‘Is this a good tax strategy or a sham transaction?' My mother wants to give me her home. I have a plan to avoid taxes.
If my mother sells or gifts me her $800,000 personal residence to me, my understanding is that I also get her adjusted cost basis. If she holds a note for 100% of the purchase price and then gifts me the note, will I end up with current fair market value as my cost basis?
As a result, she would have no income-tax consequence — right? — because her original cost basis and her recently deceased spouse's stepped-up cost basis, plus their combined personal-residence exclusion, more than covers the fair market value.
'You never know what might happen': How do I make sure my son-in-law doesn't get his hands on my daughter's inheritance?
Why Obama's former budget director is now sounding alarms about debt
I'm hosting a Memorial Day barbecue. Would it be so bad to ask my guests to make financial contributions?
'Is this a good tax strategy or a sham transaction?' My mother wants to give me her home. I have a plan to avoid taxes.
My daughter's boyfriend, a guest in my home, offered to powerwash part of my house — then demanded money
Is this gift a good tax strategy or a sham transaction?
Adult Child
Related: My tenant convinced me to take out a $175,000 home loan to buy stock — then he stole my home
It's more complicated than that. If your mother gifts you the property today, you would be well within the lifetime gift-tax exclusion of $13.99 million, and far above the annual gift-tax exclusion of $19,000 so you would have to file a gift tax return (Form 709). However, you will lose your step-up in basis if/when you decide to sell.
'When you make a gift transaction, for income tax purposes, the child will assume your tax basis in the property,' says Quatrini Law. 'This can become an important tax issue down the road. Your child could therefore expend thousands of dollars in capital gain tax that potentially could have been avoided had you simply kept the property in your name.'
If your mother purchased the home for $100,000 and it's now worth $800,000, gifting the home to you assumes that the tax basis in the property is $100,000, not $800,000 and/or the value at the time of your mother's passing. That would increase the amount you would have to pay in capital-gains tax at a sale by at least tens of thousands of dollars.
There are other options. Your mother could sell the property to you and hold the note/loan agreement for the balance of the purchase price. If her house is worth $800,000 and you decide to give $100,000 as a down payment, she holds the note for $700,000. This would mean you still get your step-up in basis.
If, on the other hand, you purchase the house from your mother at fair market value and she holds a note for 100% of the purchase price and subsequently forgives the note a later year, you will end up with the current fair-market value as your cost basis, says Pamela Dennett, partner, private client services, at Eisner Advisory Group.
Forgiving a note is typically treated as a gift. 'The general rule is that the basis of property received as a gift is the same as the basis in the hands of the donor,' Dennett says. 'However, in this scenario, you are purchasing the property at fair market value, which establishes your cost basis at the purchase price.'
Therefore, the subsequent gift of the note, in a later year, would not affect the tax basis of the purchased property, she adds. 'Your mother would have no income-tax consequence from the sale of the house if the combined adjusted cost basis (including the stepped-up basis from her recently deceased spouse) and the personal-residence exclusion cover the fair market value.'
Under Section 1014 of the U.S. tax code, the cost basis of property acquired from your mother would be the fair market value at the date of her death. Existing law allows for single filers to exclude $250,000 in capital-gains tax, which doubles to $500,000 for joint filers. That amount, established in 1997, has not changed in 26 years.
Therefore, if the combined basis and the exclusion exceed the fair market value, there would be no taxable gain on the sale, and thus no income-tax consequence for your mother, Dennett says. She would have to file a U.S. gift-tax return in the year she forgives the note and, assuming she has not yet reached her lifetime gift exclusion, she would not owe gift tax to the IRS.
Proceed with care. I've received many letters from readers who purchased a home from their parents only to find themselves in a sticky situation. This reader wrote to say he bought his parents' home and put his brother on the deed, and his brother is now holding the entire family 'hostage' and won't pay the mortgage.
Another woman wrote to me earlier this year to say she'd purchased a home for and (this is the sticky part) with her parents, and paid the legal costs and the down payment, with the agreement that they would sell their home and repay her their share for the new home. Surprise, surprise! The parents reneged on the deal. Even parents can pull a fast one on their own kids.
Family drama aside, your plan sounds like a solid one from a tax perspective.
Related: Will Trump's policies lead to a recession? I'm 62 and earn $50,000 a year. How should I invest $100,000?
I met a friend for lunch. When the check arrived, she said, 'Thank you so much for paying!' Was I taken for a fool?
'She has been telling him lies': My sister convinced my father to sign everything over to her. What can I do?
My father died, leaving everything to my 90-year-old stepmother. Do I have a right to ask her if I'm in her will?
Rising bond yields give stock-market investors the yips. Watch these levels.
'What we found horrified us': My elderly relative mistook charity envelopes for overdue bills — and gave thousands to other family members
My ex-wife said she should have been compensated for working part time during our marriage. Do I owe her?
