everything else is a peacock dance.' Bloomberg reports: Read more here. Treasury Secretary Scott Bessent told House lawmakers on Wednesday that the Trump administration may extend the 90-day tariff pause on some countries in order to continue trade negotiations. When asked if Americans should prepare for another "Liberation Day" on July 9, when the tariff pause ends for most countries, Bessent said that the administration may choose to move the deadline on 18 of the most important trading partners, so long as they make an effort to come to the negotiating table. "We are working toward deals on those, and it is highly likely that [for] those countries — or trading blocs, in the case of the EU — who are negotiating in good faith, we will roll the day forward to continue good faith negotiations," Bessent said (see video below). "If someone is not negotiating, then we will not." A recent report on the drastic decline of US ocean imports serves as an example of how President Trump's increased tariffs on China affected supply chains and several industries as ttalks continue. Reuters reports: Read more here. The Treasury Department says that the US government is successfully using tariffs to decrease the budget deficit by more than $30 billion, largely due to increased customs receipts. Reuters reports: Read more here. China will ease curbs on exports of rare earth minerals for six months as part of a new trade understanding with the US, according to The Wall Street Journal. The move could add more uncertainty for American manufacturers, particularly the auto industry, which has been pushing for easier access. The Journal notes that the move gives China leverage down the line if tensions ratchet back up. From the report: In celebrating the agreement early Wednesday, President Trump noted "any necessary rare earths will be supplied, up front, by China." He did not mention any time limit on loosening those restrictions. Treasury Secretary Scott Bessent, in testimony before Congress on Wednesday, painted Wednesday's agreement as an incremental step on the longer road to a more comprehensive trade deal. "A trade deal today or last night was for a specific goal, and it will be a much longer process," he told a House committee. When asked if current US tariff levels on Chinese imports would not change again, Commerce Secretary Howard Lutnick told CNBC, "You can definitely say that." "We're in a great place with China," Lutnick said Wednesday. While the US-China truce framework is awaiting final word from US President Trump and Chinese President Xi Jinping, Lutnick added, "Both sides are really positive." The agreement is largely viewed as reestablishing the "handshake" that US and Chinese officials reached in Geneva last month, as details on a larger trade pact remain scant. Trump posted on social media this morning that the US has imposed 55% tariffs on China, a number that does not include any new tariffs but instead comprises some preexisting tariffs, Trump's fentanyl tariffs, and 10% "Liberation Day" tariffs. Lutnick touted that, as a result of the two-day talks, the US will gain access to rare earths and magnets, while the Chinese delegation sought to remove the US's export controls. He added that the trade deficit remains an ongoing issue, stating, "We're going to examine how China can do more business with us." May's Consumer Price Index (CPI) report showed inflation pressures eased on a monthly basis despite investor concerns that President Trump's tariffs would accelerate the pace of price increases. The Consumer Price Index (CPI) increased 0.1% on a monthly basis in May and 2.4% on an annual basis, a slight uptick from April's 2.3% gain. Yahoo Finance's Allie Canal reports: Read more here. I would keep an eye on consumer names off the news of a trade deal with China floated by President Trump this morning (see our prior post below). Seeing upticks premarket in heavily China-exposed retailers such as Nike (NKE), Walmart (WMT), Target (TGT), and Abercrombie & Fitch (ANF). The premarket gains here aren't mind-blowing in part because tariffs appear to still be in place. Trump posted on Truth Social: OUR DEAL WITH CHINA IS DONE, SUBJECT TO FINAL APPROVAL WITH PRESIDENT XI AND ME. FULL MAGNETS, AND ANY NECESSARY RARE EARTHS, WILL BE SUPPLIED, UP FRONT, BY CHINA. LIKEWISE, WE WILL PROVIDE TO CHINA WHAT WAS AGREED TO, INCLUDING CHINESE STUDENTS USING OUR COLLEGES AND UNIVERSITIES (WHICH HAS ALWAYS BEEN GOOD WITH ME!). WE ARE GETTING A TOTAL OF 55% TARIFFS, CHINA IS GETTING 10%. RELATIONSHIP IS EXCELLENT! THANK YOU FOR YOUR ATTENTION TO THIS MATTER!" A variety of market observers quickly weighed in hours after Tuesday evening's unveiling