FEMA Employees Sound the Alarm on Trump Changes to Agency

A relatively quiet Wednesday as summer winds down, but that was not the case on this date in 1883, when the Krakatoa volcano blew its top, sending a plume of ash 50 miles into the air in the largest explosion in recorded history. In a less combustible vein, here's what's happening on the fiscal front.

**FEMA Employees Put on Leave After Warning on Trump Overhaul of Agency**

The Federal Emergency Management Agency placed a group of employees on leave on Tuesday after they published a statement criticizing changes made at the agency under the Trump administration.

In a document titled "Katrina Declaration and Petition to Congress," 191 current and former FEMA employees accused the Trump administration of eroding the capabilities of the agency, which they say is now staffed by unqualified leaders. Thirty-five of the signatories provided their names, with the rest remaining anonymous.

"Our shared commitment to our country, our oaths of office, and our mission of helping people before, during, and after disasters compel us to warn Congress and the American people of the cascading effects of decisions made by the current administration," the statement says. "We the undersigned - current and former FEMA workers - have come together to sound the alarm to our administrators, the US Congress, and the American people so that we can continue to lawfully uphold our individual oaths of office and serve our country as our mission dictates."

President Donald Trump has sent mixed messages about FEMA, at times saying that he wanted the agency to cease operations, with states picking up any resulting slack. As recently as June, Trump said he planned to start "phasing out" the agency at the end of hurricane season, which runs through November. He also indicated that he might distribute disaster funds himself directly from the White House, with less money being provided than in the past.

The signatories said Secretary of Homeland Security Kristi Noem, who oversees FEMA, has effectively impounded agency funds by requiring that all expenditures over $100,000 receive her personal review and approval. "Consequences of this manual review became tragically clear during the July 2025 floods in Kerrville, Texas, when mission assignments were delayed up to 72 hours," the statement says.

The agency, which has a budget of about $30 billion and employed more than 20,000 people before layoffs hit earlier this year, has placed 30 employees who signed the statement on administrative leave with pay and benefits, The Washington Post reports.

FEMA pushed back against the accusations. "It is not surprising that some of the same bureaucrats who presided over decades of inefficiency are now objecting to reform," a FEMA spokesperson said. "Under the leadership of Secretary Noem, FEMA will return to its mission of assisting Americans at their most vulnerable."

**Trump's Tariff on India Jumps to 50%**

The U.S. tariff on goods imported from India rose to 50% on Wednesday, with a 25% levy added to an existing 25% import tax as part of an effort by President Donald Trump to punish New Delhi for importing Russian oil.

The tariff is among the highest Trump has imposed on trading partners, and is on par with Brazil, which Trump is punishing for political reasons.

While much of India's economy is focused on domestic production and consumption, some key export sectors will feel the pinch, including textiles, apparel, footwear, sporting goods, jewelry and chemicals.

The United States is India's largest trading partner, and trade in goods and services between the two nations totaled about $212 billion in 2024. India imported about $41 billion in goods such as machinery and foodstuffs from the U.S. that year, while sending about $87 billion in goods to the U.S., resulting in a trade deficit in goods of roughly $46 billion. In the service sector, the U.S had a slight surplus with India last year.

Trump's tariffs are raising concerns in India about possible layoffs and closures in sectors affected by the new trade barriers. India has threatened to retaliate with its own tariff hikes on U.S. goods, and some geopolitical experts say that the tariffs could push India away from the U.S. and into closer relationships with China and Russia.

Some major U.S. corporations could suffer from any deterioration in the U.S.-India relationship. U.S. firms, including American Express, Apple, Microsoft and Google, have built facilities in India as they turn to the Asian nation as a source of low-cost, educated workers.

**Number of the Day: 24%**

The billionaires who populate the Forbes 400 list pay a lower tax rate than the rest of America, according to a new study from economists at the University of California, Berkeley. From 2018 to 2020, the superrich paid an average effective tax rate of 24%, compared to a 30% rate for all other taxpayers, according to the analysis published by the National Bureau of Economic Research.

Much of the income of the wealthiest taxpayers comes from corporations. Over the years, taxes have been cut on corporate profits, helping reduce the effective tax rate for the wealthiest among us.

The authors of the paper include Emmanuel Saez and Gabriel Zucman, who argue that the decline in taxation on businesses suggests that a wealth tax is needed to help reduce the gap between the ballooning incomes at the top and everyone else. "The wealth tax is the most direct and powerful way to specifically target the ultra-rich and increase tax progressivity at the very top," Saez told CBS News's Aimee Picchi. "The wealth tax on the ultra-rich is also popular but will obviously be fought by billionaires, and they have disproportionate influence."

Fiscal News Roundup

• Trump White House Pressures Fed Governor Lisa Cook to Go on Leave as Lawsuit Looms – CNBC
• House Panel Says It Will Examine Allegations Against Fed's Cook – Roll Call
• Trump's Fed Gamble Risks Pushing Key Bond Rates Even Higher – Bloomberg
• Trump Makes Good on Threat to Impose 50% Tariffs on India Imports – CNN
• Full Weight of American Tariffs Slams Into Effect Against India – New York Times
• Trump's Intel Stake Sparks Cries of 'Socialism' from His Party, but He Vows More Deals Are Coming – Associated Press
• FEMA Employees Put on Leave After Criticizing Trump Administration in Open Letter – Washington Post
• DOT Secretary Says Agency Will 'Take Over' Washington's Union Station, Building It Already Owns – Politico
• Trump Administration Moves to Bar Aid Groups from Serving Undocumented Immigrants – Washington Post
• Top Florida Official Says 'Alligator Alcatraz' Will Likely Be Empty within Days, Email Shows – Associated Press
• US Asks Supreme Court to Take Action in USAID Funding Challenge – Roll Call
• National Guard Troops Deployed in D.C. Add Sanitation, Landscaping Duties – Washington Post
• Trump Shrank Staffing of National Parks. See How Many Are Struggling – New York Times

Views and Analysis

• Trump's Attack on the Fed Threatens US Credibility – Janet Yellen, Financial Times
• I Wasn't Very Worried About the Fed. Now I Am – Bill Dudley, Bloomberg
• 'People Aren't Paying Enough Attention': Trump Moves to Transform the Fed – Sam Sutton, Politico
• The Fed Shouldn't Take the Political Bait – Claudia Sahm, Bloomberg
• Trump Tests the Fed's 'Don't Panic' Strategy – Victoria Guida, Politico
• The Most Dangerous Firing Trump Has Attempted Yet – Nitish Pahwa, Slate
• 'Judicial Hesitancy': Why Trump Is Betting the Courts Will Green-Light His Ouster of Lisa Cook – Josh Gerstein and Kyle Cheney, Politico
• Trump Accused Fed Governor Lisa Cook of Mortgage Fraud. That Can Be Hard to Prove, Experts Say – Kate Dore, CNBC
• Intel's Problems Can't Be Fixed by the Government – Bloomberg Editorial Board
• Tax Complexity Now Costs the US Economy over $536 Billion Annually – Sam Cluggish and Alex Muresianu, Tax Foundation
• The Quiet Collapse of America's Pandemic Preparedness – Britt Lampert and Anemone Franz, The Hill
• GOP Voters Favor Third Trump Term – David Weigel, Semafor