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IBM boasts how AI can improve productivity, pays up to $260 million in ‘stranded costs’ after laying off thousands

Story by Wallace Witkowski • Yesterday

International Business Machines Corp. shares rose in the extended session Wednesday after Big Blue topped earnings estimates and software sales expectations, and played up the efficiency of its own AI, while axing thousands of jobs.

Related video: IBM Expects Strong Sales Growth in 2023 (Bloomberg)

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IBM reported first-quarter net income of $927 million, or $1.02 a share, compared with $733 million, or 82 cents a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items like “stranded costs,” were $1.36 a share, compared with $1.40 a share in the year-ago period.

Last quarter, IBM posted its biggest sales increase in nearly a decade, while trimming its workforce by nearly 4,000 jobs.

“In the first quarter of 2023, management initiated a workforce rebalancing action to address remaining stranded costs in the business as a result of portfolio actions taken over the last several years,” IBM said in a filing, adding that the rebalancing charges primarily included employee transition costs, severance and employee benefits. IBM reported a pre-tax charge of about $260 million in the first quarter for “stranded costs.”

IBM, which now receives about three-quarters of its revenue from tech services, reported its revenue barely rose to $14.25 billion from $14.2 billion in the year-ago quarter.

Analysts surveyed by FactSet had forecast $1.26 a share on revenue of $14.35 billion. Prior to the earnings report, one analyst had said IBM would have to turn in “nearly pristine” results to support the stock.

Prior to Wednesday’s report, Chief Executive Arvind Krishna said artificial intelligence was well on its way to replacing humans for “clerical white-collar work.” On a call with analysts, Krisha gave examples of that in IBM’s own use, and told analysts that AI is projected to add $16 trillion to the global economy by 2030.

“In digital labor, we are helping finance, accounting, and HR teams save thousands of hours by automating what used to belabor intensive data-entry tasks,” Krishna told analysts. “These productivity initiatives free up spending for reinvestment and contribute to margin expansion.”

“We’re doing that in areas like HR and talent, finance, and end-to-end processes like quote-to-cash and source-to-pay,” said James Kavanaugh, IBM’s chief financial officer, on the call. “For example, in HR, we now handle 94% of our companywide HR inquiries, speeding up the completion of many HR tasks by up to 75%.”

Read: Meta begins cutting technical jobs in latest round of layoffs

IBM reported $5.92 billion in software revenue for the first quarter, while analysts forecast $5.83 billion; $4.96 billion in consulting revenue, versus the Street’s $5 billion; and $3.1 billion in infrastructure revenue, just below the consensus $3.19 billion.

IBM said it expects revenue growth will be “neutral” for the year compared with last year’s $60.53 billion, given current exchange rates, and reiterated its forecast of $10.5 billion in FCF. Analysts were laser-focused on free-cash flow, or FCF. For the first quarter, FCF came in at $1.3 billion, while analysts expected $1.6 billion.

Analysts had estimated $2.07 a share on revenue of $15.78 billion for the second quarter, and $9.45 a share on revenue of $62.7 billion for the year. Analysts currently expect $10.45 billion in FCF for the year.

Over the past year, IBM has warned about currency headwinds because of strength in the dollar, with the U.S. Dollar Index reaching a 52-week high in mid-September. Currently, the dollar index is only up 1%, compared with 12 months ago.

IBM shares rose 3% after hours, following a 1.1% decline in the regular session to close at $126.32. Shares have slipped 2.2% over the past 12 months, and are down 10.3% year to date. Meanwhile, the Dow Jones Industrial Average which counts IBM among its 30 components, is up 2.3% year to date, while the S&P 500 index is up 8.2%, and the tech-heavy Nasdaq Composite Index has gained more than 16%.

Meta lays off tech teams, battering employee morale

Story by By Katie Paul and Yuvraj Malik • Yesterday 

Headquarters of Facebook parent company Meta Platforms Inc in Mountain View© Thomson Reuters

(Reuters) - Meta Platforms Inc on Wednesday carried out another round of job cuts, this time hitting engineers and adjacent tech teams, as Chief Executive Mark Zuckerberg further moved to streamline the business in a bid to make 2023 a "year of efficiency."

Meta in March became the first Big Tech company to announce a second round of mass layoffs, which it said would take place in three main batches over several months and impact 10,000 employees.

Wednesday's cuts, though expected, prompted expressions of frustration from Meta employees. Layoffs were the subject of the most popular questions posted on an internal company forum on Wednesday ahead of an upcoming employee town hall.

"You've shattered the morale and confidence in leadership of many high performers who work with intensity. Why should we stay at Meta?" read one question seen by Reuters.

The question references comments Zuckerberg made last year urging employees to work with more "intensity" to meet the Facebook and Instagram parent company's business challenges.

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The company declined a Reuters request for comment.

Meta's first round of layoffs in the fall hit more than 11,000 employees, or 13% of its workforce at the time, and preceded other major tech companies shedding thousands of employees after a pandemic-led boom in digital advertising and cloud computing.

With the restructuring, Meta is also shelving lower-priority projects and "flattening" layers of middle management.

Investors have rewarded the company for downsizing.

Meta shares have surged about 80% this year, outperforming the tech-heavy Nasdaq Composite's 16% rise in the period.

