budget

WASHINGTON – The austere House budget drafted by Rep. Paul D. Ryan (R-Wis.) that has come to define the Republican Party was approved Thursday on a strict party-line vote, as the GOP argues that a balanced budget should now be Washington’s top goal.

The blueprint is merely a proposal, without the force of law, but its overhaul of the Medicare program and steep reductions to other social safety net spending serves as the GOP’s opening salvo in renewed budget negotiations with President Obama. It was approved, 221 to 207, with no Democrats and 10 GOP defectors, largely conservatives or congressman in swing districts.

Republicans are anxious to reopen the debate over government spending with the White House even though some attribute the party’s setbacks in the November election to the plan from Ryan, the party’s former vice presidential nominee.

Ryan achieved the party’s goal of balancing the budget in 10 years, a promise House Speaker John A. Boehner (R-Ohio) made to restive conservatives to win their votes on other matters.

To bring revenues and spending into balance by 2024, Ryan relied on deeply reducing federal spending as well as new revenue coming from the New Year’s tax deal that raised income tax rates on the wealthy.

The centerpiece of the GOP plan would turn Medicare into a voucher-like program for the next generation of seniors, those younger than 55. When they become eligible, at age 65, those seniors will be offered a voucher that can be applied either to the purchase of private health insurance or toward the cost of Medicare, though the voucher may not cover all the costs of the policy chosen.

The Ryan budget also cuts Medicaid, the health program for the poor and seniors in nursing homes, as well as food stamps, welfare programs and student loans, while largely preserving money for defense accounts.

While Ryan temporarily counts the tax hikes from the New Year, his plan would ultimately lower top tax income rates from 39.6% to no more than 25%, while closing loopholes and deductions. The top corporate rate would also be dropped to 25%. Ryan believes that lower taxes will spur economic growth and essentially pay for themselves; but critics say the lower rates cannot be achieved without asking middle-income families to give up popular income-tax deductions or else adding to the deficit.

Before approving the Ryan budget, the House dismissed alternative proposals, including one from the Democratic minority that sought to raise taxes on corporations and wealthier Americans, while putting that new revenue toward infrastructure and state jobs, as well as decreasing the deficit. Also rejected was a more conservative budget that would have balanced in four years, as well as proposals from the progressive caucus and the Congressional Black Caucus.

The Senate, which has not approved a budget in four years, is set to do so later this week. The blueprint from the Democrats is a similarly partisan document, and passage will put the House, Senate and White House on another collision course as they begin budget talks toward the next deadline, in summer, when Congress will be asked to raise the nation’s debt limit.

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lisa.mascaro@latimes.com

Twitter: @LisaMascaroinDC

SACRAMENTO — California and its state-funded programs are heading into a period of volatile fiscal uncertainty, driven largely by events in Washington and on Wall Street.

Gov. Gavin Newsom’s budget chief warned Friday that surging revenues tied to the artificial intelligence boom are being offset by rising costs and federal funding cuts. The result: a projected $3-billion state deficit for the next fiscal year despite no major new spending initiatives.

The Newsom administration on Friday released its proposed $348.9-billion budget for the fiscal year that begins July 1, formally launching negotiations with the Legislature over spending priorities and policy goals.

“This budget reflects both confidence and caution,” Newsom said in a statement. “California’s economy is strong, revenues are outperforming expectations, and our fiscal position is stable because of years of prudent fiscal management — but we remain disciplined and focused on sustaining progress, not overextending it.”

Newsom’s proposed budget did not include funding to backfill the massive cuts to Medicaid and other public assistance programs by President Trump and the Republican-led Congress, changes expected to lead to millions of low-income Californians losing healthcare coverage and other benefits.

“If the state doesn’t step up, communities across California will crumble,” California State Assn. of Counties CEO Graham Knaus said in a statement.

The governor is expected to revise the plan in May using updated revenue projections after the income tax filing deadline, with lawmakers required to approve a final budget by June 15.

Newsom did not attend the budget presentation Friday, which was out of the ordinary, instead opting to have California Director of Finance Joe Stephenshaw field questions about the governor’s spending plan.

“Without having significant increases of spending, there also are no significant reductions or cuts to programs in the budget,” Stephenshaw said, noting that the proposal is a work in progress.

California has an unusually volatile revenue system — one that relies heavily on personal income taxes from high-earning residents whose capital gains rise and fall sharply with the stock market.

Entering state budget negotiations, many expected to see significant belt tightening after the nonpartisan Legislative Analyst’s Office warned in November that California faces a nearly $18-billion budget shortfall. The governor’s office and Department of Finance does not always agree, or use, the LAO’s estimates.

On Friday, the Newsom administration said it is projecting a much smaller deficit — about $3 billion — after assuming higher revenues over the next three fiscal years than were forecast last year. The gap between the governor’s estimate and the LAO’s projection largely reflects differing assumptions about risk: The LAO factored in the possibility of a major stock-market downturn.

“We do not do that,” Stephenshaw said.

SACRAMENTO — Gov. Gavin Newsom on Thursday unveiled a sweeping proposal to overhaul how California’s education system is governed, calling for structural changes that he said would shift oversight of the Department of Education and redefine the role of the state’s elected schools chief.

The proposal, which is part of Newsom’s state budget plan that will be released Friday, would unify the policymaking State Board of Education with the department, which is responsible for carrying out those policies. The governor said the change would better align education efforts from early childhood through college.

“California can no longer postpone reforms that have been recommended regularly for a century,” Newsom said in a statement. “These critical reforms will bring greater accountability, clarity, and coherence to how we serve our students and schools.”

Few details were provided about how the role of the state superintendent of public instruction would change, beyond a greater focus on fostering coordination and aligning education policy.

The changes would require approval from state lawmakers, who will be in the state Capitol on Thursday for Newsom’s last State of the State speech in his final year as governor.

