The shaky, four-week-old ceasefire between the United States and Iran appeared to be collapsing on Monday, as the United Arab Emirates said it had been attacked by Iranian missiles and drones, and the U.S. said it sank several small Iranian military boats as it guided the passage of two American-flagged merchant ships through the Strait of Hormuz. Oil prices jumped on fears that fighting would flare up again, with Brent crude futures up about 6% to $114 a barrel.
Here's what else we're watching while the House and Senate are out this week.
Trouble for Trump: Disapproval Hits Record High in New Poll
President Trump's disapproval rating reached a new high of 62% in the latest Washington Post-ABC News-Ipsos poll, released on Sunday. Trump's approval ratings has fallen to 37%, the lowest of this term as measured in that survey.
As the Iran war has driven gas prices to a four-year high, two-thirds of Americans say the country is heading in the wrong direction and a majority of those surveyed disapproves of Trump's handling of every issue measured.
Just over three-quarters of Americans disapprove of Trump's handling of the cost of living in the United States, and 72% disapprove of his record on inflation, up from 65% in February. About two-thirds now dislike how Trump is handling the economy - and 61% disapprove of his handling of taxes, even as the president and Republicans try to highlight their success in passing a huge package of tax cuts last year. And 65% oppose increasing military spending from $1 trillion to $1.5 trillion, as Trump has proposed.
Republicans still overwhelmingly back the president, with 85% approving of the job he's doing, though the percentage who "strongly" approve of Trump has fallen from 53% last fall to 45% now. But just 25% of independents approve of Trump's performance and 46% of Americans say Trump is "too conservative."
More than seven in 10 say that Trump is not honest and trustworthy and 59% say he does not have the "mental sharpness it takes to serve effectively as president." More than half (55%) say he isn't physically healthy enough to serve effectively.
Despite Trump's low approval ratings, Emily Guskin of ABC News points out some good news for Republicans in the survey: "Americans don't trust Democrats much more to handle issues and slightly more say Democrats are too liberal than say Republicans are too conservative. ... On 11 separate issues measured, Americans trust Democrats more on just three issues, Republicans on only two issues and are divided between the two parties on the remaining issues."
The poll was conducted online from April 24 to 28 among 2,560 U.S. adults. The overall results have a margin of error of 2 percentage points.
Read more at ABC News or The Washington Post.
Op-Ed of the Day: The Biggest Driver of Soaring Healthcare Costs
There's plenty of blame to go around when it comes to the high cost of healthcare in the United States, but the leading driver often skates by with less attention: the hospital industry.
Writing in The New York Times Monday, economist Zack Cooper, who runs the Health Care Affordability Lab at Yale University, says that Americans are understandably frustrated by the high cost of health insurance, with premiums for families at times running upwards of $27,000 a year. But Cooper says the high cost of medical care at hospitals is the driving force behind soaring premiums, and that's where we have to turn if we're looking for ways to get a handle on spending.
"Americans receive a similar amount of care as people in other countries, but we pay much higher prices for the care we receive," he writes. "Take hip replacements. Hospitals in the United States earn $29,000 on average for a replacement covered by private insurance and $16,000 for one covered by Medicare. In Germany, the public system of nonprofit insurers, which covers 90 percent of the population, pays hospitals $9,400."
Cooper says that hospital prices are the main cause of the astonishing 320% increase in health insurance premiums over the last 25 years. During that time, hospital prices have risen twice as fast as drug prices and three times faster than the rate of inflation.
Hospital prices have risen so fast due to growing market power, as mergers have reduced competition, producing monopolies in some local markets. And they stay so high because hospital owners and administrators have considerable political power, as they spend more than $100 million a year on lobbying in Washington.
If politicians are serious about reining in hospital prices, they will have to regulate at least some of them, Cooper says.
"Economists generally prefer to rely on competition to determine what companies get paid," Cooper writes. "But in hospital markets that are effective monopolies, regulation isn't a departure from sound economics - it's the only tool left."
Quote of the Day: The Trump Battleship
"There's every reason ... to believe that Trump-class battleships would at best be expensive pieces of junk. At worst they would be floating coffins for U.S. sailors.
"And I do mean expensive. Current projections are that each of these ships would cost $17 billion. That's not the cost of a whole fleet, it's the cost for each individual ship. And if there's one thing the U.S. military is still good at, it's spending more than projected on weapons systems."
− Economist Paul Krugman, writing about a new class of warships that the Department of Defense is seeking to build.
Krugman notes that military experts have long seen massive battleships as obsolete - a belief that has only been strengthened by the rise of inexpensive drones that have altered the balance of power in modern warfare.