The company, which will announce its first-quarter results on April 26, is expected to benefit from a modest pickup in the digital advertising market and regulatory pressure on chief rival TikTok.

(Reporting by Katie Paul in New York and Yuvraj Malik in Bengaluru; Editing by Devika Syamnath and Bill Berkrot)

Confidence in childhood vaccines dropped around the world during pandemic: UNICEF

Story by Jared Gans, The Hill , Yesterday 

Confidence in childhood vaccines dropped internationally during the COVID-19 pandemic, falling by as much as 44 percentage points in some countries, according to a report from UNICEF.

The report, entitled “The State of the World’s Children 2023: For Every Child, Vaccination,” found that confidence dropped in 52 of the 55 countries surveyed, with China, India and Mexico being the only three countries where the perception of the importance of vaccines stayed the same or improved. Confidence dropped by more than a third in South Korea, Japan, Papua New Guinea, Ghana and Senegal since the pandemic began.

Researchers did still find that confidence in childhood vaccines overall remains mostly strong, with more than 80 percent of those surveyed in nearly half of the 55 countries saying vaccines are important for children to have.

But they warned that factors like uncertainty about the response to the pandemic, access to misleading information, declining trust in experts and political polarization could be allowing vaccine hesitancy to grow.

UNICEF Executive Director Catherine Russell said in a release that the data is a “worrying warning signal.” She said officials must not allow confidence in vaccines to become “another victim of the pandemic” or many children could die from preventable diseases like measles or diphtheria.


“At the height of the pandemic, scientists rapidly developed vaccines that saved countless lives. But despite this historic achievement, fear and disinformation about all types of vaccines circulated as widely as the virus itself,” Russell said.

The release states that the drop in confidence coincides with the largest sustained decrease in childhood immunizations in three decades, which was caused by the pandemic. It states that the pandemic disrupted childhood vaccinations in almost every country because of “intense demands” on health care systems, stay-at-home measures, workforce shortages and immunization resources being diverted to develop a COVID-19 vaccine.

The report states that 67 million children missed vaccinations between 2019 and 2021, and children born just before or during the pandemic are getting past the age where they would normally be vaccinated for a wide range of diseases.

Researchers also found that the pandemic exacerbated existing inequalities, as the children who were most impacted by the drop in childhood vaccines were those living in the poorest, most remote and most marginalized communities.

UNICEF concluded that governments must “double-down” on increasing funding for vaccination efforts and free up available resources, including COVID-19 funds, to accelerate these efforts.

The report calls on world governments to identify and reach all children who missed vaccinations during the pandemic, build greater confidence in vaccines and prioritize funding for immunizations and primary health care. It also states that governments should invest in female health care workers, “innovation” and local manufacturing to build up more resilient health care systems.

“We know all too well that diseases do not respect borders. Routine immunizations and strong health systems are our best shot at preventing future pandemics, unnecessary deaths and suffering,” Russell said.

Judicial record undermines Clarence Thomas defence in luxury gifts scandal

Story by Ed Pilkington in New York • Today
The Guardian


Earlier this month, the supreme court justice Clarence Thomas put out a statement in which he addressed the storm of criticism that has engulfed him following the blockbuster ProPublica report that revealed his failure to disclose lavish gifts of luxury vacations and private-jet travel from a Texan real estate magnate.


Photograph: Chris Kleponis/EPA© Provided by The Guardian

Thomas confirmed that the Dallas billionaire and Republican mega-donor Harlan Crow and his wife Kathy were “among our dearest friends”. Thomas admitted, too, that he and his wife Ginni had “joined them on a number of family trips during the more-than-a-quarter-century we have known them”.

Related: Clarence Thomas defends himself after undisclosed gifts revelation

The justice, who is the longest-serving member of the nation’s highest court and arguably its most staunch conservative, insisted he had taken advice that “this sort of personal hospitality from close personal friends” did not have to be reported under federal ethics laws. He emphasized that the friend in question “did not have business before the court”.


But a close look at Thomas’s judicial activities from the time he became friends with Crow, in the mid-1990s, suggests that the statement might fall short of the full picture. It reveals that a conservative organization affiliated with Crow did have business before the supreme court while Thomas was on the bench.

In addition, Crow has been connected to several groups that over the years have lobbied the supreme court through so-called “amicus briefs” that provide legal arguments supporting a plaintiff or defendant.

In 2003, the anti-tax group the Club for Growth joined other rightwing individuals and organisations, including the Republican senator Mitch McConnell and the National Rifle Association (NRA), in attempting to push back campaign finance restrictions on election spending.

At the time of the legal challenge, from at least 2001 to 2004, Crow was a member of the Club for Growth’s prestigious “founders committee”. Though little is known about the role of the committee, it clearly commanded some influence over the group’s policymaking.

During the course of a 2005 investigation into likely campaign finance violations by the Club for Growth, the Federal Election Commission (FEC) noted that rank-and-file club members could “vote on an annual policy question selected by the founders committee”.

Crow has also been a major donor to the club, contributing $275,000 to its coffers in 2004 and a further $150,000 two years later.

The 2003 legal challenge championed by the Club for Growth targeted the McCain-Feingold Act, which had been passed with cross-aisle backing the previous year. The legislation placed new controls on the amount of “soft money” political party committees and corporations could spend on elections.

