Good Tuesday evening and a happy Prime Day to those who celebrate. A report from the Senate’s Health, Education, Labor and Pensions Committee, led by Sen. Bernie Sanders, says that the Amazon sales event, with its high sales volume and intense pressure on employees, is “a major cause of injuries for the warehouse workers who make it possible.”
The second night of the Republican National Convention is slated to focus on immigration and crime and feature speeches by Nikki Haley and Ron DeSantis. Meanwhile, the Major League Baseball All-Star Game will start around 8 p.m. ET.
Trump's Choice of Vance Is Alarming Republican Elites
Donald Trump’s choice of Sen. JD Vance as his running mate is being interpreted as cementing a MAGA shift in Republican policy preferences — one that is rattling the GOP’s economic old guard.
Vance has been at the forefront of a populist Republican faction seeking to break from traditional GOP economic ideology on issues including trade and labor unions. Given that, The Washington Post’s Jeff Stein notes that Trump’s elevating Vance to be his “is alarming traditional conservative policymakers and elite donors who opposed the pick.” Billionaire hedge fund manager Ken Griffin and Fox News mogul Rupert Murdoch reportedly were among those who opposed the choice.
“The emergence of Trump has caused a populist, aggressive side of the GOP to split off on economics, and Vance is one of the leaders of that populist caucus,” Brian Riedl of the conservative Manhattan Institute think tank told the Post. “Trump is much more economically populist, anti-free trade than traditional Republicans, and Vance has pushed hard to support this new populist economics in the GOP.”
Vance is now both heir to Trump’s MAGA movement and the standard-bearer of that economic populism, joined by GOP Sens. Marco Rubio and Josh Hawley.
“It’s clear to most leaders of the party that the future will be the Vances, the Hawleys and the Rubios — to have one of them be on the ticket is a very significant marker, or in some ways validation, of the direction the Republican Party is now heading on key economic issues,” Oren Cass, president of a conservative think tank, told the Post. “Vance articulates a very clear perspective on the failure of what he’ll call the ‘market fundamentalism’ of the GOP — the consensus economic policy of the last few decades.”
Politico’s Victoria Guida suggests that few Republicans have been more critical of the GOP’s conventional economic policies than Vance, “who has embraced not just tariffs, but also policies like a higher minimum wage and increased barriers to corporate mergers.” She also notes that some Republicans and business executives are wary of that approach — and goes so far as to label the 2024 GOP ticket a “repudiation of free-market conservatism.”
That has business leaders feeling uneasy. “CEOs are shocked as this is quite an odd choice to try to balance the ticket with [someone] so hostile to business,” Jeffrey Sonnenfeld, president of Yale University’s Chief Executive Leadership Institute, told Semafor.
Still, Vance may not venture all that far from Republican orthodoxy on key issues. He’s long been supported by libertarian billionaire Peter Thiel, and he reportedly signed the Americans for Tax Reform pledge to not support tax increases, for example.
Democrats and analysts on the left argue that the GOP’s economic populism doesn’t go nearly far enough. “What they’re trying to do is tap into white working-class cultural and social signifiers, while doing as little as possible to actually reduce incomes at the top and actually redistribute them down. It’s a delicate game they play,” Matt Bruenig, co-founder of the left-leaning People’s Policy Project, told the Post.
IMF Trims Economic Growth Forecast for US
The International Monetary Fund said Tuesday that it expects the global economy to grow 3.2% this year and 3.3% next year, the same as it estimated earlier this year. But its latest economic projections include slightly lower estimates for U.S. growth, as well as warnings about the persistence of inflation and debt around the world.
In April, the IMF projected a 2.7% growth rate for the U.S. in 2024, but it has nudged that estimate down to 2.6%. “The United States shows increasing signs of cooling, especially in the labor market, after a strong 2023,” IMF economist Pierre-Olivier Gourinchas said in a blog post accompanying the new projections.
The IMF also said that while it still expects the global inflation rate to ease from 6.7% last year to 5.9% in 2024, upward pressure in the prices of services remains a problem — one that could threaten the overall outlook. “Unless goods inflation declines further, rising services prices and wages may keep overall inflation higher than desired,” Gourinchas wrote. “Even absent further shocks, this is a significant risk to the soft-landing scenario.”
Public finances are another source of concern, the IMF said, as countries around the world have done little to rebuild the “fiscal buffers” they would need to face another shock such as the pandemic. “Projected fiscal consolidations are largely insufficient in too many countries,” Gourinchas said. “It is concerning that a country like the United States, at full employment, maintains a fiscal stance that pushes its debt-to-GDP ratio steadily higher, with risks to both the domestic and global economy. The increasing US reliance on short-term funding is also worrisome.”
