A proposed "wealth tax" on California's billionaires could backfire and cost the state tens of billions of dollars in the long run.
If the proposed tax drives wealthier residents out of the state, California could end up losing between $1 billion and $3.5 billion annually in income taxes, according to a working paper published this week. A pair of researchers at Stanford University warn that the state could end up losing an estimated $39 billion because of the consequences of the wealth tax.
"These findings suggest that the Billionaire Tax Act will not fulfill the primary functions for which it was designed," write researchers Benjamin Jaros and Joshua Rauh.
Voters in California will decide next month whether to impose the one-time, 5 percent tax when they vote on Proposition 40. The ballot measure is dividing Democrats—Gov. Gavin Newsom opposes it, while progressive Rep. Ro Khanna (D–Calif.) claims it is the "most important ballot initiative in America and a fight for the soul of our party."
And it's already spurring some billionaires to flee the state—including venture capitalist Peter Thiel and Google co-founder Larry Page. Including those two, the seven billionaires who have publicly said they are leaving the state represent more than $539 billion of the nearly $1.9 trillion aggregate net worth of California's billionaires, the researchers note.
With other departures likely happening more quietly, the new study estimates that the tax will generate about $30 billion, a far cry from the $100 billion that the tax's supporters expect. The "behavioral response" from billionaires in California "has eroded most of the projected tax base," write Jaros and Rauh.
That's still a pretty big pot of revenue. In the long run, however, the state is likely to lose out.
After running 100,000 simulations using different assumptions, the two researchers report that "85 percent of plausible outcomes produce a negative" result in state revenue.
Capital is always mobile, despite the best efforts of politicians. And if you were a billionaire living in California, why would you stick around?
Polls show voters are narrowly divided over Proposition 40. A Politicopoll published earlier this month showed 46 percent of voters plan to vote for the measure, while 43 percent oppose it. Voters were similarly divided when asked if they expected it to pass or not.
In the first round of Brazil’s elections on Oct. 4, 2026, Flávio Bolsonaro, of the right wing Liberal Party (PL), came in first with 47.03% of the valid votes, compared with 45.16% for the current leftist president and Workers’ Party (PT) candidate, Luiz Inácio Lula da Silva. The margin was just over 2.2 million votes, […]
With less than two weeks before the midterm elections, some high-profile names are adding their voices to a flurry of fundraising pitches warning of the dangers of Republicans maintaining control of the House. A slew of famous faces — including Barbra Streisand, “West Wing” star Bradley Whitford, documentarian Ken Burns, and scientist and TV personality…
With little more than two weeks to go until the midterm elections, it seems increasingly possible that the Democrats, already a big favorite to win control of the House of Representatives, will also take charge of the planet's most elite nursing home, the United States Senate, where the median age is 64 years old. RealClearPolitics' poll aggregator has moved control of "the world's greatest deliberative body" (as its members are grandiosely wont to call it) to "toss up," status and prediction markets are now breaking big toward a blue wave. As of this writing, Kalshi has its Senate odds at 63 percent for the Dems vs. 37 percent for the GOP; Polymarket is at 62 percent vs. 39 percent.
As gratifying as it might be to see unprincipled Trump enablers reduced to minority status after signing off on economy-wrecking tariffs, inhumane immigration detentions, and wars of choice, there's at least one good reason to dread a Democratic majority too: Sen. Elizabeth Warren, the Massachusetts progressive who is spending the run-up to the midterms freaking out over possible consolidation in the condiments business and accusing private equity firms of gutting such shopping-mall favorites as Claire's and Toys R Us. There's every reason to believe that a Senate run by Warren and other economic interventionists will waste time, money, and resources trying to prevent a world in which, per the X wag Iowahawkblog, "a panopticon conglomerate owns two brands of hot sauce."
On October 13, Warren posted this dire warning to X:
Hellmann's mayo McCormick spices Cholula hot sauce Frank's RedHot
What do these products have in common? One company could soon control them all.
