Trump Enters Fraught Two-Week Run as Tax, Trade Deadlines Loom
Donald Trump's frenzied second term enters a crucial stretch in the coming weeks as the president juggles a fragile ceasefire between Israel and Iran, a discordant party that he needs to pass his top legislative priority and a global economy on tenterhooks awaiting his next move on tariffs.
Trump is up against a self-imposed July 4 target to pass his tax and spending bill, and he's two weeks out from the July 9 expiration of the global tariff pause that concussed the economy in April when he first introduced a raft of levies.
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Politico
28 minutes ago
- Politico
GOP megabill takes aim at universities — except for this conservative Christian college
President Donald Trump and Republicans in Congress are angling to use their megabill to turn the screws on elite liberal colleges that take millions in taxpayer funds while sitting on endowments worth tens of billions of dollars. But a single college that's a paragon of conservative higher education has managed to secure a carveout after finding itself in the crossfire. Hillsdale College, a Christian liberal arts school of fewer than 2,000 students located in southern Michigan, is one of a slew of smaller institutions that had been working to avoid being swept up in the GOP effort to raise taxes on the seemingly bottomless endowments of household names like Harvard, Princeton and Yale. But Hillsdale stands apart from those schools: For one, it's a rare institution of higher learning that the modern Republican Party applauds. Just as uncommon, Hillsdale accepts no funding from the federal government: 'The founders of our nation chose independence. As do we,' the college boasts in advertisements. That formed the crux of its argument that, on principle, Hillsdale and schools like it should not be subject to a federal tax on endowments. Senate Republicans heeded that logic in their version of the reconciliation bill that the party hopes to send to Trump's desk next week by including an exemption for schools that fit Hillsdale's profile. The reprieve is by no means guaranteed, as Hillsdale found out eight years ago. Democrats that year seized on the university's unique position, branding the exemption as an earmark for a political ally and ultimately getting it stripped from the 2017 Tax Cuts and Jobs Act with the help of a handful of Republican senators. That's why Hillsdale turned earlier this year to professional advocates for help with the latest endowment tax proposal. In April, the college retained Williams and Jensen to lobby on 'specific threats to the institutional and financial independence of the college, primarily related to the higher education endowment tax,' according to a disclosure filing. The team of lobbyists working on the account includes Dan Ziegler, who served as House Speaker Mike Johnson's top policy aide before returning to the lobbying firm in March, and who previously served as executive director of the conservative Republican Study Committee. In its meetings with policymakers, Hillsdale has reiterated its general opposition to using the tax code as a blunt force object — reaching often for the declaration from former Supreme Court Chief Justice John Marshall that 'the power to tax involves the power to destroy.' Beyond that, it has stuck to its insistence that schools that have sworn off taxpayer money should be left out of the endowment tax scheme altogether. That could end up incentivizing more institutions to follow in Hillsdale's footsteps — especially with the Trump administration taking aim at colleges' federal funding — whereas a tax hike might throw up financial roadblocks for schools who might be eyeing a move toward independence. Hillsdale's message has landed favorably on the Hill, according to a person familiar with those discussions who was granted anonymity to discuss sensitive deliberations. The person noted that the school hadn't encountered much opposition to its position on principle. Failing to exempt schools that don't accept federal funds 'penalizes most severely those institutions that have chosen the harder path of independence' from the federal government and the conditions of accepting that money, Hillsdale President Larry Arnn wrote in an op-ed in May. 