Latest news with #OBBBA
Yahoo
4 hours ago
- Business
- Yahoo
There's an Alarming Part of Trump's 'Big, Beautiful Bill' You Probably Haven't Heard Much About
Sign up for the Slatest to get the most insightful analysis, criticism, and advice out there, delivered to your inbox daily. Ever since Republicans' budget megabill passed the GOP-controlled House—by just one vote, mind you—the headlines about it have largely focused on its cuts to Medicaid. But one noteworthy aspect of the bill has gotten much less attention: It would massively increase the amount of taxpayer dollars going to immigration enforcement. Though Republicans are touting the One Big Beautiful Bill Act as a historic tax-saving, economy-boosting piece of legislation, it sets aside a whopping $80 billion for immigration enforcement, according to an analysis by the American Immigration Council. All in all, the AIC concluded that if signed into law, the OBBBA 'would represent the single biggest increase in funding to immigration enforcement in the history of the United States.' Currently, Immigration and Customs Enforcement says it has 'an annual budget of approximately $8 billion,' and $3.4 billion of that is spent on detention, according to the AIC. Under the OBBBA, the agency would be given $45 billion for immigration detention alone through September 2029, which amounts to about $12 billion annually. The bill also gives ICE $14 billion to spend on deportation operations and $8 billion to hire more ICE officers. Adriel Orozco, senior policy counsel at the AIC, has been closely tracking the OBBBA as it was finalized and passed the House. 'If you compare the detention budget to fiscal year 2023, which is the last fiscal year we have a clear-cut number for, this is a 265 percent increase,' he said. The Department of Homeland Security, which oversees U.S. Citizenship and Immigration Services, Customs and Border Protection, and ICE, has already been on the front lines of much of the Trump administration's lawless activity that's being challenged in the courts: grabbing a student off the street for writing an op-ed; arresting people as they leave court hearings, and brazenly deporting people to countries they are not from, ignoring at least two different judges' orders. 'The kinds of dollars we're talking about would really unlock an ability for the Trump administration to level up the cruelty of their enforcement actions at taxpayer expense,' said Heidi Altman, vice president of policy at the National Immigration Law Center, 'in a way that I'm not sure we can even envision right now.' And there's another historic change buried in the bill: It would charge asylum-seekers exorbitant fees just to submit an application to be considered to live here. Currently, when a person looks to leave their home country because of fear that they'll be persecuted over their race, religion, nationality, political opinion, or membership in a particular social group, they can immigrate to the U.S. and, once they are on American soil, apply for asylum. The process is free, as U.S. lawmakers up until this point have respected the fact that these folks are oftentimes fleeing life-threatening situations. The OBBBA would change that by charging individuals $1,000 a pop to submit an asylum application. Orozco noted that there have been attempts in the past to instate a fee for asylum applications, including during Trump's first term, but it was only around $50 and never ended up materializing. If the OBBBA becomes law—and if this provision isn't stripped out as the bill makes its way through the Senate—it would be the first time in our country's history that applying for asylum would carry a fee. On top of the $1,000 base fee, the bill would require asylum-seekers to cough up $100 every year that their application is pending. According to USCIS, asylum applications are resolved 'within 180 days' after they are filed, but TRAC, a government watchdog group, estimates that DHS has a backlog of 3.6 million active immigration cases, including asylum applications. The average wait time for all immigration cases to resolve is 636 days—and TRAC notes not just that asylum cases tend to take judges more time but that the backlog of those cases has been growing. Based on that estimate, it would take roughly two years for an asylum case to be resolved. The bill includes a host of other immigration-related fees, including a mandatory $550 every six months in order to keep a work permit. It also increases the current fee for appealing an asylum-application decision from $110 to $900. The OBBBA does not include any pathway to waive these charges. 'People who are applying for asylum the first time are not yet work-authorization eligible, so you're asking people who don't have legal permission to work in this country to somehow pull together the funds for an application,' Altman said. 'And it's also misaligned with international law and our obligations under the Refugee Convention to require people to pay, particularly that steep of a fee, for just getting access to asylum protections.' The OBBBA is currently in the Senate, where it could undergo significant changes—particularly because of the Byrd rule, which requires that everything in a reconciliation bill be directly related to the budget. To Orozco's knowledge, Democrats have been mostly silent when it comes to the OBBBA's immigration policies. 'At the end of the day, we do recognize that it's an uphill battle, that a lot of the conversation around the reconciliation bill is not about immigration,' he said. 'We will be trying to make those arguments and are hoping that we are able to at least decrease or remove some of these fees, but we are concerned that there's a real possibility that these can be imposed.' Donald Trump has made it clear he wants this bill on his desk to sign into law by July 4, but Senate Republicans have a long road ahead of them. They can afford to lose only three votes, and so far, at least three lawmakers have indicated they would vote against the current version of the bill.
