Business
Russell Vought, Trump’s Budget Chief, Wants to Cut ‘Woke’ Spending
Years before President Trump returned to the White House, his budget chief, Russell T. Vought, began mapping out a plan to shrink the federal government.
In Mr. Vought’s design, spending would be slashed by about $9 trillion over the next decade. Entire federal programs — from housing vouchers to student loans — would be eliminated. The government would fire thousands of civil workers, including those who investigated tax fraud. And Washington would restrict aid to the poor, requiring Americans to work in exchange for benefits.
The ideas formed the bedrock of Mr. Vought’s plan to end the “woke and weaponized” bureaucracy, a policy guide he issued in 2022 for fellow conservatives entering a key budget battle. His full vision did not come to fruition at the time, but the roughly 100-page blueprint has taken on heightened significance since Mr. Trump won re-election — and reinstalled Mr. Vought to his perch — foreshadowing their shared aim to reel in the size and reach of government.
In the perennial fight over the federal balance sheet, few officials are more important than Mr. Vought. As head of the Office of Management and Budget, he wields vast power over the United States government, its workers and the millions of people whose lives are shaped by the ebb and flow of federal funds.
Mr. Vought brings an aggressive style to the job, one revealed in podcast interviews and public writings, particularly in the years after Mr. Trump’s 2020 defeat. A longtime budget expert, he sketched out a vision for expansive presidential power in Project 2025, the conservative blueprint prepared by the Heritage Foundation for Mr. Trump. And in 2021, Mr. Vought founded his own organization, the Center for Renewing America, which describes itself as dedicated to “God, country and community.”
There, Mr. Vought refined an ambition to marry extreme fiscal austerity with Christian values, pledging to eliminate federal programs seen as too wasteful, “woke” or secular. In scrutinizing the budget, his approach has made him a natural ally of Elon Musk and his so-called Department of Government Efficiency.
Now back at O.M.B., Mr. Vought has assembled a team of like-minded advisers who are working to prepare Mr. Trump’s 2026 budget proposal. That blueprint may guide Congress in its work to extend a set of expensive and expiring tax cuts enacted in Mr. Trump’s first term.
Documents reviewed by The New York Times showed that as recently as late February, O.M.B. staff were compiling recommendations for sweeping cuts to programs that Republicans have long wanted to slash. Those cuts include imposing work requirements for recipients of food stamps, ending public service student loan forgiveness and phasing out certain federal Medicaid funds for states.
The president and Mr. Vought also subscribe to the idea that the White House should have expansive powers over the nation’s purse strings, halting or canceling federal spending even if Congress instructs otherwise. That stance has emboldened the White House to already interrupt the distribution of billions of dollars, including foreign aid, infrastructure spending and payments to food banks.
The delays have provoked lawsuits, and in a largely unnoticed move, they have triggered an investigation by the Government Accountability Office, a nonpartisan watchdog established by Congress that acknowledged its inquiries in February. Some Democrats contend that the budget office has violated the law in other ways, after it quietly disabled a government website on Monday that tracked the regular outflow of federal dollars.
“Taking down this website is not just illegal, it is a brazen move to hide this administration’s spending from the American people and from Congress,” said Senator Patty Murray of Washington and Representative Rosa DeLauro of Connecticut, the leading Democratic appropriators, in a statement this week.
Mr. Vought declined through a spokeswoman to be interviewed. In a preamble to his 2022 policy guide, he wrote: “The evidence of America’s fiscal brokenness is everywhere.”
Mr. Vought’s calls for austerity are hardly novel in Washington, where policymakers often lament the nation’s growing $36 trillion debt, but they carry new force at a moment when Mr. Trump looks to reshape the federal bureaucracy.
As DOGE agents blitz federal agencies — shuttering entire programs, dismissing thousands of workers and burrowing into sensitive federal computer systems — Mr. Vought has toiled quietly to lay the foundation for “making these cuts permanent in the long term,” he explained in an interview with Fox Business in February.
