Before Trump, Kennedy Center Was Solvent: Analysis

Happy Wednesday! Apparently, the baseball postseason games aren't the only thing happening in the world. Here's your evening update.

Kennedy Center Was Solvent Before Trump Took Over: Analysis

President Trump has threatened to tear down the Kennedy Center for the Performing Arts in Washington, D.C., claiming that its finances and 1960s-era building are beyond repair (unless, that is, his name can be added to the iconic structure, allowing him to work his financial magic). Some supporters have questioned his characterization of the condition of the building, saying it simply needs basic repairs, and now an analysis of the center's internal documents by The Washington Post raises questions about Trump's financial management of the institution.

"In the 19 months since President Donald Trump took over the Kennedy Center, the institution has borrowed everything its bank would lend it, dipped into money donors had given on the condition it never be spent and written off pledges from supporters who stopped paying," the Post's Federica Cocco and Naema Ahmed wrote Wednesday.

Based on a review of confidential board documents and tax filings, analysts at the Post, along with outside experts, concluded that the Kennedy Center was in decent financial shape when Trump took it over in early 2025.

"This was a pretty stable - large, complicated, but stable - organization," Karen Gahl-Mills, an expert in arts management at Indiana University, told the Post. "It had a hard time during the pandemic, lots of people did. And it was pretty stable at September 30, 2024."

The center, which functions as a non-profit and was never intended to turn a profit, has long been kept afloat by a mix of ticket sales and donations. When Trump took control of the Kennedy Center in February 2025, replacing board members with supporters who promptly named him chairman, ticket sales and donations started to decline. Ticket sales are expected to fall by two-thirds this year, and donations were down 40% in the first four months of the year.

Part of the problem has been the sharp reduction in the center's payroll, with the development staff slashed from 96 to 14 by Richard Grenell, who served as director under Trump for about a year.

"This is unusual, that this organization has gone this far south, this fast," Gahl-Mills said. "It's not the thing we typically see. It is an organization clearly in distress."

It's not possible to get a complete picture of the center's finances, though, because it hasn't published its 2025 audited accounts, which should have been made public in March.

The center did not respond to questions on the matter submitted by the Post. Gahl-Mills said the trustees need to step in. "Where is the board?" she asked. "This is a place that belongs to all of us, not a place that belongs to one person."

Fed Watchdog Finds Mismanagement but No Crime in $2.4 Billion HQ Renovation

The Federal Reserve's independent watchdog said in a report Wednesday that the $2.4 billion renovation of the Fed's headquarters was poorly managed, resulting in cost overruns, but did not violate the law.

The project was criticized repeatedly by President Trump as he waged a campaign against former Fed Chair Jerome Powell, who announced early this year that the Justice Department had opened a criminal probe into his testimony before Congress, including remarks about the construction project. That investigation was closed, and the U.S. District Court in Washington, D.C., threw out subpoenas issued by U.S. Attorney Jeanine Pirro, ruling that they were part of a pressure campaign to get Powell to cut interest rates or leave his job.

The new 121-page report by the Federal Reserve's Office of Inspector General says that investigators found no criminality or administrative misconduct during a probe that lasted more than a year.

"At no point during our evaluation did we find reasonable grounds to believe that a violation of federal criminal law had occurred requiring a referral to the U.S. Attorney General in accordance with the Inspector General Act," the report by Michael Horowitz, the central bank's inspector general, says. "Further, while our report outlines deficiencies in the management of the renovation project, resulting in our recommended corrective actions in accordance with the Inspector General Act, we did not identify administrative misconduct during our evaluation."

The report did, however, find "deficiencies in the management of the renovation project" and included seven recommendations to address the issues that led renovation costs to nearly double from an initial approved budget of $1.3 billion in February 2020.

"We identified numerous factors that contributed to the significant construction cost increases, including inflation, limited subcontractor bidding, substantial Board design changes, and site conditions," the report says. "We also found that the effect of some of these factors could have been mitigated by more effective project management and contract execution decisions."

Trump on Wednesday used the report to again blast Powell, who he said "should be forced to resign" his seat on the Fed's board. Trump added fresh criticisms of the construction and the cost and said that he has asked Attorney General Todd Blanche "to study the report, and make a determination as to what to do" about the project and cost overruns.

"They completely destroyed the Beauty and Glorious History of the Building. This is Jerome Powell's fault, and he should be forced to resign, IMMEDIATELY!" Trump wrote. "If he doesn't resign, he should be sued, at the highest level, by the United States Government, for either corruption or incompetence, both of which are completely unacceptable...And no, I do not want this Building named after President Donald J. Trump, ME!"

Construction on the headquarters is currently expected to be completed by December 2027.

Dems Block Two Bills Before Senate Heads Home Until November

The Senate is set to wrap up its last week in session until after the November midterms, allowing candidates to head home to campaign as control of the chamber hangs in the balance.

Before lawmakers headed home, Republican leaders hoped to use their final day to boost a couple of their vulnerable incumbents with votes on two hot-button issues, congressional stock trading and energy costs driven by data centers. Democrats had different intentions.

First, in a 53-47 vote, Democrats blocked the Stop Insider Trading Act from advancing. Democrats argued that the bill, sponsored by vulnerable GOP Sen. Pete Ricketts of Nebraska, did not go far enough. They also objected to a "poison pill" voter ID provision.

