legislation

SACRAMENTO — California lawmakers stood around Gov. Gavin Newsom on Monday and celebrated the passage of the state budget and “transformative” housing legislation at the state Capitol.

Between mutual praise and handshakes in front of television news cameras, there was little acknowledgment of the power dynamics that played out behind the scenes: Democratic lawmakers once again gave in to the demands of the soon-to-be termed-out governor.

“We’ve seen multiple situations now where it’s clear that the Legislature is in one place and the governor is in another, whether that’s bills that have passed overwhelmingly and been vetoed, or it’s dragging the Legislature along on budget bills,” said Lorena Gonzalez, leader of the California Labor Federation. “At some point the Legislature needs to legislate.”

Newsom took a rare step earlier this year and publicly supported two bills to lessen environmental review standards to speed up the construction of housing in California. Despite vowing to supercharge homebuilding, Newsom previously backed only smaller-scale policies and construction has stagnated.

In his recently published book “Abundance,” journalist Ezra Klein argued that California’s marquee environmental law stands in the way of housing construction — a critique that struck a chord with the governor. Newsom, who is considering a 2028 presidential run, this year was hellbent on proving that he’s the kind of Democrat who can be part of the solution and push through the government and political logjams.

When a pivotal bill designed to streamline housing construction recently stalled in the state Senate, Newsom effectively forced it through despite the concerns of progressive lawmakers, environmental interest groups and labor unions. The governor did so by ensuring that a state budget bill included a “poison pill” provision that required lawmakers to pass the housing legislation in order for the spending plan to go into effect on July 1.

Newsom called the bills the “most consequential housing reform that we’ve seen in modern history in the state of California” on Monday evening.

“This was too important to play chance,” Newsom said, adding that he worried reforms would have fallen prey to the same opposition as prior years if he allowed the “process to unfold in the traditional way.”

Democratic lawmakers for years have tried to cut through the thicket of regulations under the California Environmental Quality Act, known as CEQA, and faced stiff opposition from powerful labor groups. These groups, notably the State Building and Construction Trades Council, have argued that any relief offered to developers should be paired with wage and other benefits for workers.

The legislation Newsom signed Monday sidestepped those demands from labor.

Assembly Bill 130, based on legislation introduced by Assemblymember Buffy Wicks (D-Oakland), exempts most urban housing projects from CEQA, requiring only developers of high-rise — taller than 85 feet — and low-income buildings to pay union-level wages for construction workers.

Senate Bill 131 also narrows CEQA mandates for housing construction and further waives the environmental restrictions for some residential rezoning changes. The bill, led by state Sen. Scott Wiener (D-San Francisco), additionally designates a host of nonresidential projects — health clinics, child-care and advanced manufacturing facilities, food banks and more — no longer subject to CEQA.

Experts in development said the new legislation could provide the most significant reforms to CEQA in its 55-year history, especially for urban housing.

CEQA generally requires proponents to disclose and, if possible, lessen the environmental effects of a construction project. The process sounds simple but often results in thousands of pages of environmental assessments and years of litigation.

CEQA creates substantial legal risk for homebuilders and developers, and past efforts to alleviate its burdens fell short, said Dave Rand, a prominent Southern California land-use attorney. The bills signed Monday provide relief for the vast majority of housing, he said. High-rise and affordable housing construction often already require union-level pay.

“The worst cog in the wheel has always been CEQA,” Rand said. “It’s always been the place where projects get stuck. This is the first clean, across-the-board, objective, straightforward exemption that anyone can figure out.”

He said clients are eager to take advantage of the new rules, which take effect immediately.

“There’s over 10 projects we’re going to push the go button on with this exemption probably Tuesday,” Rand said.

For non-housing projects, the changes do not amount to a comprehensive overhaul but are still meaningful, said Bill Fulton, publisher of the California Planning & Development Report.

In the past, state lawmakers have passed narrow, one-off CEQA waivers for projects they supported, such as increased enrollment at UC Berkeley in 2022. SB 131 continues the Legislature’s penchant for exempting specific kinds of development from CEQA rules, he said, though the nine categories of projects affected provide more expansive relief than prior efforts.

“They’re cherry picking things that they want to speed through,” said Fulton, who has termed the phenomenon “Swiss cheese CEQA.”

Observers said Newsom’s actions were the strongest he has taken to force large-scale housing policies through the Legislature.

For years, the governor has made audacious promises — on the campaign trail in 2017, Newsom famously promised to support the construction of 3.5 million new homes by the end of this year, a goal likely to fall millions short. But he has been more likely to work behind the scenes or swoop in and praise bills once they’ve passed rather than publicly shape housing policy, said Chris Elmendorf, a UC Davis law professor.

Elmendorf, who supports the new laws, called Newsom’s arm-twisting and willingness to challenge entrenched interests, “an incredible about-face from his MO with respect to the legislative process on controversial housing and environmental issues for the last six, seven years.”

The governor has jammed his policy priorities on other topics through the Legislature before, including climate legislation, infrastructure and oil regulations, with mixed results over the years.

Newsom’s term ends in early 2027. His endorsement of the meaningful housing policies, and his strategy to propel one through the state Senate, became a bellwether of his strength at the Capitol as his time in office wanes.

Wicks said Newsom “put a ton of skin in the game” to force the proposals through.

“He went all in on pushing for taking on these sacred cows like CEQA because I think he recognizes that we have to tackle this problem,” Wicks said.

Wicks’ legislation had cleared the Assembly before the proposal became part of the state budget process, which added pressure on lawmakers to pass the bills. She described herself as “cautiously optimistic” as it moved through the Capitol and said her house understood the need for reform.

Wiener’s legislation was slower to gain traction. Just last week, the inability of the Senate and the governor’s office to reach an agreement on the proposal held up the announcement of a budget deal.

Then Newsom tied the proposal to the budget, essentially requiring lawmakers to pass the bill or risk starting the fiscal year on July 1 without a spending plan.

During the debate on SB 131, Sen. Henry Stern (D-Calabasas) said the legislation had “significant issues” but that he would vote in favor of the measure because of assurances that those would eventually be addressed.

“I think nature and abundance can live side by side. In fact, they must,” Stern said. “We don’t want to live in a moonscape California. Want to live in a livable one.”