The proposal would implement recommendations from a 2002 report by the state Legislature, titled “California’s Master Plan for Education,” which described the state’s K-12 governance as fragmented and “with overlapping roles that sometimes operate in conflict with one another, to the detriment of the educational services offered to students.” Newsom’s office said similar concerns have been raised repeatedly since 1920 and were echoed again in a December 2025 report by research center Policy Analysis for California Education.

“The sobering reality of California’s education system is that too few schools can now provide the conditions in which the State can fairly ask students to learn to the highest standards, let alone prepare themselves to meet their future learning needs,” the Legislature’s 2002 report stated. Those most harmed are often low-income students and students of color, the report added.

“California’s education governance system is complex and too often creates challenges for school leaders,” Edgar Zazueta, executive director of the Assn. of California School Administrators, said in a statement provided by Newsom’s office. “As responsibilities and demands on schools continue to increase, educators need governance systems that are designed to better support positive student outcomes.”

The current budget allocated $137.6 billion for education from transitional kindergarten through the 12th grade — the highest per-pupil funding level in state history — and Newsom’s office said his proposal is intended to ensure those investments translate into more consistent support and improved outcomes statewide.

“For decades the fragmented and inefficient structure overseeing our public education system has hindered our students’ ability to succeed and thrive,” Ted Lempert, president of advocacy group Children Now, said in a statement provided by the governor’s office. “Major reform is essential, and we’re thrilled that the Governor is tackling this issue to improve our kids’ education.”

Jan. 8 (UPI) — President Donald Trump said he would ask Congress to approve a massive $500 billion increase in defense spending to fund his “Dream Military,” taking the Pentagon’s 2027 budget to a record $1.5 trillion.

In a post on his Truth Social platform on Wednesday, Trump said “these very troubled and dangerous times” required the 50% hike for the good of the United States and that he had reached his determination after protracted, thorny debate with his cabinet and lawmakers.

“This will allow us to build the ‘Dream Military’ that we have long been entitled to and, more importantly, that will keep us SAFE and SECURE, regardless of foe. If it weren’t for the tremendous numbers being produced by tariffs from other countries, many of which, in the past, have ‘ripped off’ the United States at levels never seen before, I would stay at the $1 trillion dollar number,” he wrote.

The extra funding would pay for new hardware headed by his “Golden Dome” air defense scheme and a new class of guided-missile battleship — items totally out of reach at current budget levels.

Trump said the income that tariffs generated, unthinkable in the past, meant the United States was easily able to afford the $1.5 trillion, while at the same time producing “an unparalleled Military Force,” paying down debt and granting a “substantial dividend” to moderate-income Americans.

That claim was disputed by the Committee for a Responsible Budget, which said tariffs would only generate around half of the estimated $5.8 trillion the higher defense budget would add to the national debt through 2035.

In a post on X, the watchdog said its preliminary calculations showed the spending increase would boost defense spending by $5 trillion, plus $800 billion in interest, while revenue flowing into the Treasury from higher tariffs over the same period would only run $2.5 trillion, or about $3 trillion with interest.

Tariffs are import levies paid by U.S. companies when they bring in goods and materials from other countries, a cost they either absorb or pass onto to their customers in the form of high prices. Overseas companies may also opt to absorb tariff costs to preserve their market in the United States.

Despite Congress having yet to pass a defense spending bill for the $1 trillion Trump is seeking for FY26, was hailed by some Republican lawmakers and Defense Secretary Pete Hegseth who described it as “PEACE through STRENGTH.”

“President Trump is rebuilding our military — larger, stronger and more lethal than ever before,” Hegseth wrote in a post on X.

Raising the budget by such a significant amount will be tough, despite Trump convincing Congress to pass a reconciliation bill topping up this year’s budget by $150 billion, spread over five years, and support from some Republicans pushing for defense spending to rise to 5% of GDP, up from its current 3.5% level.

Rep. Don Bacon, R-Neb., an advocate of higher defense spending, called it “a good news story.”

“We think we need a permanent 4 % or better. That’s what it’s gonna take to build our Navy, our Air Force, our ICBMs, our bombers, and take care of our troops,” said the retired U.S. Air Force Brigadier-General.

SACRAMENTO — Congratulations, you survived 2025. What will the new year bring? Joy and prosperity for all, hopefully, but it’s hard to say.

Few in California could have predicted some of the most life-changing events of 2025 — the deadly Los Angeles area wildfires, the Trump administration’s militant, often inhumane immigration crackdown and an obscure congressional redistricting fight that could alter the balance of power in Washington.

With that in mind, California can expect one of 2026’s most consequential stories to be the turmoil in Sacramento over the entrenched state budget deficit — which will be compounded by the massive federal healthcare cuts by the Trump administration.

The good news is that, after a rain-soaked Christmas holiday, California enters the new year with reservoirs brimming, even if its coffers are not. It also just got easier to delete Facebook, X and other social media accounts that consume too much of our lives. And let’s not forget that the Los Angeles Dodgers reign as World Series champions!

Happy New Year! This is Phil Willon, the California Politics editor for the Los Angeles Times, filling in for columnist George Skelton. Along with the state budget crisis, 2026 will bring a wide-open race for governor — and the person the candidates hope to replace, Gov. Gavin Newsom, is flirting with a run for president in 2028 and has just a year left in his final term to deliver on all his promises. So buckle up and visit latimes.com early and often.

An $18-billion problem

The California Legislature returns to work Monday for the 2026 session, and a major financial headache awaits.

The Legislative Analyst’s Office estimates that the state will have an $18 billion budget shortfall in the upcoming fiscal year – $5 billion higher than what the Newsom administration predicted in June.

As Times reporter Katie King reported earlier, state revenue has been improving, but a shortfall is still expected. That’s because mandatory spending requirements under Proposition 98, which sets minimum annual funding for public schools, and Proposition 2, which specifies reserve deposits and debt payments, almost entirely offset any gains, according to the legislative analysis.