I have concerns that McCormick and Unilever's $45 billion merger could increase YOUR grocery prices.
It's hard to think of a more competitive and varied market than the one for hot sauces, which is expected to more than double over the next decade. The barriers to entry are generally low, as are the key ingredients, and new entrants can easily market and sell online, avoiding the costs of buying shelf space in conventional supermarkets. Yet Warren is urging regulators at the Department of Justice and the Federal Trade Commission to halt mergers of both product makers like McCormick and Unilever and grocery stores like Kroger and Giant Eagle.
The latter complaint is particularly picayune. Kroger is one of the country's largest supermarket chains, operating around 2,800 stores under its own name as well as Harris Teeter, Ralph's, and others. Giant Eagle operates about 170 stores. This merger is no more the stuff of nightmares than a single company producing both Cholula and Frank's RedHot. If Warren gains more clout from being in the majority, expect her to butt in more and more on such mergers.
Making it harder for businesses to adapt is not a recipe for making goods and services more affordable. But Warren is keen to blame economic creative destruction not on "new forms of industrial organization that capitalist enterprise creates" (as Joseph Schumpeter would have it), but on pure greed. In a TikTok released earlier this month, she shows a poster board with corporate logos from once-thriving companies that she says have been "gutted" by "private equity" firms.
"Here's your local mall," she piously intones. "Now, private equity wants you to believe that Red Lobster went bankrupt because of their endless shrimp….They want you to believe that Claire's went bankrupt because teens stopped shopping at the mall." In Warren's telling, private equity firms magically take over thriving businesses and then strip them bare. The typical pattern is that private equity enters the picture after a business is failing.
Virtually all accounts of the decline of, for example, Red Lobster, note that the chain had been spiraling for several reasons before the private equity firm Golden Gate Capital got involved in 2014. As this CNN article notes, the chain, which started in 1968, had seen drops in sales as customer desires changed. Management compounded the difficulties with a series of bad decisions, including continuing various all-you-can-eat menu specials, before coming out of Chapter 11 bankruptcy last year.
Similarly, it's true that some teens still go to malls and get their ears pierced at Claire's. But anyone who has spent time in retail America over the past few decades knows that malls are no longer the destination that they once were. As CapitalOne Shopping Research documents, "in 1986, there were 25,000 malls, large and small, nationwide." By 2023, that number had shrunk to just 1,200. While some malls are coming back, most are not, and for reasons that have nothing to do with private equity. Online retails plays a role (though a smaller one than usually imagined, with e-commerce accounting for less than 20 percent of all retail sales). But mostly, it's that people today tend to want a different sort of retail environment. Anchor stores—think Macy's and J.C. Penney—are shadows of themselves, and younger people have less unstructured time in which to prowl food courts and arcades.
For politicians like Elizabeth Warren, though, there can be no financial gains or losses that aren't the result of shadowy, conspiratorial forces. If her party takes control of the Senate, her words will carry more weight. But it will be American consumers that ultimately shoulder the burden of an even-more-regulated economy. The market for hot sauces will almost certainly stay spicy, but many other parts will surely suffer.
The Democratic Socialists of America (DSA) candidates running for the House of Representatives and endorsed by NYC Mayor Zohran Mamdani are all but guaranteed to win their general elections this November, but that does not mean the midterm drama is over in New York. In the state's 17th congressional district, which includes the lower Hudson Valley, Democratic challenger Cait Conley, a combat veteran who served on the Biden administration's National Security Council, could unseat incumbent Republican congressman Mike Lawler in one of the most consequential races of the midterms.
The highly contested purple district voted for former Vice President Kamala Harris in the 2024 election while reelecting Lawler for his second term. Now, Lawler is attempting to win a third term as support for President Donald Trump wanes ahead of the midterms. As of Friday, The Cook Political Report lists the race, which could determine control of the House, as a toss-up.