On appeal, a consolidated version of the lawsuit, Mitch McConnell v FEC, was taken up by the supreme court. In a majority ruling, the court allowed the most important elements of the McCain-Feingold Act to stand (though they were later nullified by the supreme court’s contentious 2010 Citizens United ruling).

Thomas was livid. He issued a 25-page dissenting opinion that sided heavily with the anti-regulation stance taken by the Club for Growth and its rightwing allies. Thomas began his opinion by breathlessly accusing his fellow justices of upholding “what can only be described as the most significant abridgment of the freedoms of speech and association since the civil war”.

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By the time Thomas issued his opinion in December 2003 he had already forged his deep relationship with Crow. According to the billionaire, they first met at a conference in Dallas in 1994 – by which time Thomas had already been nominated by George HW Bush to the most powerful court in the land.

The businessman had already showered Thomas with several lavish gifts before the McCain-Feingold challenge reached his court. Thomas disclosed for instance a 1997 flight from Washington to northern California on Crow’s private jet to attend an all-male retreat at Bohemian Grove at which the justice went on to become a regular guest.

There was also a Bible once owned by Frederick Douglass, then valued at $19,000. In 2001 Crow made a $150,000 donation to create a Clarence Thomas wing within the Savannah, Georgia, library the justice frequented as a child.

The federal law 28 US Code section 455 requires any federal judge – including the nine supreme court justices – to recuse themselves from any proceeding “in which his impartiality might reasonably be questioned”.

ProPublica’s explosive investigation earlier this month exposed undeclared gifts and travel that have continued to be bestowed by the billionaire on Thomas to this day. They included a nine-day vacation with Ginni in Indonesia in the summer of 2019 the cost of which probably exceeded $500,000.

In a later report, ProPublica revealed that in 2014 Thomas sold his mother’s home in Savannah to Crow. That transaction was also left undisclosed.

The Republican mega-donor Harlan Crow, pictured in 2015. 

Photograph: Bloomberg/Getty Images© Provided by The Guardian

The ProPublica disclosures have prompted a debate about the need for greater scrutiny of the conduct of supreme court justices. Top Democrats have called for an official inquiry into Thomas’s behavior and for all the justices to be subject to a strict ethics code.

The progressive Democratic congresswoman Alexandria Ocasio-Cortez, speaking on CNN, decried Crow’s largesse as “very serious corruption” and called for Thomas to be impeached.

Gabe Roth, executive director of Fix the Court, a non-partisan group which advocates supreme court reform, said that a crisis of trust in Thomas’s ethical judgments had been bubbling below the surface for some time. “The reason that it is so salient now is that the supreme court has grown exponentially in power since Justice Thomas took that first private plane ride in 1997 – when the court becomes the most powerful government body, then ethics issues become all the more critical.”

The Guardian contacted Thomas at the supreme court but did not receive a response.

This week, the normally media-shy Crow, who has assets valued at $30bn and who has donated at least $13m to Republicans, gave an in-depth interview to the Dallas Morning News. He claimed the furore around his relations with Thomas was a “political hit-job” by the liberal media.

He insisted he and Thomas were just friends who spent their time talking about their kids and animals. “We talk about dogs a lot,” he said.

Asked whether he ever considered their friendship as a ticket to quid pro quo, he replied: “Every single relationship – a baby’s relationship to his mom – has some kind of reciprocity.”

Crow’s office, in a statement to the Guardian, disputed any relevance of Crow’s links with the Club for Growth, his friendship with Thomas, and the justice’s opinion in the McConnell v FEC case. “Harlan Crow was not a party to the litigation, was only a financial supporter of Club for Growth, and had no role whatsoever in any Club for Growth litigation decisions.”

The statement continued: “Any insinuation that Justice Thomas wrote his opinion in this case because Harlan Crow was a supporter is ridiculous as Justice Thomas had already expressed these same views in a previous case, Nixon v Shrink MO PAC.”

The billionaire’s office insisted that Thomas’s skepticism of the constitutionality of campaign finance regulation “was established before he had even met Harlan Crow”.

Crow has never personally come before the supreme court, and denies ever trying to influence Thomas on any legal or political issue. But he has served on the boards of at least three conservative groups that have lobbied the supreme court through amicus briefs. Early in his friendship with Thomas, Crow sat on the national board of the now defunct Center for the Community Interest, which filed at least eight amicus briefs in supreme court cases backing rightwing causes such as sweeping crime off the streets and countering pornography.

He has also been a trustee for more than 25 years of the American Enterprise Institute, a thinktank advancing free enterprise ideas that has filed several supporting briefs to the court. In 2001 AEI gave Thomas a bust of Abraham Lincoln then valued at $15,000.

Crow is an overseer of the Hoover Institution, a conservative thinktank based at Stanford University. In February, Hoover senior fellows led an amicus brief filed to Thomas and his fellow justices challenging the $400bn student loan debt-relief program introduced by Joe Biden.

The supreme court is likely to rule on whether the scheme can go ahead this summer. In oral arguments in February, Thomas was among the rightwing justices who hold the supermajority who indicated they were skeptical of the program, raising the possibility that the court will scupper the hopes of more than 40 million Americans eligible for the debt relief.