And it gets worse. The LAO said that, starting in 2027-28, California’s structural deficits are expected to grow to about $35 billion annually “due to spending growth continuing to outstrip revenue growth.”

The solution? Cut spending and/or increase revenue, the LAO report says.

But cut what, and raise money how? That’s up to Newsom and the Legislature to decide, and their difficult task will begin later this week when the governor releases his proposed budget.

Poking the billionaire

One controversial idea — outside of the legislative process — already is being kicked around.

A November ballot measure proposed by a labor organization, the Service Employees International Union-United Healthcare Workers West, would impose a one-time 5% wealth tax on billionaires that could raise $100 billion for healthcare programs. Opponents say it will drive wealthy, taxpaying, job-creating, economy-driving Californians out of the state.

The measure has yet to qualify for the November ballot but will receive ample attention regardless.

Supporters say the revenue is needed to backfill the massive federal funding cuts to healthcare that President Trump signed this summer under what’s known as the “Big Beautiful Bill,” according to a report by The Times’ Seema Mehta and Caroline Petrow-Cohen.

The California Budget & Policy Center estimates that as many as 3.4 million Californians could lose Medi-Cal coverage, more rural hospitals could close and other healthcare services would be slashed unless a new funding source is found.

Federal cuts to healthcare

If California does not backfill those federal cuts by raising taxes, or other creative means, costs for the state will still increase, according to the Legislative Analyst’s Office. That seems counterintuitive, since millions of Californians may lose coverage. But under the “Big Beautiful Bill,” cuts to federal cost sharing and a drop in health provider tax revenue will far outpace any potential cost savings for the state.

Newsom’s possible White House run will ensure that California’s budget shortfall and liberal policies it spends money on will whip up the nation’s caustic partisan divide. Near the top of the list will be California’s decision to extend state-sponsored healthcare coverage to low-income, undocumented immigrants. The expansion has cost the state billions and drawn sharp criticism from Republicans and, last year, Newsom and the Democratic-led Legislature reduced the expansion of state-sponsored healthcare to those immigrants due to the high cost.

On top of that, the monthly premiums for federally subsidized plans available on the Covered California exchange — often referred to as Obamacare — will soar by 97% on average for 2026. That’s due to decisions by the Republican-led Congress and Trump not to extend federal subsidies for that coverage. State officials estimate that roughly 400,000 Californians will drop their coverage under the program because of the higher cost. And California counties are ill prepared to step into the breach, as KFF Health News recently reported.

Needless to say, the healthcare situation will be extremely volatile in 2026, which will make the state’s upcoming high-stakes budget process even more unpredictable.

What else you should be reading

The must-read: Billionaire tax proposal sparks soul-searching for Californians
CA vs. Trump: Trump pulls back National Guard from L.A. and other cities, Newsom claims win
The L.A. Times Special: California rolls out sweeping new laws for 2026, from cellphone limits in schools to a ban on cat declawing

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Asia travel experts TransIndus have crunched the numbers to find the cheapest city for money for budget-conscious travellers looking to save money

Hanoi may not be the first destination that springs to mind for Brits seeking a budget-friendly holiday but research suggests that Vietnam’s capital could be one of the best-value cities on the planet.

Asia travel specialists TransIndus have put together a basket consisting of three supermarket beers, a 5km bike taxi ride, and a McDonald’s combo meal and it adds up to £5.60 in Hanoi, so much cheaper than it would be in the UK.

A spokesperson for TransIndus said: “People understandably want their holiday money to go further in 2026 – but the smartest approach is to plan with a few simple ‘anchor’ costs in mind.

“A short ride, a casual meal, and a couple of drinks are the sort of everyday purchases many travellers make in the first 24 hours. If those are low, it’s a strong sign the city is going to feel great value overall.”

READ MORE: ‘I paid back £16,000 debt in two years using 8 simple tips – anyone can do it’

So, what does a cheap evening in Hanoi look like?

• McDonald’s combo meal (Big Mac Meal or similar): £3.14.

• Domestic beer (0.5L) from a supermarket: £0.42 each (so £1.26 for three).

• Bike taxi ride (5km estimate): about £1.20 – based on common fares for motorcycle taxis booked on local ride-hailing apps.

This brings the total to £5.60 for the complete basket.

Researchers looked at typical local prices reported by travellers and expats who currently live there. But Hanoi isn’t the only Asian destination where visitors can enjoy themselves for less.

Other Asian cities to consider visiting include:

• Yogyakarta, Indonesia: approximately £8.07 for the identical basket.

• Manila, Philippines: approximately £8.38.

• Ho Chi Minh City, Vietnam: approximately £9.29.

Vietnam is certainly a cheap place to enjoy yourself – a recent Post Office Money report highlights how Hoi An – 479 miles south – is 10% cheaper than it was in 2023.

The town is an exceptionally well-preserved example of a South-East Asian trading port dating from the 15th to the 19th century.

In the evenings the lights from the yellow painted buildings and orange sun reflect off the water making it look magical. Thanks to an Unesco decree, more than 800 buildings have been preserved, meaning the village still looks like it did several centuries ago.

Travle blogger Travel Lush recommends cycling around the city. “Wandering aimlessly around the Ancient Town is easily one of the best things to do in Hoi An.

“And sure, it is very touristy, but I always love marveling at the old buildings, snapping photos of the postcard-perfect alleyways, sampling street snacks and popping into all of the little shops – you honestly never know what gems you’ll stumble upon in Hoi An’s historic center. The people-watching is pretty great too!

“Getting the chance to take in Hoi An’s magical scenery from a bicycle is one of my all-time favorite Hoi An activities. Cycling is big in Hoi An and most hotels here offer complimentary bicycles. It’s an incredible way to check out all of the city’s beautiful temples, emerald rice paddies and everyday street scenes.”