It's my dream to travel to Africa. Can I pay for my husband's trip without commingling our finances?
My brother's 'good daughter' siphoned $70,000 from her father's accounts. Should she still get an inheritance?
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
6 hours ago
- Yahoo
Where Is Barack Obama?
The Atlantic Daily, a newsletter that guides you through the biggest stories of the day, helps you discover new ideas, and recommends the best in culture. Sign up for it here. Last month, while Donald Trump was in the Middle East being gifted a $400 million luxury jet from Qatar, Barack Obama headed off on his own foreign excursion: a trip to Norway, in a much smaller and more tasteful jet, to visit the summer estate of his old friend King Harald V. Together, they would savor the genteel glories of Bygdøyveien in May. They chewed over global affairs and the freshest local salmon, which had been smoked on the premises and seasoned with herbs from the royal garden. Trump has begun his second term with a continuous spree of democracy-shaking, economy-quaking, norm-obliterating action. And Obama, true to form, has remained carefully above it all. He picks his spots, which seldom involve Trump. In March, he celebrated the anniversary of the Affordable Care Act and posted his annual NCAA basketball brackets. In April, he sent out an Easter message and mourned the death of the pope. In May, he welcomed His Holiness Pope Leo XIV ('a fellow Chicagoan') and sent prayers to Joe Biden following his prostate-cancer diagnosis. No matter how brazen Trump becomes, the most effective communicator in the Democratic Party continues to opt for minimal communication. His 'audacity of hope' presidency has given way to the fierce lethargy of semi-retirement. Obama occasionally dips into politics with brief and unmemorable statements, or sporadic fundraising emails (subject: 'Barack Obama wants to meet you. Yes you.'). He praised his law-school alma mater, Harvard, for 'rejecting an unlawful and ham-handed attempt' by the White House 'to stifle academic freedom.' He criticized a Republican bill that would threaten health care for millions. He touted a liberal judge who was running for a crucial seat on the Wisconsin Supreme Court. When called upon, he can still deliver a top-notch campaign spiel, donor pitch, convention speech, or eulogy. Beyond that, Obama pops in with summer and year-end book, music, and film recommendations. He recently highlighted a few articles about AI and retweeted a promotional spot for Air Force Elite: Thunderbirds, a new Netflix documentary from his and Michelle's production company. (Michelle also has a fashion book coming out later this year: 'a celebration of confidence, identity, and authenticity,' she calls it.) Apparently, Barack is a devoted listener of The Ringer's Bill Simmons Podcast, or so he told Jimmy Kimmel over dinner. In normal times, no one would deny Obama these diversions. He performed the world's most stressful job for eight years, served his country, made his history, and deserved to kick back and do the usual ex-president things: start a foundation, build a library, make unspeakable amounts of money. But the inevitable Trump-era counterpoint is that these are not normal times. And Obama's detachment feels jarringly incongruous with the desperation of his longtime admirers—even more so given Trump's assaults on what Obama achieved in office. It would be one thing if Obama had disappeared after leaving the White House, maybe taking up painting like George W. Bush. The problem is that Obama still very much has a public profile—one that screams comfort and nonchalance at a time when so many other Americans are terrified. 'There are many grandmas and Rachel Maddow viewers who have been more vocal in this moment than Barack Obama has,' Adam Green, a co-founder of the Progressive Change Institute, told me. 'It is heartbreaking,' he added, 'to see him sacrificing that megaphone when nobody else quite has it.' People who have worked with Obama since he left office say that he is extremely judicious about when he weighs in. 'We try to preserve his voice so that when he does speak, it has impact,' Eric Schultz, a close adviser to Obama in his post-presidency, told me. 'There is a dilution factor that we're very aware of.' 'The thing you don't want to do is, you don't want to regularize him,' former Attorney General Eric Holder, a close Obama friend and collaborator, told me. When I asked Holder what he meant by 'regularize,' he explained that there was a danger of turning Obama into just another hack commentator—'Tuesdays With Barack, or something like that,' Holder said. Like many of Obama's confidants, Holder bristles at suggestions that the former president has somehow deserted the Trump opposition. 'Should he do more? Everybody can have their opinions,' Holder said. 