The same month, Mr. Vought ordered agencies to submit detailed plans by March and April indicating how they would cut spending, lay off workers and sell office buildings to save money and ensure they “advance the president’s policy priorities,” according to a memo sent to agency leaders.
James C. Capretta, a former O.M.B. official now serving as a senior fellow at the right-leaning American Enterprise Institute, said Mr. Vought’s actions reflected the view that “the federal executive branch really should be at the service of a president in a manner that goes beyond professional management of the agencies.”
The reorganization arrived weeks after the budget office, under interim leadership while Mr. Vought awaited Senate confirmation, froze nearly all federal spending. While political pressure and multiple lawsuits forced the White House to rescind that policy, budget officials have continued to halt the disbursement of some federal payments. Another arrived this week, when the Trump administration essentially refused to spend about $3 billion in emergency money to combat narcotics and fund other programs, a move that drew a rare bipartisan rebuke in the Senate.
“Every day, there is a headline about another institution, about funding that has been discontinued,” said Skye Perryman, the president of Democracy Forward, a left-leaning advocacy group that has sued O.M.B. over its actions.
The freezes underscored Mr. Vought’s long-held belief that the budget office must serve as the White House “air-traffic control system,” as he wrote in a chapter for Project 2025. There, and in much of his work, Mr. Vought has long criticized civil workers, portraying some of their actions as motivated by their “own agenda.” He previously promised to put them “in trauma,” he said in a video first surfaced by ProPublica.
“They’re constantly hiding the ball,” Mr. Vought said during a May 2023 podcast interview, adding that Republicans needed to “micromanage the heck out of everything that is part of your agency, or make sure that your right arms are.”
With the help of Mr. Trump, the two men have established a team in recent weeks that echoes Mr. Vought’s views.
The roster includes Mark Paoletta, the budget office’s general counsel, who served with Mr. Vought during the first Trump administration and later at the Center for Renewing America. Mr. Paoletta represented Virginia Thomas, the wife of the Supreme Court justice Clarence Thomas, during a House investigation into Mr. Trump’s efforts to remain in power after the 2020 election. Mr. Paoletta drafted the since-revoked order that froze nearly all federal spending.
Jeffrey Bossert Clark, who is serving in a key O.M.B. office that oversees regulation, previously faced possible contempt of Congress charges for refusing to testify about accusations that he sought to undo the results of the 2020 race.
And Dan Bishop, whom Mr. Trump appointed as deputy director, is a former Republican congressman who, while serving in the North Carolina legislature, sponsored a bill that restricted transgender people from using their preferred public restrooms. The Senate confirmed his nomination on Wednesday.
Testifying this month, Mr. Bishop acknowledged that he agreed with those who believe the 2020 election had been rigged. The former congressman said the president had a mandate to pursue “an end to the waste and the Washington status quo.”
The comments angered Democrats, who recalled Mr. Trump’s first term, when he and Mr. Vought halted congressionally authorized aid to Ukraine in a standoff that laid the groundwork for House Democrats to impeach the president. The budget adviser maintained in 2021 — and, years later, at his own nomination hearing — that the White House had acted lawfully.
After the Senate confirmed him along party lines, Mr. Vought helped to secure a deal to stave off a government shutdown, wooing Republicans with a promise that the administration would take aggressive steps to slash spending. On Tuesday, Mr. Trump signaled that the White House could begin by submitting to Congress a formal list of proposed cuts, reflecting some of the savings identified by DOGE.
“I assume they’ll total everything up and get it to us,” Representative Ralph Norman, a South Carolina Republican and member of the House Budget Committee, said in an interview. “What the president will have will be sweet music to all of us who want a very conservative budget.”
At his Center for Renewing America, Mr. Vought in 2022 previewed his pursuit of stark cuts, targeting benefit programs including Medicaid. He proposed limiting its funding and eligibility, an idea he has resurfaced in recent weeks.
“You can get sizable levels of savings and reforms,” Mr. Vought told the Senate Budget Committee this year.