The weathers not bad either – throughout the year the Vietnamese city enjoys temperature of around 29C on most days. However, it does have a long rainy season, from November through to January, so it may be wise to visit before, during the autumn, or from February. And while it’s cheap once you get there flights from the UK will set you back around £780.

READ MORE: Shoppers say mattress ‘beats others hands down’ with £133 off in winter sale

AN expert has revealed how you can plan a Cotswolds staycation without breaking the bank.

More than 23million tourists visit the Cotswolds every year, so its no surprise that includes a few celebrities along the way.

Beyonce, Kourtney Kardashian and even Kamala Harris have all been spotted in recent months, while the Beckhams are known for having a house there.

But despite this, there is still a way to do it on a budget as well as away from the crowds.

Local Amanda Stecker, who founded Unique Cotswold Cottages, explained: “There’s a perception that the Cotswolds is reserved for the wealthy.

“But you can stay in charming self-catering cottages or friendly B&Bs for a fraction of the cost of high-end hotels, and still enjoy the villages, countryside, and experiences that make the area so special.

Read more on the Cotswolds

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Strange attraction is UK’s ‘most photographed door’ in a Cotswolds village

“Even smaller towns and lesser-known attractions have a charm all of their own, and often a story you’ll remember far longer than the postcard-perfect spots.”

Here are some of her top tips.

Stay in less well-known villages

She explained that while Bibury and Bourton-on-the-Water are the popular spots, there are nearby villages that are just as beautiful but far more affordable.

Amanda said: “Look at towns such as Moreton-in-Marsh, Stow-on-the-Wold, or Chipping Campden.

“These locations still offer charm and convenience but at much lower rates.”

Not only did she say this could save as much as £300 for a three-night stay, but cottages mean you can head to the nearby deli for some groceries and cook yourself, saving you even more.

Visit during shoulder season

If you try and visit the Cotswolds during the summer holidays, expect huge crowds.

The same is during school half terms as well, especially in the spring and autumn.

But the villages are just as beautiful off season, usually November, January and February.

Not only is accommodation cheaper but you won’t be stuck in queues at the car park or the cafe.

Make the most of the free attractions

Just walking through many of the villages and towns feel like they are from a postcard, which is a great free activity.

Not only that, but heritage trails and even attractions like Broadway Tower are free to visit.

The Oxford Museum, Witney Museum and Swinford Museum are just some that are free too.

Amanda advises checking some of the local stately homes which can be affordable especially with a National Trust or English Heritage membership.

Otherwise there are often farmers markets or fairs which you can explore without spending a penny.

According to Amanda, this could save as much as £50 per person during a long weekend.

Check the local transport

Many of the small villages have train stations so you can hop between many of them.

For example, try the Cotswolds Line, which runs from Oxford to Kingham, with stops in Hanborough, Finstock, Charlbury and Shipton along the way.

Otherwise bus routes connect many of them as well, saving you on expensive car parking.

Amanda suggests this could save as much a £30 a day.

Here are some of the Cotswolds pubs where you might bump into a celebrity.

And here are some other places to go away from the crowds.

Dec. 26 (UPI) — The Japanese government on Friday approved a record $58 billion defense budget for the 2026 fiscal year amid worsening diplomatic tensions with China.

The allocation is 9.4% more than budgeted for defense in 2025 and is a new record for defense spending when the new fiscal year starts in April.

The funds will help pay for cruise missiles and unmanned defense systems as Japan enters the fourth year of its five-year plan to bolster its military, Newsweek reported.

During that time span, Japan is investing about 2% of its annual gross domestic product to modernize its military with state-of-the-art equipment, including drones.

It also demonstrates a significant shift in Japan’s defensive priorities after spending relatively little on national defense for several decades.

The new spending will bolster Japan’s land, sea and air coastal defenses with unmanned assets and a greater ability to attack enemies from beyond their respective ranges, according to The Japan Times.

Japan is building up its Synchronized, Hybrid, Integrated and Enhanced Littoral Defense drone system that commonly is referred to as SHIELD.

“This system will enable Japan to adopt new warfare methods, firmly protect the lives of personnel and halt enemy invasions of islands at the coastline,” Japanese Defense Minister Shinjiro Koizumi told media.

The system is slated to go into service in 2027 and will provide Japan with an ample supply of “inexpensive unmanned aerial, surface and underwater vehicles” that can be used to attack enemy targets and conduct reconnaissance.

A large quantity of relatively affordable drones is available from the United States, Australia, Turkey and other nations.

Japan also is improving its counterstrike capabilities with better anti-ship missiles and intends to acquire hypersonic missiles that can fly five or more times faster than the speed of sound.

Such improvements would improve Japan’s ability to strike enemy targets from a long distance and more effectively deter potential aggression against the island nation.

Dec. 27 (UPI) — President Donald Trump and Treasury Sec. Scott Bessent urged an end to the Senate filibuster rule ahead of an anticipated budget battle in January.

Bessent submitted an op-ed that The Washington Post published on Saturday and blames Senate Democrats and the filibuster for blocking passage of a resolution to keep the federal government open while negotiating the 2026 fiscal year budget and causing a record 43-day shutdown of the federal government.

“The American people are just now emerging from the longest and most devastating government shutdown in U.S. history,” Bessent said.

“While the blame lies squarely with Senate Democrats, we cannot ignore the weapon they used to hold the country hostage: the legislative filibuster,” Bessent wrote.

With the continuing resolution expiring on Jan. 30, Bessent said there is a strong likelihood that Senate Democrats again will use the filibuster to block passage of a budget and force the government to close again.

“Democrats inflicted tremendous harm on the nation, including $11 billion in permanent economic damage” as the federal government was “held for ransom by the left’s demands,” Bessent said.