'The one thing that always kind of pisses me off is when people say he's not out there, or that he's not doing things, that he's just retired and we never hear from him. If you fucking look, folks, you would see that he's out there.' [From the April 2016 issue: The Obama doctrine] Obama's aides also say that he is loath to overshadow the next generation of Democratic leaders. They emphasize that he spends a great deal of time speaking privately with candidates and officials who seek his advice. But unfortunately for Democrats, they have not found their next fresh generational sensation since Obama was elected 17 years ago (Joe Biden obviously doesn't count). Until a new leader emerges, Obama could certainly take on a more vocal role without 'regularizing' himself in the lowlands of Trump-era politics. Obama remains the most popular Democrat alive at a time of historic unpopularity for his party. Unlike Biden, he appears not to have lost a step, or three. Unlike with Bill Clinton, his voice remains strong and his baggage minimal. Unlike both Biden and Clinton, he is relatively young and has a large constituency of Americans who still want to hear from him, including Black Americans, young voters, and other longtime Democratic blocs that gravitated toward Trump in November. 'Should Obama get out and do more? Yes, please,' Tracy Sefl, a Democratic media consultant in Chicago, told me. 'Help us,' she added. 'We're sinking over here.' Obama's conspicuous scarcity while Trump inflicts such damage isn't just a bad look. It's a dereliction of the message that he built his career on. When Obama first ran for president in 2008, his former life as a community organizer was central to his message. His campaign was not merely for him, but for civic action itself—the idea of Americans being invested in their own change. Throughout his time in the White House, he emphasized that 'citizen' was his most important title. After he left office in 2017, Obama said that he would work to inspire and develop the next cohort of leaders, which is essentially the mission of his foundation. It would seem a contradiction for him to say that he's devoting much of his post-presidency to promoting civic engagement when he himself seems so disengaged. To some degree, patience with Obama began wearing thin when he was still in office. His approval ratings sagged partway through his second term (before rebounding at the end). The rollout of the Affordable Care Act in 2013 was a fiasco, and the midterm elections of 2014 were a massacre. Obama looked powerless as Republicans in Congress ensured that he would pass no major legislation in his second term and blocked his nomination of Merrick Garland to the Supreme Court. 'Obama, out,' the president said in the denouement of his last comedy routine at the White House Correspondents' Dinner, in 2016. In Obama lore, this mic-drop moment would instantly become famous—and prophetic. After Trump's first victory, Obama tried to reassure supporters that this was merely a setback. 'I don't believe in apocalyptic—until the apocalypse comes,' he said in an interview with The New Yorker. Insofar as Obama talked about how he imagined his post-presidency, he was inclined to disengage from day-to-day politics. At a press conference in November 2016, Obama said that he planned to 'take Michelle on vacation, get some rest, spend time with my girls, and do some writing, do some thinking.' He promised to give Trump the chance to do his job 'without somebody popping off in every instance.' But in that same press conference, he also allowed that if something arose that raised 'core questions about our values and our ideals, and if I think that it's necessary or helpful for me to defend those ideals, then I'll examine it when it comes.' That happened almost immediately. A few days after vowing in his inaugural address to end the 'American carnage' that he was inheriting, Trump signed an executive order banning foreign nationals from seven predominantly Muslim countries from entering the United States for 90 days. The so-called Muslim travel ban would quickly be blocked by the courts, but not before sowing chaos at U.S. points of entry. Obama put out a brief statement through a spokesperson ('the president fundamentally disagrees with the notion of discriminating against individuals because of their faith or religion'), and went on vacation. Trump's early onslaught made clear that Obama's ex-presidency would prove far more complicated than previous ones. And Obama's taste for glamorous settings and famous company—Richard Branson, David Geffen, George Clooney—made for a grating contrast with the turmoil back home. 'Just tone it down with the kitesurfing pictures,' John Oliver, the host of HBO's Last Week Tonight, said of Obama in an interview with Seth Meyers less than a month after the president left office. 'America is on fire,' Oliver added. 'I know that people accused him of being out of touch with the American people during his presidency. I'm not sure he's ever been more out of touch than he is now.' Oliver's spasm foreshadowed a rolling annoyance that continued as Trump's presidency wore on: that Obama was squandering his power and influence. 'Oh, Obama is still tweeting good tweets. That's very nice of him,' the anti-Trump writer Drew Magary wrote in a Medium column titled 'Where the Hell Is Barack Obama?' in the early days of the coronavirus pandemic. 'I'm sick of Obama staying above the fray while that fray is swallowing us whole.' Obama did insert himself in the 2024 election, reportedly taking an aggressive behind-the-scenes role last summer in trying to nudge Biden out of the race. He delivered a showstopper speech at the Democratic National Convention and campaigned several times for Kamala Harris in the fall. But among longtime Obama admirers I've spoken with, frustration with the former president has built since Trump returned to office. While campaigning for Harris last year, Obama framed the stakes of the election in terms of a looming catastrophe. 