If elected, Conley would have far more in common with the "Badass Women" coalition of security state and military veterans than with DSA types (think more Sen. Elissa Slotkin from Michigan than Darializa Avila Chevalier). As Judge Street Journal's Timmy Facciolanotes, "Conley's candidacy is testing the viability of a tactful centrism that rebukes left-wing positions like abolishing ICE or restricting weapon shipments to Israel." Lawler is also vying for moderates, pitching himself as "one of the most bipartisan members of Congress" and emphasizing his willingness to break with Trump occasionally while still welcoming Trump's support.
While Lawler and Conley certainly are not pure MAGA acolytes or DSA members, both have leaned into a tech-critical position, much like that of more radical populists like Lina Khan or Steve Bannon, revealing how pervasive anti-tech sentiment has become in mainstream politics.
This tech skepticism was on full display during an October 14 debate, when each candidate made the case for why they were the most equipped to regulate AI, insisting that the industry needs guardrails.
Conley said members of Congress do not want to regulate AI because "they want to look out for their billionaire and trillionaire backers like Elon Musk, who is pouring over $260 million into this midterm election." She then added that Musk backed Lawler in his 2024 race.
Lawler then accused Conley, who previously consulted for Primer AI, of being "the AI candidate for the AI industry."
While Lawler and Conley disagree on specific data center regulations (Conley supports Democratic Gov. Kathy Hochul's data center moratorium while Lawler supports local zoning control over data centers), neither wants to pitch themselves as an explicitly pro-data center candidate. During the debate, Conley claimed that, "On Mike Lawler's watch there have been five data centers built in Rockland County." Lawler has said that he had no say in the decision to build the data centers, and during the debate, he pointed out that the facilities were built for financial services. Lawler also attempted to attack Conley over data centers, slamming her in an ad for saying "we need data centers." Regardless of the candidates' specific policies on data centers, their attacks on one another demonstrate that cheerleading hyperscale data center development is a political liability. In their district, data center has presumably become a dirty term.
The candidates' tech-skeptical rhetoric did not end with unchecked data center development. After the debate, Reason asked both candidates about their positions on age-verification laws for social media and AI, since such regulations raise significant privacy and censorship concerns by age-gating the internet. Unsurprisingly, both Lawler, who votedfor the controversial KIDS Act, and Conley, who has proposed stricter age verification for AI tools, parroted platitudes about why such online safety regulations are necessary to protect children.
"We have watched how social media is literally hurting the mental health of children," Conley told Reason. "And when you talk about the power of AI and what that power could do, we have to regulate this."
Lawler gave a similar response, telling Reason that he respects free speech but that protecting children "is paramount."
This bipartisan consensus over social media regulation has long been brewing in Congress. The mainstream political conversations about AI and data centers, however, are relatively new this midterm election cycle. And it appears both Lawler and Conley have figured out which way Americans' sentiment toward AI is leaning, and they have waged their campaigns accordingly.
TEL AVIV — There is one country on earth where Donald Trump could plausibly win a national election, and he knows it. “I could run for Prime Minister,” he joked in May, claiming 99% approval here. No poll has ever shown that. But the joke landed because it is only half a joke. Thirteen days before […]
Musk is the big Paxton funder: According to campaign filings released yesterday, Elon Musk sent $158 million in September to a super PAC that immediately gave that amount of money to a group backing Texas Republican Ken Paxton's Senate bid against Democrat James Talarico.
"On Sept. 9, the first day of the GOP midterm convention in Dallas, Musk gave $75 million to SLF," reportsThe Texas Tribune. "The next day, SLF put $75 million into a new entity called Texas PAC. By the weekend after the convention, the new super PAC was up on the air with a positive spot about Paxton's work on sex trafficking and a negative ad attacking Talarico as being for 'they/them, not you.'"
Then, two weeks later, "Musk gave an additional $83 million to SLF, according to the group's filing. Sure enough, SLF deposited $83 million into Texas PAC's coffers the following day."
It would be wild if Paxton still loses. Paxton has been embroiled in rolling scandals for years, and some current polls have him underwater by 13 points. A New YorkTimes/Siena survey found only 38 percent of likely Texas voters believe he has "good character," versus 56 percent for Talarico.