Because today is Star Wars Day, May the 4th, Krugman compares the proposed new ship to the Death Star in the first Star Wars movie. He writes: "as a reminder, in the climactic battle the Empire places its faith in a massive, expensive high-tech weapons system, only to see that system destroyed by scrappy rebels' tiny fighters."
Trump is a big fan of the proposed warship, named after him - so much so that he recently fired his secretary of the Navy, John Phelan, reportedly for failing to deliver a plan to build the first ship in the class by 2028, a deadline that Phelan and most military experts have said is impossible, given the need for new designs, new technologies and a massively improved shipbuilding industry.
It's not clear that Congress will approve funds for the new ship, which would weigh as much as 40,000 tons. Trump's $1.5 trillion defense budget request includes nearly $66 billion for shipbuilding, the second-largest request in that category since 1955, but it remains to be seen if lawmakers agree that new battleships are an important priority.
As appropriators look to get the most bang for their buck, they may ask if the price is too high. "Even for a government as big as America's, $17 billion is a lot of money," Krugman writes. "Each of these ships would, for example, cost almost twice the pre-Trump annual budget of the National Science Foundation, although the NSF, like all funding sources for research, is now facing savage budget cuts."
"Somehow, I don't have the sense that the force is with us," Krugman says.
Advertisement
Is Your Retirement Plan Built to Last?
Most people saving for retirement have a number in mind. Fewer have a plan for turning that number into actual income.
The Definitive Guide to Retirement Income walks you through the questions that matter: what things will cost, where the money comes from, and how to keep your portfolio aligned with your long-term goals.
If you have $1,000,000 or more saved, download your free guide and start building a retirement income plan that holds up.
Fiscal News Roundup
- Strikes in U.A.E., Oman and at Sea Strain Iran Truce to the Breaking Point – New York Times
- Bessent: 'Help Is on the Way' on Gas Prices – The Hill
- Hassett: Energy Shocks From Iran War Will Affect Airline Profits for at Least a Quarter – The Hill
- GOP Allies Warn White House Its Positive Economic Message Is Falling Flat – Politico
- Treasury Yields Jump as Oil Turns Higher, 30-Year Treasury Yield Tops 5% – CNBC
- Warsh's Take on Fed Independence Is Met With Confusion and Some Concern – CNBC
- Treasury Market on Watch for Shift in Yellen-Era Debt Plan – Bloomberg
- New Trump Rule Puts Millions at Risk of Losing Rental Assistance – New Republic
- The Return for These Investors Isn't Money, It's More Affordable Housing – New York Times
- Warned Off Vaccine Actions, Kennedy Seeks Quick Health Wins Ahead of Midterms – Reuters
- More Than 150 Wind Projects Stall as Pentagon Delays Reviews – New York Times
- Republicans See High-Risk Plans as the Future of Health Insurance – Politico
- Democratic Leaders Want an Affordability Debate on AI. Critics Say They're Ducking the Real Fight – Politico
- 81 Percent of Young Americans Say Economic Conditions Are Bad or Terrible: Survey – The Hill
- House Sexual Harassment Payouts Exceeded $300,000 – Politico
Views and Analysis
- This Is the Biggest Culprit for High Health Care Spending – Zack Cooper, New York Times
- This $1.3 Trillion Industry Deserves to Be Taxed – Scott Hodge, Washington Post
- What Is, and Isn't, Worrying About 100% Debt to GDP – Neil Irwin, Axios
- We'll Miss Gas Taxes When They're Gone – Justin Fox, Bloomberg
- Johnson's Grip Is Slipping. So Is the GOP's Majority – David M. Drucker, Bloomberg
- Trump's Bad Polls Spell Trouble for GOP Ahead of Midterms – Julia Mueller and Caroline Vakil, The Hill
- Medicaid Work Requirements Give Red States a Chance to Turn Back Clock – Alice Miranda Ollstein, Politico
- How a Weaker Dollar Is Quietly Making Life More Expensive – Matt Sedensky, Associated Press
- How the US Is Using Swap Lines to Project Financial Power – Daniel Flatley and Enda Curran, Bloomberg
- The Death Star Administration – Paul Krugman, Substack
- The Cost of Gutting Science Is Invisible Yet Enormous – Gautam Mukunda, Bloomberg
- Redistricting War Accelerates Winner-Take-All Political Combat That's Straining American Democracy – Nicholas Ricciardi, Associated Press
- There's a Right and Wrong Way to Use Urgent Care – Simar Bajaj, New York Times
- Trump's Feud With New York Masks Amtrak's Spending Spree – Ted Mann, Bloomberg
- Paranoia, Turmoil and Backlash: Inside the FDA Under Marty Makary – Rachel Cohrs Zhang, Jessica Nix, Gerry Smith and Riley Griffin, Bloomberg