'These aren't ordinary times, and these are not ordinary elections,' he said at a campaign stop in Pittsburgh. Yet now that the impact is unfolding in the most pernicious ways, Obama seems to be resuming his ordinary chill and same old bits. Green, of the Progressive Change Institute, told me that when Obama put out his March Madness picks this year, he texted Schultz, the Obama adviser. 'Have I missed him speaking up in other places recently?' Green asked him. 'He did not respond to that.' (Schultz confirmed to me that he ignored the message but vowed to be 'more responsive to Adam Green's texts in the future.') Being a former president is inherently tricky: The role is ill-defined, and peripheral by definition. Part of the trickiness is how an ex-president can remain relevant, if he wants to. This is especially so given the current president. 'I don't know that anybody is relevant in the Trump era,' Mark Updegrove, a presidential historian and head of the LBJ Foundation, told me. Updegrove, who wrote a book called Second Acts: Presidential Lives and Legacies After the White House, said that Trump has succeeded in creating a reality in which every president who came before is suspect. 'All the standard rules of being an ex-president are no longer applicable,' he said. Still, Obama never presented himself as a 'standard rules' leader. This was the idea that his political rise was predicated on—that change required bold, against-the-grain thinking and uncomfortable action. Clearly, Obama still views himself this way, or at least still wants to be perceived this way. (A few years ago, he hosted a podcast with Bruce Springsteen called Renegades.) [From the July 1973 issue: The last days of the president] Stepping into the current political melee would not be an easy or comfortable role for Obama. He represents a figure of the past, which seems more and more like the ancient past as the Trump era crushes on. He is a notably long-view guy, who has spent a great deal of time composing a meticulous account of his own narrative. 'We're part of a long-running story,' Obama said in 2014. 'We just try to get our paragraph right.' Or thousands of paragraphs, in his case: The first installment of Obama's presidential memoir, A Promised Land, covered 768 pages and 29 hours of audio. No release date has been set for the second volume. But this might be one of those times for Obama to take a break from the long arc of the moral universe and tend to the immediate crisis. Several Democrats I've spoken with said they wish that Obama would stop worrying so much about the 'dilution factor.' While Democrats struggle to find their next phenom, Obama could be their interim boss. He could engage regularly, pointing out Trump's latest abuses. He did so earlier this spring, during an onstage conversation at Hamilton College. He was thoughtful, funny, and sounded genuinely aghast, even angry. He could do these public dialogues much more often, and even make them thematic. Focus on Trump's serial violations of the Constitution one week (recall that Obama once taught constitutional law), the latest instance of Trump's naked corruption the next. Blast out the most scathing lines on social media. Yes, it might trigger Trump, and create more attention than Obama evidently wants. But Trump has shown that ubiquity can be a superpower, just as Biden showed that obscurity can be ruinous. People would notice. Democrats love nothing more than to hold up Obama as their monument to Republican bad faith. Can you imagine if Obama did this? some Democrat will inevitably say whenever Trump does something tacky, cruel, or blatantly unethical (usually before breakfast). Obama could lean into this hypocrisy—tape recurring five-minute video clips highlighting Trump's latest scurrilous act and title the series 'Can You Imagine If I Did This?' Or another idea—an admittedly far-fetched one. Trump has decreed that a massive military parade be held through the streets of Washington on June 14. This will ostensibly celebrate the Army's 250th anniversary, but it also happens to fall on Trump's 79th birthday. The parade will cost an estimated $45 million, including $16 million in damage to the streets. (Can you imagine if Obama did this?) The spectacle cries out for counterprogramming. Obama could hold his own event, in Washington or somewhere nearby. It would get tons of attention and drive Trump crazy, especially if it draws a bigger crowd. Better yet, make it a parade, or 'citizen's march,' something that builds momentum as it goes, the former president and community organizer leading on foot. This would be the renegade move. Few things would fire up Democrats like a head-to-head matchup between Trump and Obama. If nothing else, it would be fun to contemplate while Democrats keep casting about for their long-delayed future. 'The party needs new rising stars, and they need the room to figure out how to meet this moment, just like Obama figured out how to meet the moment 20 years ago,' Jon Favreau, a co-host of Pod Save America and former director of speechwriting for the 44th president, told me. 'Unless, of course, Trump tries to run for a third term, in which case I'll be begging Obama to come out of retirement.' Article originally published at The Atlantic
Atlantic
8 hours ago
- Atlantic
Where Is Barack Obama?
