And the Interesting Thing is For May 27

Republican Leaders Brace for Senate Fight Over “One Big, Beautiful Bill”

President Trump and House Speaker Mike Johnson (R-LA) are pressing the Senate to pass their sweeping legislative package—the "One Big, Beautiful Bill"—with minimal changes. The House passed the bill last week by a single vote (215-214), and Republican leadership hopes to avoid another contentious vote in the chamber by keeping modifications in the Senate to a minimum.

However, dissent is already emerging among Senate Republicans. Sen. Ron Johnson (R-WI) voiced sharp criticism on CNN’s State of the Union, arguing the bill fails its core objective of deficit reduction. “The first goal of our budget reconciliation process should be to reduce the deficit. This actually increases it,” he said, calling for steeper spending cuts to bring expenditures back to “reasonable, pre-pandemic levels.”

Sen. Johnson warned that the bill’s path forward is far from assured: “I think we have enough to stop the process until the president gets serious about spending reduction and reducing the deficit.”

The bill, which will be considered under the budget reconciliation process that prohibits filibusters and therefore only requires 51 votes to pass, would extend the massive 2017 tax cuts, increase military and border security spending, impose new work requirements on Medicaid, and cut other safety net programs like SNAP. It also controversially includes a debt ceiling increase—something some GOP senators want to address separately.

Sen. Rand Paul (R-KY) said on Fox News Sunday that he would vote against the measure unless the debt ceiling language is removed, calling the package’s spending cuts “wimpy and anemic.” “The problem is the math doesn’t add up,” Paul said, predicting it would “explode deficits.”

On CBS’s Face the Nation, Speaker Johnson defended the bill, rejecting the idea it’s an economic risk. “It’s a big investment,” he said, framing the measure as “jet fuel” for the U.S. economy through lower taxes, deregulation, and increased incentives for domestic manufacturing. He also dismissed deficit concerns, arguing critics fail to account for the bill’s pro-growth effects. While the Congressional Budget Office (CBO) estimates the bill would increase the deficit by $3.8 trillion, Johnson claimed the score is flawed because “the CBO doesn’t do dynamic scoring” and doesn’t consider the growth he says the bill will create.

Democrats, meanwhile, have denounced the bill as favoring the wealthy at the expense of the poor. A preliminary CBO analysis found the bill would shift resources away from the lowest-income Americans and towards the wealthiest. Specifically, CBO estimated that by 2033, the lowest 10% of households by income would see the financial resources available to them each year fall by 4%, while the top 10% would get an increase of 2%. The bill’s changes to Medicaid could result in roughly 8 million people losing health coverage.

The bill’s fate now rests with the Senate, where Republican fractures threaten its viability. If amended, it would have to return to the House for another vote; risking its narrow support within the coalition the Speaker negotiated with to get it across the finish line in the House. The Speaker has urged the Senate to make “as few modifications as possible” to avoid unraveling the “delicate equilibrium” among House Republicans.

The White House is aiming for the bill to be signed by Independence Day.

And the interesting thing is, Republicans for years have criticized the CBO for overstating deficit projections of tax cuts, arguing that the agency fails to use dynamic scoring—a method of estimating the economic impact of legislation by considering how proposed changes might affect the broader economy, including changes in employment, investment, and economic growth. Instead, the CBO typically relies on static scoring, which assumes policies do not significantly alter economic growth. According to the GOP, this approach misses how lower taxes, and lighter regulation could spur investment, job creation, and increased tax revenues, ultimately offsetting the projected deficit, i.e., “tax cuts pay for themselves.”

However, this claim is more ex post facto rationalization for supporting tax cuts over deficit reduction than it is serious data analysis—politicization of budget math. There’s a limited role for accounting for potential impacts when trying to predict future revenues, the dynamic scoring that congressional Republicans consistently use for their preferred tax bills relies on speculative assumptions about future behavior and economic performance. While pro-growth policies may stimulate activity, the magnitude and timing are highly uncertain and often fall short of political promises (think public financing of sports stadiums that seldom meet rosy projections for job creation, etc.). Moreover, independent analyses—including some from right-leaning economists—have shown that tax cuts, such as those in the 2017 law, increased deficits without generating enough growth to cover lost revenue

Here is a useful primer on dynamic scoring.