Then, in a 57-43 vote, Democrats stopped a bill sponsored by GOP Sen. Jon Husted of Ohio aimed at curbing utility costs raised by data centers. The bill needed 60 votes to advance. It had passed the House 417-3, but Senate Democrats said it wouldn't be as effective as their own competing measures. "The bill is a fraud, plain and simple," Senate Democratic Leader Chuck Schumer said.

Democrats surely were also wary of helping Republicans facing tough re-election contests, and the data center issue has featured prominently in Husted's race against former Democratic Sen. Sherrod Brown.

The bottom line: Republicans may have been unable to pass their bills, but they didn't come away entirely empty-handed. They can now pivot to use Wednesday's votes to slam Democrats as obstructionists. "The Ratepayer Protection Act was such a no-brainer that some of the most conservative and the most liberal representatives all agreed it was good policy," Husted said of his bill. "Senate Democrats are the only ones who refused to take yes for an answer."

Inflation Increased Less Than Expected in August

Consumer prices rose at an annual rate of 3.4% in August, the Commerce Department reported Wednesday. The results were lower than analyst expectations of 3.7%, and below July's inflation rate, also 3.7%.

On a monthly basis, the personal consumption expenditures price index rose 0.3%, matching expectations but higher than July's 0.1% reading.

The core PCE inflation number - which strips out volatile food and fuel prices to provide a stronger sense of the underlying trend - rose 3.0% on an annual basis and 0.2% on a monthly basis.

Personal income rose 0.2% during the month, with growth dipping slightly from the month before. Even so, Americans ramped up their spending in August, with personal consumption expenditures rising 0.9% as shoppers dipped into their savings and credit lines.

What the analysts are saying: Investors were relieved that inflation was cooler than expected, reducing pressure on the Federal Reserve to keep raising interest rates.

"This is good news for investors worried about the recent surge in bond yields, and it bolsters the case for not hiking in October," said David Russell of TradeStation, per Bloomberg.

The better-than-expected results do not, however, mean that the inflation problem is gone. Pricing pressure remains persistent, and surging fuel prices could mean there's more trouble ahead.

"The inflation battle is hardly over, but today's numbers are a step in the right direction," said Bret Kenwell of eToro.

Bill Adams, chief U.S. economist at Fifth Third Commercial Bank, noted that inflation remains well above the 2% rate targeted by the Fed. "Inflation's trend is lower but still not close to their target and not improving, either," he told the Associated Press.

Economic growth is solid: In a separate report Wednesday, the Commerce Department said gross domestic product grew at a faster pace during the second quarter than previously estimated. In the third and final estimate for the April through June period, GDP grew 2.2%, a big jump from the 1.5% rate reported in earlier estimates. Consumer spending and business investment were both revised higher.

Many analysts credited the boom in artificial intelligence infrastructure for the strong numbers. "The annual revisions show AI contributed more to growth and less to inflation in recent years than previously thought," said Michael Pearce, chief US economist at Oxford Economics, per Agence France-Presse.

Fiscal News Roundup

• Fed Watchdog Finds No Crimes in $2.4B Building Renovation, Only Mismanagement – Associated Press
• US Withdraws Forces in Iraq as Balance of Power Shifts to Iran – Washington Post
• Congress Set to Leave Washington for the Midterms With No AI Progress – New York Times
• Democrats Block Stock-Trading Bill, Denying the GOP a Pre-Midterm Win – New York Times
• Data Center Bill Falls Short in Senate as Lawmakers Take Final Votes Before the Midterms – Associated Press
• Inflation Cooled Slightly Last Month Even as Consumers Stepped Up Spending – Associated Press
• Hegseth Confirms the US Military Will Cut 20% of Its Generals and Admirals – Associated Press
• White House Begins Mailing $500 Obamacare 'Refund' Checks – The Hill
• Trump's Nominee to Be Nation's Top Doctor Clears Key Hurdle in Senate Committee – Washington Post
• Trump Unveils $54 Billion in South Korean Investment in Alaska, Site of a Tight Senate Race – Associated Press
• Trump Administration Considers Scaling Back Border Project in Texas' Big Bend National Park – Associated Press
• Paxton: Trump GOP Midterm Convention 'Dropped Our Numbers' – The Hill
• Texas Seniors Are Getting a Huge Property Tax Break. Everyone Else Is Picking Up the Tab – Texas Tribune

Views and Analysis

• Trump Wants to Get His Hands on the Power of the Purse – Jamelle Bouie, New York Times
• The Kennedy Center Was Solvent When Trump Took Over. Then Its Finances Collapsed – Federica Cocco and Naema Ahmed, Washington Post
• Trump Threw a Fit About the Interest Rates He Caused. He's Still Right – Zachary Karabell, Washington Post
• Unspent Healthcare Funding Faces Do-or-Die Cliff – Nathaniel Weizel, The Hill
• Medicare Should Help Doctors Prevent Disease, Not Just Pay for It – Rep. Gregory F. Murphy (R-NC), The Hill
• The Affordability Illusion – Sheldon H. Jacobson, The Hill
• "No Beardos, No Weirdos": Hegseth Goes on Bizarre Rant to Silent Crowd – Malcolm Ferguson, New Republic
• The Age After Trump Is Coming. Better Buckle Up – Doug Sosnik, Washington Post