Last month, while Donald Trump was in the Middle East being gifted a $400 million luxury jet from Qatar, Barack Obama headed off on his own foreign excursion: a trip to Norway, in a much smaller and more tasteful jet, to visit the summer estate of his old friend King Harald V. Together, they would savor the genteel glories of Bygdøyveien in May. They chewed over global affairs and the freshest local salmon, which had been smoked on the premises and seasoned with herbs from the royal garden. Trump has begun his second term with a continuous spree of democracy-shaking, economy-quaking, norm-obliterating action. And Obama, true to form, has remained carefully above it all. He picks his spots, which seldom involve Trump. In March, he celebrated the anniversary of the Affordable Care Act and posted his annual NCAA basketball brackets. In April, he sent out an Easter message and mourned the death of the pope. In May, he welcomed His Holiness Pope Leo XIV ('a fellow Chicagoan') and sent prayers to Joe Biden following his prostate-cancer diagnosis. No matter how brazen Trump becomes, the most effective communicator in the Democratic Party continues to opt for minimal communication. His 'audacity of hope' presidency has given way to the fierce lethargy of semi-retirement. Obama occasionally dips into politics with brief and unmemorable statements, or sporadic fundraising emails (subject: 'Barack Obama wants to meet you. Yes you.'). He praised his law-school alma mater, Harvard, for 'rejecting an unlawful and ham-handed attempt' by the White House 'to stifle academic freedom.' He criticized a Republican bill that would threaten health care for millions. He touted a liberal judge who was running for a crucial seat on the Wisconsin Supreme Court. When called upon, he can still deliver a top-notch campaign spiel, donor pitch, convention speech, or eulogy. Beyond that, Obama pops in with summer and year-end book, music, and film recommendations. He recently highlighted a few articles about AI and retweeted a promotional spot for Air Force Elite: Thunderbirds, a new Netflix documentary from his and Michelle's production company. (Michelle also has a fashion book coming out later this year: 'a celebration of confidence, identity, and authenticity,' she calls it.) Apparently, Barack is a devoted listener of The Ringer 's Bill Simmons Podcast, or so he told Jimmy Kimmel over dinner. In normal times, no one would deny Obama these diversions. He performed the world's most stressful job for eight years, served his country, made his history, and deserved to kick back and do the usual ex-president things: start a foundation, build a library, make unspeakable amounts of money. But the inevitable Trump-era counterpoint is that these are not normal times. And Obama's detachment feels jarringly incongruous with the desperation of his longtime admirers—even more so given Trump's assaults on what Obama achieved in office. It would be one thing if Obama had disappeared after leaving the White House, maybe taking up painting like George W. Bush. The problem is that Obama still very much has a public profile—one that screams comfort and nonchalance at a time when so many other Americans are terrified. 'There are many grandmas and Rachel Maddow viewers who have been more vocal in this moment than Barack Obama has,' Adam Green, a co-founder of the Progressive Change Institute, told me. 'It is heartbreaking,' he added, 'to see him sacrificing that megaphone when nobody else quite has it.' People who have worked with Obama since he left office say that he is extremely judicious about when he weighs in. 'We try to preserve his voice so that when he does speak, it has impact,' Eric Schultz, a close adviser to Obama in his post-presidency, told me. 'There is a dilution factor that we're very aware of.' 'The thing you don't want to do is, you don't want to regularize him,' former Attorney General Eric Holder, a close Obama friend and collaborator, told me. When I asked Holder what he meant by 'regularize,' he explained that there was a danger of turning Obama into just another hack commentator—' Tuesdays With Barack, or something like that,' Holder said. Like many of Obama's confidants, Holder bristles at suggestions that the former president has somehow deserted the Trump opposition. 'Should he do more? Everybody can have their opinions,' Holder said. 'The one thing that always kind of pisses me off is when people say he's not out there, or that he's not doing things, that he's just retired and we never hear from him. If you fucking look, folks, you would see that he's out there.' From the April 2016 issue: The Obama doctrine Obama's aides also say that he is loath to overshadow the next generation of Democratic leaders. They emphasize that he spends a great deal of time speaking privately with candidates and officials who seek his advice. But unfortunately for Democrats, they have not found their next fresh generational sensation since Obama was elected 17 years ago (Joe Biden obviously doesn't count). Until a new leader emerges, Obama could certainly take on a more vocal role without 'regularizing' himself in the lowlands of Trump-era politics. Obama remains the most popular Democrat alive at a time of historic unpopularity for his party. Unlike Biden, he appears not to have lost a step, or three. Unlike with Bill Clinton, his voice remains strong and his baggage minimal. Unlike both Biden and Clinton, he is relatively young and has a large constituency of Americans who still want to hear from him, including Black Americans, young voters, and other longtime Democratic blocs that gravitated toward Trump in November. 'Should Obama get out and do more? Yes, please,' Tracy Sefl, a Democratic media consultant in Chicago, told me. 'Help us,' she added. 