'Worse still,' he added, 'this tax turns the incentives backward; it rewards dependence and punishes self-reliance. It encourages institutions to seek the shelter of government aid, where subsidies can offset tax burdens.' Hillsdale declined to comment on the record. Hillsdale has proudly touted its independence for refusing direct government funds since its founding by abolitionists in 1844. In the 1980s, Hillsdale was faced with a Supreme Court civil rights ruling that would've required universities to track admissions by race and bar sex-based discrimination in order to accept federal financial aid from students. In response, the school declared that it would no longer accept such assistance. Hillsdale's break from what it calls governmental overreach has made it at home with the right. Conservative luminary William Buckley donated much of his lifetime of writings to the school in the early 2000s. In 2016, Hillsdale hosted Supreme Court Justice Clarence Thomas as its commencement speaker. More recently, Republican leaders like Florida Gov. Ron DeSantis have sought to recreate versions of Hillsdale in their home states and to integrate its curriculum in K-12 classrooms. Hillsdale graduates are scattered throughout Washington, including in the offices of the top Republicans in Congress. Michael Anton, who joined Hillsdale's D.C. outpost after working in the first Trump administration (though he's not a Hillsdale grad himself), was tapped in April to lead the U.S. technical team in nuclear negotiations with Iran. The university regularly advertises its free online courses on subjects like ancient Christianity and the Biblical book of Genesis on Fox News, and rents various conservative email lists. Arnn, a co-founder of the conservative think tank the Claremont Institute, was even considered for Education secretary in Trump's first administration. Trump's eventual Education secretary, Betsy DeVos, has her own familial and financial ties to Hillsdale. In Trump 2.0, the universityhas partnered with the White House and the Education Department on an educational video series to promote the 250th anniversary of America's founding. The most recent installment, focused on the founding of the U.S. Army, featured Defense Secretary Pete Hegseth. Even with those credentials, as the GOP continues tinkering with the bill ahead of final passage, there's one hitch that could complicate things: At least right now, there aren't believed to be any other schools besides Hillsdale that don't accept federal cash and have large enough endowments that they're at risk of being hit by the endowment tax. Wealthy universities were first hit with a 1.4 percent excise on their endowments as part of the 2017 GOP tax bill. Given that the relationship between Republicans and higher education has only crumbled in the years since, colleges across the country had already been bracing for Republicans to take another swing at the excise tax in negotiations to renew expiring provisions in the Tax Cuts and Jobs Act. There's a tranche of smaller colleges that would be hit hard by an endowment tax hike and are trying to distance themselves from the Ivies in conservatives' crosshairs. But even though Hillsdale would likely benefit from some of the endowment tax changes those schools have pitched lawmakers on, including sparing schools smaller student bodies, the college has thus far declined to take other schools up on overtures to join their coalitions as it leaned on its more unique messaging. Hillsdale isn't in the clear yet. There are questions about whether several of Republicans' changes to the endowment tax are allowed under the arcane procedural rules of the reconciliation process. The exclusion was not included in the House version of the bill, and not much is set in stone amid horsetrading within the conference. The specter of the last Republican tax debate also looms large given Hillsdale's distinctive position. Earlier versions of the 2017 Tax Cuts and Jobs Act would have subjected schools with endowments of at least $250,000 per student to the excise tax. But during floor debate in the Senate, Sen. Ted Cruz (R-Texas) — who received an honorary degree from Hillsdale in 2013 — and then-Sen. Pat Toomey (R-Pa.) introduced an amendment that would have exempted from the tax any otherwise-eligible schools that don't take federal funding. The amendment triggered an outcry from Senate Democrats, who pointed out that the only university that would apply to was Hillsdale. Four Republican senators ended up voting with all Democrats to sink the amendment. Hillsdale still managed to luck out, but only temporarily, thanks to language in the final bill that raised the threshold for the tax to $500,000. The House reconciliation bill retains that threshold for the 1.4 percent tax, but neither measure indexes it to inflation, effectively lowering the threshold as time goes on. Hillsdale's endowment finally reached eligibility a few years ago, and much further down the line, other schools that have sworn off federal funding may eventually join it. If the Senate version prevails, however, Hillsdale would pay nothing. In Arnn's May op-ed, he wrote that the House-passed reconciliation bill leaves 'untouched the vast web of colleges and universities sustained by taxpayer dollars, often bloated with bureaucracies committed to fashionable ideas, far removed from the purposes of education.' Ironically, some of the biggest winners out of the Senate's version of the endowment tax — aside from Hillsdale — were schools with the biggest endowments, like Harvard, that would have seen their tax rate soar to 21 percent under the House bill. Senate Republicans softened the tax hike to less than 10 percent for the wealthiest universities.
