And the Interesting Thing is on June 19

Israel-Iran Conflict Enters Seventh Day, President has Approved U.S. Strike Plans Against Iran

Iran and Israel launched airstrikes on each other on Thursday as the conflict enters its seventh day.

Here’s what we know this morning:

· An Israeli hospital was hit by an Iranian missile, while Israel said it struck 100 targets in Iran, including the heavy-water reactor in Arak and a site in Natanz that it said was being used for nuclear-weapons development.

· Israeli Defense minister Israel Katz described the hospital strike as “war crimes of the most serious kind” and said that Iran’s Supreme Leader—Ayatollah Ali Khamenei—will Khamenei “will be held accountable for his crimes.” He added that “the Prime Minister and I have instructed the Isreal Defense Forces (IDF) to increase the intensity of attacks against strategic targets in Iran and against government targets in Tehran in order to remove threats to the State of Israel and undermine the ayatollahs' regime.”

· After visiting the hospital site, Katz later said that Iran’s Supreme Leader Ayatollah Ali Khamenei is “the modern Hitler” and cannot continue to exist. “A dictator like Khamenei, who heads a country like Iran and has made the destruction of the State of Israel his declared goal, this horrific goal of destroying Israel, cannot be allowed to continue.”

· The Wall Street Journal reports that President Trump told senior aides late Tuesday that he approved of attack plans for Iran, but was holding off to see if Tehran would abandon its nuclear program. “I’m not looking to fight,” Trump later told reporters in the Oval Office. “But if it’s a choice between them fighting or [Tehran] having a nuclear weapon, you have to do what you have to do. And maybe we don’t have to fight. There’s no way that you can allow, whether you have to fight or not, you can allow Iran to have a nuclear weapon, because the entire world will blow up,” he added. “Not going to let that happen.” The president is scheduled to receive an intelligence briefing this morning at 11:30 am in the Situation Room

· The president suggested yesterday that Iran had sought negotiations with the White House to end the conflict. Iran’s envoy to the United Nations denied the claim, blasting Trump on X as a has-been warmonger. “No Iranian official has ever asked to grovel at the gates of the White House. Iran does NOT negotiate under duress, shall NOT accept peace under duress, and certainly NOT with a has-been warmonger clinging to relevance. Iran shall respond to any threat with a counter-threat, and to any action with reciprocal measures.”

· Senate Democrats are demanding President Donald Trump outline a strategy for dealing with Iran, saying the administration has left Congress in the dark as he weighs direct U.S. military involvement. “Congress is an equal partner in preserving and defending U.S. national security around the world, and Congress has not provided authorization for military action against Iran—we will not rubberstamp military intervention that puts the United States at risk,” five senior Democratic senators said in a joint statement. “The United States cannot sleepwalk into a third war in as many decades.”

· Reuters reports that Russian President Vladimir Putin and Chinese leader Xi Jinping “decisively condemned” Israel’s strikes on Iran during a call on Thursday. Xi backed Putin’s efforts for Russia to “help de-escalate the current, highly tense situation” as an intermediary and agreed to work closely with Moscow on “exchanging possible information and ideas” about Israel’s conflict with Iran, according to Yuri Ushakov, the Russian president’s top foreign policy aide.

· Iran’s foreign minister will meet his counterparts from the UK, Germany, France, and the European Union on Friday in Geneva to discuss Iran’s nuclear program and the war. Iran’s foreign minister, Abbas Araghchi, told state news media that European officials requested the meeting. It will mark the first face to face meeting of Iranian and European officials since Israel’s attack.

And the interesting thing is, the prospect of a US strike against Iran has exposed divisions within the GOP, with some of his most ardent supporters urging him not to get the country involved in a new Middle East war. Some of Trump’s most prominent Republican allies, including Steve Bannon, have found themselves in the unusual position of being at odds with a president who shares their isolationist tendencies. Bannon, one of many influential voices from Trump’s “America First” coalition, yesterday urged caution about the US military joining Israel in trying to destroy Iran’s nuclear program in the absence of a diplomatic deal. “We can’t do this again,” Bannon told reporters at an event sponsored by the Christian Science Monitor in Washington. “We’ll tear the country apart. We can’t have another Iraq.”

