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Tax Cuts or the Border? Republicans Wrestle Over Trump’s Priorities.

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Tax Cuts or the Border? Republicans Wrestle Over Trump’s Priorities.

Republicans are preparing to cut taxes, slash spending and slow immigration in a broad agenda that will require unifying an unruly party behind dozens of complicated policy choices.

For now, though, they are struggling with a more prosaic decision: whether to cram their policy goals into one bill or split them into two.

It is a seemingly technical question that reveals a fundamental divide among Republicans about whether to prioritize a wide-ranging crackdown on immigration or cutting taxes, previewing what could be months of intramural policy debate.

Some Republicans have argued that they should pass two bills in order to quickly push through legislation focused on immigration at the southern border, a key campaign promise for Mr. Trump and his party’s candidates. But Republicans devoted to lowering taxes have pressed for one mammoth bill to ensure that tax cuts are not left on the cutting-room floor.

President-elect Donald J. Trump met with Republican senators in Washington on Wednesday, as those lawmakers sought clarity on his preferred strategy. He has waffled between the two ideas, prolonging the dispute.

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“Whether it’s one bill or two bills, it’s going to get done,” Mr. Trump told reporters after the meeting.

Republicans are planning to ram the partisan fiscal package through the Senate over the opposition of Democrats using a process called reconciliation, which allows them to steer clear of a filibuster and pass bills with a simple majority vote. But for much of this year, Republicans will be working with a one-seat majority in the House and a three-seat majority in the Senate, meaning they will need near unanimity to pass major legislation.

That has left some worried that it will be hard enough passing one bill, much less two.

“There’s serious risk in having multiple bills that have to pass to get your agenda through,” Representative Steve Scalise of Louisiana, the majority leader, said. “When you know you’ve got a lot of people that want this first package, if you only put certain things in the first package, they can vote no on the second and you lose the whole second package. That would be devastating.”

Adding to the urgency of achieving their policy goals, Republicans are facing a political disaster should they fail to deliver. Many of the tax cuts they put into place in 2017, the last time Mr. Trump was president, expire at the end of the year. That means that taxes on most Americans could go up if Congress does not pass a tax bill this year.

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Passing tax cuts can take time, though. While much of the Republican tax agenda involves continuing measures the party passed in 2017, Mr. Trump and other Republicans have floated additional ideas, including no taxes on tips and new incentives for corporations to manufacture in the United States. Ideas like that could take months to formulate into workable policy.

Then there is the gigantic cost. The nonpartisan Congressional Budget Office estimates that simply extending the 2017 tax cuts would cost more than $4 trillion over a decade — a price tag that would grow if other tax cuts, like Mr. Trump’s proposal to not tax overtime pay, are included.

Further complicating support for the legislation is that Republicans plan to raise the debt limit through reconciliation, another sensitive issue for fiscal hawks.

Members of the ultraconservative House Freedom Caucus have said they would not support any legislation unless the costs it introduces are offset by spending cuts. While most Republicans support reining in federal spending, agreeing on which federal programs to slash always proves harder than expected. In an attempted workaround, Republicans have instead begun to explore ways to change Washington’s budget rules so the tax cuts are shown to cost less.

The complexity of pulling together a tax bill that can secure the necessary votes has some Republicans hoping to hold off until later in the year and first charge ahead with a smaller bill focused on immigration, energy and military issues. Republicans have not yet publicly sketched out what that bill would look like.

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Proponents of that strategy argue it would deliver Mr. Trump an early political victory on immigration and treat a top Republican campaign issue with the urgency it deserves.

“The No. 1 priority is securing our border,” Representative Byron Donalds of Florida told reporters on Tuesday. “In my opinion it’s the top priority, and everything else is a close second.”

Senator Lindsey Graham of South Carolina, the chairman of the Budget Committee who will be overseeing the reconciliation process, has also pressed for a two-bill approach. “If you hold border security hostage to get tax cuts, you’re playing Russian roulette with our national security,” he said.

