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Tag: Budget

  • Migration money feud infiltrates EU summit

    Migration money feud infiltrates EU summit

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    BRUSSELS — EU countries are bickering over granting billions in new funds to deal with migration as asylum applications soar and backlogs pile up at the Continent’s borders. 

    Germany, which received a quarter of all EU asylum applications in 2022, specifically wants to “revitalize” the EU’s ties with neighboring Turkey, according to a senior German official — a nod to the last time the bloc faced such levels of migration. 

    Then, in 2016, the EU offered Turkey billions in exchange for the country housing thousands of Syrian refugees fleeing civil war. Now, there is a push to authorize up to €10.5 billion in new money for not just Turkey, but also countries like Libya or Tunisia, hoping it would help them prevent people from entering the EU without permission. 

    The debate has jumped onto the agenda of an EU leaders’ summit in Brussels on Thursday and Friday. And countries are sparring over whether to reference a monetary request in the meeting’s final conclusions, according to five diplomats and officials from four different countries. 

    The behind-the-scenes fight illustrates how much migration has come to dominate the political agenda. Organizers for the summit had hoped to keep the divisive migration talk to a minimum in favor of discussions on Russia, China and economic security. But with high-profile disasters like the recent migrant shipwreck near Greece and arrival figures continuing their steep climb, the heated issue is becoming increasingly hard to avoid. 

    Notably, draft conclusions for the summit, dated Wednesday evening and seen by POLITICO, still had two indirect references to the fresh migration funds: The €10.5 billion pot and another €2 billion for “managing migration” within the EU’s own borders. 

    Whether that language survives until Friday is another question. 

    Germany: Let’s talk Turkey, not money

    Germany, as always, is one of the key players in the debate — and in this instance, it is making arguments for both sides.

    On one side, Berlin wants to renew the EU’s relationship with Turkey, hoping it can take in more asylum seekers and help cut down on unauthorized border crossings. In return, the Germans want the EU to improve trade ties with the country. 

    On the other side, however, Berlin is fiercely opposing the attempt to explicitly mention money in the summit conclusions. The logic: Committing to fresh billions now would imperil upcoming talks over whether to add €66 billion to its budget. Germany wants to discuss the whole package at once, instead of approving parts of it in advance.

    As of Wednesday night, the summit conclusions draft still contained an indirect endorsement of the money.

    Germany, as always, is one of the key players in the debate — and in this instance, it is making arguments for both sides | David Gannon/AFP via Getty Images

    The document mentions “financing mechanisms” — seen as a reference to the €10.5 billion — for “the external aspects of migration.” That money would go to countries like Turkey, Libya and Tunisia, which migrants often traverse on their way to Europe. 

    There’s also an indirect reference to the €2 billion for internal EU migration management. The text calls for “support for displaced persons,” particularly from Ukraine, via “adequate and flexible financial assistance to the member states who carry the largest burden of medical, education and living costs of refugees.” Translated, that would mean more money for countries that host the bulk of Ukrainian refugees, like Poland and Germany. 

    Yet during a meeting of EU ambassadors on Wednesday, German officials urged their counterparts to cut or massively reduce both passages, according to the five diplomats and officials, who, like other officials in this story, were granted anonymity because they are not allowed to publicly discuss the talks.

    As of Wednesday night, that appeal had failed. But German Chancellor Olaf Scholz may take up the issue himself with his counterparts on Thursday.

    The German argument is that including the figures would mean EU leaders are essentially making a big step toward endorsing the full budget package — which the European Commission requested just last week — before even discussing it, two of the officials said. 

    Nevertheless, Commission President Ursula von der Leyen is expected to briefly present her €66 billion budget plan during the gathering of EU leaders on Thursday, meaning there will likely be an initial debate about the money, the officials said. 

    Von der Leyen’s plans are expected to run into resistance from a number of countries, particularly the so-called “frugal” countries, including Austria, Denmark, the Netherlands and Sweden.

    Speaking to a briefing for reporters in Berlin on Wednesday, a senior German official also voiced caution about von der Leyen’s plan.

    “One of the questions is: Is the Commission’s assessment of the situation convincing?” said the senior official, who could not be named due to the rules under which the briefing was organized.

    Time to work with Erdoğan again? 

    At the same time, the senior German official stressed Berlin’s interest in renewing the EU relationship with Turkey.

    “[Turkish President Recep Tayyip] Erdoğan has been re-elected, and this must be an opportunity for the EU to take another broad look at its relationship with Turkey,” the official said. 

    Turkish President Recep Tayyip Erdoğan | Adem Altan/AFP via Getty Images

    “For us, it’s a matter of putting EU-Turkey relations once again on the agenda … to possibly revitalize them, if all sides want to commit to this,” the official continued, adding that the European Commission and EU foreign policy chief Josep Borrell should “come back in the fall with proposals.”

    One idea could be an update of the EU’s trade rules with Turkey — a thorny issue, though, as talks between Brussels and Ankara have failed to make progress on modernizing the so-called EU-Turkey customs union for several years.

    Germany’s Scholz held a phone call with Erdoğan on Wednesday during which both leaders discussed how “to cooperate further and deepen exchanges on various cooperation issues,” according to Steffen Hebestreit, Scholz’s spokesperson. 

    Any progress in EU-Turkey relations would also require the agreement of the EU countries perpetually at odds with Turkey — Greece and Cyprus.

    At least in that sense, there seems to be progress: “We agreed to include a paragraph on Turkey and the future relations,” a Greek diplomat said.

    The latest draft conclusions from Wednesday evening ask Borrell and the Commission “submit a report” on EU-Turkey relations “with a view to proceeding in a strategic and forward-looking manner.”

    Barbara Moens, Jakob Hanke Vela, Lili Bayer, Jacopo Barigazzi and Gregorio Sorgi contributed reporting.

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    Hans von der Burchard

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  • Why the GOP Wants to Rob Gen Z to Pay the Boomers

    Why the GOP Wants to Rob Gen Z to Pay the Boomers

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    The budget cuts that House Republicans are demanding in their high-stakes debt-ceiling standoff with President Joe Biden sharpen the overlapping generational and racial conflict moving to the center of U.S. politics.

    The House GOP’s blueprint would focus its spending cuts on the relatively small slice of the federal budget that funds most of the government’s investments in children and young adults, who are the most racially diverse generations in American history.

    Those programs, and other domestic spending funded through the annual congressional-appropriations process, face such large proposed cuts in part because the GOP plan protects constituencies and causes that Republicans have long favored: It rejects any reductions in spending on defense or homeland security, and refuses to raise taxes on the most affluent earners or corporations.

    But the burden leans so heavily toward programs that benefit young people, such as Head Start or Pell Grants, also because the Republican proposal, unlike previous GOP debt-reduction plans, exempts from any cuts Social Security and Medicare. Those are the two giant federal programs that support the preponderantly white senior population.

    The GOP’s deficit agenda opens a new front in what I’ve called the collision between the brown and the gray—the struggle for control of the nation’s direction between kaleidoscopically diverse younger generations that are becoming the cornerstone of the modern Democratic electoral coalition and older cohorts that remain predominantly white and anchor the Republican base.

    The budget fight, in many ways, represents the fiscal equivalent to the battle over cultural issues raging through Republican-controlled states across the country. In those red states, GOP governors and legislators are using statewide power rooted in their dominance of mostly white and Christian nonurban areas to pass laws imposing the conservative social values and grievances of their base on issues including abortion, LGBTQ rights, classroom censorship, book bans, and even the reintroduction of religious instruction into public schools. On all those fronts, red-state Republicans are institutionalizing policies that generally conflict not only with the preferences but even the identity of younger generations who are much more racially diverse, more likely to identify as LGBTQ, and less likely to identify with any organized religion.

    Read: Why Biden caved

    The House Republicans’ plan would solidify a similar tilt in the federal budget’s priorities. Because Social Security, Medicare, and the portion of Medicaid that funds long-term care for the elderly are among Washington’s biggest expenditures, the federal budget spends more than six times as much on each senior 65 and older as it does on each child 18 and younger, according to the comprehensive “Kids’ Share” analysis published each year by the nonpartisan Urban Institute. Eugene Steuerle, a senior fellow there who helped create the “Kids’ Share” report, told me, “We are already in some sense asking the young to pay the price” by cutting taxes on today’s workers while increasing spending on seniors, and accumulating more government debt that future generations must pay off.

    Spending on children 18 and younger now makes up a little more than 9 percent of the federal budget, according to the study. But that number is artificially inflated by the large social expenditures that Congress authorized during the pandemic. By 2033, the report projects, programs for kids will fall to only about 6 percent of federal spending.

    One reason for the decline is that spending on the entitlement programs for the elderly—Social Security, Medicare, and Medicaid—will command more of total spending under the pressure of both increasing health-care costs and the growing senior population. Under current law, in 2033 those programs for seniors will expand to consume almost exactly half of federal spending, the “Kids’ Share” analysis projects.

    By protecting those programs for seniors from any cuts, and rejecting any new revenues, while exacting large reductions from programs for kids and young adults, the GOP plan would bend the budget even further from the brown toward the gray. The implication of the plan “is that children will get an even smaller slice of federal spending” than anticipated under current policies, Elaine Maag, an Urban Institute senior fellow and a co-author of the “Kids’ Share” report, told me.

    Federal spending on kids is particularly at risk because of how Washington provides it. The federal government does channel substantial assistance to kids through tax benefits, such as the child tax credit, and entitlement programs, including Medicaid and Social Security survivors’ benefits, that are affected less by the GOP proposal. But many of the federal programs that benefit kids and young people are provided through programs that require annual appropriations from Congress, what’s known as domestic discretionary spending. As Maag noted, the programs that help low-income and vulnerable kids are especially likely to be funded as discretionary spending, rather than entitlements or tax credits. “Head Start or child-care subsidies or housing subsidies are all very targeted programs,” she said.

    The GOP plan’s principal mechanism for reducing federal spending is to impose overall caps on that discretionary spending. Those caps would cut such spending this year and then hold its growth over the next nine years to just 1 percent annually, which is not enough to keep pace with inflation. Over time, those tightening constraints would result in substantially less spending than currently projected for these programs. If the GOP increased defense spending enough to keep pace with inflation, that would require all other discretionary programs—including those that benefit kids—to be cut by 27 percent this year and by almost half in 2033, according to a recent analysis by the Center on Budget and Policy Priorities, a progressive advocacy group. If the GOP also intends to maintain enough funding for veterans programs (including health care) to match inflation, the required cuts in all other discretionary programs would start at 33 percent next year and rise to almost 60 percent by 2033.

    Read: This debt crisis is not like 2011’s. It’s worse.

    As Sharon Parrott, the president of the Center on Budget and Policy Priorities, told me this week, by demanding general spending caps, the GOP does not have to commit in advance to specific program reductions that might be unpopular with the public. “What they are trying to do is put in place a process that forces large cuts without ever having to say what they are,” Parrott said.

    Federal agencies have projected that the cuts required under the Republican spending caps would force 200,000 children out of the Head Start program, end Pell Grants for about 80,000 recipients and cut the grants by about $1,000 annually for the remainder, and slash federal support for Title I schools by an amount that could require them to eliminate about 60,000 teachers or classroom aides. The plan also explicitly repeals the student-loan relief that Biden has instituted for some 40 million borrowers. Its cuts in the Temporary Assistance for Needy Families program, generally known as welfare, could end aid for as many as 1 million children, including about 500,000 already living in poverty, the Center on Budget and Policy Priorities has calculated.

    The appropriations bill that a House subcommittee recently approved for agricultural programs offers another preview of what the GOP plan, over time, would mean for the programs that support kids. The bill cut $800 million, or about 12 percent, from the Special Supplemental Nutrition Program for Women, Infants, and Children. Parrott noted that to avoid creating long waiting lists for eligibility, which might stir a more immediate backlash, the committee instead eliminated a pandemic-era program that gave families increased funding through WIC to purchase fruits and vegetables. “They are saying the country can’t possibly afford to make sure that pregnant participants, breast-feeding participants, toddlers, and preschoolers have enough money for fruits and vegetables,” she said.

    Parrott doesn’t see the GOP budget as primarily motivated by a desire to favor the old over the young. She notes that the GOP plan would also squeeze some programs that older Americans rely on, for instance by reducing funds for Social Security administration or Meals on Wheels, and imposing work requirements that could deny aid to older, childless adults receiving assistance under the Supplemental Nutrition Assistance Program.