Paxton was indicted on securities fraud charges in 2015, and that case dragged on for most of a decade before ending in a pretrial agreement. Then the Texas House, led by Republicans, accused him of bribery and abuse of public trust and successfully impeached him in 2023. The charges centered on allegations that he used his office to help donor Nate Paul—so you can imagine why Musk might want to curry favor with Paxton. Though Paxton was later acquitted by the state Senate, scandal keeps chasing him: Last year, his wife, state Sen. Angela Paxton, filed for divorce on "biblical" grounds, citing adultery as one of the reasons.
Of course, many Republican voters at the state level saw the impeachment as nothing more than a political hit job, one echoing what's happened to President Donald Trump at the national level. But what far-right, already-convinced Republicans believe about Paxton is sort of beside the point: He needs turnout, and he needs to win over more moderate Republicans and maybe even some fence-sitters if he hopes to beat Talarico. It's possible Musk's cash infusion will help, but it's also possible a cash infusion of many millions of dollars won't be enough to rehabilitate Paxton's shitty image.
A poll from the University of Texas and Texas Politics Project conducted in August "contained four major warning signs for Paxton: a drop in his support from June, lagging GOP motivation to vote, worse favorability numbers than Talarico and Trump's approval being underwater in the state."
Scenes from New York: "When Gov. Kathy Hochul first ran for re-election, Republicans in New York tried to prey on fears over crime, rising inflation and illegal immigration to boost the chances of their ticket statewide in the critical 2022 midterms," reportsThe New York Times. "The strategy seemed to work. Republicans flipped four House seats in New York, while putting a scare into Ms. Hochul, who eked out a six-point victory over Lee Zeldin, then a Long Island congressman who now leads the E.P.A." This year, Republicans have picked Bruce Blakeman, the Nassau County executive, as the guy with the best odds of beating Hochul, and they're running on crime fears again. But it's not working so well.
The crime and public disorder is, to my mind, still a problem, but it's not as rampant as it once was during the peak pandemic years. And it's certainly not perceived as very bad right now.
QUICK HITS
"Three children and a teacher were killed, and two others were critically wounded, in a shooting Thursday at Silver Rail Elementary School in Bend, Oregon, authorities said," reports CBS News. "The suspect, a 16-year-old male, was shot and killed by a bystander, Bend police said.…Officials would not say exactly what type of weapon was used in the attack or how many rounds were fired. Multiple law enforcement sources told CBS News the suspect used a shotgun, and The Associated Press cited a law enforcement official briefed on the incident as saying it was a pump-action shotgun purchased by his mother."
"A climate of radical paranoia around AI seems like it will be a feature of our world for the foreseeable future," writes Ross Douthat in The Free Press, "because human beings are really good at being paranoid about mysterious new things. With, of course, the AI doomers themselves being a prime example: As Mike Solana of Pirate Wires notes in his own recent reading of the doom canon, the prophecies of Yudkowsky and Co. are already moderately less credible insofar as they don't account for their own cultural success."
"Taiwan is preparing to tighten export controls on AI chips to further align with US restrictions, according to a senior official in Taipei, joining a Trump administration clampdown on the smuggling of cutting-edge semiconductors to China," reportsBloomberg. "Taipei plans to add artificial intelligence servers and cutting-edge semiconductors to a list of controlled items, Taiwan's Minister of Economic Affairs Kung Ming-hsin told Bloomberg News. After the measures take effect, he said, shipping restricted AI hardware to China will become a criminal offense under the Foreign Trade Act."
I'll leave you with a quote from Kennedy (not John or Robert) to start your weekend off right: "Kimberly [Guilfoyle] talked about sex so cavalierly that she made Samantha from Sex and the City seem like Greta Thunberg."
This year, Alaska held its primary elections on August 18.
As per a 2020 ballot measure, Alaska primary voters pick among all qualified candidates for a single office, regardless of party affiliation, and the top four then advance to the general election.