'We're sinking over here.' Obama's conspicuous scarcity while Trump inflicts such damage isn't just a bad look. It's a dereliction of the message that he built his career on. When Obama first ran for president in 2008, his former life as a community organizer was central to his message. His campaign was not merely for him, but for civic action itself—the idea of Americans being invested in their own change. Throughout his time in the White House, he emphasized that 'citizen' was his most important title. After he left office in 2017, Obama said that he would work to inspire and develop the next cohort of leaders, which is essentially the mission of his foundation. It would seem a contradiction for him to say that he's devoting much of his post-presidency to promoting civic engagement when he himself seems so disengaged. To some degree, patience with Obama began wearing thin when he was still in office. His approval ratings sagged partway through his second term (before rebounding at the end). The rollout of the Affordable Care Act in 2013 was a fiasco, and the midterm elections of 2014 were a massacre. Obama looked powerless as Republicans in Congress ensured that he would pass no major legislation in his second term and blocked his nomination of Merrick Garland to the Supreme Court. 'Obama, out,' the president said in the denouement of his last comedy routine at the White House Correspondents' Dinner, in 2016. In Obama lore, this mic-drop moment would instantly become famous—and prophetic. After Trump's first victory, Obama tried to reassure supporters that this was merely a setback. 'I don't believe in apocalyptic—until the apocalypse comes,' he said in an interview with The New Yorker. Insofar as Obama talked about how he imagined his post-presidency, he was inclined to disengage from day-to-day politics. At a press conference in November 2016, Obama said that he planned to 'take Michelle on vacation, get some rest, spend time with my girls, and do some writing, do some thinking.' He promised to give Trump the chance to do his job 'without somebody popping off in every instance.' But in that same press conference, he also allowed that if something arose that raised 'core questions about our values and our ideals, and if I think that it's necessary or helpful for me to defend those ideals, then I'll examine it when it comes.' That happened almost immediately. A few days after vowing in his inaugural address to end the 'American carnage' that he was inheriting, Trump signed an executive order banning foreign nationals from seven predominantly Muslim countries from entering the United States for 90 days. The so-called Muslim travel ban would quickly be blocked by the courts, but not before sowing chaos at U.S. points of entry. Obama put out a brief statement through a spokesperson ('the president fundamentally disagrees with the notion of discriminating against individuals because of their faith or religion'), and went on vacation. Trump's early onslaught made clear that Obama's ex-presidency would prove far more complicated than previous ones. And Obama's taste for glamorous settings and famous company—Richard Branson, David Geffen, George Clooney—made for a grating contrast with the turmoil back home. 'Just tone it down with the kitesurfing pictures,' John Oliver, the host of HBO's Last Week Tonight, said of Obama in an interview with Seth Meyers less than a month after the president left office. 'America is on fire,' Oliver added. 'I know that people accused him of being out of touch with the American people during his presidency. I'm not sure he's ever been more out of touch than he is now.' Oliver's spasm foreshadowed a rolling annoyance that continued as Trump's presidency wore on: that Obama was squandering his power and influence. 'Oh, Obama is still tweeting good tweets. That's very nice of him,' the anti-Trump writer Drew Magary wrote in a Medium column titled 'Where the Hell Is Barack Obama?' in the early days of the coronavirus pandemic. 'I'm sick of Obama staying above the fray while that fray is swallowing us whole.' Obama did insert himself in the 2024 election, reportedly taking an aggressive behind-the-scenes role last summer in trying to nudge Biden out of the race. He delivered a showstopper speech at the Democratic National Convention and campaigned several times for Kamala Harris in the fall. But among longtime Obama admirers I've spoken with, frustration with the former president has built since Trump returned to office. While campaigning for Harris last year, Obama framed the stakes of the election in terms of a looming catastrophe. 'These aren't ordinary times, and these are not ordinary elections,' he said at a campaign stop in Pittsburgh. Yet now that the impact is unfolding in the most pernicious ways, Obama seems to be resuming his ordinary chill and same old bits. Green, of the Progressive Change Institute, told me that when Obama put out his March Madness picks this year, he texted Schultz, the Obama adviser. 'Have I missed him speaking up in other places recently?' Green asked him. 'He did not respond to that.' (Schultz confirmed to me that he ignored the message but vowed to be 'more responsive to Adam Green's texts in the future.') Being a former president is inherently tricky: The role is ill-defined, and peripheral by definition. Part of the trickiness is how an ex-president can remain relevant, if he wants to. This is especially so given the current president. 'I don't know that anybody is relevant in the Trump era,' Mark Updegrove, a presidential historian and head of the LBJ Foundation, told me. Updegrove, who wrote a book called Second Acts: Presidential Lives and Legacies After the White House, said that Trump has succeeded in creating a reality in which every president who came before is suspect. 'All the standard rules of being an ex-president are no longer applicable,' he said. Still, Obama never presented himself as a 'standard rules' leader. This was the idea that his political rise was predicated on—that change required bold, against-the-grain thinking and uncomfortable action. Clearly, Obama still views himself this way, or at least still wants to be perceived this way. (A few years ago, he hosted a podcast with Bruce Springsteen called Renegades.) From the July 1973 issue: The last days of the president Stepping into the current political melee would not be an easy or comfortable role for Obama. He represents a figure of the past, which seems more and more like the ancient past as the Trump era crushes on. He is a notably long-view guy, who has spent a great deal of time composing a meticulous account of his own narrative. 