The term “woke” appeared 77 times in Mr. Vought’s document. The proposal looked to slash the “woke agenda” at the Centers for Disease Control and Prevention, for example, targeting money meant for “niche and small population groups.” It proposed jettisoning billions of dollars in “woke foreign aid spending”; eliminating entire programs for lesbian, gay, bisexual and transgender communities; and striking the “secular, woke religion” of climate change from the federal ledger.
“That is the central and immediate threat facing the country — the one that all our statesmen must rise tall to vanquish,” Mr. Vought wrote in the preamble to his budget. “The battle cannot wait.”
Alan Rappeport contributed reporting.
Business
Startup Varda Space Industries snags former Mattel plant in El Segundo
In an expansion of its business of processing pharmaceuticals in Earth’s orbit, Varda Space Industries is renting a large El Segundo plant where toy manufacturer Mattel used to design Hot Wheels and Barbie dolls.
The plant in El Segundo’s aerospace corridor will be an extension of Varda Space Industries’ headquarters in a much smaller building on nearby Aviation Boulevard.
Varda will occupy a 205,443-square-foot industrial and office campus at 2031 E. Mariposa Ave., which will give it additional capacity to manufacture spacecraft at scale, the company said.
Originally built in the 1940s as an aircraft facility, the complex has a history as part of aerospace and defense industries that have long shaped the South Bay and is near a host of major defense and space contractors. It is also close to Los Angeles Air Force Base, headquarters to the Space Systems Command.
Workers test AstroForge’s Odin asteroid probe, which was lost in space after launch this year.
(Varda Space Industries)
Varda is one of a new generation of aerospace startups that have flourished in Southern California and the South Bay over the last several years, particularly in El Segundo, often with ties to SpaceX.
Elon Musk’s company, founded in 2002 in El Segundo, has revolutionized the industry with reusable rockets that have radically lowered the cost of lifting payloads into space. Though it has moved its headquarters to Texas, SpaceX retains large-scale operations in Hawthorne.
Varda co-founder and Chief Executive Will Bruey is a former SpaceX avionics engineer, and the company’s spacecraft are launched on SpaceX’s workhorse Falcon 9 rockets from Vandenberg Space Force Base in Santa Barbara County.
Varda makes automated labs that look like cylindrical desktop speakers, which it sends into orbit in capsules and satellite platforms it also builds. There, in microgravity, the miniature labs grow molecular crystals that are purer than those produced in Earth’s gravity for use in pharmaceuticals.
It has contracts with drug companies and also the military, which tests technology at hypersonic speeds as the capsules return to Earth.
Its fifth capsule was launched in November and returned to Earth in late January; its next mission is set in the coming weeks. Varda has more than 10 missions scheduled on Falcon 9s through 2028.
For the last several decades, the Mariposa Avenue property served as the research and development center for Mattel Toys. El Segundo has also long been a center for the toy industry as companies like to set up shop in the shadow of Mattel.
The Mattel facility “has always been an exceptional property with a legacy tied to aerospace innovation, and leasing to Varda Space Industries feels like a natural continuation of that story,” said Michael Woods, a partner at GPI Cos., which owns the property.
“We are proud to support a company that is genuinely pushing the boundaries of what’s possible, and are excited to watch Varda grow and thrive here in El Segundo,” Woods said.
As one of the country’s most active hubs of aerospace and defense innovation, El Segundo has seen its industrial property vacancy fall to 3.4% on demand from space companies, government contractors and technology startups, real estate brokerage CBRE said.
Successful startups often have to leave the neighborhood when they want to expand, real estate broker Bob Haley of CBRE said. The 9-acre Mattel facility was big enough to keep Varda in the city.
Last year, Varda subleased about 55,000 square feet of lab space from alternative protein company Beyond Meat at 888 Douglas St. in El Segundo, which it started moving into in June.
Varda will get the keys to its new building in December and spend four to eight months building production and assembly facilities as it ramps up operations. By the end of next year, it expects to have constructed 10 more spacecraft.
In the future, Varda could consolidate offices there, given its size. Currently, though, the plan is to retain all properties, creating a campus of three buildings within a mile of one another that are served by the company’s transportation services, Chief Operating Officer Jonathan Barr said.