He said the shutdown caused the nation to lose 1.5 percentage points in gross domestic product growth during the fourth quarter, triggered 9,500 canceled flights and caused 1.4 million federal workers to miss their paychecks.

He called the filibuster a “historical accident that has evolved into a standing veto for the [Senate] minority and a license for paralysis.”

The Constitution does not mention a filibuster, and its “framers envisioned debate, but they expect majority rule,” Bessent said.

He said the filibuster has its roots in an 1806 Senate rules decision that deleted a “previous question” motion, which unintentionally removed the Senate’s mechanism for ending debate with a majority vote.

Senators later realized they could “delay or block” legislative action with unending debate, and just the threat of a filibuster is enough to trigger the filibuster rule requiring a supermajority of 60 votes to end it, Bessent explained.

He said it is likely that Senate Democrats again will force the federal government to shut down at the end of January by blocking the 2026 fiscal year budget vote.

President Barack Obama called the filibuster a “‘Jim Crow relic,'” but Bessent said Senate Democrats always use it to their advantage whenever possible, and the president agrees.

“It’s time to end the filibuster,” Trump said while agreeing with Bessent in a social media post that includes Bessent’s op-ed.

He also told Politico that the GOP must end the filibuster when interviewed on Friday night.

Doing so will help his administration to undo damage that he said was caused by the Biden administration and led to very high inflation that he is trying to fix to make life more affordable in the United States, Trump said.

The president has urged Senate Republicans to end the filibuster as soon as possible and said Senate Democrats will do it the first chance that they get when they eventually win a majority in the Senate.

Senate Democrats in September and afterward overwhelmingly opposed a clean continuing resolution to keep the federal government open and instead submitted a resolution that would add $1.5 trillion in spending over the next 10 years to extend Affordable Care Act subsidies that expire at the end of December.

Senate Democrats control 47 seats, including two occupied by independents who caucus with Senate Democrats, while the GOP controls 53 seats, so neither party can overcome the filibuster rule without help from the other.

The Senate GOP could not muster the 60 votes needed to overcome the filibuster rule until eight Senate Democrats joined with most Senate Republicans to support the continuing resolution to end the 43-day government shutdown that began when the 2026 fiscal year started on Oct. 1.

Senate Democrats in 2022 tried to end the filibuster rule but could not obtain a simple majority due to opposition from Sens. Kyrsten Sinema of Arizona and Joe Manchin of West Virginia, both of whom were Democrats but have retired from politics.

Tehran, Iran – Iran’s currency has been registering new lows amid ongoing economic turmoil that is also reflected in a planned budget for next year that effectively shrinks public spending.

Each United States dollar was priced at about 1.36 million rials in the open market on Wednesday in Tehran, its highest rate ever, before the Iranian currency slightly regained ground on Thursday.

The embattled national currency has been rapidly declining over recent weeks as the US and its Western allies pile on their sanctions and diplomatic pressure, and the threat of another war with Israel lingers.

President Masoud Pezeshkian this week sent his administration’s finalised proposed budget to the hardline-dominated parliament for the upcoming Iranian calendar year, which starts in late March. The budget will then have to be greenlit by the 12-member Guardian Council before being ratified into law in the coming weeks.

The presented budget nominally grew by just over 5 percent compared with last year, but inflation currently stands at about 50 percent – indicating that the government envisions lower spending while managing a so-called “resistance economy” as it faces a massive budget crunch yet again.

But minimum wages are to be raised far below the inflation rate, too, at only 20 percent, meaning that Iranians are once more guaranteed to have far less spending power next year as the embattled national currency sinks.

At the same time, the budget says the government sees taxes rising by a massive 62 percent next year, as authorities try to gradually decrease dependence on oil revenues amid US efforts to drive down Iranian exports, which are carried by a shadow fleet of ships mostly to China.

At the current exchange rate, the whole budget is worth about $106bn, several times lower than the projected 2026 budgets of regional players like Turkiye, Saudi Arabia and Israel.

Iran’s rent-distributing multi-tier exchange rate system is still at play, with the government proposing allocating a rate for customs duties, import valuation and budget accounting tables, and another closer to the open market rate used for oil revenue realisation.

An earlier subsidised exchange rate, which was far lower than the open market rate, has now been abandoned. Any excess cash resulting from this is expected to be doled out to low-income Iranians in the form of electronic coupons that can be used to buy essential items like food.

For the first time, the budget is drafted in new rials as four zeros are expected to be removed from the ailing national currency by the time the budget is operational for next year.

After years of back and forth, the parliament in October approved the government plan to lop off four zeros. The move is only cosmetic and will not help with the runaway inflation, but proponents argued it was necessary after years of currency devaluation.

Budget spells grim outlook

Several major factors have already been raising alarm over how bad the economic situation could become next year.

Iranians online reacted poorly to the fact that the government predicts wages will be far outpaced by inflation and tax collection. Others were concerned that eliminating the subsidised rate for essential goods could cause another price shock in the short term.

Many shared a video of Pezeshkian from last year running for president, when he said during a televised interview that the stark disparity between wage increases and inflation is a “grave injustice” being done to the Iranian people.

“Unfortunately, so long as we do not resolve the structural issues, we are making labourers and government workers poorer by the day while those with money get bigger and bigger,” Pezeshkian said at the time.

“This inflation is an additional tax on the poor and the disenfranchised.”

But successive governments have failed to eliminate budget deficits or rein in banks teetering on the brink of insolvency, therefore relying on the central bank to print more money to run the country and, in turn, exacerbate inflation.

Earlier in December, the government proceeded with increasing the price cap of petroleum despite repeated assurances it had no plans to that effect this year. The move has already led to increased transport costs, which will end up taking inflation higher.

There are now four price tiers for petroleum, with the cheapest and lowest quality that is available to most Iranians costing up to 50,000 rials per litre (about $1.19) and higher quality imported fuel delivered this week at 800,000 rials per litre ($19).