'We're part of a long-running story,' Obama said in 2014. 'We just try to get our paragraph right.' Or thousands of paragraphs, in his case: The first installment of Obama's presidential memoir, A Promised Land, covered 768 pages and 29 hours of audio. No release date has been set for the second volume. But this might be one of those times for Obama to take a break from the long arc of the moral universe and tend to the immediate crisis. Several Democrats I've spoken with said they wish that Obama would stop worrying so much about the 'dilution factor.' While Democrats struggle to find their next phenom, Obama could be their interim boss. He could engage regularly, pointing out Trump's latest abuses. He did so earlier this spring, during an onstage conversation at Hamilton College. He was thoughtful, funny, and sounded genuinely aghast, even angry. He could do these public dialogues much more often, and even make them thematic. Focus on Trump's serial violations of the Constitution one week (recall that Obama once taught constitutional law), the latest instance of Trump's naked corruption the next. Blast out the most scathing lines on social media. Yes, it might trigger Trump, and create more attention than Obama evidently wants. But Trump has shown that ubiquity can be a superpower, just as Biden showed that obscurity can be ruinous. People would notice. Democrats love nothing more than to hold up Obama as their monument to Republican bad faith. Can you imagine if Obama did this? some Democrat will inevitably say whenever Trump does something tacky, cruel, or blatantly unethical (usually before breakfast). Obama could lean into this hypocrisy—tape recurring five-minute video clips highlighting Trump's latest scurrilous act and title the series 'Can You Imagine If I Did This?' Or another idea—an admittedly far-fetched one. Trump has decreed that a massive military parade be held through the streets of Washington on June 14. This will ostensibly celebrate the Army's 250th anniversary, but it also happens to fall on Trump's 79th birthday. The parade will cost an estimated $45 million, including $16 million in damage to the streets. (Can you imagine if Obama did this?) The spectacle cries out for counterprogramming. Obama could hold his own event, in Washington or somewhere nearby. It would get tons of attention and drive Trump crazy, especially if it draws a bigger crowd. Better yet, make it a parade, or 'citizen's march,' something that builds momentum as it goes, the former president and community organizer leading on foot. This would be the renegade move. Few things would fire up Democrats like a head-to-head matchup between Trump and Obama. If nothing else, it would be fun to contemplate while Democrats keep casting about for their long-delayed future. 'The party needs new rising stars, and they need the room to figure out how to meet this moment, just like Obama figured out how to meet the moment 20 years ago,' Jon Favreau, a co-host of Pod Save America and former director of speechwriting for the 44th president, told me. 'Unless, of course, Trump tries to run for a third term, in which case I'll be begging Obama to come out of retirement.'
Miami Herald
14 hours ago
- Miami Herald
US close to high-speed rail breakthrough
When the great and the good of the American high speed rail industry gathered in Washington, D.C. over May 13-15 for the U.S. High Speed Rail Association's (USHSR) 2025 annual conference, there was tremendous excitement tinged with anxiety. Several attendees told Newsweek they believe the U.S. could be on the verge of a high-speed rail breakthrough, setting the stage for the kind of comprehensive national system enjoyed in the likes of China, Japan and Western Europe. Ray LaHood, a Republican who served as Transportation Secretary under President Obama from 2009 to 2013, said if one of the two high-speed rail lines currently under construction is completed, it will prove 'wildly popular' and boost support for high-speed rail across the nation. Other insiders agreed, but argued permitting reform and more explicit federal support will be needed first. There has been concern over the Trump administration's attitude toward high-speed rail. The conference took place one month after Transportation Secretary Sean P. Duffy announced $63.9 million in funding for a proposed Dallas to Houston route had been scrapped, and amid rumors that the California High Speed Rail line under construction between Los Angeles and San Francisco could lose federal support. This week, Duffy said there is 'no viable path' to complete California High Speed Rail on time or on budget and warned the federal government could pull billions in funding. State of U.S. high-speed rail At present there aren't any high-speed rail networks — defined by the International Union of Railways (UIC) as operating at a minimum of 250 kilometers per hour (155 miles per hour) along specially built tracks — that are operational in the U.S. This compares unfavorably with the likes of Spain, Japan and France, which have around 2,460 miles, 1,830 miles and 1,740 miles of track respectively currently in use. Most impressively, China, the chief geopolitical rival of the U.S., has gone from having virtually no high-speed rail lines to nearly 30,000 miles over the past couple of decades. Construction is currently underway on two high-speed rail lines in the U.S.