“We already have Varda-branded shuttles running up and down Aviation Boulevard,” he said.
Business
How Iran War Is Threatening Global Oil and Gas Supplies
Ships near the Strait of Hormuz before and after attacks began
Every day, around 80 oil and gas tankers typically pass through the Strait of Hormuz, the narrow waterway off Iran’s southern coast that carries a fifth of the world’s oil and a significant amount of natural gas.
On Monday, just two oil and gas tankers appear to have crossed the strait, according to a New York Times analysis of shipping activity from Kpler, an industry data firm. Since then, one tanker passed through.
“It’s a de facto closure,” said Dan Pickering, chief investment officer of Pickering Energy Partners, a Houston financial services firm. “You’ve got a significant number of vessels on either side of the strait but no one is willing to go through.”
Tankers have been staying away from Hormuz since the U.S.-Israeli attacks on Iran that began on Saturday. A prolonged conflict could ripple broadly across the global economy, threatening the energy supplies of countries halfway around the world and stoking inflation.
International oil prices have climbed 12 percent since the fighting began, trading Tuesday around $81 a barrel, and natural gas prices have surged in Europe and in Asia.
A senior Iranian military official threatened on Monday to “set on fire” any ships traveling through the Strait of Hormuz. Vessels in the region have already come under attack. Several oil and gas facilities have also been struck or affected by nearby shelling, though the damage did not initially appear to be catastrophic.
Where ships and energy facilities have been damaged
A fire broke out Tuesday at a major energy hub in Fujairah, United Arab Emirates, from the falling debris of a downed drone, the authorities said. On Monday, Qatar halted production of liquefied natural gas, or fuel that has been cooled so that it can be transported on ships, after attacks on its facilities.
The sharp reduction in tanker traffic is reducing the supply of oil and gas to world markets, pushing up prices for both commodities. And the longer that ships stay away from the Strait of Hormuz, the less oil and gas get out to the world, which could raise prices even more.
Shipping companies have paused their tankers to protect their crew and cargo, and because insurance companies are charging significantly more to cover vessels in the conflict area.
On Tuesday, President Trump said that “if necessary,” the U.S. Navy would begin escorting tankers through the strait. He also said a U.S. government agency would begin offering “political risk insurance” to shipping lines in the area.
In addition to tankers, other large vessels regularly go through the strait, including car carriers and container ships. In normal conditions, nearly 160 make the trip each day.
Some ships in the region turn off the devices that broadcast their positions, while others transmit false locations — making it hard to give a full picture of the traffic in the strait.
The Shiva is a small oil tanker that has repeatedly faked its location, according to TankerTrackers.com, which tracks global oil shipments. It is suspected of carrying sanctioned Iranian oil, according to Kpler. The Shiva was one of the two tankers that crossed the strait on Monday.
The oil and gas that typically move through the strait come from big producing countries like Saudi Arabia, Iraq, Iran and United Arab Emirates, and are exported around the world.
Where tankers moving through the Strait have traveled
In 2024, more than 80 percent of the oil and gas transported through the Strait of Hormuz went to Asia. China, India, Japan and South Korea were the top importers, according to the U.S. Energy Information Administration.
Countries have energy stockpiles that could last them into the coming months, but a continued shutdown of the strait could damage their economies.
Several big disruptions have roiled supply chains in recent years, but the tanker standstill in the Strait of Hormuz could have an outsize impact.
Business
Paramount credit downgraded to ‘junk’ status over debt worries
Paramount Skydance’s jubilation over its come-from-behind victory to claim Warner Bros. Discovery has entered a new phase:
Call it the deal-debt hangover.
Two major ratings agencies have raised concerns about Paramount’s credit because of the enormous debt the David Ellison-led company will have to shoulder — at least $79 billion — once it absorbs the larger Warner Bros. Discovery, bringing CNN, HBO, TBS and Cartoon Network into the Paramount fold.
Fitch Ratings said Monday that it placed Paramount on its “negative” ratings watch, and downgraded its credit to BB+ from BBB-, which puts the company’s credit into “junk” territory. Fitch said it took action due to “uncertainty” surrounding Paramount’s $110-billion deal for Warner Bros. Discovery, which the boards of both companies approved on Friday.