In the U.S. Senate primary, Republican incumbent Dan Sullivan won 41 percent of the vote, while former Rep. Mary Peltola, a Democrat, captured nearly 50 percent.
Dan Sullivan was also the distant third-place finisher—but in this case, it was Daniel J. Sullivan Jr., a retired schoolteacher who is also running as a Republican but is not the same person as Daniel S. Sullivan, the junior U.S. senator for the 49th state.
The presence of dual Dan Sullivans is a headache for Republicans, who have fought to keep Daniel J. off the ballot, concerned he would split their votes and cost their candidate his seat.
"Mary Peltola and Chuck Schumer know they can't beat Senator Sullivan on his record, so they're resorting to deceitful political maneuvers that attempt to trick Alaskans and buy a seat," a Republican spokesman told Fox News.
"We are looking into it," President Donald Trump said this week. "It's a disgrace." In fact, NBC News reported in July that the FBI and Department of Justice had launched an investigation "looking for possible wire fraud or a conspiracy to deprive Alaskan voters of a free and fair elections process, which could be a civil rights violation."
In August, the government apparently issued subpoenas, though Daniel J. later said he had not received anything.
But is what he is doing actually illegal? For that matter, should it be?
Carol Beecher, director of the Alaska Division of Elections, barred Daniel J. from the ballot in June after concluding that he was running "with the purpose of confusing or misleading the electorate and compromising the fairness of the ballot."
But a state superior court reversed that decision. "Despite the Division's assertion that Mr. Sullivan may be excluded from the ballot because he lacks 'good-faith,' there is no statute which provides such a criterion," wrote Judge Thomas A. Matthews. "The concept of 'good-faith,' or pure motive, or bona fide intent is simply absent." The Alaska Supreme Court agreed, keeping both Sullivans on the November ballot.
Granted, it seems extremely likely that Republicans are right, and Daniel J. is running specifically to hurt Daniel S.'s prospects.
"Campaign material metadata reveals that Amber Lee, a progressive consultant, authored a press release announcing [Daniel J.'s] Senate bid," WFMD reported in May.
Daniel J. told The New York Times that he was running as a moderate Republican in an attempt to steer the party away from its MAGA wing. But he also admitted that he had voted for the Democrat in the last three presidential races and for Peltola in her races for the U.S. House.
In Beecher's original order keeping Daniel J. off the ballot, she wrote that Daniel J. had asked to be identified as "Dan S. Sullivan" on the ballot, the same name as the senator's. (Alaska reporter Dermot Cole wrote in July that this was not true: Daniel J. wrote "Dan S. Sullivan" in an email to Beecher but followed up hours later to correct it to "Dan J. Sullivan.")
If Daniel J.'s goal truly is to mislead voters, then that is indefensible. But it's not clear that it's illegal, or whether it should be.
"I am not sure exploiting voter confusion about names is any worse than exploiting their ignorance about policy issues like crime, immigration, and health care," wrote George Mason University law professor Ilya Somin. "Trying to prevent such exploitation through criminal and civil liability is likely to violate the First Amendment. In addition, it would likely end up giving incumbent political leaders broad power to curb speech and control electoral campaigns that they cannot be trusted with."
"This is a case about someone running for office with impure motives who is lucky enough to have a name that could confuse some voters," agreed election law expert Richard Hasen. "I don't see how the government could criminalize his running for office for having impure motives. And if it could do so, then it could be a crime every time that the Republican Party backs a Green Party candidate, or Democrats support a MAGA candidate in a primary in the hopes that the candidate would be weaker against a Democrat in the general election. This stuff happens all the time."
But it's entirely possible that Alaska's ranked choice voting system will solve the problem on Election Day.
After the August open primary, the top four candidates compete on a ranked choice ballot, where voters list the candidates in order of preference. If no candidate gets an outright majority, then the lowest performer is eliminated, and every ballot that picked them first is retallied and applied to their second choice.