Forbes
7 hours ago
- Business
- Forbes
Can Artifical Intelligence Save America From Its Debt Spiral?
Jamie Dimon isn't one to cry wolf. So when the JPMorgan CEO says 'you are going to see a crack in the bond market,' it's worth listening. And he's not alone. Ray Dalio, Peter Orszag, and Paul Tudor Jones are all sounding the alarm on America's fiscal trajectory. The math is getting hard to ignore. Interest on the debt just crossed $1 trillion annually — more than the U.S. spends on defense, Medicaid, disability insurance, and food stamps combined. The One Big Beautiful Bill Act (OBBBA), if passed without offsets, could add $5 trillion to the debt over the next decade. According to the Committee for a Responsible Federal Budget, that pushes total public debt to nearly $57 trillion by 2034 — a number so large it's bordering on abstract. US Debt-to-GDP Ratio; Historical & projected If 10-year bond yields simply hold at today's ~4.4%, the CRFB estimates we add another $1.8 trillion in interest cost. And if rates rise further, a debt spiral isn't a tail risk — it's the baseline. But here's the problem: everyone agrees on the diagnosis. No one agrees on the cure. Raising taxes? Politically impossible. Cutting entitlements? Untouchable. Both parties have proven incapable of fiscal restraint — even in peacetime. So what's left? If the U.S. is going to escape its debt doom loop, we'll need to grow through it — not tighten into it. And the most credible engine for that growth isn't austerity. It's artificial intelligence. We are standing at the front end of a once-in-a-century platform shift. AI isn't just another tech cycle — it's a horizontal capability that will transform every sector of the economy, from finance and logistics to energy, healthcare, and defense. AI isn't just another tech cycle. It's a general-purpose capability that could rewire the productivity backbone of every sector — from private credit and logistics to defense, software, and healthcare. Already, we're seeing AI reduce due diligence cycles from weeks to hours, compress legal reviews by 80%, and deliver spreadsheet analysis with near-perfect accuracy. AI-powered copilots aren't replacing humans — they're multiplying the throughput of every knowledge worker. If this productivity surge lifts U.S. real GDP from ~2% to 3–4%, and inflation stays modest, we could see nominal GDP growth exceed 5% annually — fast enough to outgrow the debt even if rates remain elevated. That's not wishful thinking — it's historical precedent. After WWII, the U.S. carried debt loads above 100% of GDP. We didn't cut our way out. We grew — averaging nearly 4% real GDP growth for two decades through innovation, infrastructure, and industrial scaling. This isn't an argument to ignore the wolf. It's a call to outrun it. Yes, 3–4% real growth is aggressive. But it's not impossible. It happened before — and it could again if AI unlocks true economy-wide productivity gains. The U.S. has unique advantages: it leads the world in foundational models, semiconductors, cloud infrastructure, and startup formation (yes, we still need more energy to power this expansion). If AI is going to remake the modern economy, it will start here. Done right, AI can unleash the kind of broad-based productivity boom that defined the post-WWII economic miracle. Between 1947 and 1973, U.S. real GDP grew nearly 4% annually, driven by industrial innovation, global leadership, and a rising middle class. We've been chasing that growth rate ever since. And the numbers back it up. Vanguard projects that AI adoption could boost labor productivity by 20% by 2035, lifting U.S. GDP growth to 3%+ annually — the fastest pace since the 1990s. JPMorgan Private Bank sees productivity gains materializing as early as the late 2020s, lifting growth above 2.5%. And according to the AI Coalition, AI could raise long-run productivity growth by 0.8 to 1.5 percentage points per year — a massive unlock in a mature $27 trillion economy. Yes, even 3–4% might not be enough if interest rates spiral. But today's 4.4% Treasury yield isn't permanent — it's a reflection of uncertainty, not inevitability. If AI stabilizes growth expectations, that could anchor yields and restore fiscal confidence. The spread between nominal growth and average borrowing costs is the most important line on the chart — and AI could flip it back in our favor. Yes, productivity gains may be uneven or delayed. That's true of any general-purpose technology. Electricity and the internet took years to show up in the data. But early results are already promising — especially in high-leverage sectors like finance, law, and logistics. And no, growth alone won't fix Medicare or solve Social Security. But it will buy time — and make eventual reforms more politically and economically feasible. AI is not a substitute for tough decisions. It's the only viable bridge to a sustainable future. The original Marshall Plan powered postwar recovery through investment and innovation. AI can do the ... More same for America today. Post-WWII America didn't just survive high debt. It flourished — building a dominant economy powered by innovation, infrastructure, and productivity. We now face a similar inflection point. This time, AI is the catalyst. We have a choice: treat AI like a regulatory threat, or embrace it as a national growth strategy. Because the truth is, America doesn't have a debt problem — it has a growth problem. And the longer we delay confronting that reality, the more constrained our options become. If AI can unlock a new era of economic abundance, it won't just be good for business. It may be the only way to save the Republic's balance sheet.