    Instead, Parrott, like the Biden administration and congressional Democrats, believes that the GOP budget’s central priority is to protect corporations and the most affluent from higher taxes. “To me, that’s who they are really shielding,” she said.

    Yet the GOP’s determination to avoid reductions in Social Security and Medicare, coupled with its refusal to consider new revenue or defense cuts, has exposed kids to even greater risk than the last debt-ceiling standoff. Those negotiations in 2011, between then-President Barack Obama and the new GOP House majority, initially focused on a “grand bargain” that involved cuts in entitlements and tax increases along with reductions in both discretionary domestic and defense spending. Even after that sweeping plan collapsed, the two sides settled on a fallback proposal that raised the debt ceiling while requiring future cuts in both domestic and defense spending.

    The House Republicans’ determination to narrow the budget-cutting focus almost entirely to domestic discretionary spending not only means more vulnerability for programs benefiting kids, but also less impact on the overall debt problem they say they want to address. Even some conservative budget experts acknowledge that it’s not possible to truly tame deficits by focusing solely on discretionary spending, which accounts for only about one-sixth of the total federal budget. Brian Riedl, a senior fellow and budget expert at the conservative Manhattan Institute, supports Republican efforts to limit future discretionary spending but views it only as an attempt to “prevent the deficit from getting worse.”

    Riedl told me that in his analysis of long-term budget trends, he found it impossible to prevent the federal debt from increasing unsustainably without also raising taxes and significantly slowing the growth in spending on Social Security and Medicare. But, as he acknowledged, the GOP’s willingness to consider reductions in those programs has dwindled as their electoral coalition in the Donald Trump era has evolved to include more older and lower-income whites. “As the Republican electorate grew older and more blue collar, they revealed themselves as more attached to entitlements [for seniors] than previous Republican electorates,” he said.

    Trump in 2016 recognized that shift when he rejected previous GOP orthodoxy and instead   opposed cuts in Social Security and Medicare. Trump has maintained that position by publicly warning congressional Republicans against cutting the programs, and attacking Florida Governor Ron DeSantis, who entered the 2024 GOP race yesterday, for supporting such reductions in the past. Biden has also pressured the GOP to preserve Social Security and Medicare.

    Though it’s not discussed nearly as much, the GOP’s refusal to consider taxes on high earners also has a stark generational component. With the occasional exception, older Americans generally earn more than younger Americans (the top tenth of people at age 61 earn almost 60 percent more than the top tenth of those age 30). Older generations are especially likely to have accumulated more wealth than younger people, Steuerle noted. As part of the economy’s general trend toward inequality, Steuerle said, older generations today are amassing an even larger share of the nation’s total wealth than in earlier eras.

    Refusing to raise taxes on today’s affluent while cutting programs for contemporary young people subjects those younger generations to a double whammy. Not only does it mean that the federal government invests less in their health, nutrition, and education, but it also increases the odds that as adults they will be compelled to pay higher taxes to fund retirement benefits for the growing senior population.

    Although Biden also wants to avoid cuts in entitlements for seniors, his call for raising more revenue from the affluent still creates a clear contrast with the GOP. By proposing higher taxes, Biden has been able to devise a budget that protects federal spending on kids and other domestic programs while also reducing the deficit. Biden’s budget proposal achieves greater generational balance than the GOP’s because the president asks today’s affluent earners, who are mostly older, to pay more in taxes to preserve spending that benefits young people. If Biden reaches a deal with congressional Republicans to avoid default, however, their price will inevitably include some form of spending cap that squeezes such programs: the real question is not whether, but how much.

    Looming over these choices is the intertwined generational and racial re-sorting of the two parties’ electoral coalitions. As Riedl noted, especially in the Trump era, the GOP has become more dependent on older white people who are either eligible for the federal retirement programs or nearing eligibility. According to a new analysis published by Catalist, a Democratic electoral-targeting firm, white adults older than 45 accounted for just over half of all voters in the 2022 and 2018 midterm elections and just under half in the 2020 and 2016 presidential campaigns. But because those older white Americans have become such a solidly Republican bloc, they contributed about three-fifths of all GOP votes in the presidential years, and fully two-thirds of Republican votes in midterm elections.

    Democrats, in turn, are growing more reliant on the diverse younger generations. Catalist found that Democrats have won 60 to 66 percent of Millennials and members of Generation Z combined in each of the past four elections. Those two generations have more than doubled their share of the total vote from 14 percent in 2008 to 31 percent in 2020. Adding in the very youngest members of Generation X, all voters younger than 45 provided almost 40 percent of Democrats’ votes in 2022, Catalist found, far more than their overall share (30 percent) of the electorate.

    The inexorable long-term trajectory is for the diverse younger generations to increase their share of the vote while the mostly white older cohorts recede. In 2024, Millennials and Gen Z may, for the first time, cast as many ballots as the Baby Boomers and older generations; by 2028, they will almost certainly surpass the older groups. In the fight over the federal budget and debt ceiling—just as in the struggles over cultural issues unfolding in the states—Republicans appear to be racing to lock into law policies that favor their older, white base before the rising generations acquire the electoral clout to force a different direction.

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    Ronald Brownstein

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  • Sinn Féin scores record win in Northern Ireland as voters rage at DUP blockade of Stormont

    Sinn Féin scores record win in Northern Ireland as voters rage at DUP blockade of Stormont

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    DUBLIN — Sinn Féin has scaled new electoral heights in Northern Ireland. They can thank the Stormont-wrecking antics of their sworn enemies, the Democratic Unionist Party, for making it possible.

    The Irish republicans had been tipped to finish a strong first place in Northern Ireland’s council elections last Thursday, overtaking Jeffrey Donaldson’s DUP along the way. But even Sinn Fein’s wildest hopes were eclipsed as the weekend’s results built to a crescendo over a marathon two-day count.

    When final results were declared in Belfast City Hall after midnight Saturday, Sinn Féin had won 144 seats, a 39-seat gain that more than doubled expectations. Its 30.9 percent share of the vote marked a historic high, two points better even than last year’s poll-topping Northern Ireland Assembly election — a performance that should have propelled the party’s regional leader, Michelle O’Neill, into the first minister’s chair for the first time.

    But O’Neill has been denied the chance to lead a cross-community executive, as the Good Friday peace accord intended, because the Democratic Unionists — used to finishing first — have spent the past year blocking the formation of any government at Stormont. The current rules of power-sharing require both Sinn Féin and the DUP to participate.

    According to analysts and other party leaders, the DUP’s obstructionist tactics may have galvanized support with unionist die-hards — but also triggered waves of new support for their traditional enemies from voters sick of the deadlock.

    “Jeffrey Donaldson has become the greatest recruiting sergeant possible for republicans. The longer Michelle O’Neill is blocked from becoming first minister, the more voters are driven into the arms of her party,” wrote Suzanne Breen, political editor of the Belfast Telegraph.

    Social Democratic and Labour Party leader Colum Eastwood, who competes with Sinn Féin in Irish nationalist areas, said his own moderate party’s grassroots had switched to Sinn Féin in unprecedented numbers because the DUP had exhausted their patience.

    “They’re very annoyed that Michelle O’Neill hasn’t been able to become first minister,” said Eastwood, whose party — one of the architects of the Good Friday breakthrough a quarter-century ago — suffered heavy losses amid the Sinn Féin-DUP showdown.

    “They want politicians to get back to work and deal with the issues besetting our community,” Eastwood said. “Now it’s over to the DUP to get on with it.”

    Still waiting

    When or whether the DUP actually does so remains far from certain, given that its own vote held up well at Thursday’s election.

    Donaldson and other senior DUP figures have spent the past three months picking holes in the British government’s Windsor Framework, the successor post-Brexit trade deal for Northern Ireland designed to reduce — but not eliminate — EU-required checks on goods arriving from the rest of the United Kingdom. Unionists argue such checks effectively place Northern Ireland partly outside the U.K., and on a slippery slope toward a united Ireland, Sinn Féin’s ultimate goal.

    U.K. Prime Minister Rishi Sunak had hoped the Windsor Framework compromise package would have persuaded the DUP to resume cooperation at Stormont with a strengthened Sinn Féin.

    Jeffrey Donaldson said that his party’s resilient performance showed most unionists would rather have no Stormont than accept “barriers to trade between Northern Ireland and Great Britain.” | Charles McQuillan/Getty Images

    But Donaldson told reporters at Belfast City Hall that his party’s resilient performance — it won 122 of the 462 seats on Northern Ireland’s 11 councils, the exact same total as in the 2019 election — showed most unionists would rather have no Stormont than accept “barriers to trade between Northern Ireland and Great Britain.”

    “The DUP have polled strongly despite everything that has been thrown at us,” said Donaldson, who now wants Westminster to pass unspecified legislation reinforcing Northern Ireland’s constitutional ties to Britain. “The U.K. government must move to ensure that our place in the United Kingdom is not only respected, but protected in law. The mandate we’ve been given reinforces that message.”

    His immediate predecessor as DUP leader, Edwin Poots, said while others expected the party to end its Stormont sabotage now that the election was out of the way, such a move remains unlikely unless the U.K. government finds extra support for Stormont’s ailing finances.

    “We’re ready to go back but we need to get more than what’s currently on the table,” Poots said. “If we went back into the assembly and executive in the morning, with this budget, the first task of every minister would be to implement cuts. It’s imperative that we get a package to ensure this will not be the case.”

    O’Neill, who spent much of the weekend joining in jubilant scenes with Sinn Féin activists, expressed exasperation that the DUP might string others along indefinitely for many months longer.

    “I am not accepting the autumn as a timeframe for a restored executive, as a lot of people are suggesting. There shouldn’t be any more delays. Let’s do it Monday morning,” she said.

    Joining O’Neill in Belfast was Sinn Féin’s overall leader, Mary Lou McDonald, a Dubliner whose eye remains on a bigger prize: leading a government in the neighboring Republic of Ireland for the first time.

    Sinn Féin, the only party contesting elections in both parts of Ireland, wants as part of its Irish unity strategy to gain the reins of power in both jurisdictions simultaneously. For decades a fanciful dream — and a unionist nightmare — this scenario has become a probability.

    The party’s growth to become the top party in Northern Ireland is matched south of the border by McDonald’s successful efforts to build Sinn Féin into the dominant opposition party in Dáil Éireann, Ireland’s parliament. It has topped every opinion poll for years and looks likely to win the next general election, which must happen by 2025 but could come sooner.

    As McDonald and O’Neill together ascended the steps of Belfast City Hall, Sinn Féin activists cheered their party’s rising expectations of gaining power in both the Dáil and Stormont, with McDonald as prime minister in Dublin and O’Neill as first minister in Belfast — if the DUP ever relents.

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    Shawn Pogatchnik

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  • Biden, McCarthy to meet in person Monday after ‘productive’ debt-ceiling talk

    Biden, McCarthy to meet in person Monday after ‘productive’ debt-ceiling talk

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    WASHINGTON — President Joe Biden will meet in person Monday with House Speaker Kevin McCarthy about averting an economy-wrecking federal default, and the Republican leader expressed cautious optimism about a possible debt ceiling compromise as Washington races to raise America’s borrowing limit before the funds could be depleted early next month.

    The leaders spoke by phone Sunday while the president was returning home on Air Force One after the Group of Seven summit in Japan. McCarthy, R-Calif., told reporters at the Capitol that the call was “productive” and that the on-again, off-again negotiations between his staff and White House representatives would resume in the evening.

    Both sides have said progress was being made but that they remain far apart, and talks had lapsed for part of the weekend. Biden’s Treasury Department has said it could run out of cash as soon as June 1, and Treasury Secretary Janet Yellen said Sunday, “I think that that’s a hard deadline.”

    Read on: Biden says in Hiroshima press conference that Republicans must ‘move from their extreme positions’ on debt limit

    McCarthy said after his call with Biden that “I think we can solve some of these problems if he understands what we’re looking at.” The speaker added, “But I’ve been very clear to him from the very beginning. We have to spend less money than we spent last year.”

    McCarthy emerged from that conversation sounding upbeat and was careful not to criticize Biden’s trip, as he had before, suggesting the president had used his time overseas to insist on Democratic positions that made compromise harder. He did caution, “There’s no agreement on anything.”

    The speaker also gently praised the White House’s negotiating team, saying the sides may have “philosophical” disagreements, but could reach “common ground.”