U.S. Consumer Confidence Jumps Most in Four Years on President’s Retreats in Trade War

U.S. consumer confidence rebounded sharply in May from a near five-year low as the outlook for the economy and labor market improved amid President Trump’s retreats from the trade war’s destructive tariff levels he announced in April. The Conference Board’s gauge of confidence increased by 12.3 points to 98, marking the biggest monthly gain in four years.

“Consumer confidence improved in May after five consecutive months of decline...The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards. The monthly improvement was largely driven by consumer expectations as all three components of the Expectations Index—business conditions, employment prospects, and future income—rose from their April lows. Consumers were less pessimistic about business conditions and job availability over the next six months and regained optimism about future income prospects. However, while consumers were more positive about current business conditions than last month, their appraisal of current job availability weakened for the fifth consecutive month.”

And the interesting thing is, the rebound in confidence was seen across all age and income demographics, as well as political affiliations, although Republicans saw the strongest improvements. Tariffs will take months to make their way through the economy, and consumers have so far been shielded from the brunt of the impact by retailers absorbing much of the higher costs. Still, companies have warned they plan to raise prices, chief among them Walmart, which said last week that it will increase prices after working its way through inventory.

Trump Media Plans $2.5 Billion Crypto Fundraising Amid Conflict-of-Interest Concerns

The Financial Times reports this morning that the president’s media company, Trump Media & Technology Group (TMTG), is preparing to raise $2.5 billion to invest heavily in Bitcoin and other cryptocurrencies. TMTG will sell $1.5 billion in common stock and $1 billion in convertible senior secured notes and use the proceeds to create what it calls “a Bitcoin treasury,” the company said in a statement.

“We view Bitcoin as an apex instrument of financial freedom, and now Trump Media will hold cryptocurrency as a crucial part of our assets,” CEO Devin Nunes said.

Trump Media is the latest company connected to the president to invest in crypto. PSQ Holdings, which his son Donald Trump Jr. sits on the board of, also announced plans this morning to explore a digital asset treasury strategy.

The fundraising effort coincides with the president’s recent push to position the United States as a global leader in cryptocurrency. In March, the president signed an executive order to establish a strategic Bitcoin reserve and digital asset stockpile, while easing federal crypto regulations—moves critics say could directly benefit his personal financial interests.

Despite being skeptical of the industry in his first term, the president’s views changed dramatically during the 2024 elections, perhaps not coincidentally at the same time he was getting into the business. Since returning to office, he has publicly promoted his own $TRUMP memecoin and last week hosted a private gala at his Virginia golf club for more than 200 major investors in the coin. Some $148 million worth of $TRUMP was purchased by investors to win spots at the dinner.

TMTG’s announcement is timed to coincide with the world’s largest Bitcoin conference in Las Vegas, where key figures including Vice President J.D. Vance; Trump’s sons Donald Jr. and Eric; and the president’s so-called “crypto czar,” David Sacks, are scheduled to appear. Trump himself attended last year’s cryptocurrency gathering in Nashville while soliciting donations from crypto backers for his 2024 campaign. His vocal support for Bitcoin has already helped drive the price to a new all‐time high of $109,000.

At the time of publication, TMTG shares were down 11.5% on the news.

And the interesting thing is, the president continues to downplay concerns over conflicts of interest, citing the legal exemption that shields a sitting president from the same conflict‐of‐interest laws that bind other executive branch officials. Prior to taking office the first time in 2017, the president vowed to transfer ownership of his businesses to his sons and to avoid new foreign deals. He has, however, made no such promises during his unprecedented second term, and in private, he is dismissive of concerns about conflicts of interest, which he sees as a manufactured issue that has been weaponized by Democrats. A recent report found that the president’s various crypto holdings have increased his family’s wealth by an estimated $2.9 billion.