 Bracing For The Bloodbath: Disney Layoffs To Resume Monday

Story by Lynette Rice • Yesterday 1:28 p.m.






It was originally described as the “big one,” or even more pointedly, a straight-up “bloodbath.”

Either way, the lion’s share of layoffs at Disney are expected to begin Monday. From April 24-27, there will be Mouse House employees in film and TV losing their jobs every single day (except Friday), we hear. A rep for Disney declined comment.

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To say that anxiety is high is an understatement. Just about everyone who works on Buena Vista Street in Burbank is on high alert, wondering whether their number is up.

“There is a sense of foreboding that the cuts are going to be wide, large-scale and very meaningful,” an industry source said, noting how low company morale is right now amid persistent rumors that at least one person from each department would have to go.

The sweeping layoffs are among the first major moves for Bob Iger since his surprise return as Disney CEO in late November.

“It sucks, to be honest,” a longtime film exec at the company said. “Iger coming back got everyone’s hopes up for investment in people as well as creativity. Truth is if you’re not operating a ride at the parks, you could be on the chopping block. Maybe the worst part is still not knowing who is being let go, no matter how much time you put in.”

One employee even begged a Deadline reporter to find out if their job was safe.

“Pray 4 me,” another texted.

Iger confirmed in March that three rounds of layoffs would occur as the company looks to reduce its workforce by about 7,000 employees in an effort to to reach $5.5 billion in overall cost savings. The initial round came a few days before the company’s annual shareholder meeting April 3 and involved a consolidation of production operations across Disney TV Studios, Hulu, Freeform and FX and the shutdown of the studio operations’ Creative Acquisitions department. (A small business unit that was focused on exploring the metaverse was also axed.)

The second, much bigger wave of layoffs next week will get Disney close to the 7,000 goal, we hear. Virtually every Disney Entertainment entity — TV networks and studios and film studios — is expected to be affected in a significant way. According to sources, the various division heads were given cost targets. They translate to different percentages of the workforce for each unit, which could amount to 5%, to 10%, 15% and even more in some cases, we hear.

Network programming and studio marketing are believed to be among the areas that will take a hit this time, and there will be a new round of cuts at ABC News (which already underwent layoffs last month), sources said. The remnants of the dismantled Disney Media and Entertainment Distribution are an obvious target, too.

And then there is Hulu.

The parts of the company focused on streaming are particularly on edge given the mounting intrigue about Disney’s plans for Hulu, particularly since it contributed to overall losses in streaming of $1.5 billion in the most recent quarter. The company took full operational control of Hulu in 2019, but Comcast still has a 33% financial stake. In a “put/call” arrangement slated to take effect in early 2024, Disney can buy out Comcast, but Iger has recently said that “everything is on the table.” The agreement states that the minimum value of Hulu will be $27.5 billion at the time of a transaction. That means Disney would have to commit to shelling out at least $9 billion at the same time it is cutting staff and planning to restore its stock dividend after suspending it during Covid.

“Hulu will definitely be one place to watch with these cutbacks,” observes one high-level exec at another media company. “Since they took control, they have kept it U.S. only and managed it pretty conservatively, meaning it’s either going to get beamed up into Disney+ or they could just let it go entirely. My money’s on the former, but that means they could operate it a lot more efficiently.”

In one precursor of what could lie ahead, Joe Earley was upped this month from his role as president of Hulu to broader oversight of direct-to-consumer streaming at Disney Entertainment. Departing in that shuffle was Michael Paull, a onetime Amazon veteran whose six-year Disney run followed the company’s acquisition of BamTech, which Paull ran as CEO when it was owned by Major League Baseball. “There was zero room for Michael in the new structure,” one former Disney exec said.

ESPN, now one of three business units at the company — a new structure implemented under Iger after he re-took the controls from Bob Chapek — will also be under the microscope in terms of cutbacks. A major wrinkle: Disney and ESPN face a looming renewal of multibillion-dollar NBA rights. While there is consistent chatter of other top professional sports following the model of Major League Soccer’s venture with Apple, one exec who negotiates sports-rights deals says leagues would prefer maintaining the kind of cash flow they do with more traditional licensing deals.

“Why do you think MLB sold BamTech off in the first place? They didn’t want to be in the direct-to-consumer business,” the exec says. “For Disney, they put their chips into the middle of the table by bringing BamTech in. In this environment, though, they have to take another hard look at their costs in running all of that infrastructure as they look to keep cash available for rights.”

That “hard look” will likely cost veteran employees their jobs next week, with former longtime ESPN anchor Bonnie Bernstein lamenting the pending layoffs on Twitter.

“I love our industry. It’s brought so many amazing things to my life. But my heart aches for my friends at ESPN/Disney awaiting the next round of cuts,” she wrote. “Many have been there 20, 30 yrs. It’s all they know. The anxiety of ‘what’s next’ for lifers in any line of work… so tough.”

Dominic Patten contributed to this report.