As long as every Alaskan who wants to vote for Dan Sullivan—either one—lists both Dan Sullivans as their first and second choices, then the system will take care of any confusion. In the (highly likely) event that Daniel J. does not capture a majority on the first ballot, his votes will be retallied and applied to their second choices. The only plausible hiccup is if Peltola, the Democratic candidate, wins a majority in the first round—in which case either Sullivan would have lost anyway.
Of course, Republicans have opposed the ranked choice system since Alaska adopted it. Former Gov. Sarah Palin, who ran against Peltola twice unsuccessfully, said ranked choice was "so weird" that "it results in voter suppression."
In a post last week on Truth Social, Trump called ranked choice voting "Corrupt" and said it "shouldn't be allowed in our Country."
"I just left Alaska, where we have a real bad thing," Trump said Wednesday at a campaign rally in Arizona. "They have the ranked choice voting, where you go into I guess some kind of a test tube or something, and they pick whoever the hell they want. That's another disgrace."
As ever, it's not clear what Trump was talking about. And despite Republicans' complaints, ranked choice voting works quite well: According to the American Bar Association, recent research finds that it "is an improvement over plurality voting with clear benefits in terms of representation, campaign quality, mobilization, and turnout." It also "encourages greater consensus building as well as more civil political campaigns," and voters find it easy to understand.
In the event that a political party finds itself, for example, with two Dan Sullivans on the ballot, ranked choice voting is a perfect solution. If only the party weren't so hostile to it.
President Donald Trump promised that his tariffs would usher in a "golden age" by prioritizing the interests of American workers.
Those workers, however, are now turning against Trump's tariffs.
Support for the Trump administration's tariff policies has fallen by 25 percentage points among blue-collar workers over the past year, according to new polling data from Echelon Insights and the Economic Innovation Group (EIG).
A poll conducted by the two groups in August 2025 found that blue-collar workers supported the tariffs by a narrow margin. Now, that same segment of the population has turned decisively against Trump's tariffs: 58 percent oppose them, compared to just 36 percent who support them.
Source: Economic Innovation Group / Echelon Insights (https://eig.org/wp-content/uploads/2026/10/EIG-State-of-the-American-Worker-2026.pdf)
Overall, support for the tariffs has declined from about 43 percent last year to only 34 percent. Opposition to the tariffs has grown from 50 percent to 59 percent. Elsewhere in the same survey, 68 percent of respondents said the tariffs have made the cost of living higher.
It's not hard to figure out why people have turned against the tariffs: They have contributed to rising prices across the economy.
The annualized inflation rate ticked upward to 3.7 percent in September, according to new data from the Bureau of Labor Statistics (BLS). More BLS data released Thursday morning shows that the producer price index, which often operates as a precursor to inflation, is up 6.3 percent over the past year.
America's war with Iran has been a major factor in rising inflation, but the tariffs have played a significant role as well. In a study released last week, the New York Federal Reserve concluded that consumer prices would have declined slightly over the past year if not for the economic effects of the tariffs.
The tariffs have become so unpopular that not even partisanship can save them. "Among GOP-voting workers, only 3 percent select tariffs as their top priority," note Jordan McGillis and John Lettieri, policy experts from the EIG, in their write-up of the poll.
Other parts of Trump's economic agenda are not faring much better. The Trump administration has bought or seized shares of more than 30 private businesses over the past two years—ranging from major firms such as U.S. Steel to small mining companies with few customers. "The federal government's state corporatism is unprecedented," reports the Cato Institute in a new analysis of those deals.
Large majorities of workers across both major parties and all generations said they opposed the federal government taking equity stakes in American companies in the Echelon/EIG poll.
Source: Economic Innovation Group / Echelon Insights (https://eig.org/wp-content/uploads/2026/10/EIG-State-of-the-American-Worker-2026.pdf)
In short: This economic populism sure isn't very popular.
All of this is likely to be a major factor in next month's midterm elections. Regardless of how that shakes out, however, there are lessons to be drawn from this poll for both sides of the political divide.