Politico
29 minutes ago
- Politico
Trump isn't ready for a ceasefire with Massie
Just as President Donald Trump appears to have hit pause on a major conflict in the Middle East, he is intensifying one at home. Rep. Thomas Massie (R-Ky.) is the chief target of the president's powerful political operation, which is looking to oust the outspoken congressman in the GOP primary next year. The congressman has been a thorn in the president's side in the past, but Massie's latest threat to introduce a resolution aimed at reining in presidential war powers comes as Trump was already seething about Massie's multiple attempts to thwart the 'big, beautiful bill' ahead of Republicans' self-imposed July 4 deadline. Massie has easily beat back challenges before, including a raft of money from pro-Israel donors. But this time, the six-term Congressman's strong independent political brand may not withstand the blitz that the president's allies appear ready to unleash. Not only has Trump vowed to campaign 'really hard' against Massie next year, his political operation has launched a super PAC dedicated solely to defeating the Kentuckian. 'He's probably more vulnerable than he's been since he first won in a primary because of all this,' said GOP strategist and former Kentucky state Rep. Adam Koenig. 'There's money outside of Trump world ready to go after Massie.' Trump's political apparatus began ramping up its efforts to boot Massie after the representative voted against the party's massive tax-and-spending package for the president's domestic policy priorities when it first went through the House last month. It went public with its plans — a super PAC dubbed Kentucky MAGA led by two of the president's most-trusted lieutenants, Chris LaCivita and pollster Tony Fabrizio, first reported by Axios — as Massie pushed to reassert congressional authority over Trump's military actions in Iran. 'He has established himself as a contrarian for contrarian sake,' LaCivita said in a text message to POLITICO. 'He should be a man and switch parties instead of posing as a Republican.' The president and his advisers have viciously attacked Massie on social media in recent days, with Trump marshalling his MAGA base to dump 'LOSER' Massie and 'GET THIS 'BUM' OUT OF OFFICE.' Trump and Massie have had a contentious relationship dating back to the president's first term, when he pushed to 'throw Massie out of the Republican Party' after the Kentucky Republican erected a roadblock to Trump's Covid-19 relief package in March 2020. Trump later endorsed Massie's 2022 reelection bid and Massie backed Trump in 2024 — but only after initially supporting Florida Gov. Ron DeSantis in the presidential primary. But now that Trump is back in the Oval Office, Massie has attempted to cripple the president's legislative agenda multiple times, including becoming the only Republican to vote against a stopgap government funding bill in March. Unlike in the past, the president appears to be making good on his threats to try getting Massie out of office by putting a super PAC on the case. 'I think there's a real opportunity…they're going to spend upwards of $30 million to defeat Thomas Massie,' said one Kentucky GOP political operative who, like many interviewed for this story, was granted anonymity to discuss sensitive intraparty matters. The operative, who did not vote for Trump, also heard rumblings that AIPAC, one of the most prominent pro-Israel groups, is also ready to spend big in the May 2026 Kentucky primary — suggesting Massie's anti-war efforts may be met with resistance on multiple fronts. Some Republican strategists estimate combined spending could reach as high as $45 million, an unheard of total for a primary contest in the 4th Congressional District. (The only outside spending against Massie in last year's primary was about $320,000 from AIPAC's super PAC, United Democracy Project.) Even Speaker Mike Johnson hedged Tuesday on whether he would support Massie next year — despite acknowledging it's his job as the top House Republican to protect his party's incumbents. 'I certainly understand the president's frustration' with Massie, Johnson told reporters at the Capitol. 'If you're here and you're wearing one team's jersey and every single time you vote with the other team, people begin to question … why you're so consistently opposed to the platform, the agenda of your party.' But Massie appears unfazed by Trump and his allies' electoral threats. 'In 2020 I got my Trump antibodies from a natural infection when he came after me, and I survived,' Massie quipped to reporters on Tuesday. 'It will deplete his political capital if he doesn't succeed, and he knows that. So that's got to be part of his calculus.' In fact, Massie is embracing the fight. On Twitter, he teased an interview with podcaster Theo Von, a sign that he's seeking to widen his exposure in a format that favors Massie's unique brand of an isolationist budget hawk. He's fundraising off the social-media sparring with Trump, telling Hill reporters Monday evening that he'd raised roughly $120,000 in 24 hours. And he's still pledging to move ahead with his war powers resolution if the ceasefire between Iran and Israel doesn't hold, saying in television interviews and to Hill reporters it's 'not clear the war is over.' Overhanging the primary threat is the question of exactly which candidate Trump's allies have in mind to run against the incumbent. Already, some think first-term state Rep. Aaron Reed, a retired Navy Seal and gun shop owner who is rarely seen without his cowboy hat, would be a possible challenger. Another option is state Rep. Kimberly Moser, who is not thought of as traditionally MAGA, but has over the years made inroads with the Trump wing of the party. There are some potential outsiders who might have the means to self-fund a campaign as well, like political pundit Scott Jennings or former gubernatorial candidate Kelly Craft. 