    “We’re looking at how do we have a victory for this country. How do we solve problems,” McCarthy said. He said he did not think the final legislation would remake the federal budget and the country’s debt, but at least “put us on a path to change the behavior of this runaway spending.”

    The White House confirmed the Monday meeting and late Sunday talks but did not elaborate on the leaders’ call.

    Earlier, Biden used his concluding news conference in Hiroshima, Japan to warn House Republicans that they must move off their “extreme positions” over raising the debt limit and that there would be no agreement to avoid a catastrophic default only on their terms.

    Biden made clear that “it’s time for Republicans to accept that there is no deal to be made solely, solely, on their partisan terms.” He said he had done his part in attempting to raise the borrowing limit so the government can keep paying its bills, by agreeing to significant cuts in spending. “Now it’s time for the other side to move from their extreme position.”

    Biden had been scheduled to travel from Hiroshima to Papua New Guinea and Australia, but cut short his trip in light of the strained negotiations with Capitol Hill.

    Even with a new wave of tax revenue expected soon, perhaps giving both sides more time to negotiate, Yellen said on NBC’s “Meet the Press” that “the odds of reaching June 15, while being able to pay all of our bills, is quite low.”

    GOP lawmakers are holding tight to demands for sharp spending cuts, rejecting the alternatives proposed by the White House for reducing deficits.

    Republicans want work requirements on the Medicaid health care program, though the Biden administration has countered that millions of people could lose coverage. The GOP additionally introduced new cuts to food aid by restricting states’ ability to waive work requirements in places with high joblessness. That idea, when floated under President Donald Trump, was estimated to cause 700,000 people to lose their food benefits.

    GOP lawmakers are also seeking cuts in IRS money and asking the White House to accept parts of their proposed immigration overhaul.

    The White House has countered by keeping defense and nondefense spending flat next year, which would save $90 billion in the 2024 budget year and $1 trillion over 10 years.

    “I think that we can reach an agreement,” Biden said, though he added this about Republicans: “I can’t guarantee that they wouldn’t force a default by doing something outrageous.”

    Republicans had also rejected White House proposals to raise revenues in order to further lower deficits. Among the proposals the GOP objects to are policies that would enable Medicare to pay less for prescription drugs and the closing of a dozen tax loopholes. Republicans have refused to roll back the Trump-era tax breaks on corporations and wealthy households as Biden’s own budget has proposed.

    Biden, nonetheless, insisted that “revenue is not off the table.”

    For months, Biden had refused to engage in talks over the debt limit, contending that Republicans in Congress were trying to use the borrowing limit vote as leverage to extract administration concessions on other policy priorities.

    But with the June 1 potential deadline looming and Republicans putting their own legislation on the table, the White House launched talks on a budget deal that could accompany an increase in the debt limit.

    Biden’s decision to set up a call with McCarthy came after another start-stop day with no outward signs of progress. Food was brought to the negotiating room at the Capitol on Saturday morning, only to be carted away hours later. Talks, though, could resume later Sunday after the Biden-McCarthy conversation.

    The president tried to assure leaders attending the meeting of the world’s most powerful democracies that the United States would not default. U.S. officials said leaders were concerned, but largely confident that Biden and American lawmakers would resolve the crisis.

    The president, though, said he was ruling out the possibility of taking action on his own to avoid a default. Any such steps, including suggestions to invoke the 14th Amendment as a solution, would become tied up in the courts.

    “That’s a question that I think is unresolved,” Biden said, adding he hopes to try to get the judiciary to weigh in on the notion for the future.

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  • You May Think You Need Money to Have Style, But These 30 Picks Prove Otherwise

    You May Think You Need Money to Have Style, But These 30 Picks Prove Otherwise

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    Lately, when it comes to my monthly budget, I have been prioritizing travel, concerts, and other experiences over fashion. It’s not always easy, especially after being exposed to so many stylish pieces through my work as a fashion editor. One way I like to satisfy my fashion cravings while budgeting is to keep my eye out for stylish, cheap finds that will nicely round out my closet. Thankfully, the sales happening at the moment are abundant with cool under-$100 options.

    While I am often tempted to buy pieces on an absolute whim, I do my best to make meaningful purchases for the current season and those on the horizon. One way to do this is by using the three-three test, which was brought to my attention by our market director, Bobby Schuessler. This helps me determine exactly how and how often I will wear the piece in question before committing. This past week, I came across 30 pieces that are both affordable and spot-on for spring and beyond. Scroll ahead to shop my top picks of the moment.

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    Jennifer Camp Forbes

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  • My Mom and Friends Want New Dresses—I Sent These 30 Under-$100 Styles

    My Mom and Friends Want New Dresses—I Sent These 30 Under-$100 Styles

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    As we head deeper into spring and summer is on the horizon, many people in my life have their sartorial thoughts laser-focused on pretty dresses. I get it. There’s something so easy (and chic!) about tossing on a lovely dress, adding a pair of sandals, and heading out the door. On that note, my mom and a few of my friends recently asked for dress recommendations. To note, my mom wanted a new floral silhouette that feels modern and current. One of my friends actually wanted advice on a cool LBD that could work for a few events she has coming up.

    Below you’ll find a few of the silhouettes I suggested that actually happen to ring in under $100. I also rounded up a range of other styles I’m loving from retailers like Nordstrom, J.Crew, and H&M that are forward and look expensive, but don’t have those crazy-high price tags.

    Keep scrolling to check out the best affordable dresses for spring and summer.

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    Bobby Schuessler

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  • What’s your retirement ‘number’? How to figure it out.

    What’s your retirement ‘number’? How to figure it out.

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    There’s a lot of numbers to weigh when it comes to retirement—but what’s your number? 

    Working Americans think they need $1.1 million to retire, according to the Schroders 2023 U.S. Retirement Survey, but how does each individual really figure out what they will need in a retirement that could last decades?

    “It is very difficult for someone at 35 to have any comprehension about what life at 65 will cost,” said Robert Gilliland, managing director and senior wealth adviser with Concenture Wealth Management. “You have no comprehension what $100 will buy in 30 years. It gets easier to imagine as you get closer to retirement but you need to start planning.”

    Read: What’s the magic number for retirement savings? Americans say it’s more than $1 million, but most will fall short of that goal.

    “We have people call us on a weekly basis to ask ‘do we have enough to retire?’ Yes, but it depends on what lifestyle you want,” Gilliland said. “We sit down with them, talk about the lifestyle they’re living now and the lifestyle they want to live if working was optional.”

    Start with a budget

    In the information gathering phase, you want to start with a budget. Look at your current expenses for everything from housing, food, utilities and transportation to extras like travel, gifts, and entertainment. You can keep a simple log or use more sophisticated budgeting software, but the key to the process is honesty, said John Leonard, vice president, client adviser with Spinnaker Trust. 

    “Be honest with yourself on what you really spend. It may surprise you,” Leonard said. “And think about your goals or what lifestyle do you want to live? Do you want to travel, move to a different state? What do you want your retirement to look like?”

    By retirement, you’ve likely paid down all or most of your debt and you’re no longer saving for retirement. So that will free up those funds. There will be some reduction in expenses, such as commuting costs or clothes costs associated with work, and you’ll likely be in a different tax situation with lower earnings, said Matt Fleming, wealth adviser executive with Vanguard.

    Plan for the long haul

    Plan for retirement to last several decades and base your budget around living to age 100.

    “You don’t want to plan for the average life expectancy. You want to plan conservatively and plan for expenses through age 100,” Fleming said. 

    Next, look at what potential sources of income you might have in retirement. That includes your 401(k), IRAs, pensions, savings and Social Security, plus any additional income streams such as rental properties, annuities or inheritance. Also, this is a good time to check on your insurance policies. To figure out your Social Security benefits, use the Social Security website at SSA.gov. 

    “Get to know your inflows and outflows,” said Fleming said.

    Vanguard estimates people should expect to have 75% to 85% of their preretirement income for retirement years, Fleming said.

    Another rule of thumb is the 4% rule, but that has evolved over time and may be lower now—as low as 2.5% to 3%, according to Gilliland. The original 4% benchmark suggested that a $1 million in savings and investments would allow you to spend an inflation-adjusted $40,000 each year in retirement with minimal odds of outliving your money. 

    Read: The 4% retirement spending rule may be too high. Could you get by on 1.9%?

    Social Security questions

    As far as whether to include Social Security in your planning, it depends on your age, experts said.

    “For those close to retirement, Social Security confidence is higher. For early accumulators just starting out in their retirement savings, we have little confidence Social Security will exist in a meaningful way,” Fleming said. “It’s better to overfund your plan than underfund.”

    Social Security’s combined trust funds will become depleted in 2034, with 80% of benefits payable at that time. The issue of how to “fix” Social Security has grabbed headlines in recent months with President Biden vowing to protect Social Security and Medicare and some politicians suggesting changes to the system. 

    Read: Social Security is now projected to be unable to pay full benefits a year earlier than expected

    “For those 45 and older, they will likely have Social Security. Generally, for those 35 and younger, we don’t talk about Social Security,” Gilliland said. “There will always be some form of Social Security. Politicians will want to be re-elected. Some form of Social Security will always be there—but how meaningful it will be, I don’t know.”

    Other factors to consider in budgeting include healthcare costs, travel expenses or helping with college tuition for grandchildren. 

    “People end up spending more in the first five to 10 years of retirement than they though they would—they’re active, traveling, involved with grandkids. They have an active lifestyle. Then spending goes down a bit until healthcare costs kick in,” Gilliland said 

    “People need to be aware and conscious of spending in this time,” Leonard said. “Put your expenses in buckets in terms of needs, wants and wishes.”

    Healthcare costs

    Weigh factors such as getting Medicare at 65, and the impact of long-term care costs and the estimated $315,000 the average couple is expected to spend on healthcare alone in retirement, according to Fidelity Investment’s 2022 report.

    Gilliland said to plan for healthcare costs to grow at about 7% a year. Family history and your own health should also shape how you budget for healthcare, he said. 

    For those who haven’t started saving for retirement—don’t wait. Start now, no matter how small. Eventually, work toward a goal of putting 12% to 15% of your pay toward retirement, said Fleming.

    “The earlier you start, the better. Stick to a plan and revisit it on an annual basis. Keep checking in and rein in your spending if you’re not on track,” Leonard said. “Be conservative and lean on the side of caution.”

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  • Limited PR Budget? Here’s How Employee Advocacy Can Help. | Entrepreneur

    Limited PR Budget? Here’s How Employee Advocacy Can Help. | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    Startups and small businesses know that creating effective PR and marketing strategies can be challenging, especially when working with limited budgets. Traditional advertising can be expensive, and reaching new customers through social media can take time and effort. However, there is a solution that you may have yet to consider: employee advocacy.

    Explore how employee advocacy can help you overcome the challenges of limited budgets by turning your employees into powerful advocates for your business. I will discuss employee advocacy, why it’s essential and how you can implement a successful employee advocacy program for your business.

    Related: Employees Are Your Biggest Brand Advocates

    What is employee advocacy?

    Employee advocacy encourages employees to promote your business through their personal and professional networks. This can include sharing your company’s content on social media, attending industry events and conferences to represent your brand and referring new customers or clients to your business.

    When your employees become advocates for your business, they can help increase brand awareness, boost engagement on social media and even drive sales. But employee advocacy is about more than just getting your employees to talk about your business. It’s about building a culture of engagement and empowerment that benefits your employees and business.

    Why is employee advocacy important?

    There are several reasons why employee advocacy is essential for your business. Here are just a few:

    1. Trust: According to Edelman’s Trust Barometer, people trust employees more than they trust CEOs, journalists or government officials. Employees sharing positive messages about your business can help build trust with potential customers.

    2. Reach: Your employees have networks of friends, family and professional connections. When they share your content, they can help extend your reach to new audiences.

    3. Authenticity: People are more likely to believe recommendations from people they know and trust. When your employees share their experiences working for your business, it can help build an authentic and relatable brand image.

    4. Engagement and satisfaction: When your employees feel empowered to share their opinions and ideas about your business, it can help increase their engagement and job satisfaction.

    Related: Here’s How Employee Advocacy Benefits Brands

    How can you encourage employee advocacy?

    Encouraging your employees to become advocates for your business can be a challenge, but there are several strategies you can use to make it happen:

    1. Provide training: Many employees may feel uncomfortable sharing information about your business on social media or in other settings. Providing training on social media best practices and company messaging can help build their confidence and expertise.

