Unlikely Pair of Senators Push a Plan to Save Social Security

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By Yuval Rosenberg and Michael Rainey

Happy Tuesday! House lawmakers, returning to the Capitol today for eight days in session before their July 4 recess, are about to pass the bipartisan housing affordability bill that cleared the Senate yesterday. President Trump is expected to sign the bill tomorrow. The Senate, meanwhile, voted 50-48 to block Trump from resuming his war with Iran. Four Republicans joined with nearly all Democrats in supporting the resolution. Two Republicans, Sens. Mitch McConnell and Dave McCormick, missed the vote, allowing the measure to pass after nine past efforts had failed. The resolution, which was approved by the House earlier this month, is seen as a significant but largely symbolic rebuke of Trump's military action. The president is set to meet with GOP senators tomorrow.

Here's what else is happening.

Unlikely Pair of Senators Push a Plan to Save Social Security

A bipartisan pair of senators is calling on Congress to act quickly to shore up the finances of Social Security, the immensely popular old-age program that faces the threat of benefit cuts starting in 2032.

Writing in The New York Times Tuesday, Republican Sen. Bernie Moreno and Democratic Sen. Elizabeth Warren say that the "common-sense solution" to the problem is to eliminate the payroll tax cap, which protects all income above $184,500 from Social Security taxes as of 2026. Moreno and Warren argue that the tax cap is "doubly unfair," since it allows high earners to pay a lower effective tax rate overall, even as their wages have pulled ahead of other income groups over the last few decades.

Eliminating the tax cap would raise more than $3 trillion over 10 years, extending the solvency of the Social Security program for decades. Doing so would be popular, too, Moreno and Warren note, with majorities of both Democrats and Republicans supporting that approach.

"Social Security was created by overwhelming bipartisan congressional majorities," the lawmakers write. "Today, members of Congress from both parties must come together again to save it. That's why the two of us are working together on legislation to remove the cap on Social Security taxes and extend the solvency of our retirement system. Americans deserve nothing less."

Read the full piece at The New York Times.

National Debt Matters More Than It Used To,' Two Dem Economists Say

The United States' fiscal outlook has gotten "notably worse" than it was even a decade ago - and stabilizing the debt picture is now likely to be considerably more difficult, even as Congress has been "increasingly unresponsive" to the problem, according to a new paper by economists Bobby Kogan and Jared Bernstein for the Center for American Progress, a left-leaning think tank.

How we got here: Kogan and Bernstein blame the deteriorating outlook on Republican tax cuts enacted since the turn of the century and interest rates that have rebounded from historic lows reached after the Great Recession.

"The first and second rounds of the Trump tax cuts have since significantly increased the fiscal gap and have led to historically large primary-or noninterest-deficits outside of times of war and economic recession," they write. "With large primary deficits and higher interest rates, the debt ratio is now projected to climb indefinitely at a significantly faster pace than was previously projected. Importantly, this is now happening even during periods of low unemployment and sustained wage growth."

What it would take to close the gap: Congress has done little in response to warnings about an unsustainable fiscal trajectory, allowing those primary deficits to reach historically high levels. "The fiscal gap-the average amount of primary deficit reduction needed to keep the debt ratio from rising-is now sufficiently large that course correction is quite difficult," Kogan and Bernstein write.

They calculate that, if the temporary tax cuts enacted by Republicans last year are made permanent and tariff revenues decline after President Trump leaves office, primary deficits would need to be cut by an average of 2.6% of GDP to stabilize the nation's debt ratio. In simpler terms, the economists say that deficits before interest would need to be cut by $10.5 trillion over 10 years.

That's much harder, Kogan argues, than the cuts of roughly 1.5% of GDP that would have been needed a decade ago.

"If the country had to quickly reduce primary deficits by 2.6 percent of GDP to close the fiscal gap, it would mean deeply painful spending cuts or tax increases with negative growth impacts," the economists write. "For example, this would mean raising taxes by 15 percent (more than $5,100 on the average employed individual if borne entirely by them) or cutting program spending by 13 percent-or 57 percent if Social Security, Medicare, Medicaid, the Supplemental Nutrition Assistance Program (SNAP), veterans spending, and defense spending are left untouched, or 23 percent if just Social Security and Medicare are left untouched."

The authors also note that the outlook would be even worse if interest rates climb higher than projected.