U.S. Rep. Marjorie Taylor Greene (R-GA) posted on X, “Anyone slobbering for the U.S. to become fully involved in the Israel/Iran war is not America First/MAGA. Appearing on former Republican Rep. Matt Gaetz’s television show, Greene said, “A Middle Eastern war will pull America back 20 years.”

U.S. Sen. Ted Cruz (R-TX) and conservative talk show host Tucker Carlson got into a heated exchange in a sit-down interview for Carlson’s program, that has since gone viral. Over the course of nearly two hours, the conversation continued to grow increasingly tense, with both shouting at each other at certain times and hurling insults. The president weighed in on from the Oval Office on Wednesday afternoon—seeming to take no definitive side of either ally following the heated dispute. “Tucker is a nice guy. He called and apologized the other day, because he thought he said things that were a little bit too strong, and I appreciated that.”

The president downplayed any notion that his supporters are cooling on him amid uncertainty over whether he will order a U.S. strike on Iran, addressing a rift between some of his most vocal MAGA backers and national security conservatives.

“My supporters are more in love with me today, and I’m more in love with them, more than they even were at election time where we had a total landslide. I may have some people that are a little bit unhappy now, but I have some people that are very happy, and I have people outside of the base that can’t believe that this is happening, they’re so happy,” he said.

Federal Reserve Keeps Interest Rates Steady, but Keeps Door Open for 2 Rate Cuts this Year As it Expects Slower Economic Growth

The Federal Reserve announced yesterday that he Federal Reserve announced it would keep its benchmark interest rate unchanged for the fourth consecutive meeting, maintaining the federal funds rate at a range of 4.25% to 4.5%. While this decision was widely anticipated by financial markets, the Fed’s accompanying economic projections painted a more sobering picture: a downgraded outlook for U.S. economic growth.

Fed officials still see two rate cuts this year, the same amount projected in March, amid uncertainty of how the Trump administration’s policies, from tariffs to immigration to tax policy, will impact the economy. What the central bank did change, however, was its outlook on inflation and economic growth amid those uncertainties. Fed officials now see inflation staying higher this year than previously estimated and economic growth going lower than prior predictions.

The Fed estimates that the core Personal Consumption Expenditures (PCE) measure of inflation will be 3.1%, compared with 2.8% previously, though they see that measure dropping back to 2.4% in 2026. And the US economy is now projected to grow at an annualized pace of 1.4% instead of 1.7%. The unemployment rate is seen edging up to 4.5% from 4.4% previously.

“Uncertainty about the economic outlook has diminished, but remains elevated,” officials said in their policy statement, softening their language. Fed officials also removed language that previously said, "the risks of higher unemployment and higher inflation have risen."

Fed Chair Jerome Powell told reporters at a press conference that recent inflation reports have been favorable but that goods prices have been moving up following the introduction of new tariffs and there could be more of that this summer.

Ahead of the Fed's rate announcement, the president spoke extensively to reporters about his displeasure with Powell, repeatedly calling the Princeton and Georgetown Law graduate whom he nominated to the post in 2018 some version of “stupid” or “not a smart person.”

“So, we have a stupid person. Frankly, you probably won’t cut today,” Trump said in impromptu remarks just outside the White House. “Europe had 10 cuts, and we had none. And I guess he’s a political guy, I don’t know. He’s a political guy who’s not a smart person, but he’s costing the country a fortune.”

Trump, though, said higher interest rates are costing the U.S. “hundreds of billions” of dollars in financing costs that could be saved if the Fed would ease. “If he’s worried about inflation, that’s OK. I understand that. I don’t think there’s going to be any. So far there hasn’t,” Trump said. “But now we have a man that just refuses to lower the Fed rate, just refuses to do and he’s not a smart person,” the president added. “I think he hates me, but that’s OK.”

