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Trump Takes Reins on U.S. Economy With Policy Bill and Tariffs Renewal

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His expensive tax cuts have been signed into law. His steep global tariffs are taking clearer shape. And his twin campaigns to deregulate government and deport immigrants are well underway.With the major components of his agenda now coming into focus, President Trump has already left an indelible mark on the U.S. economy. The triumphs and turbulence that may soon arise will squarely belong to him.Not even six months into his second term, Mr. Trump has forged ahead with the grand and potentially disruptive economic experiment that he first previewed during the 2024 campaign. His actions in recent weeks have staked the future of the nation’s finances — and its centuries-old trading relationships — on a belief that many economists’ most dire warnings are wrong.Last week, the president enacted a sprawling set of tax cuts that he believes to be the ingredients for rapid economic growth, even as fiscal experts warned that the law may injure the poor while putting the U.S. government on a risky new fiscal path.Then, on Monday, Mr. Trump began to issue his latest round of tariff threats, insisting that “we’re done” negotiating as economists warned about a potential surge in consumer prices that could arise from taxing imports.The White House also proceeded with its aggressive and legally contested plans to eliminate scores of federal regulations and deport millions of migrants. The immigration crackdown, in particular, could come to the detriment of many sectors, like agriculture, that rely heavily on foreign labor, experts believe.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s Big Policy Bill Puts U.S. on Perilous Fiscal Path

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    Among the most expensive pieces of legislation in years, the Republican legislation could reshape the country’s finances for a generation.Washington has not exactly won a reputation for fiscal discipline over the last few decades, as both Republicans and Democrats passed bills that have, bit by bit, degraded the nation’s finances.But the legislation that Republicans passed through the Senate on Tuesday stands apart in its harm to the budget, analysts say. Not only did an initial analysis show it adding at least $3.3 trillion to the nation’s debt over the next 10 years — making it among the most expensive bills in a generation — but it would also reduce the amount of tax revenue the country collects for decades. Such a shortfall could begin a seismic shift in the nation’s fiscal trajectory and raise the risk of a debt crisis.The threat is a reflection of the fact that Senate Republicans have voted to make tax cuts that the party first passed in 2017 a permanent feature of the tax code. That means the growth in the country’s debt, already at levels economists find alarming, would only accelerate as the bill shaves down the country’s main source of money.“We are looking at the most expensive piece of legislation probably since the 1960s,” said Jessica Riedl, a senior fellow at the Manhattan Institute, a conservative think tank. “The danger is that Congress is piling trillions of new borrowing on top of deficits that are already leaping.”Historically, lawmakers have been unable to make such a large change in the country’s finances without bipartisan support, helping contain how much debt is added at a time.That is because reconciliation, the special legislative procedure that Republicans used to avoid the filibuster in the Senate and pass the bill along party lines, has long included the requirement that bills cannot add to the debt for more than a decade. But Republicans decided to disregard that rule, relying on an accounting gimmick to argue that the $3.8 trillion cost of extending the 2017 tax cuts is actually zero and therefore they can continue indefinitely.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Some Republicans Join Democrats in Unease Over White House Budget Cuts

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    President Trump has sought to claw back funds for public broadcasting and foreign aid, sparking a fierce debate over the power of the purse.A handful of Senate Republicans joined Democrats on Wednesday in sharp questioning of President Trump’s proposed budget cuts, exposing the depth of congressional unease with the White House’s new plan to pare back billions of dollars for foreign aid and public broadcasting.The rare display of bipartisan discord left the fate of that package uncertain at a moment when the Trump administration has signaled that it is willing to circumvent Congress to slash federal spending, potentially touching off a constitutional battle over the power of the purse.The dynamic played out over a tense, roughly three-hour grilling of Russell T. Vought, the White House budget director, who asked lawmakers to approve Mr. Trump’s request to rescind more than $9 billion in enacted funds. The administration has framed the package, unveiled this month, as the first of possibly many that could implement changes identified by the Department of Government Efficiency, or DOGE.But Democrats and some Republicans on Wednesday questioned the president’s proposed clawbacks, which passed the House earlier in June. Some lawmakers said the cuts would undermine longtime bipartisan priorities, including a shared desire to preserve local television and radio stations and combat the global AIDS crisis.Senator Susan Collins, Republican of Maine and the chairwoman of the Senate Appropriations Committee, said she worried about the implications for global health, particularly because some of the funding that the president targeted has “saved more than 26 million lives.”Lawmakers from both parties later echoed some of those criticisms, prompting Ms. Collins to conclude the hearing by saying that it showed the “depth of concerns about this rescission from members on both sides of the aisle” with the White House’s plans. A spokesperson for the senator later confirmed that she was drafting an amendment to change the package when it reached the Senate floor.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Officials Unveil Budget Cuts to Aid for Health, Housing and Research