Despite the concerns, lawmakers passed both bills on Monday.

Gonzalez was critical of legislators, saying “nobody is voting their values.” She compared the Legislature going along with Newsom’s plan to Republicans in Congress.

“California Democrats are crying foul that legislators and senators are passing things that they don’t even know the effect of that aren’t in line with their constituents that are just being shoved down their throats by Donald Trump,” Gonzalez said. “And those same legislators in California are allowing that to happen to themselves.”

WASHINGTON — President Trump’s megabill encompassing his domestic agenda on Monday inched closer to becoming law as Republican senators sifted through familiar procedural hurdles toward a final vote on legislation that would dramatically transform the tax code and Medicaid.

Throughout a day of marathon voting, senators offered amendments to the bill that could ultimately decide whether it secures passage through Congress. If the Senate approves the legislation — as it is expected to do by a slim, simple majority and with bipartisan opposition — then the House will have to vote for a second time on the final text before it goes to the president’s desk for his signature.

Anticipating Senate passage, the House Rules Committee has already scheduled a hearing on reconciling the two bills for Tuesday. The White House previously set July 4 as a goal to get the package, called the “One Big Beautiful Bill Act,” passed by both chambers.

But several Republicans are still criticizing the bill, including Sens. Rand Paul of Kentucky and Thom Tillis of North Carolina, who announced he will not seek reelection in 2026 over the weekend before ripping into the legislation as a “betrayal” to voters.

Although the legislation has hundreds of provisions, its most sweeping would make tax breaks passed in 2017 during Trump’s first term permanent — an expensive proposition — before they are set to expire at the end of this year, while attempting to offset some of those costs with historic cuts to Medicaid and the Supplemental Nutrition Assistance Program, social welfare programs that for decades had been seen as a political third rail.

Polling shows that Americans broadly support extending the 2017 tax cuts. Other expensive programs in the bill — including additional funding for border security and defense — also enjoy public support. But polls indicate that the public disapproves of the bill overall by a double-digit margin due to its cuts to core government programs.

“What do I tell 663,000 people in two years or three years, when President Trump breaks his promise by pushing them off of Medicaid because the funding’s not there anymore?” Tillis said in a speech from the Senate floor. “The people in the White House advising the president are not telling him that the effect of this bill is to break a promise.”

Both Paul and Tillis voted against advancing the bill to a floor vote and have indicated they will vote “no” on its final passage.

“Republicans are about to make a mistake on healthcare, and betraying a promise,” Tillis continued. “It is inescapable that this bill in its current form will betray the very promise that Donald J. Trump made in the Oval Office, or in the Cabinet room, when I was there with Finance [Committee members] where he said, ‘We can go after waste, fraud and abuse on any programs.’”

Tillis and a handful of his colleagues, including Sen. Josh Hawley of Missouri, have expressed concern with elements of the bill that restrict state taxes on healthcare providers, known as the “provider tax,” an essential tool for many states in their efforts to supplement Medicaid funding.

The Senate parliamentarian has already determined that the provision, among others, fails to follow the rules of the chamber and must be removed or modified. Another passage crucial to the bill, which introduces a structure for work requirements for Medicaid, was halted by the parliamentarian.

Senate Minority Leader Chuck Schumer (D-N.Y.) speaks to reporters outside the chamber on June 30, 2025.

(Manuel Balce Ceneta / Associated Press)

Republicans efforts to prohibit the use of Medicaid funds on gender transition care, to cancel regulations that require a minimum staffing ratio at nursing homes and to limit Medicaid access to immigrants were also cut by the parliamentarian, who continued to review amendments to the bill as they were introduced Monday.

The parliamentarian’s moves eat into the stated cost savings of a bill that is already slated to add trillions of dollars to the debt over the next decade — a problem for fiscal hawks in both chambers whose votes will be crucial for passage.

They also gutted key provisions that were top priorities for Sen. Lisa Murkowski of Alaska, the focus of an intense lobbying campaign by Senate Republican leadership after expressing skepticism over several provisions of the legislation. Sen. Susan Collins of Maine, who is up for reelection next cycle, has also expressed concern over its cuts to Medicaid.

“This is an ongoing process — the president continues to be very much engaged with the leadership in both the Senate and the House,” Karoline Leavitt, the White House press secretary, told reporters in a briefing Monday. “He understands that legislators want to protect jobs in the communities and their districts.”

Democrats in the Senate have been united in their opposition to the bill, with Mark Kelly, of Arizona, warning Republicans of electoral repercussions.

“If they lose their health insurance,” he told MSNBC in an interview, “sure, they’re going to remember.”

But the potential political windfall for Democrats isn’t stopping the party from attempting to improve the legislation, he said, noting a number of amendments proposed by Democratic senators Monday that would roll back cuts to Medicaid and SNAP.

If the bill does ultimately clear the Senate, Republicans will have only a handful of votes in the House to spare in a final vote. And several are already suggesting they will vote against it, including Rep. David Valadao of California, whose constituents rely heavily on Medicaid.

“I’m not a ‘yes’ necessarily,” said Rep. Don Bacon, a Republican from Nebraska who has announced his retirement. Bacon added that he believes the Senate version has gone too far in gutting healthcare programs. “I think we’ll have a hard time passing.”

An intraparty fight has also broken out among Republicans over the fate of green energy tax credits, which several GOP senators — including Murkowski, as well as Chuck Grassley and Joni Ernst of Iowa — sought to preserve for several more years. A group of House Republicans had successfully lobbied in their version of the bill to speed up the termination of those credits.

Elon Musk, a co-founder of Tesla, and Trump’s close advisor and benefactor before the two men fell out this month, renewed his attacks on the legislation Monday, calling it “utterly insane and destructive” for its price tag.

“It is obvious with the insane spending of this bill, which increases the debt ceiling by a record FIVE TRILLION DOLLARS that we live in a one-party country — the PORKY PIG PARTY!!” Musk wrote.

“Time for a new political party,” he added, “that actually cares about the people.”

WASHINGTON — The changes made to President Trump’s big tax bill in the Senate would pile trillions onto the nation’s debt load while resulting in even steeper losses in healthcare coverage, the nonpartisan Congressional Budget Office said in a new analysis, adding to the challenges for Republicans as they try to muscle the bill to passage.