Trump even mused about appointing himself as Fed chair, saying, “I’d do a much better job than these people.”

When asked about Trump’s pressure on the Fed during his press conference, Powell said that what he and his Fed colleagues want is a solid economy. “That is pretty much all that matters to us.”

And the interesting thing is, though the president’s histrionics and questions about the number and timing of any future rate cuts capture much of the attention, what Powell said about tariffs, and their expected economic impact was low key the day’s most important development. Powell said goods price inflation will pick up over the course of the summer as the president’s tariffs work their way to U.S. consumers, who he argued would bear those costs.

"“Everyone that I know is forecasting a meaningful increase in inflation in coming months from tariffs. Ultimately, the cost of the tariff has to be paid, and some of it will fall on the end consumer. We know that because that's what businesses say. That's what the data say from the past."

"So, we're beginning to see some effects, and we do expect to see more of them over the coming months," he said. "We do also see price increases in some of the relevant categories, like personal computers and audio-visual equipment and things like that, attributable to tariff increases."

"I think we learned in April, after the March meeting, that substantially higher tariffs were likely. And since then, the estimates of the tariffs have actually moved back down, although still at an elevated level," Powell said. "So, we're adapting in real time."

The conflict between Israel and Iran adds another wild card to the policy mix, with prospects of higher energy prices a potential additional factor in keeping the Fed from cutting. It’s worth noting that the Fed policy statement did not mention influence from the Middle East fighting since the conflict is only a week old, but oil prices yesterday reached their highest levels since Israel launched preemptive strikes on June 13.

A gradually softening economy could provide incentive to cut later this year. Recent labor market data shows layoffs creeping higher, long-term unemployment also rising and consumers spending less. Retail sales tumbled nearly 1% in May and recent data has reflected a cooling housing market, with starts hitting their lowest level in five years.

Social Security & Medicare Trustee Reports Find that Both Programs Face Insolvency in Less than a Decade

The Social Security and Medicare Trustees released their annual reports yesterday on the financial status of the programs, highlighting the precarious financial states of the programs. The Trustees project that both the Social Security retirement trust fund and the Medicare Hospital Insurance (HI) will be insolvent in 2033, a year sooner than last year’s projection.

Here are some of the key findings:

· Social Security is only eight years from insolvency. The Old-Age and Survivors Insurance (OASI) trust fund is projected to go insolvent in 2033, when today’s 59-year-olds reach their full retirement age and today’s youngest retirees turn 70. At that point, retirees will face an automatic 23% benefit cut under the law. If the OASI trust fund borrows from the disability fund, the trust funds would be depleted by 2034, leading to a 19% benefit cut.

· Social Security faces large and growing imbalances. Social Security faces cash deficits totaling $3.6 trillion over the next decade, or 0.9% of Gross Domestic Product (GDP). Annual cash deficits will grow to 3.6% of payroll (1.3% of GDP) by 2050 and to 4.9% of payroll (1.6% of GDP) by 2099.

· Social Security faces a large actuarial deficit. Over 75 years, Social Security faces an actuarial deficit of $26 trillion on a present value basis. This shortfall is the largest in almost 50 years, and twice as large as it was back in 2010.

· Social Security’s finances have further deteriorated. Social Security’s 75-year solvency gap increased relative to last year’s projections, from 3.50% of payroll to 3.82% of payroll. Half the deterioration is due to the passage of the “Social Security Fairness Act,” which allows some workers to partially double dip between Social Security benefits and state or local alternatives.

And the interesting thing is, approximately 70 million people will receive Social Security benefits this year, while 185 million individuals work and contribute to the program through payroll taxes, Social Security Administration Commissioner Frank Bisignano said in a statement.

