Trump Takes Credit for Troop Payments Provided by Congress

Happy Thursday! President Trump's handpicked board of trustees of the John F. Kennedy Center for the Performing Arts voted Thursday to rename the Washington, D.C., institution as the Trump Kennedy Center. The move drew immediate backlash from the Kennedy family and Democrats, who also challenged its legality. Here's what else is happening.

The Truth About Trump's $1,776 'Warrior Dividends'

In his address to the nation Wednesday night, President Trump announced that more than 1 million U.S. service members will receive "warrior dividends" worth $1,776 in the next few days.

"In honor of our nation's founding in 1776, we are sending every soldier $1,776," Trump said. "Think of that. And the checks are already on the way. Nobody understood that one until about 30 minutes ago."

However, the "warrior dividend" is not a new bonus, as Trump implied, but a rebranding of an existing program funded by Congress to help troops cover the cost of their housing, tweaked to combine what is usually a bi-weekly or monthly stipend into one lump sum.

A housing aid program: In the One Big, Beautiful Bill Act that became law in July, Congress provided $2.9 billion to "supplement the basic allowance for housing payable to members of the Army, Air Force, Navy, Marine Corps, and Space Force."

Now referred to as a "warrior dividend" by the White House, the one-time payments are scheduled to go to roughly 1.28 million active-duty service members and 174,000 members of the reserves, at a total cost of $2.6 billion. The payments are tax-free because they are intended to cover living expenses, although there are questions about how the payments will be treated for those who live in military housing on base.

The remaining $300 million from Congress's $2.9 billion allocation will be used for future housing stipend payments, The Hill's Sarah Fortinsky reports. Although Trump said "every soldier" will receive the payments, they will be limited to the ranks below generals and admirals.

Trump also claimed that revenues from the tariffs he has imposed on trading partners around the world are at least partially funding the payments - "We made a lot more money than anybody thought because of tariffs," he said - but there is no apparent connection between the housing payments authorized by Congress last summer and the tariff revenues. Trump would need authorization from Congress to redirect tariff revenues.

Lawmakers respond: Some of Trump's allies in Congress were enthusiastic about the payments, with Republican Sen. Jim Banks of Indiana saying the checks were "great news for military families."

Democratic Sen. Tammy Duckworth of Illinois, a former helicopter pilot who lost her legs in the Iraq war, had a very different take. "Your $1,776 'warrior checks' aren't Christmas bonuses-you're just stealing money out of a fund meant to help our troops find affordable housing," she said on X. "Once a conman always a conman."

Senate Scrambles to Pass Appropriations 'Minibus' Before the Holidays

Senate leaders are reportedly rushing to finalize a deal on a "minibus" package of five annual appropriations bills that would fund nearly all of the federal government for fiscal year 2026 and largely defuse the threat of another government shutdown when current funding expires at the end of January.

The Hill's Alexander Bolton reports: "Senators were waiting Thursday afternoon for a deal to set up votes on a series of amendments to the so-called minibus, which would fund the departments of Defense, Labor, Health and Human Services, Education, Commerce, Justice, Interior, Transportation, and Housing and Urban Development."

The House would still need to approve the minibus. Congress approved three of the required 12 annual funding bills as part of the deal to end the government shutdown last month.

Inflation Cools in November, but There Are Questions About the Data

The consumer price index rose 2.7% on an annual basis in November, the Labor Department announced Thursday. The results were a pleasant surprise, beating expectations for a 3.1% increase, a modest increase over the September reading of 3.0%.

The core inflation measure, which strips out volatile food and fuel prices, was also better than expected, coming in at 2.6% annually and 0.2% on a two-month basis going back to September.

'Anomaly after anomaly': Some economists are wondering, though, if the November report is accurate following the record-long government shutdown, which disrupted data collection for about six weeks starting on October 1. The Bureau of Labor Statistics did not collect data during October and did not provide an estimate of inflation for that month. The agency began collecting data later than usual in November, and relied on some "nonsurvey data sources" to make calculations.

"This one-of-a-kind report produced anomaly after anomaly, almost all pointing in the same direction," Stephen Stanley, chief U.S. economist at Santander US Capital Markets, said in an analysis, per Bloomberg. "I think it would be unwise to dismiss the results entirely, but I also believe it would be rash to take them at face value."

The housing numbers were a particular concern. The November report shows rents increasing by just 0.06% over two months, with owner's equivalent rent up just 0.14%. That suggests the BLS assumed there was almost no housing inflation in October.

"This is totally inexcusable," Omair Sharif, president of Inflation Insights, said in a note to clients. "I am sure they have a good technical explanation for this, but the only way you get a two-month average for rent of 0.06 percent and [owner-occupied rent] at 0.135 percent is assuming October was zero. There is just no world in which this was a good idea, but here we are."

Alan Detmeister, an economist at UBS, told The Wall Street Journal that the report should come with a very large asterisk. "I think you largely just put this one to the side," he said. "Maybe this report gives a minor downward sign for overall inflation, but the vast, vast majority of this is just noise and should be ignored."