    2. Recognize and reward participation: Recognizing and rewarding employees participating in your advocacy program can help incentivize others to get involved. Consider offering prizes or other incentives for employees who refer new customers or share a certain number of social media posts.

    3. Make it easy: Provide your employees with pre-written social media posts, email templates and other content they can share with their networks. This can make it easier for them to participate in your advocacy program without feeling like they need to create content from scratch.

    How can employees connect with customers and share their knowledge?

    One of the most significant advantages of employee advocacy is that it lets employees connect with customers personally. Employees who share their experiences and insights about your business can build trust and establish relationships with potential customers.

    Here are a few ways that your employees can connect with customers and share their knowledge:

    1. Customer service: Your employees who work in customer service can share their knowledge and expertise with customers with questions or concerns. This can help build trust and establish a reputation for excellent customer service.

    2. Industry events and conferences: Send your employees to events and conferences to represent your brand and share their knowledge with others in your industry. This can help position your business as a thought leader and build relationships with potential customers.

    3. Internal knowledge sharing: Encourage your employees to share their knowledge and expertise. This can help build a culture of collaboration and innovation within your business, ultimately benefiting your customers.

    Related: 5 Ways to Make Your Employees Your Greatest Brand Advocates

    Measuring the success of your employee advocacy program

    Measuring the success of your employee advocacy program is essential to ensure that you are achieving your goals and getting the most out of your investment. Here are a few metrics you can track to measure the success of your program:

    1. Engagement: Track the number of employees participating in your program and the frequency of their participation. You can also track engagement on social media by monitoring the number of likes, comments and shares on your employees’ posts.

    2. Reach: Track the number of people reached through your employees’ social media posts and other advocacy activities.

    3. Referrals: Track the number of new customers or clients referred to your business by your employees.

    4. Sales: If your employee advocacy program is focused on driving sales, track the sales generated through your program.

    By tracking these metrics, you can measure the success of your employee advocacy program and adjust as needed to ensure that you are getting the most out of your investment.

    The saying goes, “When employees win, we all win.” This rings true when it comes to employee advocacy. When employees are willing to speak highly of their company, its products or services, and its overall mission, it can significantly impact its success.

    Companies that recognize and value their employees’ advocacy efforts are more likely to attract and retain top talent while reaping the benefits of increased brand awareness and revenue. In this way, when employees win, we all win.

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    Diana Gauthier

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  • New York’s $229B spending plan to increase minimum wage | Long Island Business News

    New York’s $229B spending plan to increase minimum wage | Long Island Business News

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    Lawmakers in Albany passed a $229 billion spending plan that will increase the state’s minimum wage, tweak its bail laws and attempt to curb illegal and unlicensed marijuana shops.

    New York Gov. Kathy Hochul will sign the 10 bills into law Wednesday, according to her office.

    Negotiations between the governor and her fellow Democrats who control the Legislature produced a deal late Tuesday that is packed with compromises, including many between the party’s left and center.

    Under one of the bills, the minimum wage would increase to $17 in New York City and its suburbs, and $16 elsewhere in the state by 2026, with future hikes pegged to inflation.

    Lawmakers also approved a revision of the state’s bail law that will give judges more discretion to jail certain criminal defendants before trial unless they are able to come up with cash guaranteeing their return to court.

    Hochul insisted on the changes despite an outcry from some liberal Democrats who see it as partially rolling back changes approved in 2019 that eliminated pretrial incarceration for most nonviolent offenses.

    Another bill gives state regulators power to confiscate marijuana products from unlicensed pot shops, which have proliferated since the state legalized recreational marijuana.

    The budget will also increase the state’s cigarette tax by $1, to $5.35, though lawmakers rejected Hochul’s proposed ban on menthol cigarettes.

    The votes came a little over a month past the initial April 1 deadline, with budget talks largely held up over the changes to the bail law and other policy issues. In New York, the state budget often serves as a vessel for passing major policy legislation.

    “

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  • NY state budget delayed again amid talks on bail, housing | Long Island Business News

    NY state budget delayed again amid talks on bail, housing | Long Island Business News

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    New York state lawmakers passed another weeklong extension for the state’s budget Monday to ensure state operations run undisrupted and workers get paid as budget negotiations continue.

    State Comptroller Thomas DiNapoli highlighted the need for lawmakers to push the deadline yet again when he sent a letter to Gov. Kathy Hochul on Friday urging her to take action to ensure 83,000 state workers get paid in time for the next payroll cycle.

    State lawmakers will not be paid themselves until a budget is passed, DiNapoli’s office said, and it is not clear how long it’ll take Democratic legislative leaders to reach an agreement.

    The legislators missed the original April 1 deadline for adopting a state budget because of disagreements over the governor’s proposals to change bail rules and create new housing.

    There has been “zero movement in discussions” on any other issues besides bail and housing in a state budget that is now more than a week late, state Assembly Speaker Carl Heastie told reporters on Monday.

    “I don’t believe that we should be doing policy on budgets, I’ve been very clear on that,” Heastie said.

    Hochul, a Democrat, said Saturday during an Easter celebration that although it will take additional time to solidify a final budget, she’s “confident” that progress is being made.

    With a second extension, the Legislature would have through April 17 to either pass a budget or extend the process again.

    Senate Republican Leader Rob Ortt called disagreements among the Democratic leaders “a sticking point.”

    “New Yorkers have suffered enough by Democrat policies making our state less affordable and less safe,” he said.

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    The Associated Press

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  • Biden salutes a Good Friday Agreement that just isn’t working any more

    Biden salutes a Good Friday Agreement that just isn’t working any more

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    BELFAST — President Joe Biden arrives in Northern Ireland on Tuesday to salute the 25th anniversary of its U.S.-brokered peace accord. But it will be a hollow celebration.

    Power-sharing between British unionists and Irish nationalists, the central vision of the Good Friday Agreement of 1998, is failing.

    Northern Ireland has for nearly a year had no elected government at Stormont, the grand parliament building overlooking Belfast. It has no annual budget either — only red ink, rising in a sea of dysfunction. And thanks to Brexit, the U.K.’s most socially divided region this month lost tens of millions in annual European Union funds that had sustained the poorest communities.

    Northern Ireland’s fiscal council, created two years ago to advise Stormont following a previous government shutdown, estimates an extra £808 million is needed this year just to keep existing services running at a time of rising energy bills and wage demands.

    Instead, the British government in London wants immediate spending cuts topping £500 million. Its failure to deliver a 2023 budget in time for the new fiscal year, or to fulfil pledges to match now-departed EU funds, have left local hospitals, schools and community groups scrambling for services to curtail and staff to cut.

    Who slashes spending when there’s no bona-fide government? Emergency legislation laid in Westminster places this burden on 10 unelected permanent secretaries — senior civil servants who were employed to advise ministers neutrally, not take direct political decisions.

    With finances running low, the education department has already ended holiday meal subsidies for schoolchildren from poor households — nearly a third of all students. Other departments are braced for cuts averaging 6 to 10 percent. Those drawing up the cuts are incensed.

    “I shouldn’t be forced to play the role of minister. It’s an affront to democracy and it’s politically indefensible,” one of the permanent secretaries told POLITICO.

    “Locally elected ministers must be taking these deeply consequential decisions if the power-sharing element of the Good Friday Agreement is to mean anything any more,” said the civil servant, who spoke on condition they were not identified because they traditionally do not talk on the record to journalists.

    “As long as power-sharing is not working, London needs to take its own responsibilities seriously. Its refusal to act in a timely fashion is making matters needlessly worse. We’re doing damage to so many lives. It’s truly shameful.”

    The U.K. government insists it’s right to expect sharp cuts now, arguing the financial problems were created by years of divided, indecisive Stormont governments that failed to take other tough financial decisions.

    “We’ve inherited an enormous black hole,” said Steve Baker, a minister in the U.K.’s Northern Ireland Office. “It hasn’t arisen overnight. It is the product of many years of financial mismanagement, and often the expectation of bailout.”

    Notorious DUP

    Baker places primary blame on the Democratic Unionists, the main pro-British party in Northern Ireland, who refused to form a new unity government with the Irish republicans of Sinn Féin following last year’s Stormont assembly election.

    The Democratic Unionists say they will indefinitely obstruct Stormont in protest at the U.K.’s Brexit treaty with the EU. It keeps Northern Ireland, unlike the rest of the U.K., still subject to EU goods rules. Since 2021, that policy has kept cross-border trade with the Republic of Ireland flowing freely — but at the price of complicated new controls on goods arriving from Britain.

    Unionists fear, and nationalists hope, that these shifting trade winds will eventually help push Northern Ireland out of the U.K. and into the arms of the republic.

    After two years of diplomatic wrangling, the U.K. government and European Commission six weeks ago published a wide-ranging agreement, the Windsor Framework, that vastly reduced EU-required checks on British goods arriving at Northern Irish ports. London and Brussels voiced hopes this would be enough to revive Stormont.

    But the famously stubborn DUP — which grew to become the largest unionist party specifically because it rejected the Good Friday deal and opposed compromise with Sinn Féin — is holding out for more, and still won’t re-enter Stormont alongside its adversaries.

    Once committed to Northern Ireland’s violent overthrow and abolition, Sinn Féin topped last year’s election ahead of the DUP for the first time, meaning its regional leader — party vice president Michelle O’Neill — should be entitled to the top Stormont post of first minister. The DUP’s loss of top-dog status has increased unionist unease that Northern Ireland’s bonds with Britain could be irreversibly fraying.

    The center cannot hold

    Moderate politicians blame both extremes for making Northern Ireland ungovernable. They suggest that power-sharing rules drafted a generation ago no longer work in today’s hardened political landscape.

    They argue the central requirement for “mandatory coalition” between unionist and nationalist forces should be eased. The policy effectively gives the largest party from each sectarian bloc — for the past two decades the DUP and Sinn Féin — the power to block the formation of any government. As a result, the hard liners have taken turns periodically shutting down Stormont over the past decade.

    These rules have a particularly perverse impact on Northern Ireland’s most compromise-minded party, Alliance, which refuses to define itself as either British unionist or Irish nationalist — and is treated as a power-sharing irrelevance as a result.

    Alliance was a fringe player back in 1998 but made the biggest gains in last May’s election, finishing third with 17 assembly seats to Sinn Féin’s 27 and the DUP’s 25. Yet instead of Alliance becoming a coalition kingmaker, the current power-sharing rules mean its nonsectarian votes don’t count at all.

    Some suggest Alliance leader Naomi Long could sue the British government to force reform.

    Alliance Party leader Naomi Long says the Good Friday Agreement’s power-sharing rules explicitly permit periodic reviews of the system | Paul Faith/AFP via Getty Images

    “I don’t believe that our votes counting for less than other people is legal,” Long said, citing legal advice that found the prevailing rules violate European human rights law. “We are willing to challenge what is a fundamental inequality at the heart of our government.”

    Long says she hopes such a confrontation won’t be necessary, emphasizing that the Good Friday Agreement’s power-sharing rules explicitly permit periodic reviews of the system.

    Time for a new deal?

    Bertie Ahern, the former Irish prime minister who worked alongside Britain’s Tony Blair in 1998 to achieve the Good Friday breakthrough, also believes the time for dumping “mandatory coalition” is fast approaching. In its place, as advocated by recent think tank papers exploring ways to save Stormont, would be a voluntary coalition — which Ahern pointedly describes as “what happens in a democracy.”

    Such a change would mean Sinn Féin and the DUP retain rights, as the largest parties on either side of the divide, to lead a Stormont coalition together. But should either one balk, they could no longer block the formation of a different government combination. This would open the door for more moderate politicians to represent their communities once again.

    But while Sinn Féin has said it would be open to talks on making the rules more flexible, the DUP has been quick to rule out the surrender of its veto.

    For the journalist who famously broke the news of the Good Friday Agreement a quarter-century ago, Stormont’s ongoing inability to build a stable culture of partnership has made this week’s anniversary bittersweet.

    Stephen Grimason, at that time BBC Northern Ireland’s political editor, became Stormont’s chief spin doctor for 15 years. He worked alongside a string of DUP and Sinn Féin ministers who, in his eyes, too often ducked the difficult decisions that would have delivered strong, reforming government.

    “Looking back, I have this emptiness in the pit of my stomach about all the opportunities we had,” he told the Belfast Telegraph last week. “We missed every single one of them.”