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    The new blueprint shows that a vast array of education, health, housing and labor programs would be hit, including aid for college and cancer research.The Trump administration on Friday unveiled fuller details of its proposal to slash about $163 billion in federal spending next fiscal year, offering a more intricate glimpse into the vast array of education, health, housing and labor programs that would be hit by the deepest cuts.The many spending reductions throughout the roughly 1,220-page document and agency blueprints underscored President Trump’s desire to foster a vast transformation in Washington. His budget seeks to reduce the size of government and its reach into Americans lives, including services to the poor.The new proposal reaffirmed the president’s recommendation to set federal spending levels at their lowest in modern history, as the White House first sketched out in its initial submission to Congress transmitted in early May. But it offered new details about the ways in which Mr. Trump hoped to achieve the savings, and the many functions of government that could be affected as a result.The White House budget is not a matter of law. Ultimately, it is up to Congress to determine the budget, and in recent years it has routinely discarded many of the president’s proposals. Lawmakers are only starting to embark on the annual process, with government funding set to expire at the end of September.The updated budget reiterated the president’s pursuit of deep reductions for nearly every major federal agency, reserving its steepest cuts for foreign aid, medical research, tax enforcement and a slew of anti-poverty programs, including rental assistance. The White House restated its plan to seek a $33 billion cut at the Department of Housing and Urban Development, for example, and another $33 billion reduction at the Department of Health and Human Services.Targeting the Education Department, the president again put forward a roughly $12 billion cut, seeking to eliminate dozens of programs while unveiling new changes to Pell grants, which help low-income students pay for college.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    U.S. Infrastructure Improves, but Cuts May Imperil Progress, Report Says

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    A report card from an engineering group found that American roads, ports and other infrastructure got better last year but could be hurt if federal funding is reduced.Increased federal spending in recent years has helped to improve U.S. ports, roads, parks, public transit and levees, according to a report released on Tuesday by the American Society of Civil Engineers.But that progress could stagnate if those investments, some of which were put on hold after President Trump took office in January, aren’t sustained.Overall, the group gave the nation’s infrastructure a C grade, a mediocre rating but the best the country has received since the group’s first report card in 1998. Most infrastructure, including aviation, waterways and schools, earned a C or D grade; ports and rail did better. The group also projected a $3.7 trillion infrastructure funding shortfall over the next decade.“The report card demonstrates the crucial need for the new administration and Congress to continue sustained investment in infrastructure,” Darren Olson, the chairman of the society’s committee on America’s infrastructure, said on a call with reporters. “Better infrastructure is an efficient investment of taxpayer dollars that results in a stronger economy and prioritizes American jobs.”The report, which is now released every four years, has long noted that the United States spends too little on infrastructure. But that started to change in 2021, the group said, thanks to the Infrastructure Investment and Jobs Act, which authorized $1.2 trillion in funding under President Joseph R. Biden Jr. That investment is showing results, with grades having improved since the last report, in 2021, for nearly half the 18 categories that the group tracks.But in January, Mr. Trump froze much of the funding under that law and another aimed at addressing climate change, pending a review by his agencies. That halted a variety of programs, including those intended to help schools, farmers and small businesses.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    U.S. Could Run Out of Cash by July, Analysis Finds

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    The Bipartisan Policy Center estimates that the so-called X-date could fall between mid-July and early October if Congress does not lift or suspend the nation’s debt limit.The United States could run out of cash to continue paying its bills by mid-July if Congress does not take action to raise or suspend the nation’s debt limit, according to an analysis on Monday by the Bipartisan Policy Center.That deadline, known as the “X-date” — the moment when the United States is unable to meet its financial obligations and might default on its debt — is a fiscal milestone that’s among the most closely watched in Washington and on Wall Street.The date is subject to considerable uncertainty. It relies on estimates of how much wiggle room the Treasury has to use accounting maneuvers — known as “extraordinary measures” — to keep paying the government’s bills by shifting money around. The Bipartisan Policy Center, a think tank, provided estimates suggesting that the X-date could come as late as the beginning of October.Efforts to address the debt limit will likely consume Congress and the Trump administration later this year as Republicans race to enact trillions of dollars of tax cuts.The debt limit is a cap on the total amount of money that the United States is authorized to borrow to fund the government and meet its financial obligations.Because the federal government runs budget deficits — meaning it spends more than it brings in through taxes and other revenue — it must borrow huge sums of money to pay its bills. Those obligations include funding for social safety net programs, salaries for members of the armed forces and paying investors who have bought U.S. government debt in exchange for interest payments.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Says a Recession Would Be Worth It, but Economists Are Skeptical