-Brightline West, which will connect Las Vegas to Southern California, and California High Speed Rail between Los Angeles and San Francisco. A range of other projects have been proposed around the country, including plans to link Boston, New York and Washington, D.C. in the Northeast; Dallas, Houston and Fort Worth in Texas; and Chicago to East St. Louis in Illinois. Obstacles When asked why the U.S. had failed to build a high-speed network comparable to other advanced economies, industry experts told Newsweek there are major issues with permitting, financing and cross-party political support. California High Speed Rail has sparked particular controversy, with its cost ballooning from $34 billion to over $128 billion, while the completion date has been pushed back. Terry Hynes, an attorney specializing in rail infrastructure projects, argued planning issues in particular have bottled up capital investment. He is currently part of a team investigating how the permitting process could be sped up for USHSR. Addressing Newsweek, he said: 'I've been in the business 46 years, making railroads, and I've been frustrated as hell representing the high-speed just takes forever. And there's private money that could be brought in. Wall Street's got a lot of money looking for infrastructure investments. 'This is a wonderful infrastructure investment, the trouble is they see those permitting times. Eight years for environmental review, then you build for four years and in year 13 you're finally going to see some money. Nobody's going to invest in that.' Hynes added: 'The biggest issue to my mind is this permitting issue. The review period takes so long, the cost goes up and the more expensive it is for people doing a cost-benefit analysis, the analyses looks less beneficial.' Brandon Wheeler, a senior program manager at the North Central Texas Council of Governments, a local government-based voluntary association, said a lack of national leadership has undermined high-speed rail construction across the U.S. Speaking to Newsweek, he said: 'We don't have a national single point of leadership on that single point of leadership it really is a little bit hopscotch and we're making the best we can of it. 'Until there is, like the interstate highway system, there's a national vision to create and you have a vision around the ability to move military and goods and those kinds of things. Until our airports get bad enough, until our roads get bad enough, until people have this massive outcry and we're able to concentrate them on something, we're going to have to find what that single vision is to rally around or we will fall behind the rest of the world.' LaHood agreed, saying: 'I think the success of these projects in Europe and Asia is largely due to the national government making investments but then encouraging the private sector. Once the national government makes a commitment, it's easier for the private sector then — they know it's going to be a stable project, they know their investment is going to be good.' If you build it they will come In 2023, Brightline, the first privately built rail line in the U.S. to open in nearly a century, began operations between Miami and Orlando in Florida and has since seen passenger numbers surge. While Brightline runs below the high-speed standard, LaHood said it showed Americans are ready to embrace new rail networks, and argued one successful project in the U.S. could turbocharge the whole industry. 'If you look at the Brightline project in is wildly popular,' he said. 'They're putting more and more trains on that track every day because people like the idea that they don't have to get on the I95 and they don't have to travel on highways that are crowded with big trucks and cars... 'If you build it they will come, if you build it it will be successful and I think that will be the case with Brightline West, Las Vegas to L.A., and I think it will be true San Francisco to L.A. I think they will be wildly popular. I really believe at this point if you build it they will come and the proof of that is Europe and Asia-their trains are wildly popular.' Speaking to Newsweek, Portland Mayor Keith Wilson, who is advocating for a 'Cascadia' high-speed rail line linking the city to Seattle in Washington and Vancouver in British Columbia, said: 'Our system continues to be compacted and stagnant. 'The great cities from around the world are all tending to go towards high-speed rail and we need an opportunity to unlock our economic renaissance, which is what's missing in our country right now, and high-speed rail would move us forward and get us completing again with the world.' Trust fund A number of industry insiders told Newsweek the formation of a federal government trust fund could provide the financial muscle for a major U.S. high-speed rail expansion. Asked what one development would most speed up U.S. high-speed rail, Jim Derwinski, executive director of Chicago rail system Metra, replied: 'A trust fund so it's national, it's bipartisan so it doesn't change from administration to administration and it can be supported through the states as a national effort. 'If you're going to build something, to compare it to Europe and Asia right now, it's got to have a national campaign right now.' Arthur Sohikian is executive director of High Desert Corridor, a proposed high-speed rail line that would link Brightline West to the California High Speed Rail line. He expressed a similar view to Derwinski, telling Newsweek: 'We have to energize the public to make that been trying to get a trust fund for rail since I started my career, it seems. 'For whatever reason why the politicians won't grab onto that and won't do that, especially when you realize the Highway Trust Fund keeps diminishing as cars get more efficient, we're paying less in gas taxes, that fund is have to invest in this infrastructure as a nation, and until that happens, seriously, we're all going to be trying to do our little pieces.' The U.S. High Speed Rail Association paid travel and hotel expenses for Newsweek reporter James Bickerton to attend its 2025 annual conference. Related Articles Portland Plan To Eliminate Homelessness 'Right On Schedule'Texas High Speed Rail Plan Issued Blow From Trump AdministrationTexas Bill Seeks To Thwart High-Speed RailPossible Northwest High-Speed Rail Route Gets $50 Million Boost 2025 NEWSWEEK DIGITAL LLC.