A political problem: Political incentives make it challenging for lawmakers to respond to such warnings. "One problem is that policymakers heavily and increasingly discount the future," Kogan and Bernstein write. "Given the incentives they face, it is politically rational for them to provide deficit-financed 'goodies' to their donor base or constituents rather than to insist they accept cuts to services or higher taxes to stave off higher interest rates and debt-service crowding out down the road."

The authors suggest that discussing the debt picture in more concrete terms - for example, by highlighting the link between a higher debt-to-GDP ratio and higher rates for mortgages - might help shift the political considerations involved. They also float the idea that a more gradual approach to stabilizing the long-term debt might be more manageable: "When in a deep hole, the first thing one should do is stop digging, even if that requires a substantial redefinition of the hole!" But they conclude that Congress should look for ways to reduce primary deficits - but only if it's done responsibly.

"Congress should ensure that any deficit reduction does not harm the poorest or vital public services on which Americans rely," Kogan and Bernstein write. "Irresponsible deficit reduction is significantly worse than doing nothing, but doing nothing is worse than responsible deficit reduction. Congress should look first and foremost to undo some of the many tax cuts significantly tilted toward the wealthy, which are responsible for the fiscal gap in the first place."

Judge Blocks SNAP Junk Food Rules, Dealing a Blow to MAHA

A federal judge ruled on Monday that states cannot impose bans on the purchase of soda, candy and other foods deemed unhealthy for those using the Supplemental Nutrition Assistance Program, commonly referred to as SNAP or food stamps.

As part of the "Make America Healthy Again" agenda driven by Health Secretary Robert F. Kennedy Jr., the Trump administration has allowed some states to place limits on the types of foods SNAP beneficiaries can purchase, with the goal of reducing obesity and improving health. Agriculture Secretary Brooke Rollins granted waivers to 23 states allowing them to ignore the standard federal definition of "food," clearing the way for them to create new restrictions on SNAP benefits. Rollins also approved several pilot programs in which states enforced the new limitations. In a ruling that applies to Colorado, Iowa, Nebraska, Tennessee and West Virginia, a federal judge canceled the pilot programs.

"Congress defined what 'food' is supposed to be, and it did not authorize the agency to amend or waive the definition it enacted," U.S. District Judge Amy Berman Jackson wrote in a court filing. "It did not authorize the agency to cut types of food out of SNAP entirely."

Politico's Marcia Brown says the ruling "could jeopardize one of the biggest policy achievements of the Make America Healthy Again agenda." Rollins and Kennedy have encouraged states to submit plans that would limit food purchases within SNAP to "healthy" products, and Kennedy has told states that they can get more federal healthcare funding if they create SNAP restrictions.

After the ruling was issued, Rollins vowed to continue to push for limits on SNAP purchases. "An activist judge just blocked our commonsense restriction on using SNAP benefits for soda and junk," she wrote on social media. "SNAP is for food - not sugar bombs fueling obesity, diabetes, and skyrocketing healthcare costs for low-income families. Taxpayers shouldn't subsidize junk food and drinks at the expense of American health."

The judge said her ruling had nothing to do with the wisdom of the "healthy" food policy, which some critics see as paternalistic, and was focused instead on the legality of how the policy has been rolled out.

"The Court's analysis should not be taken as a comment on whether the pilot projects are a good idea or not," she wrote. "That is a question of policy that is not before the Court. The federal defendants and the states may have a genuine desire to improve the health of SNAP households by encouraging healthy choices at the store, and they can take lawful steps to meet those goals. But what they cannot do is violate the law and their own regulations along the way."

Number of the Day: $17.5 Billion

The Department of Energy announced today that it would provide $17.5 billion in low-interest loans to Westinghouse, a technological manufacturing company. The loans will be at the company's disposal for purchasing materials required to produce the AP100, Westinghouse's signature nuclear reactor model, according to The Wall Street Journal.

The policy, which is meant to expedite the production of 10 reactors in the U.S., aligns with the Trump administration's goal of increasing nuclear energy production.

President Trump signed an executive order in May 2025 aimed at fostering the nuclear industry, promising to quadruple American production from 100 gigawatts to 400 gigawatts by 2050.

U.S. Energy Secretary Chris Wright praised the new conditional loans, writing in a post on X that they will "unleash the American nuclear renaissance" and "deliver on Trump's bold energy agenda."

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