Biden Proposes Plan to Limit Rent Increases
President Joe Biden on Tuesday unveiled a proposal to use the tax code to punish large landlords who raise rents by more than 5% a year.
The rules would apply only to landlords who own more than 50 rental units. Any such landlord whose annual rent increase exceeds the threshold would be unable to claim tax deductions for depreciation for the next two years. The White House said the proposal would potentially apply to more than 20 million rental units.
“Today, I’m sending a clear message to corporate landlords: If you raise rents more than 5% on existing units, you should lose valuable tax breaks,” Biden said in a statement. “Rent is too high and buying a home is out of reach for too many working families and young Americans, after decades of failure to build enough homes. I’m determined to turn that around.”
The plan would require Congress to act, which is unlikely before the election, and an administration official said Monday the proposal would be on the agenda for a second Biden administration. But some affordable housing advocates are questioning the wisdom of the administration’s approach. “Rent Caps don’t work and will have a chilling effect on housing supply,” David Dworkin, CEO of the National Housing Conference, said in a statement. “It’s time to stop making policy by bumper sticker and get serious about housing production.”
Quote of the Day
“You want a friend in Washington, get a dog. After the last couple weeks, I know what he means.”
− President Biden, invoking a famous line by President Harry Truman, in a speech Tuesday at the NAACP national convention.
Number of the Day: 911
The national 911 emergency response system is itself in dire need of some assistance, Stephanie Armour of KFF Health News reports at The Washington Post: “The lack of federal funding to upgrade aging 911 systems has created significant disparities in state emergency response services, with older operations plagued by outages and longer response times.”
Armour reports that at more than three-quarters of call centers said in a survey that they had suffered outages over the past year, and some experts say that billions of dollars are needed to strengthen the national emergency response system and address geographic disparities. But congressional efforts to deliver that funding reportedly have stalled for the time being, leaving state and local governments to invest in upgrading to more resilient next-generation systems, or not. “Next-generation 911 shouldn’t be for people who happen to have an emergency in a good location,” Jonathan Gilad, vice president of government affairs at the National Emergency Number Association, which represents 911 first responders, told KFF.
Fiscal News Roundup
- D.N.C. Aims to Push Biden Toward Nomination Next Week, Despite Doubts – New York Times
- Scoop: Biden Rebellion Resurfaces on Capitol Hill – Axios
- House Dems Plot Last-Ditch Effort to Delay Biden Nomination – Politico
- Schiff Warned of Overwhelming Losses for Democrats if Biden Stays in Race – New York Times
- Trump Leading Biden in All 7 Major Swing States: Polling – The Hill
- Trump on Taxes, Tariffs, Jerome Powell and More – Bloomberg Businessweek
- Far-Right Groups That Block Aid to Gaza Receive Tax-Deductible Donations From US and Israel – Associated Press
- Amazon’s Health Clinic Pushed a Misleading Account of Call Center Errors – Washington Post
- About 7 Percent of U.S. Adults Have Had Long Covid, Report Says – Washington Post
Views and Analysis
- Fact-Checking Day 1 of the Republican National Convention – FactCheck.org
- The Trump-Vance Ticket Is a Repudiation of Free-Market Conservatism – Victoria Guida, Politico
- What Is J.D. Vance’s Vision for the Economy? – Rachel Siegel and Jeff Stein, Washington Post
- What Does J.D. Vance Mean for the Future of the GOP? – Megan McArdle, Washington Post
- Why Trump Picked J.D. Vance – Matthew Continetti, New York Times
- J.D. Vance On Social Security Reform – Andrew Biggs, American Enterprise Institute
- With Vance, Trump Is Doubling Down on MAGA – Edward Luce, Financial Times
- Trump-Vance Administration Could Herald New Era for Dollar – Alan Rappeport, New York Times
- Trumponomics 2.0 Will Awaken Bond Vigilantes – Jonathan Levin, Bloomberg
- Republican Make-Believe: Playing Nice and Loving Workers – Harold Meyerson, American Prospect
- Can We ‘Make America Affordable Again’? Should We? – Paul Krugman, New York Times
- Don’t Lose Sight of Project 2025. That’s the Real Trump – Paul Krugman, New York Times
- The Democratic Debate Over Biden’s Electoral Future Comes Roaring Back – Steve Benen, MSNBC
- Here’s How to Create a Social Safety Net With Bipartisan Support – Sarah Holder, Bloomberg Businessweek
- Why Is the Oil Industry Booming? – Rebecca F. Elliott, New York Times