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    Shawn Pogatchnik

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  • Rishi Sunak picks his way through budget minefield

    Rishi Sunak picks his way through budget minefield

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    LONDON — “Better than the last guy” might not be quite the tagline every world leader hopes for. It could yet be Rishi Sunak’s winning formula.

    The British prime minister, swept into office late last year by wave after wave of Tory psychodrama, has cleared several major hurdles in the space of the past month. His success has even sparked a shocking rumor in Westminster that — whisper it — he might actually be quite good at his job. 

    That was the murmur among hopeful Conservative MPs ahead of this week’s U.K. budget, anyway — many of them buoyed by the PM’s recent moves on two long-running sources of angst in Westminster.

    First came an apparent resolution to the intractable problem of post-Brexit trade arrangements in Northern Ireland. Sunak’s so-called Windsor Framework deal with Brussels landed to near-universal acclaim.

    A week later, Sunak unveiled hard-hitting legislation to clamp down on illegal migration to the U.K., coupled with an expensive deal with France to increase patrols across the English Channel. Tory MPs were delighted. The Illegal Migration Bill sailed through parliament Monday night without a single vote of rebellion.

    Then came Wednesday’s annual budget announcement, with Sunak hoping to complete an improbable hat trick. 

    It started well, with Chancellor Jeremy Hunt making the big reveal that the U.K. is no longer expected to enter recession this year, as had been widely predicted.

    But a series of jaw-droppers in the budget small print show the scale of the challenge ahead. 

    The U.K.’s overall tax take remains sky-high by historic standards — an ominous bone of contention for skeptical Tory MPs and right-wing newspapers alike. Meanwhile, millions of Britons’ living standards continue to fall, thanks to high fuel bills and raging inflation. U.K. growth forecasts remain sluggish for years to come.

    “He’s chalking up some wins,” observed one former party adviser grimly, “because he’s going to need them.”

    ‘Workmanlike’

    Among all but the bitterest of Sunak’s Tory opponents, there is a palpable sense of relief about the way he has approached his premiership so far.

    “It doesn’t mean everything will suddenly turn to gold,” said Conservative MP Richard Graham, a longtime Sunak-backer. “But like Ben Stokes and England’s cricket team, his quiet self-confidence may change what the same team believes is possible.” 

    Nicky Morgan, a Conservative peer and former Treasury minister, praised a “workmanlike” budget that would reassure voters and the party there was a “firm hand on the tiller” after the “turmoil” of the preceding year with two prime ministers stepping down, Boris Johnson and then Liz Truss.

    UK Chancellor Jeremy Hunt meets children during a visit to Busy Bees Battersea Nursery in south London after delivering his Budget earlier in the day | Stefan Rousseau/POOL/AFP via Getty Images

    Most of Wednesday’s biggest announcements, including an extra £4 billion for childcare and a decision to lift the cap on pensions allowances, were either trailed or leaked in advance. This may have made for a predictable budget speech, but as Morgan put it: “I think that’s probably what businesses and the public need at the moment.”

    An ex-minister who did not originally support Sunak for leader said that the general tone of the budget, together with the Northern Ireland deal and small boats legislation, meant that “increasingly it’s hard for hostile voices to pin real failure on Rishi.”

    Others, however, fear key announcements could yet unravel. An expensive change to pension taxes was instantly savaged by critics as a “giveaway for the 1 percent.” Headline-grabbing back-to-work programs and an expansion of free childcare will take years to kick in.

    Hiking corporation tax was the “biggest mistake of the budget,” Truss ally and former Cabinet minister Jacob Rees-Mogg complained.

    Doing the hard yards

    Observers note that in the wake of the rolling chaos under Truss and Johnson, the bar for a successful government has been lowered.

    “[Sunak] could stand at the podium and soil himself, and he’d be doing a better job than his predecessors,” noted one business group lobbyist on Wednesday evening, having watched budget day unfold.

    But even Sunak’s fiercest critics praise his work rate and attention to detail, in sharp contrast to Johnson. Most accept — grudgingly — he has set up an effective Downing Street operation.

    Having returned from his Paris summit last Friday evening, the PM kicked off budget week with a whirlwind trip to the west coast of California to launch a defense pact with the U.S. and Australia, arranging a bank bailout along the way. He landed back in the U.K. less than 24 hours before Hunt unveiled the annual spending plan.

    “It turns out working like an absolute maniac and being forensic is quite useful,” one of his ministers said. 

    Another Tory MP added: “He’s got the brainpower and will do the hours. He’s not good at barnstorming politics or old school dividing lines — but he is good for the politics we have right now.”

    There has also been a clear effort to run a tighter ship behind the scenes at No. 10. One veteran of Johnson’s Downing Street said the atmosphere seemed “calm” in comparison.

    There are tentative signs that voters are starting to notice.

    James Johnson, who ran a recent poll by JL Partners which showed Sunak’s personal ratings are on the up, said the PM’s growing reputation as a “fixer” seems to be behind his recent rally, and that the biggest increase on his polling scorecard was on his ability to “get things done.” 

    It remains to be seen if this will shift the dial on the Tory Party’s own disastrous ratings, however, which languish some 25 points behind the opposition Labour Party. “Voters have clearly lost trust in the Tories,” Johnson said. “But if government can deliver … I would expect it to feed through.”

    Anthony Browne, a Tory MP elected in 2019, expressed hope that Sunak had begun “changing the narrative” which in turn “could restore our right to be heard.”

    Trouble ahead?

    Sunak will be well aware that plenty of recent budgets — not least Truss’ spectacular failure last September — have unraveled in the 72 hours after being announced.

    And while expanding free childcare, incentivizing business investment and ending the lifetime pensions allowance were all crowd-pleasers for his own MPs, they were not enough to conceal worrying subheadings.

    The tax take is predicted to reach a post-war high of 37.7 percent in the next five years, while disposable incomes are hit by fiscal drag pulling 3.2 million people into higher tax bands. Right-wing Tories are not impressed.

    Ranil Jayawardena, founder of the Conservative Growth Group of backbench MPs, described it in a statement as “an effective income tax rise,” which will be “a concern to many.”

    Net migration is set to rise to 245,000 a year by 2026-27, and will add more people to the labor force than all the measures intended to make it a “back to work” budget, according to the Whitehall’s fiscal watchdog, the Office for Budget Responsibility (OBR). The message is not one Conservative MPs want to hear.

    Already singled out by Labour’s Keir Starmer as a “huge giveaway to the wealthiest,” scrapping the lifetime allowance on pensions will cost £835 million a year by 2027-28 while benefiting less than 4 percent of workers. Conservative MPs reply that NHS doctors are one of the main groups to benefit. 

    Perhaps most worrying of all, the government’s own budget expects living standards to fall by 6 percent this year and next — less than the 7 percent fall predicted in November but still the largest two-year fall since records began in the 1950s.

    There are some problems that can’t be solved by pulling an all-nighter. Ironically for Sunak, whose career was made in the Treasury, his may prove to be the state of the U.K. economy. 

    Rosa Prince, Stefan Boscia and Dan Bloom contributed reporting.

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    Esther Webber, Eleni Courea and Emilio Casalicchio

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  • EU nears deal to restock Ukraine’s diminishing ammo supplies

    EU nears deal to restock Ukraine’s diminishing ammo supplies

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    BRUSSELS — The EU is finalizing a €2 billion deal to jointly restock Ukraine’s dwindling ammunition supplies while refilling countries’ stocks, according to documents obtained by POLITICO. 

    The plan has two major elements.

    First, the EU will spend €1 billion to partially reimburse countries that can immediately donate ammunition from their own stockpiles. Secondly, countries will work together to jointly purchase €1 billion in new ammunition — the idea being that together they can negotiate bigger contracts at a lower price-per-shell.

    EU ambassadors will discuss the proposal — prepared by the EU’s diplomatic wing, the European External Action Service — during a meeting on Wednesday.

    The scheme — which POLITICO first reported on earlier this month — has come together rapidly in recent weeks in response to Ukraine’s pleas for more ammunition, specifically the 155-millimeter artillery shells it desperately needs to both hold territory and launch a spring counteroffensive.

    And the figures, one of the documents notes, respond “to a specific request made by the Ukrainian minister of defense.”

    The numbers are stark. 

    Estonia, which helped start the conversation in February about how the EU could jointly help fill a looming munitions shortage, has estimated that Russia is burning through 20,000-60,000 shells per day while Ukraine is trying to judiciously only use between 2,000 and 7,000.

    Covering that figure will not come easy — or cheap. 

    Thus far, EU countries have only provided Ukraine with 350,000 155-millimeter shells in total, with the EU spending €450 million on partial reimbursements, said one EU official, speaking on the condition of anonymity to discuss the sensitive topic. But the official pegged the cost for each new shell at €4,000, meaning costs are growing.  

    To cover both the losses of countries dipping into their stockpiles and funding new ammunition buys, the EU is tapping the so-called European Peace Facility. The little-known fund sits outside of the EU’s normal budget, giving officials the flexibility to use it to cover weapons purchases — once a verboten concept within the EU, a self-proclaimed peace project. 

    Thus far, the facility has been used solely to partially reimburse countries for their weapons donations to Ukraine. Now, documents show countries are willing to funnel an additional €2 billion into the facility — €1 billion to cover some ammunition donations and €1 billion to support joint purchases of replacement shells. 

    Ukrainian artillerymen in the vicinity of Bakhmut, Donetsk | Ihor Tkachov/AFP via Getty Images

    The documents foresee the European Defense Agency, an EU agency meant to better coordinate members’ security efforts, possibly playing a role in coordinating the joint procurement efforts. But individual countries could also help spearhead these negotiations, as long as the country is working with at least two other EU members and not creating competing bids for the shells that drive up prices.

    The joint procurement plan covers not just EU countries but Norway as well — as POLITICO first reported — potentially opening the door to some of the money going to non-EU-based companies. Norway, however, which produces ammunition, is already relatively integrated into the EU market. 

    EU officials are now aiming to get a consensus agreement on the plan during a meeting on Monday of foreign and defense ministers, before getting final sign-off from the 27 EU leaders at a summit in Brussels a few days later. 

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    Jacopo Barigazzi

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  • Biden budget aims to cut deficits nearly $3T over 10 years | Long Island Business News

    Biden budget aims to cut deficits nearly $3T over 10 years | Long Island Business News

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    President Joe Biden’s upcoming budget proposal aims to cut deficits by nearly $3 trillion over the next decade, the White House said Wednesday.

    That deficit reduction goal is significantly higher than the $2 trillion that Biden had promised in his State of the Union address last month. It also is a sharp contrast with House Republicans, who have called for a path to a balanced budget but have yet to offer a blueprint.

    The White House has consistently called into question Republicans’ commitment to what it considers a sustainable federal budget. Administration officials have noted that the various tax plans and other policies previously backed by GOP lawmakers would add more than $2.7 trillion to the national debt over 10 years.

    Biden intends to discuss his budget proposal on Thursday in Philadelphia. The Associated Press reported the deficit reduction goal earlier Wednesday, citing an administration official speaking on the condition of anonymity.

    “This is something we think is important,” White House press secretary Karine Jean-Pierre said in confirming the president’s plan. “This is something that shows the American people that we take this seriously.”

    As part of the budget, the president already has said he wants to increase the Medicare payroll tax on people making more than $400,000 per year and impose a tax on the holdings of billionaires and others with extreme degrees of wealth.

    It’s a delicate time with the U.S. economy on edge because of high inflation. The government this summer is likely to exhaust its emergency measures to keep Washington running, setting up the risk of a default on payments along with cataclysmic series of job losses that could crash the economy.

    Biden’s package of spending priorities is unlikely to pass the House or Senate as proposed. Senate Minority Leader Mitch McConnell, R-Ky., said Tuesday that the plan “will not see the light of day,” a sign that it might primarily serve as a messaging document going into the 2024 elections.

    Republicans, newly in control of the House, are demanding sharp spending cuts. Biden has suggested that tax increases on the earnings and holdings of the country’s wealthiest households can bolster government finances and also improve Medicare and Social Security.

    The president contended in a Monday speech that there are 680 billionaires in the United States and that many of them pay taxes at a lower rate than do families who think of themselves as being in the middle class. Biden said not to hold him to the precise number of billionaires, but that they could afford to pay more for the good of the country.

    “No billionaire should be paying a lower tax rate than a fire fighter — nobody,” Biden said at a gathering of the International Association of Fire Fighters.