The CBO estimates that the Senate bill would increase the deficit by nearly $3.3 trillion from 2025 to 2034, a nearly $1-trillion increase from the House-passed bill, which the CBO has projected would add $2.4 to the debt over a decade.

The analysis also found that 11.8 million more Americans would become uninsured by 2034 if the bill became law, an increase over the estimate for the House-passed version of the bill, which predicts that 10.9 million more people would be without health coverage.

The stark numbers are yet another obstacle for Republican leaders as they labor to pass Trump’s bill by his declared July 4 deadline.

Even before the CBO’s estimate, Republicans were at odds over the contours of the legislation, with some resisting the cost-saving proposals to reduce spending on Medicaid and food aid programs even as other Republicans say those proposals don’t go far enough. Republicans are slashing the programs as a way to help cover the cost of extending some $3.8 trillion in Trump tax breaks put in place during his first term.

The push-pull was on vivid display Saturday night as a routine procedural vote to take up the legislation in the Senate was held open for hours as Vice President JD Vance and Republican leaders met with several holdouts. The bill ultimately advanced in a 51-49 vote, but the path ahead is fraught, with voting on amendments still to come.

Still, many Republicans are disputing the CBO estimates and the reliability of the office’s work. To hoist the bill to passage, they are using a different budget baseline that assumes the Trump tax cuts expiring in December already have been extended, essentially making them cost-free in the budget.

The CBO on Saturday released a separate analysis of the GOP’s preferred approach that found the Senate bill would reduce deficits by about $500 billion.

Democrats and economists decry the GOP’s approach as “magic math” that obscures the true costs of the GOP tax breaks.

In addition, Democrats note that under the traditional estimation system, the Republican bill would violate the Senate’s “Byrd Rule” that forbids the legislation from increasing deficits after 10 years.

In a Sunday letter to Oregon Sen. Jeff Merkley, the top Democrat on the Senate Budget Committee, CBO Director Phillip Swagel said the office estimates that the Finance Committee’s portion of the bill, also known as Title VII, “increases the deficits in years after 2034” under traditional scoring.

Hussein writes for the Associated Press.

California leaders reached a tentative agreement Tuesday night on the state budget, which hinges on Gov. Gavin Newsom’s demand that the Legislature pass a housing reform proposal.

The eleventh-hour negotiations about the spending plan, which takes effect July 1, speak to the political challenge of overhauling longstanding environmental regulations to speed up housing construction in a state controlled by Democrats.

The party has been loath to do more than tweak the California Environmental Quality Act, or approve one-off exemptions, despite pressure from the governor and national criticism of a law that reform advocates say has hamstrung California’s ability to build.

The proposal is among a series of policies Newsom and Democratic lawmakers are expected to advance in the coming days as part of the $321.1-billion budget. The deal reflects the Legislature’s resistance to the governor’s proposed cuts to reduce a $12-billion budget deficit expected in the year ahead, citing uncertainty about the scope of the state’s financial problems.

“We appreciate the strong partnership with the Legislature in reaching this budget agreement,” said Izzy Gardon, a spokesperson for Newsom. “The governor’s signature is contingent on finalizing legislation to cut red tape and unleash housing and infrastructure development across the state — to build more, faster.”

The consensus comes after weeks of conversations about how to offset the deficit, caused by overspending in California, and start to address even larger financial problems anticipated in the future, including from potential federal policy changes.

The tentative deal largely relies on borrowing money, tapping into state reserves, and shifting funding around to close the shortfall. By reducing and delaying many of the governor’s proposed cuts, the budget continues a practice at the state Capitol of sparing state programs from immediate pain while avoiding taking on California’s long-term budget woes.

Assembly Republican Leader James Gallagher (R-Yuba City) said the budget deal papers over the state’s financial problems.

“We’re in this situation because of overspending,” Gallagher said. “We’ve made long-term commitments to programs that Democrats have championed, and now, just like everybody warned, the money is not there to support them all, and they don’t want to cut back their program that they helped expand.”

The cuts lawmakers and the governor ultimately agreed to will reduce the expansion of state-sponsored healthcare to undocumented immigrants and reinstate asset limit tests for Medi-Cal enrollees. The final deal, however, achieves less savings for the state than Newsom originally proposed.

The plan restores cost-of-living adjustments for child-care workers, which the governor wanted to nix, and rejects his call to cap overtime hours for in-home caregivers.

Democrats in the Legislature successfully pushed to provide another $500 million in funding for Homeless Housing, Assistance and Prevention grants. The governor originally resisted giving more money to counties, which he has chastised for being unable to show results for the billions of dollars in state funding they have received to reduce homelessness.

Assembly Budget Chair Jesse Gabriel (D-Encino) pushed back on the notion that the Legislature hasn’t done “real belt-tightening.” Lawmakers are trying to balance compassion and fiscal responsibility before making drastic cuts to safety net programs that Californians rely on, he said.

“That is the balance that we are trying to strike here with this budget of being responsible, of focusing on the work that we need to do regardless, but also understanding that there is a pretty high delta of uncertainty for a lot of reasons,” Gabriel said.

The budget also preserves Newsom’s plan to provide $750 million to expand the California Film and Television Tax Credit, a proposal supported by Hollywood film studios and unions representing workers in the industry.

The tentative agreement is expected to serve as a precursor to more challenging financial discussions about additional reductions in the months ahead.

California expects to lose federal funding from the Trump administration and state officials predict a potentially greater funding dilemma in 2026-27.

Here are few key elements of the budget deal, detailed in summaries of the agreement and legislation:

A housing caveat

Described colloquially as a “poison pill” inserted into the budget bill, the agreement between the Legislature and Newsom will only become law if legislators send the governor a version of a proposal initially introduced by Sen. Scott Wiener (D-San Francisco).

Wiener’s bill is expected to lessen the number of building projects that would require a full environmental review under CEQA and make the process of developing environmental impact reports more efficient.

Paired with another proposal that could exempt more urban housing developments from CEQA, the legislation could mark a significant change in state policy that makes it easier to build.

Newsom is effectively forcing the Wiener proposal through by refusing to sign a budget deal without the CEQA exemptions. The proposal was still being drafted as of Tuesday evening.