Forbes
9 hours ago
- Business
- Forbes
What Trump's 2026 Budget Would Mean For Older Adults
WASHINGTON, DC - MAY 22: President Donald Trump and Health and Human Services Secretary Robert F. ... More Kennedy Jr. attend an event introducing a new Make America Healthy Again Commission report. (Photo by) President Trump's 2026 budget would freeze spending for many services for older adults, deeply cut others, continue his efforts to slash government staffing for key programs, and abolish a critical federal office that manages many of those initiatives. It would retain, but sharply reduce funding for, the National Institute on Aging. It would restructure and cut funding for low-income housing, including for older adults and people with disabilities. And it would kill a jobs program for low-income older adults and several initiatives aimed at assisting people with disabilities. Trump's draft 2026 budget is separate from the many staffing cuts he already made through Elon Musk's Department of Government Efficiency. And it is unrelated to the 2025 budget bill passed by the House May 22 and now pending in the Senate. His 2026 budget will need to be approved by Congress, where its fate is uncertain. Lawmakers will consider it sometime after they complete the 2025 fiscal bill, which the House calls the One Big Beautfiul Bill Act (OBBBA). According to a budget description released by the federal Department of Health and Human Services, Trump would fund most programs under the umbrella Older Americans Act in 2026 at roughly the same levels as this year. That means programs such as Meals on Wheels and other nutrition assistance, support for family caregivers, the long-term care ombudsman program, and the like would get no additional funding, but neither would they see their budgets cut. In a time of inflation, flat funding means the buying power of these programs would shrink. Yet, Older Americans Acy programs fared far better than other domestic spending, which Trump would cut by about 22 percent. The biggest immediate change, which the White House announced earlier this year, would abolish the Administration for Community Living, which oversees those OAA programs as well as a federal initiative aimed at supporting family caregivers called the RAISE Act. HHS initially announced it would divide ACL's work among three other agencies within the department. Now, Trump would shift all of ACLs work to an office that had been known as the Administration for Children and Families. It will become the Administration for Children, Families, and Community. HHS leadership also announced earlier this year it would eliminate about 45 percent of all positions in ACL, which had about 200 staff at the beginning of 2025. It is not clear from the budget how that number will change. After receiving pushback from key members of Congress and advocacy groups, the final Trump budget reverses several program cuts the White House proposed back in March. For example, it now saves and funds at current levels the ombudsman program that investigates consumer complaints about nursing homes, a respite program for family caregivers, and the State Health Insurance Assistance Program, which provides consumer advice about Medicare. Some programs still would be killed, however. They include several for people with disabilities and the White House conference on aging. The Administration also would cut federal rental assistance by almost $27 billion, or 43 percent. It would combine six different programs into a single State Rental Assistance Block Grant, funded at about $32 billion. The combined programs would include Section 202 Housing for the Elderly and Section 811 Housing for Persons with Disabilities. Absent those subsidies, it would be difficult if not impossible to build affordable housing for low-income older adults. The new model would give states greater flexibility in spending the funds. But it also would create something of a zero-sum game, where housing needs of older adults could be pitted against the needs of young families. Trump also would kill a long-standing Department of Labor program aimed at helping low-income older adults find work. Over the long term, the most profound cut proposed by Trump may be slashing the National Institute on Aging budget from $4.4 billion to $2.8 billion. NIA funds a broad range of critical research into ways to improve the health of older adults. NIA would remain an independent entity at the National Institutes of Health, unlike several others Trump would eliminate. But losing nearly 40 percent of its funding would be a severe blow to the current and future study of aging. These budget proposals are separate from House plans to substantially cut the federal contribution to Medicaid or impose a work requirement on Medicaid recipients. Trump's budget proposal now goes to Congress, where its fate is uncertain. On one hand, many programs for older adults and people with disabilities enjoy widespread support on Capitol Hill. But bond investors are getting increasingly nervous about the rapidly rising federal budget deficit, a concern that is likely to grow if Congress approves anything close to the $3.9 trillion in tax cuts the House adopted in May. The Senate is considering even bigger tax cuts. But bond market resistance could force Congress to either scale back those plans, which would be a tough sell among GOP lawmakers, or look for ways to pay for some tax reductions by cutting domestic spending even more deeply. If lawmakers go that route, Older Americans Act funding still could face a struggle on Capitol Hill. It seems improbable that the Trump Administration will fight hard to retain many of these programs, since it proposed cutting them in its initial budget draft. The Trump budget could have been much worse for older adults. But it remains to be seen how those programs are managed following the major staffing cuts at HHS. And don't be surprised if services for seniors and people with disabilities get caught up in congressional efforts to further cut domestic spending later this year.