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  • EV Trucks Are Coming, But There’s One Big Problem | Entrepreneur

    EV Trucks Are Coming, But There’s One Big Problem | Entrepreneur

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    While the Northeast is ramping up efforts to electrify the diesel-powered truck fleets that rumble through its major freight corridors, the region lacks a vision for what the increased electricity demand will mean for the grid and vehicle charging infrastructure.

    A new study headed up by National Grid, the utility company, aims to lay out a clear path forward.

    Brian Wilkie, National Grid’s director of transportation electrification in New York, said the two-year study will pinpoint future critical charging locations along highways in nine Northeast states, and advise as to where major transmission upgrades will be needed.

    The study is pulling together transportation planning and electric transmission distribution planning expertise, “two sectors of the economy that never really talk to each other,” Wilkie said.

    A multi-state approach

    It’s clear that future power demands along the highways will be significant. A study released last year by National Grid projected power demand growth across 71 highway charging sites in New York and Massachusetts. It determined that as soon as 2030, more than a quarter of those sites will require a level of charging capacity equal to the demand of an outdoor professional sports stadium.

    And by 2045, some of the most high-demand locations will require charging capacity equivalent to the electric load of a major industrial site.

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    The upgrades required, including high-voltage, transmission-level interconnections, will be costly and take four to eight years to complete, the report concluded.

    The expanded study will cover Maine, Massachusetts, New Hampshire, Vermont, Rhode Island, Connecticut, New York, Pennsylvania and New Jersey. While that swath of land extends well beyond National Grid’s service territory, “if you don’t have a more regional view, you fail to study it properly and you don’t allow for the type of cooperation that is required across state borders,” Wilkie said. “The transportation sector doesn’t honor state lines.”

    The study is being funded with a $1 million grant from the U.S. Department of Energy, which announced the award last month as part of the Biden administration’s efforts to accelerate the creation of zero-emission vehicle corridors across the country.

    The project “is extremely well-timed,” said Sarah McKearnan, senior manager for clean transportation at Northeast States for Coordinated Air Use Management, known as NESCAUM, a nonprofit association of state air quality agencies and a participant in the study.

    “Over the next five years, states will have access to very significant levels of federal funding to expand public charging stations,” she said. “This project will provide essential input that Northeast states can use to guide decisions about how to spend that funding.”

    NESCAUM facilitates a zero-emission vehicle task force that last year released a multi-state action plan for electrifying medium- to heavy-duty vehicles. The plan highlights the need for state and utility coordination to plan for grid transmission and distribution capacity, something the National Grid study will help lay the groundwork for.

    Big rigs and big data

    Zero-emission trucks are expected to expand rapidly throughout the region in coming years, not least because all of the states in the study group except New Hampshire are signatories to a memorandum of understanding promising to work together to foster widespread electrification of those vehicles.

    In addition, Massachusetts, New York and New Jersey have adopted California’s Advanced Clean Trucks rule, which requires truck makers to sell an increasing number of zero-emission vehicles beginning with model year 2025.

    The trucking industry is preparing for that transition, but they also understand that they won’t be able to sell zero-emission trucks at scale if the infrastructure isn’t in place to support them, said Diego Quevedo, utilities lead in Daimler Truck North America’s infrastructure and consulting department for zero-emission vehicles.

    Daimler Truck North America, the country’s largest commercial vehicle manufacturer and a participant in the National Grid study, began studying the feasibility of zero-emission vehicles in 2017. Their goal is to have a zero-emission vehicle offering in every lineup that they sell by 2039, in order to transition all customer fleets to zero-emission by 2050, Quevedo said.

    The company has about 40% of the country’s market share in Class 6 through 8 trucks, “anywhere from your really big U-Haul box trucks all the way to the semi-tractor trailers you see on the highway,” he said.

    What they bring to the National Grid study is data. They use a software system that pings GPS coordinates from their Class 8 vehicles out in the field — some 230,000-250,000 tractors nationwide. The data is aggregated and anonymized so there is no specific customer information.

    “You can look at where these vehicles operate, where they are stopping, how long they stop, how far they travel before they stop,” Quevedo said. “Assuming that those vehicles in the future are battery electric, you can determine what the future load requirements will be to replenish those electric miles that they’re traveling. It can give utilities very good insight into the future hotspots for load.”

    David Mullaney, a principal at RMI’s carbon-free transportation team and a core participant in the study, said they will be looking at truck traffic through existing highway truck stops, as well as the ports of New York and New Jersey.

    “But we don’t look at every truck stop out there,” said Mullaney, who has done similar modeling studies elsewhere in the U.S. and co-authored the earlier National Grid study. “We are preliminarily looking at places with proximity to big electrical infrastructure, where it is cost-effective to bring more electricity to.”

    Targeting high-traffic sites that can connect to the transmission system more easily will allow charging infrastructure to be scaled more quickly and result in “no-regrets” investments, McKearnan said.

    Who pays?

    Perhaps the biggest challenge in getting all this done is figuring out how to pay for it. Utilities typically spread the cost of infrastructure investments across their ratepayer base, with regulator approval. But in this case, “it would be deeply unfair to put it on the average ratepayer,” Mullaney said.

    Federal and state governments may need to think more broadly about who is benefiting from these investments, and spread the costs around accordingly, he said. For example, trucking companies who longer have to pay for diesel, truck stops that are selling more products because trucks stop there to charge, and the public, whose health benefits from cleaner air.

    “We have to look at high diversification of revenue streams,” he said.

    Wilkie agrees that it will require more creative thinking about how to allocate the cost of this infrastructure. One idea is highway toll stratification, in which electric trucks pay higher tolls to offset some of the costs.

    “We’re going to have to change the paradigm a bit,” he said. “But we can’t let that conversation stop us from taking action.”

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    Lisa Prevost

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  • EU looks to dedicate €1B to howitzer shells for Ukraine

    EU looks to dedicate €1B to howitzer shells for Ukraine

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    BRUSSELS — In a new blueprint for military support to Ukraine, the European Union will propose that €1 billion should be specifically dedicated to ammunition, particularly 155mm artillery shells, according to a document seen by POLITICO.

    The EU is helping supply Ukraine with arms through an off-budget, inter-governmental cash pot called the European Peace Facility, which is used to reimburse countries that export arms to Ukraine. So far, the facility has disbursed €3.6 billion in military aid to Ukraine, with member countries deciding last December to increase its funding by €2 billion in 2023.

    To date, the spending needs have been loosely defined but the EU is now placing heavy emphasis on artillery ammunition — as Ukrainian forces are locked in attritional howitzer battles with the Russians in the east, around towns such as Bakhmut.

    Top EU diplomat Josep Borrell intends to propose an “extraordinary support package” of €1 billion focused on the delivery of ammunition, according to the EU document, drafted by the bloc’s diplomatic service, the European Commission and the European Defence Agency.

    The document said the extraordinary €1 billion should be focused on ammunition — “notably 155mm” — as soon as the €2 billion top-up of the European Peace Facility is “operationalised.” This means that half of this year’s top-up should be dedicated to ammunition, mainly shells, according to an EU official.

    The EU document also envisages ramping up European industrial production, which is straining to produce ammunition at the rate demanded by the war.

    The proposal cites “a favourable reimbursement rate, for instance up to 90% … given the extreme urgency and the depletion of Member States’ stocks.”

    Such a high rate could be to reassure member countries that provide major military help. When the reimbursement rate last year dropped below 50 percent, this created problems for some EU nations, in particular Poland, one of the EU’s largest weapons donors to Ukraine.

    The funding proposal also provides a possible way out by citing “voluntary financial contributions” for countries not to take part, such as Austria, which is neutral; or that are reluctant to provide weapons, such as Hungary.

    It stresses that the specific legal constraints of certain countries “will be taken into consideration,” mentioning also a possibility “to constructively abstain from lethal assistance measures.” 

    Teaming up

    Regarding joint procurement — meaning EU countries teaming up to buy arms — the European Defence Agency, together with member countries, would use a new scheme “encompassing seven categories from small arms calibres up to 155mm.”

    This project is to be “launched for a duration of seven years” and so far, 25 EU member states plus Norway have already confirmed their interest in participating, according to the document.

    Ukrainian artillery shells Russian troops’ position on the front line near Lysychansk in the Luhansk region on April 12, 2022 | Anatolii Stepanov/AFP via Getty Images

    In particular, procurement of 155mm ammunition should be accelerated “through a fast-track procedure for direct negotiation” with several providers. This type of ammunition is especially in demand as Ukrainian forces use it in long-range, precise artillery barrages.

    Here, time is of the essence: “In view of the urgency, the Project Arrangement needs to be signed no later than March.” And contracts should “be tentatively concluded between end-April and end-May.”

    The document also maps out the need for increased support to ramp up manufacturing, as European weapons factories are almost at full capacity and prices are already spiraling.

    Concrete measures could include “identifying and helping to remove production bottlenecks in the EU” as well as “facilitating the collaboration of relevant companies in a joint industry effort to ensure availability and supply.”

    The document will be discussed by defense ministers at an informal meeting in Stockholm next week and is then expected to be formally agreed by foreign and defense ministers on March 20. Leaders are also expected to give their final blessing at a meeting on March 23 and 24.

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    Jacopo Barigazzi

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  • NATO on the precipice

    NATO on the precipice

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    WASHINGTON/BRUSSELS — The images tell the story.

    In the packed meeting rooms and hallways of Munich’s Hotel Bayerischer Hof last weekend, back-slapping allies pushed an agenda with the kind of forward-looking determination NATO had long sought to portray but just as often struggled to achieve. They pledged more aid for Ukraine. They revamped plans for their own collective defense.  

    Two days later in Moscow, Vladimir Putin stood alone, rigidly ticking through another speech full of resentment and lonely nationalism, pausing only to allow his audience of grim-faced government functionaries to struggle to their feet in a series of mandatory ovations in a cold, cavernous hall.

    With the war in Ukraine now one year old, and no clear path to peace at hand, a newly unified NATO is on the verge of making a series of seismic decisions beginning this summer to revolutionize how it defends itself while forcing slower members of the alliance into action. 

    The decisions in front of NATO will place the alliance — which protects 1 billion people — on a path to one the most sweeping transformations in its 74-year history. Plans set to be solidified at a summit in Lithuania this summer promise to revamp everything from allies’ annual budgets to new troop deployments to integrating defense industries across Europe.

    The goal: Build an alliance that Putin wouldn’t dare directly challenge.

    Yet the biggest obstacle could be the alliance itself, a lumbering collection of squabbling nations with parochial interests and a bureaucracy that has often promised way more than it has delivered. Now it has to seize the momentum of the past year to cut through red tape and crank up peacetime procurement strategies to meet an unpredictable, and likely increasingly belligerent Russia. 

    It’s “a massive undertaking,” said Benedetta Berti, head of policy planning at the NATO secretary-general’s office. The group has spent “decades of focusing our attention elsewhere,” she said. Terrorism, immigration — all took priority over Russia.

    “It’s really a quite significant historic shift for the alliance,” she said.

    For now, individual nations are making the right noises. But the proof will come later this year when they’re asked to open up their wallets, and defense firms are approached with plans to partner with rivals. 

    To hear alliance leaders and heads of state tell it, they’re ready to do it. 

    “Ukraine has to win this,” Adm. Rob Bauer, the head of NATO’s military committee, said on the sidelines of the Munich Security Conference. “We cannot allow Russia to win, and for a good reason — because the ambitions of Russia are much larger than Ukraine.”

    All eyes on Vilnius

    The big change will come In July, when NATO allies gather in Vilnius, Lithuania, for their big annual summit. 

    Gen. Chris Cavoli will reveal how personnel across the alliance will be called to help on short notice | Henrik Montgomery/TT News Agency/AFP via Getty Images

    NATO’s top military leader will lay out a new plan for how the alliance will put more troops and equipment along the eastern front. And Gen. Chris Cavoli, supreme allied commander for Europe, will also reveal how personnel across the alliance will be called to help on short notice.

    The changes will amount to a “reengineering” of how Europe is defended, one senior NATO official said. 

    The plans will be based on geographic regions, with NATO asking countries to take responsibility for different security areas, from space to ground and maritime forces. 

    “Allies will know even more clearly what their jobs will be in the defense of Europe,” the official said. 