Disney To Open Affordable Housing Near Walt Disney World, Company Notes After Pounding By Gov. DeSantis; New Reedy Creek Board Has A Plan

Story by Jill Goldsmith • Yesterday 

Disney To Open Affordable Housing Near Walt Disney World, Company Notes After Pounding By Gov. DeSantis; New Reedy Creek Board Has A Plan© Provided by Deadline

Disney said Wednesday that “affordable and attainable housing” around Walt Disney World, which it first announced a year ago, will be ready to open in 2026. “This type of land contribution is unique and is one of many ways we are making a lasting impact in Central Florida,” according to a post on the Disney Parks Blog. It comes two days after Florida Gov. Ron DeSantis included a lack affordable housing in the area on his list of reasons to slam the House of Mouse.

The governor even threatened to consider building a new state prison near WDW in an ongoing feud over who has operational control over thousands of acres in south Florida — Disney or the state.

Said Disney: “We’ve been making more and more progress on this initiative every day, and now, we’re thrilled to share that groundbreaking on this development is targeted for next year, with the first units anticipated to be completed in 2026.” It has expanded the project by 100 units to about 1,400.

“To be able to offer more units means even more Florida families will get access to attainable housing, in addition to creating new Florida jobs as part of the construction and operation.” It said the property is several miles from Magic Kingdom, near schools and shopping. The development will be privately financed and limited to applicants within a certain income range.

WDW President Jeff Vahle met earlier this week with developer The Michaels Organization “and we discussed how we hope this development inspires others in the community and across the country to support this important issue in innovative ways.” Disney also noted it recently joined Coalition for the Homeless of Central Florida for the opening of a newly renovated youth center that included a $100,000 Disney grant. It also said Walt Disney World and Disneyland Resort donated more than $300,000 to local community food banks.

The governor has drawn fire for retaliating against Disney after the conglom spoke out last year against a new state law critics dubbed “Don’t Say Gay” that forbids discussion of sexual orientation or gender identity in public schools through third grade. Lawmakers rescinded Disney’s longstanding autonomy over what was called the Reedy Creek Improvement District, but appeared to have been outmaneuvered by a separate development deal that was a parting gift from the outgoing Disney-appointed Reedy Creek board. DeSantis vows to overturn that contract and assert control over the company, taking an aggressive stance against the state’s biggest taxpayer and one of its biggest employers.

“We’ve always respected and appreciated what the state has done for us, but it’s kind of been a two-way street,” Disney CEO Bob Iger said recently.

DeSantis’ new handpicked board of the Central Florida Tourism Oversight District met earlier today and discussed how they might proceed. The board will apparently argue that procedural flaws around public notice nullify the agreement that gave Disney exclusive development rights, according to the Orlando Sentinel. The deal was made publicly and out in the open, as Disney has said. But an attorney for the board today said state law requires notice to be mailed to all affected property owners ahead of time, which didn’t happen.

“The bottom line is that Disney engaged in a caper worthy of Scrooge McDuck to try to evade Florida law,” said David H. Thompson, a lawyer with the Cooper & Kirk law firm, according to the Sentinel.

A Disney rep wasn’t immediately available for comment.

As the battle in Florida continues, Disney staffers brace for company-wide layoffs next week.

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Navy chief defends nonbinary officer from GOP attacks over poem reading

Story by Julia Mueller • Yesterday 

Chief of Naval Operations Adm. Michael Gilday on Tuesday defended a nonbinary officer from Republican criticism at a Senate Armed Services committee hearing.

Navy chief defends nonbinary officer from GOP attacks over poem reading© Provided by The Hill

Sen. Tommy Tuberville (R-Ala.) said during the hearing he had a lot of problems with a video on the Navy’s social media last week in which a nonbinary junior officer, Lt. j.g. Audrey Knutson, said the “coolest thing” about their deployment aboard the USS Gerald R. Ford last year was reading during an LGBTQ spoken-word poetry night.

Tuberville said he hopes officers are trained “to prioritize their sailors, not themselves” and asked Gilday whether it surprised him that the junior officer’s highlight was “about herself and her own achievement.”

The navy chief countered that he’s “particularly proud” of the sailor.

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NOT A PEEP OUT OF GOP

“Her grandfather served during World War II, and he was gay and he was ostracized in the very institution that she not only joined and is proud to be a part of, but she volunteered to deploy on Ford and she’ll likely deploy again next month when Ford goes back to sea,” Gilday said.

The Navy asks “people from all of the country, from all walks of life, from all different backgrounds to join,” and commanding officers have to build a “cohesive war-fighting team” based on trust, dignity and respect, he noted.

“That level of trust that a commanding officer develops across that unit has to be grounded on dignity and respect,” the navy chief added. “And so, if that officer can lawfully join the United States Navy, is willing to serve, and willing to take the same oath that you and I took to put their life on the line, then I’m proud to serve beside them.”

Tuberville parried that “the problem that I’m having is the obsession with race, gender, sex” and knocked what he perceived as a focus on self over team.

Sen. Marco Rubio (R-Fla.) shared the video on Twitter and wrote, “While China prepares for war this is what they have our @USNavy focused on.”

Why Republicans are proposing another enormous Medicaid cut

Story by Dylan Scott • Yesterday 

The House Republican majority has released its demands for major government spending cuts in exchange for increasing the federal debt limit. And they include a familiar target for conservatives: Medicaid.