Yahoo
a day ago
- Business
- Yahoo
'One Big Beautiful Bill Act' would mean cuts to taxes, social programs
In this second installment of our series exploring the ways President Donald Trump's 'One Big Beautiful Bill Act' could impact people on the local level, The Commercial-News takes a deeper look at how the bill, if passed by the Senate, would cut taxes for some and implement work requirements for SNAP and Medicaid programs. The bill was passed by the House of Representatives on May 22 and is currently being debated by the U.S. Senate, who is expected to vote on the bill sometime this summer. For families with children, the 'One Big Beautiful Bill Act' (OBBBA) would mean an increase in the Child Tax Credit. Established in 1997 as part of the Taxpayer Relief Act, the goal of the Child Tax Credit (CTC) is to enhance the economic security of families with children, particularly those in lower- to middle-income brackets. The dollar amount of the tax credits is based on the number of dependent children, as well as income level and marital status, according to the National Conference of State Legislatures. In other words, those who claim their children on their federal tax return — and some state returns, including Illinois — are not taxed on their entire income, thanks to those deductions. That means families could save hundreds or even thousands in taxes they would otherwise be required to pay. It's important to note that these changes would only remain in effect until 2028, when the CTC would be reduced back down to the current $2,00 per child. Elimination of taxes on tips and overtime Another group who could benefit from the OBBBA are servers or bartenders, who may see a bump in their net pay thanks to the elimination of taxes on tips and overtime. According to some bartenders in Illinois make as much as $150 a day in tips, all of which counts toward their taxable income as the law stands today. Should the OBBBA pass the Senate, tips and overtime hours would no longer be taxed, meaning more money would stay in the pockets of bartenders, servers, baristas, and anyone else who relies on tips. The actual change would take place as a deduction, like the child tax credit, in which taxpayers who receive tips would receive 'a deduction in an amount equal to the qualified tips received during the taxable year that are included on statements furnished to the individual.' The same goes for those who worked beyond their required hours across the year. Overtime hours would not be taxed, thanks to a deduction 'in an amount equal to the qualified overtime compensation received during the taxable year.' For Seniors Those who are 65 years or older would also see an increased standard deduction to their taxable income as a way to ease the burden on fixed-income retirees. Should the bill pass Senate, standard deduction amounts for 2025 through 2028 would be increased by an additional $4,000 for seniors 65 and older who meet certain income limits. For Small Business Owners Those who own small businesses could see an expanded QBI (Qualified Business Income) deduction. The QBI allows eligible businesses — like S corporations, partnerships, and limited liability companies (LLCs), as well as sole proprietors and self-employed individuals — to deduct up to 20% of their qualified business income, lowering their taxable income and saving them money. Cuts to Social Programs — Who's at Risk? Medicaid Work Requirements Around 3.9 million people in Illinois, including low-income adults, children, pregnant women, and people with disabilities, have their health needs currently covered by Medicaid. 44% of that 3.9 million were children, 9% were seniors, and 7% were adults with disabilities, according to The Civic Federation. Should the OBBBA pass the Senate, it would be harder for people to meet eligibility requirements for Medicaid coverage. The new bill would impose work or job-training requirements for able-bodied adults as part of a requirement to 'demonstrate community engagement.' Applicants must either prove that in the month leading up to their application, they've worked at least 80 hours, participated in 80 hours of community service, or been enrolled in an educational program at least half-time, or some combination of these, totaling 80 hours. In Vermilion County, 1,310 adults, or 4.3% of the applicable population, were unemployed as of April 2025, according to the U.S. Census. To ensure people covered by Medicaid continue to remain employed or otherwise 'engaged' in the community, the OBBBA gives the federal government access to payroll data. Exceptions would be made for people under 19 years of age and pregnant people or those entitled to post-partum medical assistance. People who have been released from a public institution within three months before they applied for Medicaid are also exempt from the community engagement requirement. For those who would not qualify for Medicaid but who cannot afford to pay for their own emergency care, local hospitals and clinics may bear