S&P Global Ratings took similar action.
To finance the Warner takeover, Ellison’s billionaire father, Larry Ellison, has agreed to guarantee the $45.7 billion in equity needed. Bank of America, Citibank and Apollo Global have agreed to provide Paramount with more than $54 billion in debt financing.
“Potential credit risks include the prospective debt-funded structure, Fitch’s expectation of materially elevated leverage and limited visibility on post-transaction financial policy and capital structure,” Fitch said.
Late last week, Paramount sent $2.8 billion to Netflix as a “termination fee” to officially end the streaming giant’s pursuit of Warner Bros. That payment paved the way for Warner and Paramount’s board to enter into the new merger agreement.
Paramount hopes the merger will be wrapped up by the end of September. It needs the approval of Warner Bros. Discovery shareholders and regulators, including the European Union.
Paramount executives acknowledged this week the new company would emerge with $79 billion in debt — a considerably higher total than what Warner Bros. Discovery had following its spinoff from AT&T. That 2022 transaction left Warner Bros. Discovery with nearly $55 billion of debt, a burden that led to endless waves of cost-cutting, including thousands of layoffs and dozens of canceled projects.
Warner still has $33.5 billion in debt, a lingering legacy that will be passed on to Paramount.
Paramount plans to restructure about $15 billion in Warner Bros. Discovery’s existing debt.
Paramount CEO David Ellison at a 2024 movie premiere for a Netflix show.
(Evan Agostini / Invision / AP)
Paramount told Wall Street it would find more than $6 billion in cost cuts or “synergies” within three years — a number that has weighed heavily on entertainment industry workers, particularly in Los Angeles.
Hollywood already is reeling from previous mergers in addition to a sharp pullback in film and television production locally as filmmakers chase tax credits offered overseas and in other states, including New York and New Jersey.
Some entertainment executives, including Netflix Co-Chief Executive Ted Sarandos, have speculated that Paramount will need to find more than $10 billion in cost cuts to make the math work. More recently, Sarandos went higher, telling Bloomberg News that Paramount may need $16 billion in cuts.
Cognizant of widespread fears about additional layoffs, Paramount Chief Operating Officer Andrew Gordon took steps this week to try to tamp down such concerns.
Gordon is a former Goldman Sachs banker and a former executive with RedBird Capital Partners, an investor in Paramount and the proposed Warner Bros. deal. He joined Paramount last August as part of the Ellison takeover.
During a conference call Monday with analysts, Gordon said Paramount would look beyond the workforce for cuts because the company wants to maintain its film and TV production levels.
Paramount plans to look for cost savings by consolidating the “technology stacks and cloud providers” for its streaming services, including Paramount+ and HBO Max, Gordon said. The company also would search for reductions in corporate overhead, marketing expenses, procurement, business services and “optimizing the combined real estate footprint.”
It’s unclear whether Paramount would sell the historic Melrose Avenue lot or simply centralize the sprawling operations onto the Warner Bros. and Paramount lots in Burbank and Hollywood.
Workers are scattered throughout the region.
HBO, owned by Warner Bros. Discovery, maintains its West Coast headquarters in Culver City; CBS television stations operate from CBS’ former lot off Radford Avenue in Studio City; and CBS Entertainment and Paramount cable channels executive teams are located in a high-rise off Gower Street and Sunset Boulevard, blocks from the Paramount movie studio lot.
“The combination of PSKY and WBD could create a materially stronger business than either individual entity,” Standard & Poor’s said in its note to investors. “However, this transaction presents unique challenges because it would involve the combination of three companies, with the smallest, Skydance, being the controlling entity.”
David Ellison’s production firm, Skydance Media, was the entity that bought Paramount, creating Paramount Skydance.
Ellison has not announced what the combined company will be called.
Paramount shares closed down more than 6% Tuesday to $12.45.
Warner Bros. Discovery fell 1% to $28.20. Netflix added less than 1% to close at $97.70.
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