Republicans have looked to Mr. Trump to intervene and set a clear direction for the party. On Sunday, he wrote on social media that Congress should pass “one powerful Bill,” an apparent victory for lawmakers like Representative Jason Smith of Missouri, the chairman of the House Ways and Means Committee, who had championed that approach. Mr. Trump’s equivocation since then, though, has left Republicans still unsure of which strategy they should pursue.

Mr. Trump’s meeting with top Republican senators on Wednesday will be followed by a discussion with various House Republicans in Florida over the weekend.

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In a sign of how politically complicated the tax cut discussion could get, one of the sessions is expected to focus on relaxing the $10,000 limit on the state and local tax deduction, known as SALT.

Republicans included the $10,000 limit in the 2017 tax law as a way to contain the cost of that legislation. But the move angered House Republicans from high-tax states like New York and New Jersey, many of whom voted against the entire 2017 tax bill as a result. Such defections are a luxury that Republican leaders can’t afford this year given their narrow majority.

G.O.P. lawmakers from New York, New Jersey and California could tank a tax bill if they are unsatisfied with how the provision is handled. They are now pushing to lift the cap as part of the party’s tax bill. Eliminating the cap entirely could add roughly $1 trillion to the price tag of the legislation.

Maneuvering ambitious policy agendas through Congress has often been a messy and time-consuming process for presidents. A Republican effort to repeal the Affordable Care Act during Mr. Trump’s first term collapsed after more than six months of discussion.

After quickly passing pandemic relief measures in 2021 under President Biden, much of Democrats’ broader agenda was stymied for almost two years before a second party-line measure passed that was far narrower than many in the party had hoped.

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This time around, Republicans will be grappling not only with a historically slim margin in the House, but also a president prone to sudden changes of heart.

“You can argue the merits of both” strategies, said Representative Jodey Arrington, a Texas Republican who leads the House Budget Committee. “He has to tell us what he wants and what he needs.”

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L.A. County sues oil companies over unplugged oil wells in Inglewood

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L.A. County sues oil companies over unplugged oil wells in Inglewood

Los Angeles County is suing four oil and gas companies for allegedly failing to plug idle oil wells in the large Inglewood Oil Field near Baldwin Hills.

The lawsuit filed Wednesday in Los Angeles Superior Court charges Sentinel Peak Resources California, Freeport-McMoran Oil & Gas, Plains Resources and Chevron U.S.A. with failing to properly clean up at least 227 idle and exhausted wells in the oil field. The wells “continue to leak toxic pollutants into the air, land, and water and present unacceptable dangers to human health, safety, and the environment,” the complaint says.

The lawsuit aims to force the operators to address dangers posed by the unplugged wells. More than a million people live within five miles of the Inglewood oil field.

“We are making it clear to these oil companies that Los Angeles County is done waiting and that we remain unwavering in our commitment to protect residents from the harmful impacts of oil drilling,” said Supervisor Holly Mitchell, whose district includes the oil field, in a statement. “Plugging idle oil and gas wells — so they no longer emit toxins into communities that have been on the front lines of environmental injustice for generations — is not only the right thing to do, it’s the law.”

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Sentinel is the oil field’s current operator, while Freeport-McMoran Oil & Gas, Plains Resources and Chevron U.S.A. were past operators. Energy companies often temporarily stop pumping from a well and leave it idle waiting for market conditions to improve.

In a statement, a representative for Sentinel Peak said the company is aware of the lawsuit and that the “claims are entirely without merit.”

“This suit appears to be an attempt to generate sensationalized publicity rather than adjudicate a legitimate legal matter,” general counsel Erin Gleaton said in an email. “We have full confidence in our position, supported by the facts and our record of regulatory compliance.”

Chevron said it does not comment on pending legal matters. The others did not immediately respond to a request for comment.

State regulations define “idle wells” as wells that have not produced oil or natural gas for 24 consecutive months, and “exhausted wells” as those that yield an average daily production of two barrels of oil or less. California is home to thousands of such wells, according to the California Department of Conservation.

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Idle and exhausted wells can continue to emit hazardous air pollutants such as benzene, as well as a methane, a planet-warming greenhouse gas. Unplugged wells can also leak oil, benzene, chloride, heavy metals and arsenic into groundwater.