Administration Pursuing Nuclear Option Against Harvard University

The New York Times is out this morning with reporting that the Trump administration is set to cancel the federal government’s remaining federal contracts with Harvard University — worth an estimated $100 million, according to a letter that is being sent to federal agencies on Tuesday. The letter also instructs agencies to “find alternative vendors” for future services. The additional planned cuts represented what an administration official called “a complete severance of the government’s longstanding business relationship with Harvard.”

The letter is yet another indication of the Trump administration's ongoing efforts to diminish Harvard, targeting its financial stability and global standing. The president has publicly lambasted Harvard, calling it a “failed institution” and accusing it—and other Ivy League schools—of harboring anti-American values and radical ideologies. Over the past month, the administration has withheld approximately $3.2 billion in grants and contracts linked to the university, threatened to divert billions in grants from the university to “trade schools” (valuable learning institutions, but typically not equipped to do the kind of research the grants underwrite), threatened to revoke its tax exempt status and attempted to ban Harvard’ from enrolling international students.

And the interesting thing is, while Harvard has received the most attention from the president and the media, it is hardly alone in being targeted by the administration under the auspices of “combatting antisemitism.” Since the president issued an executive order on January 29, calling for a stronger government response to alleged antisemitism on college campuses, which laid the groundwork for a Department of Justice-led multi agency antisemitism task force “to root out anti-Semitic harassment in schools and on college campuses,” the Department of Education announced investigations of 60 colleges and universities. So far, seven universities have been singled out for punitive funding cuts or have been notified that their funding is in serious jeopardy—Brown, Columbia, Cornell, Harvard, Northwestern, Penn, and Princeton. Additionally, George Washington University, Johns Hopkins and NYU are also facing potential funding cuts. Not for nothing, each of these schools are in states that the president lost in 2024 and are often referred to as “elite” universities, seen by large swaths of the president’s base as bastions of liberal ideology, globalism, and political correctness.

NPR Sues Trump Administration Over Executive Order Cutting Federal Funding

National Public Radio (NPR) this morning filed a lawsuit against the Trump administration, challenging an executive order calling for elimination of federal funding for public broadcasting. Filed in the U.S. District Court in Washington, D.C., the suit, brought by NPR and three Colorado-based public radio stations, argues that the order violates the First Amendment and provisions of the Public Broadcasting Act, which was passed by Congress in 1967. The suit also argues that the president lacks the authority to stop federal funding for NPR and PBS, and that the order should be invalidated as unconstitutional.

"It is not always obvious when the government has acted with a retaliatory purpose in violation of the First Amendment. 'But this wolf comes as a wolf…The Order targets NPR and PBS expressly because, in the President's view, their news and other content is not 'fair, accurate, or unbiased,” the suit states. "The order's objectives could not be clearer: the order aims to punish NPR for the content of news and other programming the president dislikes and chill the free exercise of First Amendment rights by NPR and individual public radio stations across the country.”

"The Executive Order is a clear violation of the Constitution and the First Amendment's protections for freedom of speech and association, and freedom of the press," NPR President and CEO Katherine Maher said in a statement.

The White House has justified the move by claiming that public broadcasting outlets promote “left-wing propaganda” and fail to provide fair and unbiased reporting. The order also instructs federal agencies to identify and eliminate indirect sources of public financing for NPR and PBS, further restricting their ability to receive federal support.

And the interesting thing is, founded in 1970, NPR employs hundreds of journalists whose work is broadcast by more than 1,000 local stations. While most of its initial funding was allocated by Congress and delivered through the Corporation for Public Broadcasting (CPB), the funding formula was changed in the 1980s as the Reagan Administration sought to shrink public media funding. Today, CPB sends federal money to local member stations, who then buy NPR programming. Those member station fees comprise 30% of NPR’s funding, while just 1% of NPR’s revenue comes directly from the federal government. The largest share of its funding, 36%, comes from corporate sponsorship.

That’s all for today. See you back here again tomorrow!