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    President Trump and his advisers say his policies may cause short-term pain but will produce big gains over time. Many economists are skeptical of those arguments.Presidents usually do all they can to avoid recessions, so much so that they avoid even saying the word.But President Trump and his advisers in recent weeks have offered a very different message. Yes, a recession is possible, they have said. Maybe one wouldn’t even be that bad.Howard Lutnick, the commerce secretary, has said Mr. Trump’s policies are “worth it” even if they cause a recession. Scott Bessent, the Treasury secretary, has said the economy may need a “detox period” after becoming dependent on government spending. And Mr. Trump has said there will be a “period of transition” as his policies take effect.Such comments may partly reflect an effort to align political statements with economic reality. Mr. Trump promised to end inflation “starting on Day 1” and declared, in his inaugural address, that “the golden age of America begins right now.”Instead, inflation has remained stubborn, and while Mr. Trump has been in office less than two months, economists warn that his tariffs are likely to make it worse. Measures of consumer and business confidence have plummeted and stock prices have tumbled, attributable in large part to Mr. Trump’s policies and the uncertainty they have caused.“It’s the kind of language that you use when your policy isn’t going great and you can see that it’s actively harming people,” said Sean Vanatta, a financial historian at the University of Glasgow in Scotland.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump and DOGE Create Anxiety but Opportunity for Federal Contractors

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    By cutting federal employees, the Trump administration may increase its reliance on firms that take in billions through government contracts.A contracting firm called Leidos took in more than $16 billion in revenue last year, most of it through contracts with federal agencies like the Department of Veterans Affairs.So when the Trump administration’s budget cutters took aim at the V.A. last month, it seemed like bad news not just for the department’s employees but also for Leidos and dozens of other private-sector firms.“No more paying consultants to do things like make Power Point slides and write meeting minutes!” the department’s secretary, Doug Collins, wrote on X. Overall, the department said, it was canceling more than 850 contracts worth nearly $2 billion.But shortly after Mr. Collins’s announcement, the outlook for some of the V.A.’s contractors seemed to brighten. The department put the cancellations on pause, saying it needed to review the contracts to avoid “eliminating any benefits or services” to veterans or V.A. beneficiaries. It later narrowed the list of canceled contracts by a few hundred.And experts on government contracting said cuts to the agency, which announced last week that it was seeking to trim 80,000 of its roughly 480,000 employees, could even lead to increased spending on federal contracts.These experts noted that cutting employees without reining in a government function — like providing health care and benefits to veterans, work in which Leidos plays a key role — typically means the job will fall more heavily on contractors.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump Tariffs and Trade Wars Leave Investors, Once Optimistic, Feeling Apprehensive

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    On Tuesday, President Trump sent markets into another tailspin by announcing additional tariffs on Canada, suggesting a falling stock market is no longer the bulwark investors had hoped.President Trump made a lot of promises on the campaign trail last year. Investors and business leaders enthusiastically cheered some, like lower taxes and relaxed regulation, and expressed wariness about others, like tariffs and reduced immigration.But when Mr. Trump won the election, there was little sign of that ambivalence: Stock prices soared, as did measures of business optimism.Investors at the time offered a simple explanation: They believed Mr. Trump, backed by a Republican-controlled Congress, would follow through on the parts of his agenda that they liked and scale back the more disruptive policies like tariffs if financial markets started to get spooked.It is increasingly clear they were wrong.In his first weeks in office, Mr. Trump has made tariffs the central focus of his economic policy, promising, and at times imposing, steep penalties on allies as well as adversaries. He has threatened to curb subsidies that businesses had come to rely on. And he has empowered Elon Musk’s efforts to slash the federal bureaucracy, potentially putting tens of thousands of federal workers out of jobs and cutting off billions of dollars in government grants and contracts.Most surprising, at least to the optimists on Wall Street: Mr. Trump has so far been undeterred by signs of cracks in the economy or by plunging stock prices.“The idea that the administration is going to be held back by a self-imposed market constraint should be discounted,” said Joe Brusuelas, chief economist at the accounting firm RSM.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More