Plugging idle and exhausted wells includes removing surface valves and piping, pumping large amounts of cement down the hole and reclaiming the surrounding ground. The process can be expensive, averaging an estimated $923,200 per well in Los Angeles County, according to the California Geologic Energy Management Division, which notes that the costs could fall to taxpayers if the defendants do not take action. This 2023 estimate from CalGEM is about three times higher than other parts of the state due to the complexity of sealing wells and remediating the surface in densely populated urban areas.

The suit seeks a court order requiring the wells to be properly plugged, as well as abatement for the harms caused by their pollution. It seeks civil penalties of up to $2,500 per day for each well that is in violation of the law.

Residents living near oil fields have long reported adverse health impacts such as respiratory, reproductive and cardiovascular issues. In Los Angeles, many of these risks disproportionately affect low-income communities and communities of color.

“The goal of this lawsuit is to force these oil companies to clean up their mess and stop business practices that disproportionately impact people of color living near these oil wells,” County Counsel Dawyn Harrison said in a statement. “My office is determined to achieve environmental justice for communities impacted by these oil wells and to prevent taxpayers from being stuck with a huge cleanup bill.”

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The lawsuit is part of L.A. County’s larger effort to phase out oil drilling, including a high-profile ordinance that sought to ban new oil wells and even require existing ones to stop production within 20 years. Oil companies successfully challenged it and it was blocked in 2024.

Rita Kampalath, the county’s chief sustainability officer, said the county remains “dedicated to moving toward a fossil fuel-free L.A. County.”

“This lawsuit demonstrates the County’s commitment to realizing our sustainability goals by addressing the impacts of the fossil fuel industry on front line communities and the environment,” Kampalath said.

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Instacart is charging different prices to different customers in a dangerous AI experiment, report says

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Instacart is charging different prices to different customers in a dangerous AI experiment, report says

The grocery delivery service Instacart is using artificial intelligence to experiment with prices and charge some shoppers more than others for the same items, a new study found.

The study from nonprofits Groundwork Collaborative and Consumer Reports followed more than 400 shoppers in four cities and found that Instacart sometimes offered as many as five different sales prices for the exact same item, at the same store and on the same day.

The average difference between the highest price and lowest price on the same item was 13%, but some participants in the study saw prices that were 23% higher than those offered to other shoppers.

The varying prices are unfair to consumers and exacerbate a grocery affordability crisis that regular Americans are already struggling to cope with, said Lindsey Owens, executive director of Groundwork Collaborative.

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“In my own view, Instacart should close the lab,” Owens said. “American grocery shoppers aren’t guinea pigs, and they should be able to expect a fair price when they’re shopping.”

The study found that an individual shopper on Instacart could theoretically spend as much as $1,200 more on groceries in one year if they had to deal with the kind of price differences observed in the pricing experiments.

At a Safeway supermarket in Washington, D.C., a dozen Lucerne eggs sold for $3.99, $4.28, $4.59, $4.69, and $4.79 on Instacart, depending on the shopper, the study showed.

At a Safeway in Seattle, a box of 10 Clif Chocolate Chip Energy bars sold for $19.43, $19.99, and $21.99 on Instacart.

Instacart likely began experimenting with prices in 2022, when the platform acquired the artificial intelligence company Eversight. Instacart now advertises Eversight’s pricing software to its retail partners, claiming that the price experimentation is negligible to consumers but could increase store revenue by up to 3%.

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“These limited, short-term, and randomized tests help retail partners learn what matters most to consumers and how to keep essential items affordable,” an Instacart spokesperson said in a statement to The Times. “The tests are never based on personal or behavioral characteristics.”

Instacart said the price changes are not the result of dynamic pricing, like that used for airline tickets and ride-hailing, because the prices never change in real time.

But the Groundwork Collaborative study found that nearly three-quarters of grocery items bought at the same time and from the same store had varying price tags.

The artificial intelligence software helps Instacart and grocers “determine exactly how much you’re willing to pay, adding up to a lot more profits for them and a much higher annual grocery bill for you,” Owens said.

The study focused on 437 shoppers in-store and online in North Canton, Ohio; Saint Paul, Minn.; Washington, D.C., and Seattle.