The governor declared lofty goals to build more housing on the 2018 gubernatorial campaign trail, but he has failed to spur enough construction to meet housing demand and make homes more affordable.

New York Times columnist Ezra Klein effectively called out the inaction in California caused by the state’s marquee environmental law and a lack of political will in his recent book “Abundance,” which increased pressure on the governor and other Democrats to reconsider their approach and push for more substantial fixes this year.

The CEQA reform bill must be passed by Monday under the budget agreement, which omits a separate Newsom call to streamline the Delta tunnels project.

Changes to Med-Cal funding

Medi-Cal cost overruns are causing major problems for the California budget. The challenges stem from a higher-than-expected price tag for the expansion of state-sponsored healthcare to all income-eligible undocumented immigrants and medical care for other enrollees.

Newsom’s budget proposal in May suggested substantial trims to the healthcare program for people who are undocumented. His plan included freezing new enrollment as of Jan. 1, requiring all adults to pay $100 monthly premiums, eliminating long-term care benefits and cutting full dental coverage. The changes offered minor savings in the year ahead but could save billions of dollars in future years.

Lawmakers ultimately agreed to require undocumented immigrant adults ages 19 to 59 to pay $30 monthly premiums beginning July 2027. They plan to adopt Newsom’s enrollment cap but give people three months to reapply if their coverage lapses instead of immediately cutting off their eligibility.

Democrats agreed to cut full dental coverage for adult immigrants who are undocumented, but delayed the change until July 1, 2026.

State leaders agreed to reinstate much higher limits than the governor originally proposed on the assets Medi-Cal beneficiaries may possess and still get coverage. The new limits would be $130,000 for individuals and $195,00 for couples, compared to prior limits of a few thousand dollars.

They also adopted Newsom’s proposal to withdraw Medi-Cal benefits for specialty weight-loss drugs.

Shifting money around

The negotiations resulted in less general fund spending than the Legislature proposed in a counter to Newsom’s budget revision in May, dropping from $232 billion to an estimated $228 billion for 2025-26.

Officials are using more money from California’s cap-and-trade program, which sets limits on companies’ greenhouse gas emissions and allows them to buy pollution credits from the state, including $1 billion next year. They are also using $300 million from climate change bonds instead of the general fund to pay for environmental programs.

Lawmakers and the governor agreed to delay a $3.4-billion payment on a loan to cover Medi-Cal cost overruns and increase the loan by another $1 billion next year.

Trump uncertainty

The plan continues an agreement to take $7.1 billion from the state’s rainy day fund to help cover the deficit and taps into another $6.5 billion from other cash reserves to balance the budget.

California leaders for months have warned about the so-called Trump effect on the state budget.

Financial analysts at UCLA predict that the state economy is expected to slow in the months ahead due to the effects of Trump’s tariff policy and immigration raids on construction, hospitality, agriculture and other key sectors.

Meanwhile, the state is warning that federal funding reductions to California could require lawmakers to adopt additional budget cuts in August or September, during a special session in the fall or early next year.

State officials expect future deficit estimates to range from $17 to $24 billion annually, according to an Assembly summary of the budget deal.

More to come

The final budget agreement is being publicly released in bits and pieces this week through a series of trailer bills that appear online at random hours.

Lawmakers are expected to pass a main budget bill on Friday and approve additional legislation by Monday, before the July 1 deadline for the budget to go into effect. Some legislation, such as the CEQA housing exemptions, will not appear in print until the end of the week.

Other decisions, such as reauthorizing California’s cap-and-trade program, will be considered later in the year outside of the budget process.

WASHINGTON — The massive tax and spending cuts package that President Trump wants on his desk by July 4 would loosen regulations on gun silencers and certain types of rifles and shotguns, advancing a longtime priority of the gun industry as Republican leaders in the House and Senate try to win enough votes to pass the bill.

The guns provision was first requested in the House by Georgia Rep. Andrew Clyde, a Republican gun store owner who had initially opposed the larger tax package. The House bill would remove silencers — called “suppressors” by the gun industry — from a 1930s law that regulates firearms that are considered the most dangerous, eliminating a $200 tax while removing a layer of background checks.

The Senate kept the provision on silencers in its version of the bill and expanded upon it, adding short-barreled, or sawed-off, rifles and shotguns.

Republicans who have long supported the changes, along with the gun industry, say the tax infringes on 2nd Amendment rights. They say silencers are mostly used by hunters and target shooters for sport.

“Burdensome regulations and unconstitutional taxes shouldn’t stand in the way of protecting American gun owners’ hearing,” said Clyde, who owns two gun stores in Georgia and often wears a pin shaped like an assault rifle on his suit lapel.

Democrats are fighting to stop the provision, which was unveiled days after two Minnesota state legislators were shot in their homes, as the bill speeds through the Senate. They argue that loosening regulations on silencers could make it easier for criminals and active shooters to conceal their weapons.

“Parents don’t want silencers on their streets, police don’t want silencers on their streets,” said Senate Democratic leader Chuck Schumer of New York.

The gun language has broad support among Republicans and has received little attention as House Speaker Mike Johnson (R-La.) and Senate Majority Leader John Thune (R-S.D.) work to settle differences within the party on cuts to Medicaid and energy tax credits, among other issues. But it is just one of hundreds of policy and spending items included to entice members to vote for the legislation that could have broad implications if the bill is enacted within weeks, as Trump wants.

Inclusion of the provision is also a sharp turn from the climate in Washington just three years ago when Democrats, like Republicans now, controlled Congress and the White House and pushed through bipartisan gun legislation. The bill increased background checks for some buyers under the age of 21, made it easier to take firearms from potentially dangerous people and sent millions of dollars to mental health services in schools.

Passed in the summer of 2022, just weeks after the shooting of 19 children and two adults at a school in Uvalde, Texas, it was the most significant legislative response to gun violence in decades.

Three years later, as they try to take advantage of their consolidated power in Washington, Republicans are packing as many of their longtime priorities as possible, including the gun legislation, into the massive, wide-ranging bill that Trump has called “beautiful.”

“I’m glad the Senate is joining the House to stand up for the 2nd Amendment and our Constitution, and I will continue to fight for these priorities as the Senate works to pass President Trump’s One Big Beautiful Bill,” said Texas Sen. John Cornyn, who was one of the lead negotiators on the bipartisan gun bill in 2022 but is now facing a primary challenge from the right in his bid for reelection next year.