For conservatives, these polling data should end the tariff experiment. It has proven economically damaging, and it is no longer a political winner (if it ever was).
Remember, the idea to hike tariffs and start trade wars with all of America's biggest trading partners was not some grand plan backed by careful study and thoughtful analysis. It sprung, half-baked, from the head of one man. Yes, there have been various attempts to support, in a post hoc way, Trump's desire for tariffs. All of that can, and should, be easily discarded. There is no reason to allow a lame duck president to continue to set such a politically and economically destructive path for the country.
Undoing the tariffs might also put a meaningful dent in rising prices. That should be a no-brainer after the midterms, no matter which party controls Congress.
On the left, this poll should be a reminder that Americans do not look favorably on the mixing of government and business. Democrats should promise to unwind the "equity stakes" that the federal government has taken under Trump's watch. Heading toward the 2028 presidential cycle, Democrats might want to borrow some old Republican talking points about how government shouldn't be picking winners and losers—they may find that message is still quite popular.
Yes, it's probably right to be skeptical that those things will happen. Trump's efforts to centralize economic power in the executive branch are likely to outlive his presidency—that's how these things always seem to go.
But there is a glimmer of hope here. Americans are soundly rejecting the Trump administration's big government policies.
With less than three weeks until Election Day and Republican approval numbers down, President Donald Trump is taking unorthodox measures to drum up support for the GOP. Last week, Trump sent out $90 payments to over 20 million Americans on Medicare Part B—which covers doctor visits and regular checkups. The money was made available to help seniors "pay for their Medicare Part B premiums," which cost $202 per month.
In a Truth Social post, Trump said the money is coming from "a pointless 'Slush Fund'" known as the Medicare Improvement Fund, which, though bombastic, is an accurate telling of how lawmakers have used the account.
The fund was created in 2008 "to improve program management" of Medicare. However, as a 2023 report from the Congressional Budget Office (CBO) points out, this fund has really served one purpose far above supporting Medicare: sneaky government accounting.
As the CBO wrote, "No funds have been spent by [Centers for Medicare & Medicaid Services] from either improvement fund since their establishment in 2008." Instead of using the fund to support Medicare programs, Congresses have filled up the fund with money scheduled for use only in the distant future, then siphoned that money away to other legislation. Under CBO accounting rules, canceling or redirecting future spending is a "credit" to the bill's total cost—a helpful trick for legislators who want to couch their initiatives as being affordable. This trick was used to finance nearly $21 billion of the Affordable Care Act and has been used for a scattering of legislation since.
While Trump says this disbursement is needed to help enrollees pay premiums, the timing of the announcement—weeks before the midterms—and Trump's history of using taxpayer money to win over senior citizens make the claim dubious. In the One Big Beautiful Bill Act, for instance, seniors were given a $6,000 tax deduction. Trump has also consistently defended senior-focused entitlement programs like Social Security and Medicare, which are both facing a funding cliff in the coming years. Trump siphoning off public money to turn out the electorate hasn't been limited to senior citizens either. Last month he promised to hand out $5,000 checks to all Americans—conditional upon Republican victory in the midterms.
Despite grumbling by some Democrats about Trump's decision to empty the Medicare Improvement Fund, it seems unlikely the choice will detract from Medicare's ability to provide services. The bigger concern is that the president is using his office to hand out personally signed checks to voters weeks before an election. Pre-election vote grabbing through irresponsible spending is not unprecedented, but it has rarely been so characteristic.
The fiscal ramifications of Trump's unorthodox spending are also concerning. Medicare is already teetering toward insolvency, and entitlement spending continues to balloon. Neither Congress' playbook of deceptive accounting nor Trump's vote buying will address these problems. Without raising taxes or lowering benefits, these programs cannot continue as they are.
But raising taxes and cutting benefits is no way to win an election. Trump knows this and seems perfectly willing to sacrifice America's fiscal stability for a quick boost in the polls.
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