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Instacart shares were down more than 5% in midday trading on Wednesday and have risen 1% this year.

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Commentary: Is $140,000 really a poverty income? Clearly not, but the viral debate underscores the ‘affordability’ issue

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Commentary: Is 0,000 really a poverty income? Clearly not, but the viral debate underscores the ‘affordability’ issue

On the Sunday before Thanksgiving, a wealth manager named Michael Green published a Substack post arguing that a $140,000 income is the new poverty level for a family of four in America, where the official poverty line is $32,150.

The post promptly went viral.

One would hope that economic commentators coast-to-coast mentioned Green as their “person I’m most thankful for” at their family gatherings that week, because he gave them something to masticate ever since. On the spectrum from left to right, countless pundits have rerun Green’s numbers to deride or validate his argument.

It is jarring that in one of the richest countries in the world, one-third of the middle class does not make enough to afford basic necessities.

— Stephens and Perry, Brookings

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“The whole thing doesn’t pass the smell test,” asserted right-of-center economist Noah Smith in a very lengthy rebuttal. On the other side, Tom Levenson, who teaches science writing at MIT, gave us a Bluesky thread in which he noted that “$140,000 in many urban areas in the US is a family income that is at least precarious, and at worst, one or two missed paychecks from having to make rent-or-food choice.”

Green has asserted that the response to his post has been “massively favorable.” That isn’t my impression, but leave it aside.

Here’s my quick take: Green made a category error (and a rhetorical blunder) by hanging his argument on the concept of “poverty”; that’s the claim that most of his critics focus on. His real argument, however, concerns the concept of affordability. Indeed, in a follow-up post he redefined his argument as applying to “the hidden precarity for many American families.”

We can stipulate that making $140,000 a poverty standard is absurd. Even in a high-cost economy such as California’s, millions of families live comfortable lives on much less. (The median household income in Los Angeles County — meaning half of all households earn less and half earn more — is about $86,500.)

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Plenty of working families are raising children and having fruitful social lives on median incomes or even less: Living thriftily is not the same as living penuriously or meanly. Much of what middle-class families give up are things that aren’t necessarily crucial. Green’s image of families stripped to the bones with mid-six-figure or even high five-figure incomes feels like something conjured up by an asset manager with a distinctly affluent clientele, which is what he is.

Yet, what his post alludes to implicitly is that the concept of “middle-class” has evolved over the last few decades, and not in a good direction. That’s why so many Americans, including millions with incomes that used to place them firmly in the middle class, feel strapped as never before, wondering how they can afford things their parents took for granted, such as putting the kids through college and saving for a comfortable retirement.

“The nation’s affordability crisis has not spared middle-class families, one-third of which struggle to afford basic necessities such as food, housing, and child care,” Hannah Stephens and Andre M. Perry of the Brookings Institution observed last week. Their analysis covered 160 U.S. metro areas, and held firm in all of them.

(They defined the middle class as falling into the income range of $30,000 to $153,000.)

Let’s give Green’s argument the once-over.

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He started with the origin of the federal poverty calculation, which dates back to 1963, when a Social Security economist named Mollie Orshansky figured that since American households spent an average of one-third of their budget on food, if you estimated the cost of a minimally adequate food basket and multiplied by three, you might have a useful overall standard for poverty. She pegged that at $3,130 for a nonfarm family of four.

“If it is not possible to state unequivocally ‘how much is enough,’” she wrote, “it should be possible to assert with confidence how much, on an average, is too little.” She pegged that at $3,130 for a nonfarm family of four.

Green festooned his post with lots of hand-waving and magic asterisks to accommodate changes in American lifestyles over the ensuing six decades and come up with his $140,000 standard. But if one applies a constant inflation rate to Olshansky’s $3,130 via the consumer price index, you get about $33,440. As it happens, the government’s official poverty level for a family of four today is $32,150. Pretty close.

That’s an important figure, because it defines eligibility for a host of government programs. Eligibility for Medcaid under the Affordable Care Act (in states that accepted the ACA’s Medicaid expansion) runs up to income of 138% of the poverty level; higher than that steers families into ACA health plans. As KFF notes, “in states that have not adopted Medicaid expansion, adults with income as low as 100% FPL can qualify for Marketplace plans.”