If the gun provisions remain in the larger legislation and it is passed, silencers and the short-barrel rifles and shotguns would lose an extra layer of regulation that they are subject to under the National Firearms Act, passed in the 1930s in response to concerns about mafia violence. They would still be subject to the same regulations that apply to most other guns — and that includes possible loopholes that allow some gun buyers to avoid background checks when guns are sold privately or online.

Larry Keane of the National Shooting Sports Foundation, who supports the legislation, says changes are aimed at helping target shooters and hunters protect their hearing. He argues that the use of silencers in violent crimes is rare. “All it’s ever intended to do is to reduce the report of the firearm to hearing-safe levels,” Keane says.

Speaking on the floor before the bill passed the House, Rep. Clyde said the bill restores 2nd Amendment rights from “over 90 years of draconian taxes.” Clyde said Johnson included his legislation in the larger bill “with the purest of motive.”

“Who asked for it? I asked,” said Clyde, who ultimately voted for the bill after the gun silencer provision was added.

Clyde was responding to Rep. Maxwell Frost, a 28-year-old Florida Democrat, who went to the floor and demanded to know who was responsible for the gun provision. Frost, who was a gun-control activist before being elected to Congress, called himself a member of the “mass shooting generation” and said the bill would help “gun manufacturers make more money off the death of children and our people.”

Among other concerns, control advocates say less regulation for silencers could make it harder for law enforcement to stop an active shooter.

“There’s a reason silencers have been regulated for nearly a century: They make it much harder for law enforcement and bystanders to react quickly to gunshots,” said John Feinblatt, president of Everytown for Gun Safety.

Schumer and other Democrats are trying to persuade the Senate parliamentarian to drop the language as she reviews the bill for policy provisions that aren’t budget-related.

“Senate Democrats will fight this provision at the parliamentary level and every other level with everything we’ve got,” Schumer said earlier this month.

Jalonick writes for the Associated Press.

PROVIDENCE, R.I. — Rhode Island’s Democratic-controlled state House on Friday approved legislation that would ban the sale and manufacture of many semiautomatic rifles commonly referred to as assault weapons.

The proposal now heads to the desk of Democratic Gov. Daniel McKee, who has said he supports assault weapons bans. If the bill is signed into law, Rhode Island will join 10 other states that have some sort of prohibition on high-powered firearms that were once banned nationwide and are now largely the weapon of choice among those responsible for most of the country’s mass shootings.

Gun control advocates have been pushing for an assault weapons ban in Rhode Island for more than a decade. But despite being a Democratic stronghold, lawmakers throughout the country’s smallest state have long argued over the necessity and legality of such proposals.

The bill applies only to the sale and manufacturing of assault weapons and not possession. Only Washington state has a similar law. Residents looking to purchase an assault weapon from nearby New Hampshire or elsewhere will also be blocked. Federal law prohibits people from traveling to a different state to purchase a gun and returning it to a state where that particular of weapon is banned.

Nine states and the District of Columbia have bans on the possession of assault weapons, covering major cities including Los Angeles and New York. Hawaii bans assault pistols.

Democratic Rep. Rebecca Kislak described the bill during floor debates Friday as an incremental move that brings Rhode Island in line with neighboring states.

“I am gravely disappointed we are not doing more, and we should do more,” she said. “And given the opportunity to do this or nothing, I am voting to do something.”

Critics of Rhode Island’s proposed law argued Friday during floor debates that assault weapons bans do little to curb mass shootings and only punish people with such rifles.

“This bill doesn’t go after criminals, it just puts the burden on law-abiding citizens,” said Republican Sen. Thomas Paolino.

Republican Rep. Michael Chippendale, the House minority leader, predicted that if the legislation were to become law, the U.S. Supreme Court would deem it unconstitutional.

“We are throwing away money on this,” he said.

It wasn’t just Republicans who opposed the legislation. David Hogg — a gun control advocate who survived the 2018 school shooting in Parkland, Fla. — and the Rhode Island Coalition Against Gun Violence described the proposed ban as the “weakest assault weapons ban in the country.”

“I know that Rhode Islanders deserve a strong bill that not only bans the sale, but also the possession of assault weapons. It is this combination that equals public safety,” Hogg said in a statement.

Elisabeth Ryan, policy counsel at Everytown for Gun Safety, rejected assertions that the proposed law is weak.

“The weakest law is what Rhode Island has now — no ban on assault weapons,” Ryan said. “This would create a real, enforceable ban on the sale and manufacture of assault weapons, just like the law already working in Washington state, getting them off the shelves of Rhode Island gun stores once and for all.”

Nationally, assault weapons bans have been challenged in court by gun rights groups that argue the bans violate the 2nd Amendment. AR-15-style firearms are among the bestselling rifles in the country.

The conservative-majority Supreme Court may soon take up the issue. The justices declined to hear a challenge to Maryland’s assault weapons ban in early June, but three conservative justices — Samuel A. Alito Jr., Neil M. Gorsuch and Clarence Thomas — publicly noted their disagreement. A fourth justice, Brett M. Kavanaugh, indicated he was skeptical that the bans are constitutional and predicted the court would hear a case “in the next term or two.”

Kruesi writes for the Associated Press. AP writers David Lieb in Jefferson City, Mo., and Lindsay Whitehurst in Washington, D.C., contributed to this report.

California lawmakers on Tuesday moved one step closer to placing more guardrails around artificial intelligence-powered chatbots.

The Senate passed a bill that aims to make chatbots used for companionship safer after parents raised concerns that virtual characters harmed their childrens’ mental health.

The legislation, which now heads to the California State Assembly, shows how state lawmakers are tackling safety concerns surrounding AI as tech companies release more AI-powered tools.

“The country is watching again for California to lead,” said Sen. Steve Padilla (D-Chula Vista), one of the lawmakers who introduced the bill, on the Senate floor.

At the same time, lawmakers are trying to balance concerns that they could be hindering innovation. Groups opposed to the bill such as the Electronic Frontier Foundation say the legislation is too broad and would run into free speech issues, according to a Senate floor analysis of the bill.