In a Wall Street speech this week, House Speaker Kevin McCarthy laid out his party’s plans for the upcoming federal debt-limit negotiations, likely to include a proposed Medicaid work requirement.© Michael Nagle/Bloomberg via Getty Images

It’s a gambit that may be more than a decade out of a date and could pose a political risk to the party. For years, Republicans have believed that Medicaid, which primarily serves low-income Americans, is less politically potent than Medicare or Social Security, two of the other core features of the US social safety net, and therefore a safer target for proposed cuts.

There may be some truth to that notion — but Medicaid is plenty popular on its own terms. Over the past two decades, the health insurance program has become an increasingly crucial part of the safety net. Enrollment has roughly doubled from about 46 million people in 2007 before the Great Recession to more than 92 million today. More than 75 percent of the US public says they have very or somewhat favorable views of the program. Two-thirds say they have some kind of connection to Medicaid, either because they themselves or a loved one was enrolled.

In state after state, when the question of expanding Medicaid to working-age, childless adults has been put to voters in red states, they’ve voted in favor of giving more people access to health insurance. Even the Republican legislature in North Carolina recently made peace with expanding the program.

The House’s work requirement proposal — dubbed a “community engagement” requirement in the bill’s text — would roll back those coverage gains by requiring many recipients to be working, looking for work, or participating in another kind of community service. Children under 18, adults over 56, people with mental or physical disabilities, and parents of dependent children would be exempted.

The Congressional Budget Office has previously estimated requiring non-disabled, non-elderly childless adults to work in order to receive Medicaid benefits would slash the program’s spending by $135 billion over 10 years — largely because more than 2 million people would lose coverage for failing to meet the work requirement.

The last time Republicans tried (and failed) to pass significant cuts to the Medicaid program, in the first year of the Trump presidency as part of their Affordable Care Act repeal plans, they paid the price during the 2018 midterm elections. So if Medicaid has proven popular quite recently, why have Republicans seemingly convinced themselves that they can try to cut it again without penalty?

The answer is partly about the method they’ve chosen to cut the program: work requirements, which leaders think will go over well in competitive congressional districts. But it’s also about how Republicans have (in some cases reluctantly) embraced other facets of the social safety net, leaving themselves with few other options.

The GOP has tried to cut other social welfare programs and failed

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Once upon a time, conservatives wanted to remake Social Security and Medicare just as eagerly as they still wish to overhaul Medicaid.

President George W. Bush invested much of his political capital in his second term in pursuing his doomed attempt to privatize Social Security. Paul Ryan, who became the party’s intellectual leader in the early 2010s as the Tea Party backlash to President Barack Obama was rising, made further privatizing Medicare a central plank of the Republican platform.

But those proposals proved politically disastrous. Democrats campaigned against Bush’s Social Security proposal when they gained seats in the 2006 midterms. The 2012 Obama campaign hung Ryan’s Medicare overhaul on Mitt Romney, who had picked Ryan to be his vice presidential candidate.

Then in 2016, the window for so-called entitlement reform slammed shut. Donald Trump bulldozed through the Republican primary, where he promised not to cut Medicare and Social Security as so many GOP candidates before him had pledged to do. When Republicans retook the House in 2022 and began plotting for the pending debt-limit debate, they preemptively took Medicare and Social Security cuts off the table.

But there’s a reason Republicans had targeted those programs in the past: they are two of the biggest outlays in the federal budget. Social Security alone accounts for 20 percent of federal spending. Medicare covers another 12 percent or so. If you assume Republicans are unwilling to cut defense spending and veterans benefits, that means almost half of the federal budget is off limits from the start.

So what is the GOP willing to cut, or at least to propose cutting to start its negotiations with the Biden White House and Senate Democrats? Enter Medicaid. In a Monday speech given at the New York Stock Exchange, House Speaker Kevin McCarthy laid out his party’s priorities in the debt-ceiling talks and sought to justify their proposed cuts to social programs. He said he wanted the government to give Americans “a hand up, not a handout.”

There is a certain logic to Republicans’ commitment to pursuing Medicaid cuts: Social Security and Medicare are universal programs. Everyone pays in while they work, and then enjoys the benefits when they retire. Medicaid, on the other hand, is targeted to people who have low incomes. Republicans argue that this program, like food stamps and cash welfare, discourages people from seeking work, since they only qualify for benefits if their income is below a certain threshold.

“Assistance programs are supposed to be temporary, not permanent,” McCarthy said. “A hand up, not a handout. A bridge to independence, not a barrier.”

The problem is their diagnosis may be wrong. For starters, about two-thirds of the people covered by Medicaid — those who are children, elderly, or disabled — are usually exempted from work requirement proposals. Working-age adults who are expected to meet them can end up losing coverage even if they are attempting to satisfy it, if they have irregular work hours for example, or if they have trouble filing the necessary paperwork. One estimate of a Medicaid work requirement proposal in Michigan found that only about one-quarter of the people expected to lose their coverage were considered “out of work,” meaning they could work but weren’t. The rest were already working, retired, caring for a loved home at home, or unable to work for some other reason.

In Arkansas, where implementation of a work requirement was eventually blocked by a court order, nearly 17,000 people lost coverage after the requirement was put in place. Analyses later found that Medicaid beneficiaries had not started working more or earning more money as a result of the policy. Instead, lots of people got kicked off Medicaid, but it didn’t lead to an improvement in their economic status; they simply became uninsured.

