Canadian Prime Minister Meets American President

Donald Trump met yesterday with newly elected Canadian PM Mark Carney, and tried to woo him to join America as the 51st state by offering tax cuts. Carney told Trump that he was not interested and Canada is not for sale and won't ever be. But Carney was wearing a suit, so he wasn't treated as badly as Ukrainian President Volodymyr Zelenskyy when he visited the Oval Office in February.

Carney understood the White House protocol. All visiting dignitaries are expected to praise Trump as the greatest leader anywhere in the world since Ramses II. Carney did what he was supposed to do, but it didn't help. Reporters asked questions of the two leaders. Many were about tariffs. In particular, when asked if there was anything Carney could offer to get Trump to lift the tariffs on aluminum, steel, and cars, Trump simply said: "No." Carney continued that most cars sold in both countries are partly made in the other one. Trump said "We want to make our own cars. We don't really want cars from Canada. And we don't want steel from Canada because we make our own steel."

Carney barely got a word in edgewise. Trump dominated the entire conversation, frequently veering off topic and rambling. Trump said that trade between the U.S. and Canada favors Canada, even though it follows the USMCA agreement signed by one Donald J. Trump on Nov. 30, 2018. All in all, nothing was accomplished at the meeting. Carney scrupulously avoided picking a fight with Trump, but Ontario Premier Doug Ford was less restrained. He said: "I can't wait for the midterms, and we'll fix his little red wagon." (V)

Supreme Court Allows Trump to Ban Trans Soldiers for the Time Being

Joe Biden signed an XO allowing trans people to serve openly in the Armed Forces. On Day 1, Donald Trump revoked that XO. Several trans soldiers sued. Lower courts have repeatedly ruled that Trump has failed to show that trans soldiers are not as good as other soldiers and so that ban is unconstitutional under the equal protection provision of the 14th Amendment. Yesterday, the Supreme Court ruled that he can ban trans soldiers for the time being, while the legal process plays out. Yesterday's unsigned decision (with dissents from the three liberal women) vindicates Trump's position for the moment. The case will now go to the U.S. Court of Appeals for the Ninth Circuit for a full hearing.

The Pentagon, pursuant to Trump's XO, issued an order to each branch to identify all service members with gender dysphoria within 30 days and remove them. That process was stopped by the lower courts. It can now continue until the Supreme Court eventually rules on the merits of the case. Given that the Tuesday ruling was apparently 6-3 along partisan lines, there is a pretty good chance that the final ruling will go the same way. (V)

President Gloom and Doom

Presidents generally like to be upbeat. FDR promised a new deal for America and his theme song was "Happy Days Are Here Again." Ronald Reagan talked about morning in America. During his campaign, Donald Trump promised a golden age if he won. In his final campaign rally, in Michigan, he said: "Your paychecks will be higher, your streets will be safer and cleaner, your communities will be richer, and your future as an American will be much better than it ever has been when I get in." Things are definitely not going his way and he is now changing his tune and trying to prepare his supporters for the worst. No more lowering prices on Day 1 or deporting 11 million immigrants. He is warning that the road ahead will be bumpy.

All of a sudden Trump is talking about sacrifice, something Americans are not keen on unless there is a popular war going on. He is talking about the need to "take your medicine" in order to have a bright future sometime in the indefinite future. He seems to be convinced bad times are ahead and wants to steel people for them.

It might not work. Marc Short, Mike Pence's former chief of staff, said: "I don't think it will resonate very well. I think it's particularly optically difficult when the president is earning a billion dollars in crypto while asking Americans to cut back on toys and products for kids. That seems like a disconnect to me." Douglas Holtz-Eakin, president of the center-right American Action Forum, said: "This feels tone-deaf to me. This is, 'You're too materialistic. You don't need as many dollars as you think.' And he's a very strange messenger for that message, and I don't think it's going to sell."

In his Meet the Press interview with Kristen Welker, Trump upped the doll count. At first he said little girls might have to do with two dolls for Christmas instead of 30. However, he told Welker: "I think they can have three dolls or four dolls, because what we were doing with China was just unbelievable. We had a trade deficit of hundreds of billions of dollars with China." It is completely tone-deaf. People who can't put food on the table and who are struggling to save enough to buy one doll for their daughter (or son) for their birthday or Christmas aren't going to like hearing that they will have to make do with three or four dolls to punish China. And if the tariffs stay up long enough, the shelves in toy stores will be bare and there will be no dolls for sale at all. Trump made it even worse by comparing the U.S. to a department store and himself to the owner of it. He said: "And on behalf of the American people, I own the store, and I set prices, and I'll say, If you want to shop here, this is what you have to pay." After that, how is he going to blame the economy on Joe Biden? Biden doesn't own the department store. Trump does.