Democrats and Republican lawmakers are divided over whether to raise taxes or cut benefits to shore up Social Security. However, a recent survey found 85% of Americans would rather raise taxes than cut benefits, according to the National Academy of Social Insurance, AARP, the National Institute on Retirement Security and U.S. Chamber of Commerce. The groups polled more than 2,200 Americans.

“Across party lines, generations, income, education, the American people are strongly opposed to cutting Social Security,” said Rebecca Vallas, chief executive of the National Academy of Social Insurance.

The most popular policy option Americans want to see would be eliminating the payroll tax cap for earnings over $400,000, according to the survey. Currently, workers contribute payroll taxes to Social Security for wages up to $176,100. That cap would stay in place, while the payroll levies would be reapplied starting at $400,000 for higher earners.

The number of Americans aged 65 and older has been steadily increasing. In 2022, there were 57.8 million older adults, representing 17.3% of the population. This number is projected to reach 84 million by 2054, comprising 23% of the population. The issue of Social Security and Medicare solvency is not going away any time soon.

Juneteenth Celebrations Scaled Back Amidst Federal Attacks on Diversity and Cuts in Corporate Support

Now in its fifth year as a federal holiday, Juneteenth—commemorating June 19, 1865, when U.S. Army troops arrived in Galveston, TX, to inform some of the last enslaved Americans that they were free—celebrations across the country are being scaled back or canceled. as companies and municipalities across the country reconsider their support for diversity, equity, and inclusion (DEI) initiatives.

The political climate has shifted sharply since President Biden signed the legislation establishing Juneteenth as a federal holiday in 2021 and, much like June celebrations of Pride Month, Juneteenth events across the country have been forced to scale back due to declining financial support or concern about political blowback given federal attacks on DEI programs. According to a recent survey, 15% of organizations said they would stop celebrating identity and heritage-related events like Juneteenth.

The Associated Press reports that many state and local governments hold or help fund celebrations, but some decided not to this year. The governor’s office in West Virginia stated that the state won’t be hosting any Juneteenth events this year for the first time since 2017. Republican Gov. Patrick Morrisey last month signed a bill to end all diversity programs. “Due to the continued fiscal challenges facing West Virginia, state government will not be sponsoring any formal activities,” Deputy Press Secretary Drew Galang said in an email.

City Council members in Scottsdale, AZ dissolved their DEI office in February, which led to the cancellation of the city’s annual Juneteenth festival. Event organizers in Colorado Springs, CO, had to move locations due to fewer sponsors and cuts in city funding. Planners in Bend, Oregon, cited “an increasingly volatile political climate” in a statement about why they canceled this year’s celebration.

While Juneteenth is a federal holiday, state governments have varying levels of recognition and observance. Barely more than half (28) of U.S. states and the District of Columbia now legally recognize Juneteenth as state holidays and give state workers a paid day off.

And the interesting thing is, the White House has announced no formal plans to mark the holiday, which was celebrated with large parties attended by thousands of guests on the South Lawn under former President Biden. It remains unclear if the president will participate in any events or acknowledge the day in public comments. Ironically, he recognized Juneteenth in the final year of his first term—a year before it became a federal holiday—writing in a presidential message that:

“Juneteenth reminds us of both the unimaginable injustice of slavery and the incomparable joy that must have attended emancipation. It is both a remembrance of a blight on our history and a celebration of our Nation’s unsurpassed ability to triumph over darkness. That ability is rooted in the fundamental goodness of America—in the truths upon which we, as a Nation, declared an end to our status as the subjects of a monarch and emerged as a free and independent people: that all men are created equal by the hand of God, endowed by our Creator with the right to life, liberty, and the pursuit of happiness. These words form the heart of what Reverend Dr. Martin Luther King, Jr., called the “promissory note to which every American was to fall heir.” The celebration of Juneteenth marks an important milestone in the hard-fought journey to make good on that promise for all Americans.

This Juneteenth, we commit, as one Nation, to live true to our highest ideals and to build always toward a freer, stronger country that values the dignity and boundless potential of all Americans.”

What a difference 5 years can make.

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