Hamid Pourmohammadi, who heads the Plan and Budget Organization of Iran, insisted that the government has devised a 20-point plan to be unveiled soon that will reduce pressure on the livelihoods of Iran’s 90 million population.

“The government is trying to adopt an active approach to address the economic challenges of the people, businesses and economists, so there is no perception of complacency in these economic conditions,” he said.

My Christmas shopping is done. My annual rewatch of “The Family Stone” is queued up. And our last issue of 2025 is out in the world. Which means it’s time to sign off and start food prep. (I’m doing beef Wellington this year.)

But before I do, I wanted to share stories from this week’s edition of The Envelope, and my thanks to all of you out there for reading. Have a very happy holiday!

The Envelope Directors Roundtable

(Jason Armond / For The Times)

As Rian Johnson said while taping this year’s Envelope Directors Roundtable, filmmakers don’t get many chances to hang out and talk shop — so when they do, it’s always an engaging and illuminating conversation.

Led by moderator Mark Olsen, participants Johnson (“Wake Up Dead Man: A Knives Out Mystery”), Jon M. Chu (“Wicked: For Good”), Nia DaCosta (“Hedda”), Guillermo del Toro (“Frankenstein”), Mona Fastvold (“The Testament of Ann Lee”) and Benny Safdie (“The Smashing Machine”) shared their unvarnished views on theatrical moviegoing, budgets and artificial intelligence. It’s absolutely worth your time.

And by the by: I’m not sure what The Times’ standard is on the, uh, pungent phrase Del Toro used to describe A.I. during the conversation, so I’ll just say that you can and should see it in all its glory on our Instagram.

‘Roofman’ Is a Christmas Movie

(The Tyler Twins / For The Times)

If you’re looking for a new Christmas movie to watch before Santa squeezes down the chimney tonight, “Roofman” is just the ticket. Like “The Holdovers” last year, Derek Cianfrance’s charming fable about a fugitive (Channing Tatum) who falls for a single mom (Kirsten Dunst) while hiding out in a Toys R Us channels Old Hollywood in a way that can seem sadly out of fashion.

“As we were selling this movie, trying to get it financed, I was pitching it to everyone as a Capra movie and what I kept hearing is, ‘We don’t make those movies anymore,’” as Cianfrance told Kristen Lopez.

Perhaps they should reconsider. Unfairly written off after its $8 million opening weekend in October, “Roofman” went on to gross $34 million worldwide from a slim $19 million budget. Not exactly “Home Alone,” to be sure, but a respectable showing nonetheless — and that’s before its streaming afterlife. And those of us who dearly miss the mid-budget studio movie will take any data we can to show they can still thrive at the right price.

Imax’s banner year

(Robert Alexander / Getty Images)

Speaking of box office, one big bright spot in 2025 was the performance of Imax and other premium formats, which are attracting cinephiles to see movies theatrically, often multiple times, and at a higher price point than the standard movie ticket.

With an estimated $1.2 billion take this year, and a raft of highly anticipated films like Christopher Nolan’s “The Odyssey” slated for 2026, Imax has forged an alliance between our most committed moviegoers and some of our most exciting filmmakers that bodes well for the future of cinemas, writes Daron James.

“Imax superfan Shane Short, who saw ‘Oppenheimer’ 132 times and once sat next to [cinematographer Autumn Durald] Arkapaw during a screening of ‘Sinners,’ says it’s a good thing. ‘What really pulls me into movies is the emotional aspect when connecting with something. For me, it’s hard to get that in a normal theater. Imax is truly the ultimate immersive experience that draws me in.’”

More stories from this week’s issue

SACRAMENTO — Bolstering Republican calls for deeper spending cuts, state Controller Kathleen Connell warned Wednesday that disappointing revenues are paving the way for the state’s budget gap to swell to nearly $27 billion.

Connell’s warning came as talks over a new spending blueprint, already more than eight weeks overdue, appeared stalled in the Assembly. Democrats want $4.2 billion in new revenue to help close a budget gap that has been projected at $23.6 billion, but Republicans seek deeper spending cuts to eliminate the need for tax hikes and to diminish future shortfalls.

Connell said June and July revenues are running $434 million below projections by Gov. Gray Davis’ administration, and the state would take in $2.9 billion less than anticipated during the current fiscal year if the trend continues.

Even after a budget is adopted for 2002-03, the imbalance between revenue and expenditures is expected to continue. Connell projects a $12-billion shortfall next year, and she said the situation warrants a midyear review of the spending plan lawmakers approve this year.

Anita Gore, a spokeswoman for the state Department of Finance, had no comment on Connell’s revised revenue forecast. Gore said her department would not revise its revenue estimates until January.

Connell said her office is preparing a plan for the state to borrow as much as $12 billion to avert a cash crunch that will materialize in November if the current standoff drags into the fall. She warned, however, that securing the short-term borrowing would not free her to make certain payments without a budget in place.

State payments for abortion services provided after Sunday as well as payments owed to 21 regional centers that help connect the developmentally disabled to services–ranging from transportation to residential care–will cease without legislative intervention until a budget is approved and signed by Davis.

Abortion rights advocates disagreed Wednesday with Connell’s interpretation of the law.

Connell has already stopped paying elected officials, legislative staff and hundreds of vendors who provide goods and services to the state. Assembly Republicans urged Democrats Wednesday to hear a bill that would allow emergency appropriations to be made for the developmentally disabled, vendors and others.

As the Palisades fire raged, then-Los Angeles Fire Department Chief Kristin Crowley went on a television blitz, calling out city leadership for systematically underfunding her agency.

The LAFD, she said, didn’t have enough firefighters, based at enough fire stations, to quench the wind-driven flames that were tearing through the hills.

“We need more. This is no longer sustainable,” she said in one interview Jan. 10.