Under Senate Bill 243, operators of companion chatbot platforms would remind users at least every three hours that the virtual characters aren’t human. They would also disclose that companion chatbots might not be suitable for some minors.

Platforms would also need to take other steps such as implementing a protocol for addressing suicidal ideation, suicide or self-harm expressed by users. That includes showing users suicide prevention resources.

The operator of these platforms would also report the number of times a companion chatbot brought up suicide ideation or actions with a user, along with other requirements.

Dr. Akilah Weber Pierson, one of the bill’s co-authors, said she supports innovation but it also must come with “ethical responsibility.” Chatbots, the senator said, are engineered to hold people’s attention including children.

“When a child begins to prefer interacting with AI over real human relationships, that is very concerning,” said Sen. Weber Pierson (D-La Mesa).

The bill defines companion chatbots as AI systems capable of meeting the social needs of users. It excludes chatbots that businesses use for customer service.

The legislation garnered support from parents who lost their children after they started chatting with chatbots. One of those parents is Megan Garcia, a Florida mom who sued Google and Character.AI after her son Sewell Setzer III died by suicide last year.

In the lawsuit, she alleges the platform’s chatbots harmed her son’s mental health and failed to notify her or offer help when he expressed suicidal thoughts to these virtual characters.

Character.AI, based in Menlo Park, Calif., is a platform where people can create and interact with digital characters that mimic real and fictional people. The company has said that it takes teen safety seriously and rolled out a feature that gives parents more information about the amount of time their children are spending with chatbots on the platform.

Character.AI asked a federal court to dismiss the lawsuit, but a federal judge in May allowed the case to proceed.

By Tina Teng

Published on
22/05/2025 – 7:35 GMT+2

ADVERTISEMENT

Bitcoin surged to a fresh record high on Thursday, fuelled by optimism that the US Congress will soon pass a bill ill for stablecoin- the GENIUS Act, which is set to be the first regulatory framework under the Trump Administration.

During Thursday’s Asian session, the world’s largest cryptocurrency soared past $111,000 (€98,000) at 5:23 am CEST, surpassing its previous all-time high of over $109,000 (€96,000) set during President Trump’s inauguration on 20 January.

The rally was supported not only by legislative developments but also by increasing institutional interest. Michael Saylor’s firm, Strategy, disclosed a further aggressive Bitcoin purchase worth $765 million (€675 million) on Monday, bringing its total holdings to over $63 billion (€56 billion). Major financial institutions, including JPMorgan Chase, Morgan Stanley and BlackRock, have also expanded crypto offerings to clients.

“Perhaps the most crucial shift is who’s buying. This is the first real bull market where institutional participation is front and centre,” said Josh Gilbert, market analyst at eToro Australia.

Stablecoin legislation wins key Senate vote

Stablecoins are cryptocurrencies designed to maintain a stable value by being pegged to reference assets such as the US dollar, the euro or commodities like gold.

On Monday, a group of Senate Democrats dropped their opposition to the legislation, allowing it to clear a key procedural vote and raising hopes that the Senate will pass it as early as this week. The bill is expected to include provisions aimed at protecting stablecoin holders and regulating potential abuse for criminal or terrorist financing.

Previously, the bill had stalled over concerns about potential conflicts of interest, stemming from President Trump’s and his family’s involvement in the cryptocurrency. Trump launched his own meme coin in January, while the Trump family business supported the launch of a new stablecoin, USD1, in March. USD1 is pegged to US dollar deposits and backed by short-term US Treasuries.

David Sacks, the White House’s crypto tsar and a senior AI adviser to Trump, said in an interview with CNBC that the bill’s passage would boost demand for US government debt. “If we provide the legal clarity and legal framework for this, I think we could create trillions of dollars of demand for our Treasuries practically overnight,” he said.

Bitcoin outperforms traditional risk assets

Bitcoin has emerged as one of the top-performing risk assets this year, having risen nearly 20% year-to-date. In contrast, the S&P 500 has slipped 0.48%, while the Nasdaq has gained 2.7%. Meanwhile, gold, a traditional safe-haven asset, has climbed about 21% over the same period.

Wednesday’s US 20-year US government bond auction revealed tepid demand, pushing Treasury yields sharply higher. Bond yields move inversely to prices. The auction result underscored mounting investor concerns about Washington’s ballooning debt burden, amid upcoming Trump’s proposed tax bill. The market reaction also followed Moody’s decision to downgrade the US credit outlook last Friday. Surging bond yields triggered renewed selling pressure across US assets, with stocks, the dollar and Treasuries all falling on Wednesday.

Despite its impressive rally, Bitcoin remains a highly volatile financial asset with limited fundamental support, unlike stocks which are underpinned by corporate earnings.

WASHINGTON — House Republicans are getting closer to passing President Trump’s tax breaks, spending cuts and beefed-up border security as Speaker Mike Johnson (R-La.) attempts to pass the package over unified Democratic opposition by Memorial Day.

House committees have labored for months on the legislation, which exceeds 1,000 pages and is titled the “One Big Beautiful Bill Act,” a nod to Trump himself.

GOP divisions have narrowed but continue as fiscal conservatives worry the bill doesn’t do enough to curb Medicaid spending, while Republicans from competitive swing districts have expressed concerns about the prospect of their constituents losing access to health coverage and food assistance.

Democrats say they will fight what House party leader Hakeem Jeffries (D-N.Y.) calls “this extreme and toxic bill.”

Here’s a look at what’s in and out of the legislative package so far.

Tax cuts for individuals and businesses

Republicans are looking to make permanent the individual income and estate tax cuts passed in Trump’s first term, in 2017, plus enact promises he made on the 2024 campaign trail to not tax tips, overtime and interest on some auto loans.

To partially offset the lost revenue, Republicans propose repealing or phasing out more quickly the clean energy tax credits passed during Joe Biden’s presidency, helping to bring down the overall cost of the tax portion to about $3.8 trillion.

The bill includes a temporary boost in the standard deduction — a $1,000 increase for individuals, bringing it to $16,000 for individual filers, and a $2,000 boost for joint filers, bringing it to $32,000. The deduction reduces the amount of income that is actually subject to income tax.

There is also a temporary $500 increase in the child tax credit, bringing it to $2,500 for 2025 through 2028. It then returns to $2,000 and will increase to account for inflation.