'I think it's too soon to know if his outright opposition to what Trump has done – and I think it's pretty horrible what [Massie's] done – will make a difference,' said Ellen Williams, a former chair of the Kentucky GOP. 'You can't just put anybody up against him and spend a shitload of money. I just think it emboldens him.' Members of Kentucky's congressional delegation say Massie's sprawling district, which runs along the northern border along Ohio and Indiana and stretches from the southern Cincinnati suburbs to the outer bands of the Louisville metro area, is a unique cross-section of the state that appears to relish Massie's independent streak. It's home to some of the most prominent members of the 'liberty faction' of the Kentucky Republican Party, a group that embraces Trump while also gravitating toward libertarian-leaning Republicans like Massie and Kentucky Sen. Rand Paul. The senator has weathered his own barrage of attacks from Trump for voicing opposition to the megabill and defended Massie to POLITICO on Tuesday. Massie is 'very popular in Kentucky,' Paul said. 'I will continue to support him.' 'His district is different,' Rep. James Comer, a fellow Kentucky Republican, said Tuesday on Capitol Hill, though he declined to weigh in on the conflict between Massie and Trump. 'That's a unique congressional district.' Former Kentucky Secretary of State Trey Grayson believes Trump, as much as he is the undisputed leader of the Republican Party, may be overplaying his hand when it comes to Massie's district. 'As popular as Trump is in Republican politics, as popular as Trump is in Kentucky, as popular as Trump is in the 4th District, on the substance, on the policy, Thomas wins those arguments over Trump,' Grayson said. 'Until you see someone step up, Thomas is still pretty formidable.' He also warned of repercussions for Trump, who — constitutionally barred from seeking office again — is a lame duck. If the representative is able to fend off a primary challenge, it could open the floodgates for others who have private misgivings about the president's actions. 'It will make a difference if Massie were to overcome this,' Grayson added. 'If he wins, if you're a member, you'd be more likely to speak out in the future.' Massie's never been in serious jeopardy in the GOP primary. His closest primary contest was when he first ran for Congress in 2012 when he defeated Alecia Webb-Edgington, a state representative, to succeed the retiring Rep. Geoff Davis by roughly 7,000 votes. In subsequent primary contests, Massie cruised to victory in otherwise low-turnout primaries where he won with no less than 60 percent of the vote. Many operatives believe Trump would need to juice primary turnout considerably to succeed in his quest to topple Massie. Some cautioned that Trump's popularity 11 months from now could shift considerably. Massie was matter-of-fact about the challenges before him Tuesday afternoon when addressing reporters. 'I just have to spend more money if he gets in the race,' Massie said, when asked his thoughts on Trump meddling in his primary. He then laid out a pair of scenarios, one in which Trump endorses someone and then backtracks on the endorsement — as the president has done before. He floated another in which Trump's allies lay down a lot of money and groundwork, only to abandon its efforts down the line. 'They're gonna try to talk to somebody in the them that the Trump endorsement is coming, and then they'll wait to see if that person can get close. And if that person can get close, then Trump may get in,' Massie said. 'If that person can't, they'll leave that person hanging on the bone.'
Yahoo
30 minutes ago
- Yahoo
Can a Roth IRA be used for college?
Both a Roth IRA and a 529 Plan are valid ways to save for a college education. Each has unique benefits and limitations. Starting in 2024, unused funds in a 529 account may be converted into a Roth IRA if the investor so chooses, though there are pros and cons. Families should carefully assess which type of account will give them the most benefit. Some people decide to leverage both for college savings purposes. A Roth IRA can be used as a savings vehicle for college. You can withdraw your Roth contributions at any time without penalty to pay for any expense, though there may be associated taxes on any earnings. You can also use Roth earnings without penalty to cover qualified education expenses, such as tuition and fees. Before you use a Roth IRA for college, it's a good idea to be aware of the advantages and disadvantages so you can assess whether it makes sense for you and your family. Be aware that, in some cases, a 529 plan may be a better fit for your circumstances. While they're not specifically designed for college savings, Roth IRAs can be used to pay for a college education. Roth IRA accounts are funded with after-tax dollars and grow tax-free, and money can be withdrawn for educational purposes without a penalty — though you'll still have to pay income taxes. With that said, there are contribution limits for this type of account. In 2024, those who meet income requirements to contribute to a Roth IRA can contribute up to $7,000 across a Roth and a traditional IRA. The exception is individuals who are age 50 or older, who can contribute an additional $1,000 per year in what is known as a 'catch-up contribution.' Keep in mind that if your modified adjusted gross income (MAGI) exceeds $146,000 for heads of household or $230,000 for married couples, you will be subject to reduced annual contribution limits. These limits are assessed annually by the IRS and tend to fluctuate each year. Roth IRA withdrawal rules are considerably different from rules that apply to other retirement accounts. Because Roth IRA accounts are funded with after-tax dollars, account owners can withdraw their contributions (but not their earnings) before the standard retirement age of 59 ½ without paying any taxes or penalties. The Internal Revenue Service (IRS) typically charges a 10 percent penalty on distributions that include earnings before retirement age. However, it provides several important exceptions for Roth IRAs, including distributions to pay college tuition. Parents who withdraw earnings for college costs will have to pay income taxes on the amount but not an added fee. For parents who are making withdrawals after the age of 59 ½, no penalties apply, regardless of whether the funds are being used for college or not. However, the longer a parent is able to leave funds parked in investments, the more these savings can grow. While distributions taken from a Roth IRA account are tax-free, distributions are counted as untaxed income on the following year's Free Application for Federal Student Aid (FAFSA). In other words, using a Roth IRA for college can reduce eligibility for need-based aid. However, the impact depends on the amount of money withdrawn and which year of school the distribution is made. If you're on the fence about making a Roth IRA education withdrawal, consider the advantages and disadvantages that could apply to your situation. Using a Roth IRA for college can reduce reliance on student loans. Parents who want to help their children avoid student loan debt can use Roth IRA funds to lessen the burden of borrowing. Roth IRAs can be invested for long-term growth. Money invested in a Roth IRA can be invested in stocks, bonds, ETFs, index funds and more, giving you plenty of options to customize your investment. You get tax-free growth. Since Roth IRAs are funded with after-tax dollars, the money can grow tax-free over time. There is no penalty for education-related withdrawals. As long as the funds are used for education-related expenses, you won't be penalized for withdrawing money from a Roth IRA. Using a Roth IRA cuts into retirement savings. If you use too much of your Roth IRA funds to cover higher education expenses, you may fall behind on retirement goals. Roth IRA accounts can lose money. Stocks, bonds and other investments are also at risk of losing money. This means that you could have less saved than you started with, depending on your timeline. Financial aid could be impacted. Distributions from a Roth IRA will count as income on the FAFSA, which may reduce your child's need-based financial aid eligibility. You'll be subject to income and contribution limits. Unlike with other savings vehicles, you won't be able to contribute to a Roth IRA if you exceed the income threshold. You can also contribute only $7,000 or $8,000 a year, depending on your age. Learn more: Check out our FAFSA guide Before using a Roth IRA plan for a college education, you may also want to consider a 529 college savings plan. A 529 plan is a type of investment account specifically designed for a college education, which grows your contributions on a tax-deferred basis. There are some significant advantages that come with saving for college in a 529 plan over a Roth IRA, although some of the benefits depend on your situation. Detail Roth IRA 529 Plan Eligibility Restrictions apply past a certain income threshold No income restrictions Tax deductibility No Yes, in some states Tax-free withdrawals Yes, though earnings may be taxed as income Yes, tax-free and penalty-free Annual contribution limit $7,000; $8,000 if age 50 or older No federal limit; varies by state, but generally with higher caps than a Roth IRA Holding period Account must be open for 5 years before a withdrawal can be made None Impact on financial aid May impact need-based aid eligibility; withdrawals count as income May or may not impact need-based aid; withdrawals are not counted as income Penalty-free uses of invested funds Retirement savings, first-time home purchase, qualifying birth or adoption expenses, qualifying emergency expenses or disaster relief, education Tuition for K-12 education, post-secondary tuition, qualifying education-related expenses (such as textbooks, computers, room and board) Bankrate insight In general, a Roth IRA is best for savers who aren't sure how much their child will need for college. A 529 plan is better if you need to put away more money at once. Although the primary purpose of a Roth IRA is to help you save for retirement, you can also use it to save for college. But using Roth IRA funds to cover college expenses has a few drawbacks — for example, using them for education can cut into your retirement savings. Before you use a Roth for education, consider whether using a 529 instead makes more sense for your financial situation. Alternatively, you may decide that using both to save for college is best for your family. If you are unable to save enough to cover college between a 529 plan and a Roth IRA, investigate federal student loans before taking out a private student loan. Can you convert a Roth IRA to a 529? 'Yes, all or part of a Roth may be converted to a 529,' says William Bevins, a certified financial planner (CFP) and certified trust and fiduciary advisor (CTFA) based in Franklin, Tennessee. Converting a Roth IRA to a 529 requires you to withdraw money from your Roth and use it to fund a 529. But before you do this, you should understand some potential drawbacks. 'The primary reason for building a Roth is to reap the reward of tax-free retirement growth down the road,' Bevins says. 'Making early withdrawals can limit the advantage of having one.' Bevins recommends contacting a tax advisor for help determining if this move makes sense for you. Is there a limit to how often you can draw from a Roth IRA? No, there's no limit. You can make withdrawals from your Roth at any time. Withdrawing your Roth IRA contributions doesn't have any tax consequences; however, you might have to pay income taxes on withdrawn earnings.