Still, a little more than half of the Republican base continues to consider Medicaid more akin to welfare than health care. Punchbowl News reported that internal House GOP polling showed that work requirements were popular among voters in the competitive districts that will determine future House control.

Public polling suggests it’s a little more complicated than that. As I wrote in 2018, Americans are of two minds about work requirements. When asked if they support requiring work in order to receive certain government benefits, the public will generally say yes. But when those policies are framed differently, and particularly when they are portrayed as cuts, their popularity drops.

That is the risk for House Republicans in this debt-ceiling gambit: Medicaid spending cuts are deeply unpopular with both the American public and lawmakers. Two-thirds of Americans now say they oppose cutting Medicaid’s spending.

There’s even a risk that the GOP’s attempts to overhaul the program could further reinforce its popularity. An analysis published last year in the American Political Science Review studied the effects of the party’s attempts to repeal the Affordable Care Act, of which Medicaid expansion is a core part. The threat to the law helped to solidify its standing with the public, partly because Republican voters became more resistant to the possibility of losing benefits. Two of the Republican senators who doomed the party’s plans cited the Medicaid cuts as a major factor in their vote.

And yet, the GOP continues to pursue Medicaid cuts — perhaps because, on other programs, they have boxed themselves in.

Here's what's included in the Republican bill to lift the debt ceiling

Yesterday 

House Speaker Kevin McCarthy on Wednesday unveiled a long-awaited GOP proposal to lift the debt limit and enact federal spending cuts.

What happens after US officially hits debt ceiling?  View on Watch  Duration 6:10

Speaking on the House floor, McCarthy outlined what's included in the so-called Limit, Save, Grow Act, designed to raise the debt limit into next year and also provide more than $4.5 trillion in savings.

"The American people have elected a divided government, and our government is a divine compromise," McCarthy said. "That is why the House, the Senate and the White House should be negotiating a responsible debt limit increase right now."


FILE - Speaker of the House Kevin McCarthy speaks in New York City, April 17, 2023.

© Brendan Mcdermid/Reuters, FILE

The legislation would claw back unspent COVID-19 money, block federal student loan cancellation, rescind billions of dollars for the Internal Revenue Service provided by the Inflation Reduction Act, end green tax credits and put in place stricter work requirements for federal aid programs. It would also limit government spending to pre-inflationary, fiscal year 2022 levels and limit spending increases to 1% per year, according to McCarthy

MORE: 'Clock is ticking': Lawmakers return to Washington facing fast-approaching debt limit 'X-date'

President Joe Biden, who gave the proposal a chilly reception, last met with McCarthy to discuss the debt limit in February. Their standoff has intensified in recent weeks as lawmakers stare down a fast-approaching summer deadline to lift the debt ceiling or risk an economically catastrophic default.

In recent days, the House speaker has tried to amp up pressure on Biden and Democrats to negotiate. Biden and other party leaders have so far declined to do so as they push for a "clean" debt limit increase not tied to federal spending cuts.

"President Biden is skipping town to deliver a speech in Maryland, rather than sitting down to address the debt ceiling," McCarthy said on Wednesday. "He's giving America's debt the Southern border treatment: ignore it and hope that it goes away."MORE: Biden, McCarthy standoff over budget intensifies as deadline looms

Biden shot back at the Republican leader during his Maryland event, taking aim at McCarthy's debt ceiling comments delivered Monday at the New York Stock Exchange.

"They say they're going to default unless I agree to all these wacko notions they have. Default would be worse than totally irresponsible," Biden said.

Biden warned a default "would destroy this economy. And who do you think will hurt the most? You, hardworking people, the middle-class, neighborhoods I got raised in -- not the super wealthy or the powerful, but working folks."


FILE - President Joe Biden speaks in the Rose Garden of the White House in Washington, April 18, 2023.© Susan Walsh/AP, FILE

The legislative text of the House GOP bill, which clocks in at 320 pages, was released shortly after McCarthy's remarks.

McCarthy said the chamber will vote as early as next week on the plan. While it's not yet clear he'll have the 218 votes necessary to pass it, he expressed optimism about its prospects.

"We're going to get there," he told reporters. "I never give up. We'll get them."

-ABC News' Gabe Ferris, Justin Gomez contributed to this report.

House Republicans want to ban student-loan forgiveness and immediately end the payment pause in their new debt ceiling bill

Story by asheffey@businessinsider.com (Ayelet Sheffey) • Yesterday

U.S. House Speaker Kevin McCarthy. 

Alex Wong/Getty 

House Republicans unveiled their bill to raise the debt ceiling on Wednesday.

It includes banning student-loan forgiveness and immediately ending the payment pause.

The bill is unlikely to pass, but it comes at a time of extreme uncertainty for student-loan borrowers.

Republicans' debt ceiling bill is finally here, and it's bad news for student-loan borrowers.

On Wednesday, House Republicans unveiled a bill to raise the debt ceiling through March 2024, and alongside increasing the limit, they have 320 pages worth of proposed spending cuts alongside it. For example, the legislation includes strengthened work requirements for welfare programs like SNAP, clawing back unspent pandemic funds, and repealing environmental programs.