The estate tax exemption rises to $15 million and is adjusted for inflation going forward.

Several of the provisions Trump promised in the campaign would be temporary, lasting roughly through his term in office. The tax breaks for tips, overtime and car loan interest expire at the end of 2028. That’s also the case for a $4,000 increase in the standard deduction for seniors.

Among the various business tax provisions, small businesses, including partnerships and S corporations, will be able to subtract 23% of their qualified business income from their taxes. The deduction has been 20%.

Businesses will temporarily be allowed to fully expense domestic research and development costs in the year they occur and the cost of machinery, equipment and other qualifying assets. This encourages businesses to invest in ways that enhances their productivity.

Parents and older Americans face work requirements for food assistance

House Republicans would reduce spending on food aid, what is known as the Supplemental Nutrition and Assistance Program, by about $267 billion over 10 years.

States would shoulder 5% of benefit costs, beginning in fiscal 2028, and 75% of the administrative costs. Currently, states pay none of the benefit and half of the administration costs.

Republicans also are expanding the work requirements to receive food aid. Under current law, able-bodied adults without dependents must fulfill work requirements until they are 54, and that would change under the bill to age 64.

Also, some parents are currently exempt from work requirements until their children are 18; that would change so only those caring for a dependent child under the age of 7 are exempt.

At the same time, the legislation would invest $60 billion in new money for agriculture programs, sending aid to farmers.

New work requirements for Medicaid

A focal point of the package is nearly $700 billion in reduced spending in the Medicaid program, according to the nonpartisan Congressional Budget Office.

To be eligible for Medicaid, there would be new “community engagement requirements” of at least 80 hours per month of work, education or service for able-bodied adults without dependents. The new requirement would not kick in until Jan. 1, 2029, after Trump leaves office. People would also have to verify their eligibility for the program twice a year, rather than just once.

Republicans are looking to generate savings with new work requirements. But Democrats warn that millions of Americans will lose coverage.

An estimate from the Congressional Budget Office said the proposals would reduce the number of people with healthcare by at least 7.6 million from the Medicaid changes, and possibly more with other changes to the Affordable Care Act.

Applicants could not qualify for Medicaid if they have a home that is valued at more than $1 million.

No taxes on gun silencers, no money for Planned Parenthood and more

Republicans are also using the package to reward allies and disadvantage political foes.

The package would eliminate a $200 tax on gun silencers that has existed since Congress passed the National Firearms Act in 1934. The elimination of the tax is supported by theNational Rifle Assn.

The group Giffords, which works to reduce gun violence, said silencers make it more difficult to recognize the sound of gunfire and locate the source of gunshots, impairing the ability of law enforcement to respond to active shooters.

Republicans are also looking to prohibit Medicaid funds from going to Planned Parenthood, which provides abortion care and other services. Democrats say defunding the organization would make it harder for millions of patients to get cancer screenings, pap tests and birth control.

‘MAGA’ kids $1,000 savings accounts

“MAGA” is shorthand for Trump’s signature line, “Make America Great Again.” But in this case, it means “Money Accounts for Growth and Advancement.”

For parents or guardians who open new “MAGA” accounts for their children, the federal government will contribute $1,000 for babies born between Jan. 1, 2024 and Dec. 31, 2028.

Families could add $5,000 a year, with the account holders unable to take distributions before age 18. Then, they could access up to 50% of the money to pay for higher education, training and first-time home purchases. At age 30, account holders have access to the full balance of the account for any purpose.

Funding for Trump’s mass deportation operation

The legislation would provide $46.5 billion to revive construction of Trump’s wall along the U.S.-Mexico border, and more money for the deportation agenda.

There’s $4 billion to hire an additional 3,000 new Border Patrol agents as well as 5,000 new customs officers, and $2.1 billion for signing and retention bonuses. There’s also funds for 10,000 more Immigration and Customs Enforcement officers and investigators.

It includes major changes to immigration policy, imposing a $1,000 fee on migrants seeking asylum — something the nation has never done, putting it on par with a few others, including Australia and Iran.

Overall, the plan is to remove 1 million immigrants annually and house 100,000 people in detention centers.

More money for the Pentagon and Trump’s ‘Golden Dome’

There’s also nearly $150 billion in new money for the Defense Department and national security.

It would provide $25 billion for Trump’s “Golden Dome for America,” a long-envisioned missile defense shield, $21 billion to restock the nation’s ammunition arsenal, $34 billion to expand the naval fleet with more shipbuilding and some $5 billion for border security.

It also includes $9 billion for servicemember quality-of-life-related issues, including housing, healthcare and special pay.

Tax on university endowments and overhaul of student loans

A wholesale revamping of the student loan program is key to the legislation, providing $330 billion in budget cuts and savings.

The proposal would replace all existing student loan repayment plans with just two: a standard option with monthly payments spread out over 10 to 25 years and a “repayment assistance” plan that is generally less generous than those it would replace.

Among other changes, the bill would repeal Biden-era regulations that made it easier for borrowers to get loans canceled if their colleges defrauded them or closed suddenly.

There would be a tax increase, up to 21%, on some university endowments.

More drilling, mining on public lands

To generate revenue, one section would allow increased leasing of public lands for drilling, mining and logging while clearing the path for more development by speeding up government approvals.

Royalty rates paid by companies to extract oil, gas and coal would be cut, reversing Biden’s attempts to curb fossil fuels to help address climate change.

In a last-minute add, Republicans also included a provision authorizing sales of hundreds of thousands of acres of public lands in Nevada and Utah, prompting outrage from Democrats and environmentalists.

Freking and Mascaro write for the Associated Press. AP writers Collin Binkley and Mary Clare Jalonick in Washington and Matthew Brown in Billings, Mont., contributed to this report.

WASHINGTON — House Republicans proposed sweeping tax breaks Monday in President Trump’s big priority bill, tallying at least $4.9 trillion in costs so far, partly paid for with cuts to Medicaid, food stamps and green energy programs used by millions of Americans.

The House Ways and Means Committee named its package “THE ONE, BIG, BEAUTIFUL BILL” in all capital letters, a nod to Trump himself. It seeks to extend the tax breaks approved during Trump’s first term — and boost the standard deduction, child tax credit and estate tax exemption — while adding new tax breaks on tipped wages, overtime pay, Social Security benefits and auto loans that Trump promised during his campaign for the White House.