Nearly a year after the fire destroyed much of the Palisades, LAFD officials continue to highlight financial concerns, with Crowley’s successor requesting a 15% budget increase and the firefighters union proposing a sales tax that could bring in an extra $300 million per year.

A Jan. 9 aerial view of neighborhoods destroyed by the Palisades fire.

(Robert Gauthier / Los Angeles Times)

But the LAFD’s hyper-focus on money obscures its leaders’ failures in managing the resources they had, beginning with a decision to leave the scene of a New Year’s Day fire despite signs it hadn’t been fully extinguished.

Days later, that fire reignited into the Palisades fire, which killed 12 people and destroyed thousands of homes. Despite forecasts of catastrophically high winds, LAFD officials didn’t pre-deploy engines in the area or increase manpower by ordering a previous shift of firefighters to stay on duty.

As the flames spread, the firefighting response was disorganized and chaotic, with the LAFD’s own after-action report describing major failures by high-ranking commanders in communication, staffing and basic wildland firefighting knowledge.

City leaders have highlighted changes they have made since the fire, including appointing 30-year LAFD veteran Jaime Moore as chief and drafting new protocols for staffing on high hazard weather days.

But the question remains: Is Los Angeles prepared for the next major wildfire? Some city officials and fire experts don’t think so, pointing to an LAFD that hasn’t evolved with the times and an incomplete review of how the Palisades fire started.

Moore, who was appointed chief last month, declined to comment.

Mayor Karen Bass said in an interview earlier this month that the city is “on the path to be completely ready” for a major wildfire, with the LAFD now taking a more proactive approach to weather warnings.

“The Fire Department has been way more aggressive, has done pre-deployment, has been very visible, alerts going out early, trying to be very, very aggressive,” she said.

But Genethia Hudley Hayes, president of the Board of Fire Commissioners, said that the LAFD is still unprepared and that there hasn’t been enough time to make the necessary changes. She cited the LAFD’s technology, which she said is about two decades behind.

“I am not confident there would be a different result” if a similar disaster strikes, she said.

City Councilmember Traci Park, whose district includes Pacific Palisades and who has advocated for more Fire Department funding, agreed with Hudley Hayes.

Some essential changes have been made, such as requiring firefighters to stay for an additional shift during red flag warnings, Park said. But she said that too many fire engines are out of service, there are not enough mechanics, and most important, questions about the origin of the Palisades fire remain unanswered.

In October, after federal prosecutors charged a former Palisades resident with deliberately setting the Jan. 1 Lachman fire, The Times reported that a battalion chief ordered firefighters to roll up their hoses and leave the burn area on Jan. 2, even though they had complained that the ground was still smoldering and rocks remained hot to the touch. The Times reviewed text messages among firefighters and a third party, sent in the weeks and months after the fire, describing the crew’s concerns.

The LAFD’s after-action report, released in October, only briefly mentioned the Lachman fire. Critics have flagged this as a crucial lapse in the report, which prevents the department from figuring out what went wrong and avoiding the same mistakes.

After the Times report, Bass ordered an investigation into the LAFD’s handling of the Lachman fire.

Mayor Karen Bass, right, and then-Fire Chief Kristin Crowley speak during a news conference in January. Bass ousted Crowley less than two months after the Palisades fire.

(Allen J. Schaben / Los Angeles Times)

Bass had ousted Crowley less than two months after the Palisades fire, citing the LAFD’s failure to properly deploy resources ahead of the winds and potentially have a chance to extinguish the fire before it exploded out of control, an issue that was exposed by a series of reports in The Times.

Bass also countered Crowley’s financial complaints, saying that the budget did not affect the department’s ability to fight the fire. The LAFD’s 2024-25 budget had actually increased 7% from the previous year, due in part to generous firefighter raises.

More money won’t solve bad decision-making by top officials, said Marc Eckstein, an emergency physician who served as LAFD’s medical director and commander of its emergency medical services bureau until he retired in 2021.

He said that without transparency and accountability, “the fallback is always going to be what it has been: We need more of everything — more people, more money, more fire trucks, more fire stations.”

A modern fire agency needs the flexibility to surge its staff during a disaster, he said, while also addressing day-to-day needs. Most 911 calls are for medical problems, he said, yet the LAFD functions more or less the same as it did decades ago, when structure fires were more common.

He said a panel of outside experts should have been given access to the LAFD’s records to offer an unbiased look at how the department performed leading up to and during the Palisades fire.

“And it’s a playbook. OK, how do we prevent this from happening again?” he said. “And the fact that didn’t happen is a disgrace.”

How much the department transforms after the Palisades disaster will depend, in large part, on its new chief. Moore, who joined the LAFD in 1995 and most recently was deputy chief of the Operations Valley Bureau, was chosen by Bass to lead the department over a fire chief from a major city outside California.

At stations around L.A., firefighters told Bass that they wanted an insider for the job, which she said factored into her decision.

“Given that the Fire Department was under such scrutiny, such a difficult time, morale is in the toilet, infighting that’s going on, the last thing in the world they needed, in my opinion, was somebody from the outside,” Bass told The Times.

Moore had signaled before his appointment was confirmed last month that he was troubled by the LAFD’s missteps with the Lachman fire and was going to bring in an outside organization to investigate.

But the following week, he appeared to change course, alleging that the media was trying to “smear” firefighters while saying he still planned to investigate the Lachman fire.

Moore will be in charge of implementing the 42 recommendations in the after-action report, which range from establishing better communication channels to how to defend homes where hidden embers could ignite.

The report drew the conclusion that top LAFD commanders had startlingly little knowledge about combating wildfires, including “basic suppression techniques.” It suggested that all LAFD members undergo training on key skills such as structure defense and how to draw water from swimming pools when hydrants don’t work.

In an interview with ABC7, Moore said that the LAFD has adopted about three-quarters of the recommendations and is considering creating a division specializing in wildland fires.