Before any firm conclusions can be made about the course of inflation, economists will need to see more solid data. "The upshot is that it looks like we all have to wait until the December data is published next month to verify whether this is a statistical blip or a genuine disinflation," Paul Ashworth, chief North America economist at Capital Economics, said in a note.

Obamacare Subsidies Will Expire as Congress Pauses Healthcare Fight

The House and Senate will be heading home for the holidays after taking their last votes of the year on Thursday. That means the enhanced Affordable Care Act subsidies will officially expire as scheduled at the end of the month.

House Speaker Mike Johnson celebrated Wednesday evening after House Republicans passed a healthcare package that doesn't extend those subsidies. "This is a big night in the House. The Republican Party just delivered on our promises once again. We passed a big, important healthcare bill that will bring down the cost of healthcare," he told reporters, referring to the GOP's "Lower Premiums for All Americans Act."

The House-passed bill is expected to go nowhere in the Senate, but the healthcare battles will continue in both chambers. After four moderate Republicans signed on to a Democratic-led discharge petition yesterday, the House will also have to vote next month on a Democratic bill to extend the enhanced ACA subsidies for three years - or, potentially, a bipartisan compromise plan, if one is reached. Lawmakers continue to work toward a deal that can get backing from both parties and clear the 60-vote threshold in the Senate.

Johnson also promised that his conference would continue to focus on healthcare in 2026. "We'll be back in January to do much more of this," he said. "More policies, more ideas ahead, policy changes to fix the broken healthcare system."

As the legislative efforts continue, the political messaging battle is also heating up as the calendar turns to a crucial midterm election year. "The messaging battle over the expiring subsidies is an important early test of the two parties' unity and momentum on an issue - health care - that has the potential to define the midterm campaign," Politico's Amanda Chu writes. "The future of President Donald Trump's policy agenda is at stake with Republicans defending narrow House and Senate majorities."

The bottom line: The enhanced ACA subsidies are going to expire in less than two weeks and millions of Americans are expected to see their premium costs soar or lose coverage.

A programming note: We'll be back in your inbox on Monday! Send your feedback to yrosenberg@thefiscaltimes.com.

Fiscal News Roundup

• Senate Nears 'Minibus' Deal to Largely Fund Government, Thwarting Shutdown Threat – The Hill
• Democrats Steer Away From Another Shutdown Fight – Semafor
• Trump Acknowledges ACA Premiums Set to "Skyrocket" Absent a Deal in Congress – CNN
• Speaker Johnson Was Ready to Move on From ACA Subsidies. But His Members Had Other Plans – Associated Press
• Johnson Dismisses Concerns From Endangered GOP Members Over Health Care – CNN
• Trump Claims Credit for Military Bonus That Congress Already Approved – Politico
• Inflation Eased to 2.7% in Report Distorted by Government Shutdown – Wall Street Journal
• US Says Price Increases Eased Last Month but Data May Be Distorted and Americans Aren't Feeling It – Associated Press
• 'No Path' for Another GOP Party-Line Bill, Ways and Means Chair Says – Politico
• Johnson Says He Still Controls the House. Some Fellow Republicans Disagree – Washington Post
• Republicans Vow Bitter Recriminations After Johnson Outflanked on ACA – Axios
• HHS Moves to Slash Funding and Access to Care for Transgender Minors – NBC News
• Republicans Drop Support for Afghan Wartime Allies After National Guard Shooting – Politico
• US Announces Massive Package of Arms Sales to Taiwan Valued at More Than $10 Billion, Angering China – Associated Press

Views and Analysis

• A Bellicose Trump Points Fingers in Defending His Record on the Economy – David E. Sanger, New York Times
• Fact Check: Trump Repeats Numerous False Claims in Prime-Time Address – Daniel Dale, CNN
• Fact Focus: Trump's Glowing Account of Progress Is at Odds With His Government's Own Stats – Calvin Woodward, Associated Press
• 4 Takeaways From Trump's Primetime Address – Aaron Blake, CNN
• Trump's Dark Christmas Story Doubles Down on a Political Error – Stephen Collinson, CNN
• Trump's Unconvincing Argument on Affordability – Washington Post Editorial Board
• The ACA's Enhanced Subsidies Are Expiring at Year's End. Here's What You Need to Know – Tami Luhby, CNN
• Why a Key Group of Republicans Broke Ranks on Obamacare Subsidies – Sahil Kapur, NBC News
• Once Again, Health Care Proves to Be a Bitter Political Pill for G.O.P. – Carl Hulse, New York Times
• One Generic Cancer Drug Costs $35. Or $134. Or $13,000 – John Tozzi, Tanaz Meghjani and Mathieu Benhamou, Bloomberg
• The Trump Economy and America's Bad Mood – David Brooks, E. J. Dionne Jr. and Robert Siegel, New York Times (podcast)
• Trust These Numbers? Economists See a Lot of Flaws in Delayed CPI Report Showing Downward Inflation – Sean Conlon, CNBC
• Quantitative Easing Is Back. Let's Hope It Works for All Americans This Time – Anthony Pompliano, Washington Post
• Next Fed Chair in 'No-Win Scenario' as Selection Process Draws to a Close – Colby Smith, New York Times