And President Joe Biden's student loan programs aren't off the hook. According to the bill text, Republicans want to end the student-loan payment pause immediately, prohibit the Education Department from carrying out Biden's plan to cancel up to $20,000 in student debt for federal borrowers, block the department's new income-driven repayment plan, and prohibit the department from making any new changes to debt relief programs without congressional approval.



1 of 9 Photos in Gallery©STEFANI REYNOLDS/AFP via Getty Images
How 10 student-loan borrowers are coping with the highs and lows of Biden's debt relief announcement
Biden announced up to $20,000 in student-debt relief at the end of August.
Since then, two lawsuits have blocked the plan, and its fate rests with the Supreme Court.
Here are 10 borrowers' stories on what they have experienced since Biden's August announcement.

Student-loan borrowers have had quite the year in 2022 — and millions are confused about what it means for their finances in 2023.

In August, a moment millions of federal borrowers had been waiting years for finally arrived when President Joe Biden announced $20,000 in student-debt cancellation for Pell Grant recipients making under $125,000 a year, and $10,000 in relief for other federal borrowers under the same income cap.

While the amount wasn't as expansive as many might have been hoping for — some Democratic lawmakers were pushing the president to cancel $50,000 in student debt — it still marked a significant step toward providing long-awaited relief to millions of Americans.

"For too many people, student loan debt has hindered their ability to achieve their dreams—including buying a home, starting a business, or providing for their family," Education Secretary Miguel Cardona said after the loan forgiveness was announced. "Getting an education should set us free; not strap us down!"

But the relief quickly ran into hurdles. Since the loan forgiveness had an income cap, the Education Department was unable to automatically cancel the debt and needed until October to make an online application available for borrowers. Conservative groups used that time to file lawsuits to block the relief, and Biden's administration responding by further narrowing the eligibility for the relief to exclude some borrowers with privately-held loans to avoid litigation.

Still, just weeks after the application opened in early October, a ruling from the 8th Circuit Court of Appeals paused the process, barring the department from processing any new applications, and another ruling from a Texas judge later ruled the relief is illegal.

Right before Thanksgiving, Biden extended the student-loan payment pause through June 30 or whenever the lawsuits are resolved — whichever comes first — meaning the fate of the relief ultimately rests with the Supreme Court, who will begin hearing arguments on February 28. Until then, borrowers' financial futures hang in the balance.


These proposals aren't surprising. Since Biden took office, many GOP lawmakers have slammed the president's debt relief plans, saying they are an overreach of authority and costly to taxpayers. After the president announced his broad debt relief plan at the end of August, two conservative-backed lawsuits paused its implementation, and the Supreme Court heard oral arguments in the cases in February.

Related video: House Speaker Proposes Plan to Raise US Debt Ceiling and Avoid Default (Wibbitz - Politics)

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In light of the lawsuits, Biden extended the student-loan payment pause through 60 days after June 30, or 60 days after the Supreme Court issues a final decision on the legality of the relief — whichever happens first — but Republicans have continued to oppose the relief, most recently introducing a resolution to overturn the debt cancellation without waiting for a Supreme Court decision.

The House is set to vote on the bill next week, but even if it passes the House, it's highly likely it will not get enough votes in the Senate. And even if it does, Biden will almost certainly veto it because he has repeatedly stated that raising the debt ceiling should be bipartisan — and without any spending cuts attached.

Even so, millions of student-loan borrowers remain in limbo. The Education Department is planning to resume payments this year with or without the broad debt relief, and while it's working to implement changes to income-driven repayment plans and the Public Service Loan Forgiveness (PSLF) program, the lack of additional funding from Congress in this year's budget is causing delays with carrying out those reforms.

In the meantime, Democratic lawmakers and advocates have been urging Congress to raise the debt ceiling and avoid a financially catastrophic default. The Joint Economic Committee released a report last month that found private student-loan payments could surge if the US defaulted on its debt. And Melissa Byrne, executive director of We, the 45 Million — an advocacy group pushing for debt relief — said in a Wednesday statement that "McCarthy announced that he will hold the debt ceiling hostage and risk crashing the global economy in order to hurt 40M student loan borrowers and our families. "

"Everyone in the House and Senate must reject the Speakers and GOP efforts to repeal student loan relief, changes to PSLF + IDR, and preventing future relief," she said. "The American people deserve bett

Chemours, TC Energy to partner on clean hydrogen facilities

Story by Reuters • Yesterday 



(Reuters) -Chemical maker Chemours Co said on Wednesday it has partnered with TC Energy Corp to develop two clean hydrogen production facilities in West Virginia.


Illustration shows smartphone with TC Energy's logo displayed© Thomson Reuters

Clean hydrogen, made using renewable energy to power electrolyzers to convert water, is being backed by many governments for vehicles and energy plants, but it is currently too expensive for widespread use.

Related video: Why hydrogen and other 'clean energy bridges' will be crucial in the years ahead (CNBC)  Duration 3:07  View on Watch

The facilities would be located at or near Chemours' Washington Works and Belle manufacturing sites in West Virginia, the company said.

The agreement covers the companies' interest in developing, constructing and operating clean hydrogen production facilities and associated infrastructure.

(Reporting by Ankit Kumar; Editing by Sriraj Kalluvila and Dhanya Ann Thoppil)