    NATO leaders have also pledged to reinforce the alliance’s eastern defenses and make 300,000 troops ready to rush to help allies on short notice, should the need arise. Under the current NATO Response Force, the alliance can make available 40,000 troops in less than 15 days. Under the new force model, 100,000 troops could be activated in up to 10 days, with a further 200,000 ready to go in up to 30 days. 

    But a good plan can only get allies so far. 

    NATO’s aspirations represent a departure from the alliance’s previous focus on short-term crisis management. Essentially, the alliance is “going in the other direction and focusing more on collective security and deterrence and defense,” said a second NATO official, who like the first, requested anonymity to discuss ongoing planning.

    Chief among NATO’s challenges: Getting everyone’s armed forces to cooperate. Countries such as Germany, which has underfunded its military modernization programs for years, will likely struggle to get up to speed. And Sweden and Finland — on the cusp of joining NATO — are working to integrate their forces into the alliance.

    Others simply have to expand their ranks for NATO to meet its stated quotas.

    “NATO needs the ability to add speed, put large formations in the field — much larger than they used to,” said Bastian Giegerich, director of defense and military analysis and the International Institute for Strategic Studies.  

    East vs. West

    An east-west ideological fissure is also simmering within NATO. 

    Countries on the alliance’s eastern front have long been frustrated, at times publicly, with the slower pace of change many in Western Europe and the United States are advocating — even after Russia’s invasion. 

    Joe Biden traveled to Warsaw for a major speech last week that helped alleviate some of the tensions and perceived slights | Mandel Ngan/AFP via Getty Images

    “We started to change and for western partners, it’s been kind of a delay,” Polish Armed Forces Gen. Rajmund Andrzejczak said during a visit to Washington this month. 

    Those concerns on the eastern front are being heard, tentatively. 

    Last summer, NATO branded Russia as its most direct threat — a significant shift from post-Cold War efforts to build a partnership with Moscow. U.S. President Joe Biden has also conducted his own charm offensive, traveling to Warsaw for a major speech last week that helped alleviate some of the tensions and perceived slights. 

    Still, NATO’s eastern front, which is within striking distance of Russia, is imploring its western neighbors to move faster to help fill in the gaps along the alliance’s edges and to buttress reinforcement plans.

    It is important to “fix the slots — which countries are going to deliver which units,” said Estonian Foreign Minister Urmas Reinsalu, adding that he hopes the U.S. “will take a significant part.” 

    Officials and experts agree that these changes are needed for the long haul. 

    “If Ukraine manages to win, then Ukraine and Europe and NATO are going to have a very disgruntled Russia on its doorstep, rearming, mobilizing, ready to go again,” said Sean Monaghan, a visiting fellow at the Center for Strategic and International Studies. 

    “If Ukraine loses and Russia wins,” he noted, the West would have “an emboldened Russia on our doorstep — so either way, NATO has a big Russia problem.” 

    Wakeup call from Russia

    The rush across the Continent to rearm as weapons and equipment flows from long-dormant stockpiles into Ukraine has been as sudden as the invasion itself. 

    After years of flat defense budgets and Soviet-era equipment lingering in the motor pools across the eastern front, calls for more money and more Western equipment threaten to overwhelm defense firms without the capacity to fill those orders in the near term. That could create a readiness crisis in ammunition, tanks, infantry fighting vehicles, and anti-armor weapons. 

    A damaged Russian tank near Kyiv on February 14, 2023 | Sergei Dolzhenko/EPA-EFE

    NATO actually recognized this problem a decade ago but lacked the ability to do much about it. The first attempt to nudge member states into shaking off the post-Cold War doldrums started slowly in the years before Russia’s full-scale invasion of Ukraine last year. 

    After Moscow took Crimea and parts of the Donbas in 2014, the alliance signed the “Wales pledge” to spend 2 percent of economic output on defense by 2024.

    The vast majority of countries politely ignored the vow, giving then-President Donald Trump a major talking point as he demanded Europe step up and stop relying on Washington to provide a security umbrella.

    But nothing focuses attention like danger, and the sight of Russian tanks rumbling toward Kyiv as Putin ranted about Western depravity and Russian destiny jolted Europe into action. One year on, the bills from those early promises to do more are coming due.

    “We are in this for the long haul” in Ukraine, said Bauer, the head of NATO’s Military Committee, a body comprising allies’ uniformed defense chiefs. But sustaining the pipeline funneling weapons and ammunition to Ukraine will take not only the will of individual governments but also a deep collaboration between the defense industries in Europe and North America. Those commitments are still a work in progress.

    Part of that effort, Bauer said, is working to get countries to collaborate on building equipment that partners can use. It’s a job he thinks the European Union countries are well-suited to lead. 

    That’s a touchy subject for the EU, a self-proclaimed peace project that by definition can’t use its budget to buy weapons. But it can serve as a convener. And it agreed to do just that last week, pledging with NATO and Ukraine to jointly establish a more effective arms procurement system for Kyiv.

    Talk, of course, is one thing. Traditionally NATO and the EU have been great at promising change, and forming committees and working groups to make that change, only to watch it get bogged down in domestic politics and big alliance in-fighting. And many countries have long fretted about the EU encroaching on NATO’s military turf.

    But this time, there is a sense that things have to move, that western countries can’t let Putin win his big bet — that history would repeat itself, and that Europe and the U.S. would be frozen by an inability to agree.

    “People need to be aware that this is a long fight. They also need to be brutally aware that this is a war,” the second NATO official said. “This is not a crisis. This is not some small incident somewhere that can be managed. This is an all-out war. And it’s treated that way now by politicians all across Europe and across the alliance, and that’s absolutely appropriate.”

    Paul McLeary and Lili Bayer also contributed reporting from Munich.

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    Paul McLeary and Lili Bayer

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  • Why You Shouldn’t Drop Your Marketing Budget in a Recession

    Why You Shouldn’t Drop Your Marketing Budget in a Recession

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    Opinions expressed by Entrepreneur contributors are their own.

    When the economy takes a downturn, and the word “recession” is uttered in executive offices across the country, there is often one standard response: cut the budget. For many companies, the first department on the chopping block is marketing. This is the one area of businesses where results may seem intangible, and executives could assume — at their peril — that slicing away some of the perceived marketing fat will make little difference to the end result. The truth could not be more different.

    You can switch it off — but you shouldn’t

    Advancements in marketing tools have made marketing budgets even more at risk in times of recession. Before digital marketing was the norm, businesses were often tied into lengthy and expensive-to-kill print and radio campaigns. With digital marketing, though, switching off the campaign is as easy as one click.

    The flexibility and cost-efficiency of digital marketing are some of its greatest benefits, after all. You could go from spending $100,000 a month to zero in the blink of an eye. For a small or medium-sized business, that could be game-changing. It could also be game-ending in the medium to long term.

    Switching off your digital marketing efforts in a recession would be completely counterintuitive because it is during this very time period that more people will be spending time online than ever before. Sure, they may not be spending money on nonessentials the same way they were, but nothing lasts forever. Not even a recession. By completely removing yourself from the digital market, you nearly guarantee that, when your customer is ready to spend again, they won’t have your brand in mind.

    Related: 6 Proven Business Marketing Strategies to Grow During a Recession

    Market smart, not hard

    The aspects of digital marketing we enjoy so much (its flexibility and cost-effectiveness) make it the one budget you should not cut during a recession. Instead, consider narrowing your targeting strategy and confirming that you are using that budget to its best effect. It will pay you back in dividends when the economic noose starts to loosen.

    Even if you aren’t making your presence known online, your competitors are. And that means that they’ll be at the forefront of your target audience’s minds when the time comes to buy.

    For ecommerce businesses, emphasizing digital marketing during a recession should really not be a question. More than ever, consumers are shifting to online shopping, and even if they aren’t splurging on luxury items, they’re still buying essentials and even treating themselves. Ecommerce businesses cannot afford to not have a consistent digital presence.

    Another important reason to maintain your digital marketing efforts during a pandemic is the long-term value of brand awareness. When money is scarce, consumers are careful how they spend their dollars and who they spend them with. Customers will want to be sure they are buying from reputable and well-known brands, and for many consumers today, reputation and brand awareness are built in the digital realm.

    Speaking from experience

    I started my own business in 2008 — a year which, for many, brings back difficult memories of extreme financial hardship. And yet, my company thrived. I invested in marketing — and my customers responded because they knew the recession would not last forever and they couldn’t put their lives or businesses on hold.

    Digital marketing is the one channel that provides easy-to-validate results. Keep in mind, the value of the data you get from your marketing efforts is equivalent to the level of attribution tracking you have in place. Having that clear visibility allows you to channel your efforts in the right direction, which is even more critical during times of economic stress.

    Related: How to Recession-Proof Your Ads and Meet Customers Where They Are

    Best practices for marketing in a recession

    To ensure you’re getting the most out of your marketing dollars in trying financial times, there are a few guidelines you can follow:

    • Focus on holistic attribution: It’s vital to ensure that you really know which digital channels are working together to bring in sales and brand awareness. Otherwise, you may end up pulling the wrong levers and wasting precious money.

    • Personalize to maximize conversions: A recession is not the time to cast wide nets out in the hopes that you’ll catch the right fish. You’ll need to ensure you are narrowly targeting just the right group of people, and continuously checking in with your attribution data to fine-tune the specifics of your campaigns.

    • Encourage repeat business through brand loyalty: Attracting new customers is important, but keeping the ones you already have is equally so. Focus on providing amazing customer experiences to build brand loyalty during the toughest of times, and you’ll see repeat business as a reward when the sun comes out from behind the clouds.

    It is entirely possible to market your way through a recession, and marketing budgets should definitely not suffer during trying economic times. Market strategically, track attribution holistically, and make the most of the changes that come with global financial challenges. The recession will come to an end, but your business doesn’t need to end with it.

    Related: Why You Should Never Skimp on Brand Marketing in a Recession

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    Sergio Alvarez

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  • Inside Gov. Hochul’s controversial NYS budget proposal | Long Island Business News

    Inside Gov. Hochul’s controversial NYS budget proposal | Long Island Business News

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    An $845-million-infusion into economic and community development. Another $2.4 billion for healthcare capital infrastructure.

    LARRY LEVY: ‘There are an awful lot of goodies in the budget for Long Island that we really need.’ Photo courtesy of Hofstra University

    Funds for downtown revitalization and to promote tourism, and investment in childcare, renewable energy, arts and the film industry.  Record funding for education.  And $455 million for Belmont Racetrack’s redevelopment.

    These are but some of the components of New York Gov. Kathy Hochul’s proposed $227 billion budget, which has displeased some Long Islanders because of what they say is insufficient funding for the region.

    “I’m committed to doing everything in my power to make the Empire State a more affordable, more livable, safer place for all New Yorkers,” Hochul said in Albany last week.  “We will make bold, transformative investments that lift up New Yorkers while maintaining solid fiscal footing in uncertain times.”

    There are discussions to revise the state bail law, which would likely meet resistance from liberal state lawmakers. And there is proposed legislation to expand housing development, which is already meeting opposition from some on Long Island. (For more on housing, see p. 7.)

    What happens next are weeks of intense negotiations with state legislative leaders looking to finalize the budget by April 1. Long Island leaders weighed in on how the plan might impact the economy.

    “There are an awful lot of goodies in the budget for Long Island that we really need,”

    said Larry Levy, the executive dean of the National Center for Suburban Studies at Hofstra University.

    One big plus, he said, was the plan’s 10% increase in aid to public school districts, which, depending on how districts applied it, could have a “direct impact on property taxes” and would benefit “underserved communities, which made progress in leveling up to wealthier districts in what they can spend.”

    Locally, energy, healthcare and infrastructure all stand to gain, said Tom Garry,  the Long Island office managing partner for the law firm Harris Beach.

    For example, Hochul proposed $5.5 billion to promote energy affordability, reduce emissions, and invest in clean air and water.  And on Long Island, “with its big shoreline,” offshore wind energy projects are already moving forward, Garry said. Here, “municipalities are open to this,” and combined with initiatives on the federal level, there is opportunity to “modernize our grid, slowly but surely getting away from fossil fuels.”

    Investment in healthcare is another win for the region, Garry said.

    “Long Island is an aging population – we need our healthcare to be state-of-the-art,” he said. “It drives other aspects of the economy,” including housing and downtowns.

    The support for increased sewer and water infrastructure would assist Nassau County’s aging suburbs and help Suffolk County get the sewers it needs. All of that “drives economic vitality,” Garry said.

    Still, not everyone is bullish about the budget.