Green’s critics generally note that the median household income in the U.S. was $83,730 in 2024, meaning that he’s placed well more than half of America into the poverty zone. That just swears at reality.

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It needs to be said that Green’s approach differs from those articles that regularly appear asking us to commiserate with families earning $400,000 or $500,000 because they can’t make ends meet.

As I’ve reported in the past, these articles invariably depend on sleight-of-hand. They offer their own definitions of “rich” and list as necessary or unavoidable expenses many items that ordinary families would consider luxuries — lavish vacations, charitable donations (including to the adults’ alma maters), etc., etc. The strapped family eking out an existence on $500,000 featured in one such piece had fully-funded retirement and college plans, payments on two luxury cars, “date nights” every other week … you get the drift.

Levenson ran the numbers for a hypothetical family in his home town of Brookline, Mass., which is objectively upper-crust, but his approach applies more widely. Let’s run them for a hypothetical household in Los Angeles County. These figures are necessarily conjectural, because your mileage may vary — in fact, everyone’s mileage varies.

The median monthly rent in L.A., according to Zillow, is $2,750, or $33,000 a year. On the other hand, the median home price in the county is close to $1 million. At today’s average mortgage rate of 6.2% and assuming a 20% down payment, the cost of an $800,000 mortgage runs to $4,900 a month, or $58,800 a year. One can find a cheaper home farther from the coast, so for argument’s sake let’s posit a $500,000 home with a $40,000 mortgage: $2,450 a month, or only $29,400. But you’re probably living farther from work, so your transportation costs go up.

The property tax on that $1-million home: $10,000 in year one. (On the $500,000 home, it’s $5,000.)

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State and federal taxes on a $140,000 income: about $18,000. Social Security payroll tax: $8,680.

So of our $140,000, housing and taxes leave us with somewhere between $44,500 and $78,920.

Food: The bureau of economic analysis pegs the annual spending of a four-member California family at an average $18,000. That figure is almost certainly on the upswing.

Healthcare? In its annual report on employer-sponsored health coverage, KFF found that the employee share of family covered reached $6,850 this year, with employers shouldering the balance of the average $27,000 total. For families on Affordable Care Act plans, the costs are impossible to calculate just now, because Republicans in Congress can’t get their act together to extend the premium subsidies that make these plans workable.

Then there’s child care. In the old days, when single-earner families were more common than today, that wasn’t as much of an issue than it is today. But if both parents work, children have to be stowed in child care until they’re old enough for kindergarten or first grade — let’s say up to age 5 or 6. In California, according to one survey, that’s about $13,000 per year per child.

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A few more things we haven’t counted yet: cellphone account, say $100 a month; home Wi-Fi, another $100; computers, $1,000 or so each; cars, $17,000 to $25,000 used; auto and home insurance, $1,500 each; gasoline; and utilities ($3,300 a year, according to SoFi).

At the low end of housing costs, our California family has remaining monthly discretionary income of a few hundred dollars. At the higher mortgage level they’re underwater. Levenson adds, “our notional couple best not have any student loans.”

It’s also worth noting that our couple has put a dime into retirement or college funding. If they set aside 10% of their income for 401(k) contributions, they’re in trouble.

What we’re actually looking at is the collapse of the American middle class. “It is jarring that in one of the richest countries in the world, one-third of the middle class does not make enough to afford basic necessities,” Stephens and Perry of Brookings write. “The single woman living in Pennsylvania buying her first home, the Latino or Hispanic couple in Indiana running a local business, the Black parents in Texas starting their family — all of these faces of the American middle class are struggling with affordability when they shouldn’t have to.”

Trump could alleviate these pressures, notably by knocking off the tariff stunts. For all that he declares “affordability” to be a Democratic hoax or that his acolytes Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and White House chief economist Kevin Hassett try to smile away the reality, the American public isn’t fooled.

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The Conference Board, a business think tank, reported that U.S. consumer confidence fell sharply in November. No surprise. Michel Green put his finger on something, and the likelihood is that things are only getting worse.

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