Members of Crew 4, the department’s new full-time wildland hand crew, practice cutting fire lines near Green Verdugo Fire Road in Sunland.

(Myung J. Chun / Los Angeles Times)

Since the Palisades fire, the LAFD has hired a 26-member wildland hand crew that uses chainsaws and other tools to chop paths through brush to stop a fire from spreading. When they aren’t battling fires, they do brush clearance throughout the city.

Earlier this month, as hand crew members practiced cutting fire lines through the brush in Sunland, the crew’s leader, Supt. Travis Humpherys, declined to say whether they would have changed the outcome of the Palisades fire.

Travis Humpherys is the Crew 4 superintendent.

(Myung J. Chun / Los Angeles Times)

But they have already “made a dramatic impact” with brush clearance and fighting wildfires, including a 20-acre fire in Burbank in June, Humpherys said.

Moore’s requested budget of more than $1 billion for the coming year — a 15% increase over this year’s budget — includes money for a second wildland hand crew, as well as nearly 200 additional firefighter recruits and helitanker services to attack fires from the air. That amount could be pared down during the months-long city budgeting process, as the City Council and the mayor find ways to balance the overall budget amid financial headwinds.

Meanwhile, United Firefighters of Los Angeles City Local 112 is charting an ambitious course to reduce the department’s dependency on the city budget, pushing for a ballot measure that, if approved by voters in November 2026, would raise nearly $10 billion by 2050 through a half-cent sales tax. But after the LAFD’s failures in the Palisades fire, some voters may be reluctant to entrust its leaders with more money.

“It’s hard to believe that we are fully prepared for the next major emergency,” Doug Coates, the union’s acting president, said in a statement. “We desperately need more firefighters and paramedics, more trucks, engines, and ambulances and more wildfire resources and neighborhood fire stations.”

E. Randol Schoenberg, whose family lost four homes in the fire, including his in Malibu — along with documents that belonged to his grandfather, the composer Arnold Schoenberg — said he would be happy to pay more taxes for more services.

But Schoenberg, an attorney who is representing Palisades fire victims in a lawsuit against the city and the state, said he expects the LAFD to honestly examine its mistakes.

“If they don’t really grapple with the issues of how this happened, then no matter how much money we throw at it, it’s going to happen again,” he said.

Times staff writer David Zahniser contributed to this report.

A POPULAR Spanish beach city is set to get new flights from the UK.

Valencia is known for its vibrant culture and being the birthplace of paella, and soon the city will get new Wizz Air flights from London Gatwick Airport.

The new flights will be daily and launch on March 29, next year.

Return flights will cost from £40 per person.

Wizz Air also recently announced that there will be a route between London Luton Airport and Valencia, starting in March next year as well.

This route will operate five times a week.

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It takes just under three hours to get to Valencia, which experiences high temperatures of 17C during the winter months and 300 days of sunshine a year.

The city features a charming old town – also known as Ciutat Vella – home to Gothic architecture including the cathedral where you can climb the bell tower and the Silk Exchange – a UNESCO World Heritage site.

For history lovers, there is also St. Nicholas Church, which is often dubbed as Valencia’s ‘Sistine Chapel’ due to its Baroque frescoes.

Visitors note the ornate ceilings inside and the light show that takes place, called ‘The Light of Saint Nicholas’, which highlights the numerous Baroque frescoes.

It costs €15 (£13.15) per person to visit.

Head to El Carmen too, to see medieval walls and experience a vibrant nightlife.

Of course, there are pretty beaches too, such as beaches Malvarrosa, which is the best-known beach in the city and has lots of deck chairs for hire, kiosks selling drinks and inviting waters.

For a bite to eat, make sure to visit Mercado Central, which is Europe‘s largest fresh produce market.

Visitors can pick up a variety of produce or grab a takeaway, including fresh oysters and raw shrimp with lemon juice and chilli.

One recent visitor said: “Everything was fresh and very tasty.

“We did a little shopping for vegetables and meats and drank Aqua di Valencia at two different stands, before finishing with empanadas and a roll with jamon and queso.

“The market itself is very large, with interesting architecture both inside and outside.”

Other top foodie destinations in the city include Fum De Llum, where diners can try the tasting menu for €28 (£24.53) with citrus-marinated tuna tartare, Iberian pork shoulder and a number of homemade desserts.

One visitor said: “As I walked in, I was instantly greeted by a delicious aroma that filled the air, creating a wonderful atmosphere for my experience.

“The generous portions only enhanced my enjoyment, and it was clear that the ingredients were fresh.

“Each bite was packed with authentic flavours that transported me to a special place.

“I left feeling thoroughly satisfied and pleased with my choice, eagerly anticipating the next opportunity to indulge in such a delightful meal.”

And if you happen to be in the city on March 19, you’ll get to see Las Fallas – a festival where giant cardboard sculptures are burned.

In 2026, Las Fallas will celebrate its 10th anniversary and will last 19 days.

The festival dates back to the 18th century when carpenters used to burn pieces of wood.

Next year, the city will also be hosting Gay Games from June 27 to July 4.

In total, there will be more than 3,000 people involved in the games across 37 events.

And later in 2026, the Sorolla Museum at the Palace of Communications will open.

The new museum will feature more than 220 works by the famous Valencia painter, Joaquin Sorolla.

There are also hotels for all budgets, including the adults-only Axel Hotel Valencia, which has city views and a spa and costs from £106 per night.

Alternatively, you could stay at the Vincci Mercat, which is less than 100 metres from Mercado Central, from £125 a night.

For more inspiration on where to travel to in Spain, these are five of the best Spanish foodie destinations with direct UK flights and cheap holiday packages.

Plus, a couple has been to Benidorm over 100 times – they go back for Christmas for Chinese buffets and unlimited drinks for £16.