    PARVIZ FARAHZAD: ‘I was hoping the state would give us another 5% to 10% to make it worthwhile for [film] productions to come [to Long Island]. That didn’t happen.’ Photo by Judy Walker

    Take Parviz Farahzad, whose Grumman Studios at Port Washington North is near completion. He said that the plan to extend and expand the film credit program, which is aimed at supporting thousands of jobs and small businesses that depend on the film industry, falls short on Long Island.

    “What has happened lately is that neighboring states – New Jersey, Connecticut and Massachusetts – jumped on the bandwagon and are offering much more incentives,” he said. “A lot of productions,” he added, “are going to other states.”

    The proposed budget allows for an increase in the film tax credit base from 25% to 30%. But Farahzad said that rate used to be 30%, and that the proposed increase wouldn’t be enough for industry leaders on Long Island and Westchester as they compete with New York City.

    “I was hoping the state would give us another 5% to 10% to make it worthwhile for productions just to come out,” he said. “That didn’t happen.”

    He said that “there has to be a reason to come out here – money is the reason. People are not going to travel to the Island. The producers, directors and talents’ time is worth money. It has to be worthwhile to take the space.”

    When it comes to getting their voices heard about the need for better incentives, film

    TOM GARRY: Support for increased sewer and water infrastructure ‘drives economic vitality.’
    Photo by Judy Walker

    industry leaders in the borough’s surrounding counties are competing with the voices of the “studios in the city that have a big lobby.”

    As for funding for the arts, “I was disappointed, and honestly a bit surprised by the amount allocated for arts and culture in the governor’s budget,” said Lauren Wagner, executive director of Long Island Arts Alliance.

    LAUREN WAGNER: Contrary to what the state seems to believe, the arts sector has not fully recovered from the pandemic. Photo courtesy of Long Island Arts Alliance

    “Last year, NYSCA [New York State Council on the Arts] was given $109 million after statewide arts advocacy groups like ArtNYS fought hard for much-needed rescue funding,” Wagner said. “That funding added about $60 million to the initial $40 million that was proposed for 2023.”

    But now, Wagner said, “[s]eeing the plan for 2024, the governor has cut all rescue-funding, essentially bringing us back to where we had been for the last five-to-10 years. We have not yet been able to show the impact that last year’s budget increase has had on the sector, so the appropriation of $40 million for granting across the state seems to indicate that the governor believes that our sector has fully recovered from the pandemic, and I can assure you that it hasn’t.”

    Wagner said that the “attempts to ‘rescue’ arts and culture through emergency funding have only provided temporary relief, demonstrating a systemic underestimation of the sector’s value. There has been very little growth with regard to the allocation for arts and culture through NYSCA over the last decade. It certainly has not kept up with demand, nor has it accounted for the amount of growth we have seen in the sector. We have over 700 eligible nonprofit organizations on Long Island alone that could benefit from NYSCA funding, and as we all try to build capacity and engage local artists to serve our communities, we once again see that our leaders are not recognizing the value of the work we do.”

    Matt Cohen, the president and CEO of Long Island Association, the region’s largest business group saw big opportunities in the plan for Belmont.

    MATT COHEN: ‘Modernizing Belmont Park is a once-in-a-generation opportunity to secure the future of horse racing for generations to come, while boosting our economy and creating jobs.’
    Photo courtesy of Long Island Association

    “Modernizing Belmont Park is a once-in-a-generation opportunity to secure the future of horse racing for generations to come, while boosting our economy and creating jobs,” Cohen told LIBN. “That’s why it’s a major priority on Long Island and we commend Gov. Hochul for recognizing this project’s importance by including it in her budget.”

    Because of the New York Racing Association’s “hard work and planning, this project will provide a shot in the arm to the downstate economy, generating approximately $1 billion in one-time construction-related economic impact with hundreds of millions more to come annually,” he added. “We urge legislators to partner with the governor and include it in the final budget agreement.”

    This year’s budget includes plans to create the “Technology Innovation Matching Program,” providing $6 million in matching grants for New York companies applying for SBIR (Small Business Innovation Research) and SBTT (Small Business Technology Transfer) funding.

    STACEY SIKES: ‘Growing the state’s semiconductor and cell and gene therapy assets will create high-tech jobs of the future.’ Photo courtesy of Accelerate Long Island

    “Innovation drives our economy, and the governor’s proposed support of tech startups through SBIR/STTR matching funds, tax incentives, university-based partnerships, and growing the state’s semiconductor and cell and gene therapy assets will create high-tech jobs of the future,” said Stacey Sikes, the chair of Accelerate Long Island, which aims to help regional startups with business expertise, investors and other support measures.

    Levy said that “money for economic development should help the Island continue its transformation to a knowledge-based economy,” including in such sectors as technology, medicine and higher education.

    There is money for childcare, where, Levy points out, Hochul “has a lot of credibility in this issue because she championed it,” he said. “If the legislature is going to add on to the budget, this is one area where you cannot spend enough money to meet demand.”

    Hochul wants to make more revisions to the state’s bail law, which was changed in 2019 to do away with pretrial incarceration of people accused of most nonviolent offenses. The law has been tweaked since, but Republicans and some moderate Democrats continue to argue the rules have deprived judges of a tool they could use to hold people who are likely to commit new crimes.

    Budget briefing documents say Hochul wants to give judges greater discretion by removing the “least restrictive means” standard to ensure a defendant returns to court, as opposed to considering how dangerous they appear. The governor said the current guidelines are not always clear and that she wants to provide “clarity for the judges.”

    The Associated Press contributed to this report.

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    Adina Genn

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  • Rishi Sunak is haunted by ghosts of prime ministers past

    Rishi Sunak is haunted by ghosts of prime ministers past

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    LONDON — “Back to her old self again” was how one erstwhile colleague described Liz Truss, who made her return to the U.K.’s front pages at the weekend. 

    That’s exactly what Rishi Sunak and his allies were afraid of. 

    Truss, who spent 49 turbulent days in No. 10 Downing Street last year, is back. After a respectful period of 13 weeks’ silence, the U.K.’s shortest-serving prime minister exploded back onto the scene with a 4,000-word essay in the Sunday Telegraph complaining that her radical economic agenda was never given a “realistic chance.”

    In her first interview since stepping down, broadcast Monday evening, she expanded on this, saying she encountered “system resistance” to her plans as PM and did not get “the level of political support required” to change prevailing attitudes.

    While the reception for Truss’s relaunch has not been exactly rapturous — with much of the grumbling coming from within her own party — it still presents a genuine headache for her successor, Sunak, who must now deal with not one but two unruly former prime ministers jostling from the sidelines. 

    Boris Johnson is also out of a job, but is never far from the headlines. Recent engagements with the U.S. media and high-profile excursions to Kyiv have ensured his strident views on the situation in Ukraine remain well-aired, even as he racks up hundreds of thousands in fees from private speaking engagements around the world.

    Wasting no time

    Truss and Johnson have, typically, both opted for swifter and more vocal returns to frontline politics than many of their forerunners in the role. 

    “Most post-war prime ministers have been relatively lucky with their predecessors,” says Tim Bale, professor of politics at Queen Mary, University of London. “They have tended to follow the lead of [interwar Conservative PM] Stanley Baldwin, who in 1937 promised: ‘Once I leave, I leave. I am not going to speak to the man on the bridge, and I am not going to spit on the deck.’”

    Such an approach has never been universal. Ted Heath, PM from 1970-74, made no secret of his disdain for his successor as Tory leader Margaret Thatcher. Thatcher in turn “behaved appallingly” — in Bale’s words — to John Major, who replaced her in Downing Street in 1990 after she was forced from office.

    But more recent Tory PMs have kept a respectful distance.

    David Cameron quit parliament entirely after losing the EU referendum in 2016, and waited three years before publishing a memoir — reportedly in order to avoid “rocking the boat” during the ongoing Brexit negotiations. 

    And while Theresa May became an occasional liberal-centrist thorn in Boris Johnson’s side, she did so only after a series of careful, low-profile contributions in the House of Commons on subjects close to her heart, such as domestic abuse and rail services in her hometown of Maidenhead.

    “You might expect to see former prime ministers be a tad more circumspect in the way they re-enter the political debate,” says Paul Harrison, former press secretary to May. “But then she [Truss] wasn’t a conventional prime minister in any sense of the word, so perhaps we shouldn’t be surprised that she’s done something very unconventional.”

    Truss’s rapid refresh has not met with rave reviews.

    Paul Goodman, editor of influential grassroots website ConservativeHome, writes that “rather than concede, move on, and focus on the future, she denies, digs in and reimagines the past,” while Tory MP Richard Graham told Times Radio that Truss’ time in office “was a period that [people] would rather not really remember too clearly.”

    One long-serving Conservative MP said “she only had herself to blame for her demise, and we are still clearing up some of the mess.” Another appraised her latest intervention simply with an exploding-head emoji.

    Trussites forever

    But despite Tory appeals for calm, the refusal of Truss and Johnson to lie low remains a serious worry for the man eventually chosen to lead the party after Truss crashed and burned and Johnson thought better of trying to stage a comeback.

    Between them, the two ex-PMs have the ability to highlight two of Sunak’s big weaknesses. 

    While Truss may never live down the disastrous “mini-budget” of last September which sent the U.K. economy off the rails, her wider policy agenda still has a hold over a number of Conservative MPs who believe they have no hope of winning the election without it. 

    This was the rationale behind the formation last month of the Conservative Growth Group, a caucus of MPs who will carry the torch for the low-tax, deregulatory approach to government favored by Truss and who continue to complain Sunak has little imagination when it comes to supply-side reforms. 

    Simon Clarke, who was a Cabinet minister under Truss, insisted “she has thought long and hard” about why her approach failed and “posed important questions” about how the U.K. models economic growth in her Telegraph piece.

    Other Conservatives have been advocating a reappraisal of the actions of the Bank of England in the period surrounding the mini-budget, arguing that Truss was unfairly blamed for a collapse in the bond market.

    But Harrison doubts whether she may be the best advocate for the causes she represents. “There’s a question about whether it actually best serves her interests in pushing back against a strong prevailing understanding of what happened so soon after leaving office.”

    Johnson, meanwhile — to his fans, at least — continues to symbolize the star quality and ballot box appeal which they fear Sunak lacks. 

    One government aide who has worked with both men said Johnson’s strength lay in his “undeniable charisma” and persuasive power, while Sunak, more prosaically, “was all about hard work.”

    These apparent deficiencies feed into a fear among Sunak’s MPs that he is governing too tentatively and, as one ally put it recently, needs to rip off the “cashmere jumper.”

    It’s been posited that British prime ministers swing back and forth between “jocks” and “nerds” — and nothing is more likely to underline Sunak’s nerdiness than a pair of recently-deposed jocks refusing to shut up. 

    Trouble ahead 

    Unluckily for Sunak, there are at least three big-ticket items coming up which will provide ample ground on which his nemeses can cause trouble. 

    One is the forthcoming budget — the government’s annual public spending plan, due March 15. Truss and Johnson are unlikely to get personally involved, but Truss loyalists will make a nuisance of themselves if Sunak’s approach is judged to offer the paucity of answers on growth they already fear.

    Before that, Truss is expected to make her first public appearance outside the U.K. with a speech on Taiwan which could turn up the heat on Sunak over his approach to relations with China. 

    One person close to her confirmed China would be “a big thing” for her, and is expected to be a theme of her future parliamentary interventions.

    Then there is the small matter of the Northern Ireland protocol, the thorniest unresolved aspect of the Brexit deal with Brussels where tortured negotiations appear to be reaching an endgame.

    Sunak has been sitting with a draft version of a technical deal since last week, according to several people with knowledge of the matter, and is now girding his loins for the unenviable task of trying to get a compromise agreement past both his own party and hardline Northern Irish unionists.

    A Whitehall official working on the protocol said Johnson “absolutely” had the power to detonate that process, and that “he should never be underestimated as an agent of chaos.”

    One option touted by onlookers is for Sunak to attempt to assemble the former prime ministers and ask them to stand behind him on a matter of such huge national and international significance. But as things stand such a get-together is difficult to picture.

    At the heart of Johnson and Truss’ actions seems to be an essential disquiet over the explosive manner of their departures.

    They appear fated to follow in Thatcher’s footsteps, as Bale puts it — “not caring how much trouble they cause Sunak, because in their view, he should never have taken over from them in the first place.”

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    Esther Webber and Annabelle Dickson

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