There’s also a tripling of the state and local tax deduction, called SALT, from $10,000 up to $30,000 for couples, which certain high-tax state GOP lawmakers from New York and California already rejected as too meager. Private universities would be hit with a hefty new tax on their endowments, as much as 21%, as the Trump administration goes after the Ivy League and other campuses. And one unusual provision would terminate the tax-exempt status of groups the State Department says support “terrorists,” which civil society advocates warn is a way to potentially punish those at odds with the Trump administration.

Overall, the package is touching off the biggest political debate over taxes, spending and the nation’s priorities in nearly a decade. Not since 2017 has Congress wrestled with legislation as this, when Republicans approved the Trump tax cuts but also failed to repeal and replace the Affordable Care Act, or Obamacare. The cost assessments are only preliminary, and expected to soar.

“Republicans need to UNIFY,” Trump posted on social media before departing for a trip to the Middle East.

Trump said when he returns to Washington, “we will work together on any and all outstanding issues, but there shouldn’t be many — The Bill is GREAT. We have no alternative, WE MUST WIN!”

But one key Republican, Sen. Josh Hawley of Missouri, implored his party not to impair Medicaid, arguing that cutting healthcare to pay for tax breaks is both “morally wrong and politically suicidal.”

“If Republicans want to be a working-class party — if we want to be a majority party — we must ignore calls to cut Medicaid and start delivering on America’s promise for America’s working people,” Hawley wrote in the New York Times.

Late Monday, the House Agriculture Committee released its proposals — cutting $290 billion from federal nutrition programs, in part by shifting costs to the states and requiring able-bodied adults without dependents to fulfill work requirements until they are 64 years old, rather than 54, to qualify for food aid.

Round-the-clock work ahead

As Republicans race toward House Speaker Mike Johnson’s Memorial Day deadline to pass Trump’s big bill, they are preparing to flood the zone with round-the-clock public hearings starting Tuesday and stitch the various sections together in what will become a massive package.

The politics ahead are uncertain. The bipartisan Joint Committee on Taxation said Monday that tax breaks would reduce revenue by $4.9 trillion over the decade — and that was before Trump’s new tax breaks were included.

Texas Rep. Chip Roy, a member of the conservative House Freedom Caucus, warned the price tag could climb to $20 trillion, piling onto the deficits and debt.

“I sure hope House & Senate leadership are coming up with a backup plan,” Roy posted on social media, “…. because I’m not here to rack up an additional $20 trillion in debt over 10 years.”

House Republicans have been huddling behind closed doors, working out final provisions in the 389-page tax portion of the package.

The legislation proposes to boost the standard deduction many Americans use by $2,000, to $32,000 per household, and increase the child tax credit from $2,000 to $2,500 for four years. It adds a new requirement focused on preventing undocumented immigrants from benefiting from the credit even if the children are U.S. citizens, which the Center on Budget and Policy Priorities, a liberal think tank, estimates would affect 4.5 million children who are U.S. citizens or lawful residents.

It would also increase the estate tax exemption, which is now $14 million, to $15 million and index future increases to inflation.

As for the president’s promises, the legislation includes Trump’s “no taxes on tips” pledge, providing a deduction for those workers in service industry and other jobs that have traditionally relied on tips. It directs the Treasury secretary to issue guidance to avoid businesses gaming the system.

The package also provides tax relief for automobile shoppers with a temporary deduction of up to $10,000 on car loan interest, applying the benefit only for those vehicles where the final assembly occurred in the United States. The tax break would expire at the end of Trump’s term.

For seniors, there would be a bolstered $4,000 deduction on Social Security wages for those with adjusted incomes no higher than $75,000 for individuals and $150,000 for couples.

But one hard-fought provision, the deduction for state and local taxes known as SALT, appears to be a work in progress. The legislation proposes lifting the cap to $15,000 for single filers and $30,000 for couples, but with a reduction at higher incomes — about $200,000 for singles and $400,000 for couples.

“Still a hell no,” wrote Rep. Nick LaLota (R-N.Y.) on social media.

Battle over Medicaid, food aid

Meanwhile, dozens of House Republicans have told Johnson and GOP leaders they will not support cuts to Medicaid, which provides some 70 million Americans with healthcare, nor to green energy tax breaks that businesses back home have been relying on to invest in new wind, solar and renewable projects.

All told, 11 committees in the House have been compiling their sections of the package as Republicans seek at least $1.5 trillion in savings to help cover the cost of preserving the 2017 tax breaks, which are expiring at the end of the year.

The final section from the Agriculture Committee proposed cutting the Supplemental Nutrition and Assistance Program, known as SNAP, by expanding work requirements, limiting future expansions of the program and forcing states to shoulder more of the cost.

Along with new work requirements for older Americans, it would also require some parents of children older than 7 to work to qualify, down from 18 years old. Only areas with unemployment rates over 10% would be eligible for waivers.

Some Republicans have already balked at the increased costs to the states, which would be required to contribute at least 5% of the cost of SNAP allotments beginning in 2028.

At the same time, the legislation would invest $60 billion in new money for agriculture programs, sending aid to farmers.

On Sunday, House Republicans on the Energy and Commerce Committee unveiled the cost-saving centerpiece of the package, with at least $880 billion in cuts largely to Medicaid to help cover the cost of the tax breaks.

While Republicans insist they are simply rooting out “waste, fraud and abuse” to generate savings with new work and eligibility requirements, Democrats warn that millions of Americans will lose coverage. In the 15 years since Obamacare became law, Medicaid has only expanded as most states have tapped into federal funds.

A preliminary estimate from the nonpartisan Congressional Budget Office said the proposals would reduce the number of people with healthcare by 8.6 million.

To be eligible for Medicaid, there would be new “community engagement requirements” of at least 80 hours per month of work, education or service for able-bodied adults without dependents. People would also have to verify their eligibility to be in the program twice a year, rather than just once.

There are substantial cuts proposed for green energy programs and tax breaks, rolling back climate-change strategies from the Biden-era Inflation Reduction Act.

Mascaro and Freking write for the Associated Press. AP writers Amanda Seitz, Leah Askarinam and Mary Clare Jalonick contributed to this report.