to suggest that the deal may not have a lot of meat on the bones — but at least relations are no longer moving in the wrong direction. The talks perhaps underscored how unlikely a comprehensive trade deal is anytime soon, noted AGF Investments Greg Valliere, "but at least relations may not worsen as talks continue throughout the summer." Both sides promised additional talks in the weeks or months ahead, but none have yet been scheduled. Veronique de Rugy, a professor at the Mercatus Center at George Mason University, suggested the talks continued to show China's leverage. "China is hurting, yes—but they still hold the upper hand on critical resources, and they know how to use them." Any lessening of tensions — and freer flow — of these mineral resources in China would be a significant boost to the global economy with China holding outsized leverage in both the reserves and processing capacity of these key building blocks for everything from computers to electric vehicle batteries to medical devices. Likewise, the US offering concessions on export controls would be a significant move after years where successive US administrations have wielded these controls — especially around the design and manufacture of semiconductors — by saying they need to be tight on China for national security reasons. Read more here. May's Consumer Price Index (CPI) report will be released on Wednesday and its expected to show that prices rose a bit faster than in April. Yahoo Finance's Allie Canal breaks down what to look out for and how President Trump's tariffs are impacting what consumers are now paying for goods and services. Read more here. Now that the US-China trade truce is back on track, both sides are keen to ensure it stays that way. China's Vice Premier He Lifeng said both sides need to now 'show the spirit of good faith in abiding by their commitments and jointly safeguard the hard-won results of the dialogue.' Bloomberg News reports: Read more here. Reuters reports: Read more here. Despite the US-China trade truce resuming the pain from President Trump's tariffs remains in China, especially among small exporters. Reuters reports: Read more here. Japan warned Wednesday that tariffs threaten its economic growth, the government said in a monthly report. Reuters reports: Read more here. Reuters reports: Read more here. Reuters reports: Read more here. A federal appeals could said on Tuesday that President Trump's sweeping tariffs can continue for now. This is a significant win for Trump, who introduced tariffs back in March and declared "Liberation Day," as he saw them as a way to free the US from what he called unfair trade practices. Bloomberg News reports: Read more here. Early summer sales for Inditex, the owner of fashion retailer Zara, came in weaker, as the company missed expectations for first quarter sales on Wednesday. President Trump's tariffs have impacted consumer demand in the US and other major markets. Reuters reports: Read more here. After weeks of back and forth, the US and China have agreed on a framework to implement the Geneva consensus that helped ease tariffs. The breakthrough came after two days of talks in London, including a marathon session on Tuesday. US Commerce Secretary Howard Lutnick said both sides had to "get the negativity out" before making progress. 'Now we can go forward to try to do positive trade, growing trade,' he said. As part of the deal, Beijing has promised to speed up shipments of rare earth metals, a crucial component for global auto and defense industries. Washington will ease export controls. This marks the first sign of movement on key issues. The proposal will now be presented to President Trump and China's Xi. Still, the discussions also did little to resolve a long-standing issue: China's trade surplus with the US. 'Markets will likely welcome the shift from confrontation to coordination,' said Charu Chanana, chief investment strategist at Saxo Markets. 'We're not out of the woods yet — it's up to Trump and Xi to approve and enforce the deal.' The meeting was set up after a phone call between the two leaders, following weeks of each side accusing the other of breaking the Geneva commitments. Both countries had used chips, rare earths, student visas and ethane as bargaining tools. Josef Gregory Mahoney, a professor at East China Normal University, said trust, not money, has been the biggest casualty of the trade war. 'We've heard a lot about frameworks,' he said. 'But the fundamental issue remains: Chips versus rare earths. Everything else is a peacock dance.' Bloomberg reports: Read more here. Sign in to access your portfolio

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