the burden, especially those in more rural areas where a higher percentage of the population depends on Medicaid. It's not just individuals and families who could be impacted by cuts, as many public schools receive Medicaid funding as a reimbursement for school nurses and counsellors. The Center on Budget and Policy Priorities estimates that up to 1.35 million could be at risk of losing Medicaid coverage under the OBBBA. SNAP (Food Stamp) Changes As part of the OBBBA, a new plan called 'the Thrifty Food Plan' would take effect, wherein able-bodied adults without dependents would have to maintain the same work requirements for Medicaid recipients. Children under 18 or seniors over 65, as well as those people who are 'medically certified as physically or mentally unfit for employment,' and parents or other members of a household with responsibility for a dependent child under 7 years of age, would be excluded from the work requirement. Pregnant women, someone who is currently unhoused, a veteran, those under 24 who were previously cared for in foster care, and someone married to someone who fits the above requirements. In 2022, there were 20,733 individuals in Vermilion County receiving SNAP benefits, or supplemental nutrition assistance program, according to the U.S. Census. If even a portion of those recipients were to lose their SNAP benefits, local food pantries would see a surge in demand. What to Watch and What to Do If the OBBBA passes the Senate, many provisions would go into effect over the next 1–2 years. It would be up to state and local agencies to determine how to implement certain aspects of those provisions. For those concerned with how the OBBBA could impact them, speak with a tax advisor or social worker. Those struggling with food insecurity can reach out to the Illinois' Hunger Hotline at 1-800-359-2163, for assistance with SNAP application, case management, and food pantry referrals.
Mint
3 days ago
- Business
- Mint
What is ‘revenge tax' Section 899 of the One Big Beautiful Bill? Why is it raising alarms on Wall Street?
The United States' House of Representatives passed the One Big Beautiful Bill Act, also known as OBBBA, a budget reconciliation bill which includes major provisions of the Tax Cuts and Jobs Act of 2017. Wall Street investors are shifting their focus to 'revenge tax' Section 899 of the bill, which can impact the attractiveness of US assets. Section 899 of the 'One Big Beautiful Bill' contains a clause that allows for the possibility of imposing a progressive tax load of up to 20 per cent on the passive income of foreign investors, such as dividend or royalty payments. This charge will be paid by entities like sovereign funds and companies that have businesses in the United States or individuals from nations that impose duties on the US that it considers unfair, including a digital service tax. According to Reuters' report from Friday, 30 May 2025, George Saravelos, the head of FX Research at Deutsche Bank, said in a note that this legislation is expected to transform the ongoing trade war between the US and other world nations into a capital war. 'We see this legislation as creating the scope for the U.S. administration to transform a trade war into a capital war if it so wishes, a development that is highly relevant in the context of today's court decision constraining President Trump on trade policy,' said Saravelos in the note. US stock market investors are becoming concerned over Section 899 in the 'One Big Beautiful Bill,' as it is expected to target foreign investors in the United States. This, in turn, may weaken the demand for US government bonds and the US dollar. This comes amid ongoing uncertainties due to the baseline and reciprocal tariffs imposed by US President Donald Trump on all imports from other world nations, which have led to a tariff war that is raging to date. If the US Senate passes the bill, the rising tax rate on foreign investors is likely to raise concerns in addition to the tariff woes, rising fiscal deficit, and ballooning debt for the Western nation. 'It would deter foreign investment in U.S. assets at a time when the country faces increasing reliance on foreign capital to finance its ballooning debt. Clearly, this is not good for the dollar,' Elias Haddad, senior market strategist at Brown Brothers Harriman (BBH), told the news agency. A Fortune report cited Even House Ways and Means Committee Chair Jason Smith, who in a panel discussion said that he hopes that it is never used and instead acts more like a 'deterrent,' which stops other nations from cracking down on US firms. As the Section 899 fears loomed over Wall Street, the global financial services group, Nomura, told the news agency that if the Senate passes the Bill, the US should likely expect a 'pushback' against the new tax rate or negotiations to seek exemptions for US Treasuries and agency mortgage-backed securities. The Bloomberg US Dollar Spot Index was up 0.05 per cent at 99.329 as of 12:00 a.m. (EDT) on Friday, 30 May 2025.