Cabinet members are echoing his gloom and doom. Secretary of Agriculture Brooke Rollins told Fox that people could beat high egg prices by raising chickens in their backyard. Secretary of Commerce Howard Lutnick told CBS News that a recession would be "worth it." Secretary of the Treasury Scott Bessent gave a speech at the Economic Club of New York saying that the American Dream was not about "access to cheap goods." How will ordinary folks barely making it (or not) respond to a cabinet full of millionaires and billionaires telling them they will have to make do with less while Trump is trying to ram a big tax cut for his billionaire buddies through Congress? (V)

Republicans Are Looking for Gimmicks to Cut Medicaid under the Radar

The Congressional budget resolution calls for cutting Medicaid by $880 billion over the next 10 years. Poll after poll and interview after interview show that this would be very unpopular. But to get a bill though the House, huge cuts in Medicaid, Medicare, Social Security or defense might be needed to placate the Freedom Caucus. Republicans are scratching their heads about how to pull this off without getting wiped out in 2026.

They think they may have the solution: gimmicks. In other words, rather than direct cuts to the budget, which would infuriate voters, use tricks that are down in the weeds that no one understands they will save money in sneaky ways. The leading plan at the moment is a per capita cap. Huh?

Medicaid is a program in which costs are shared by states and the federal government according to a fixed formula. For Medicaid expansion states, the feds pay 90% and the states pay 10%. It is an open-ended program, so Uncle Sam's contribution depends on what the states spend. The new idea that congressional Republicans are bandying about is to limit how much federal money can be spent on any one enrollee in a year. Since the amount of care is unlimited, the states would have to make up the difference, which would give them incentives to limit care, change the rules about what is covered, reduce payments to providers, etc. With enough magic, the projected federal savings could be made to look like $880 billion. As a side benefit, if most of the red states enthusiastically cut benefits for chronically sick people, those people may migrate to blue states that haven't cut benefits, saddling the blue states with extra expenses. It's a twofer! It's also pretty reprehensible. The Bible that so many of these folks thump must be different from the copy we have; ours has a bunch of (commie?) verbiage about helping the sick and poor. They must be using the $60 King Donald version manufactured in Hangzhou, China. (V)

Democrats Have a Goldilocks Problem

Progressives are pushing Democrats to move further to the left and confront Donald Trump much more aggressively. They cite the enormous rallies Sen. Bernie Sanders (I-VT) and Rep. Alexandria Ocasio-Cortez (D-NY) have been holding as evidence that people want to stand up to Trump and the oligarchs. This way of thinking suggests Democrats need to move to the left.

On the other hand, Congressional Democrats look at the problem more tactically. They know to flip the House they need to win districts currently represented by Republicans. These are R+1, R+2, maybe up to R+5 districts. That's how the incumbent won in the first place. To win these moderate Republican voters, cloning AOC is probably not the right approach. This way of thinking suggests that Democrats should move to the right. But if they move to the left and right at the same time, they will get dizzy.

Put another way, moving left will energize blue-state voters but may not flip swing seats. Moving right may demoralize progressives and hurt in D+1 or D+2 districts. This can be summed up as a "Goldilocks" problem. There is no easy way out of this.

Related to this problem is which issue to prioritize. Many progressives want to prioritize immigration and getting Kilmar Abrego Garcia home. Moderates think that voters view this as a "process" issue and see it as defending a criminal who entered the country illegally. They think it is a loser. They want to focus on Trump's broken promise to lower prices on Day 1.

Some progressives want to take the fight to Trump. Rep. Shri Thanedar (D-MI) has filed seven articles of impeachment. The Democratic leadership in the House thinks this is totally pointless and counterproductive since the votes aren't there even for a floor fight. Of course, if the Democrats take the House in 2026, the impeachment resolutions will come fast and furious.

The only plausible strategy for the Democrats is to fight each House battle differently, depending on the district. In affluent suburban districts, the Democrats can talk about the rule of law, saving the planet, environmental justice, and all that cool stuff. In working-class districts, the pitch could be "Trump lied to you when he said he would make eggs cheaper." In other words, strictly about kitchen table issues and inflation. It might be the only way out. You can't serve voters porridge that's too liberal or too conservative for them; it has to be just right (or just left, or just center, as the case may be). (V)

Hegseth Is Purging the Pentagon

During his confirmation hearing, Secretary of Defense Pete Hegseth promised to purge the DoD of woke admirals, generals, women, minorities, and DEI. Now he is doing it. Specifically, he is targeting officers of four-star rank, especially women and people of color. He already fired the chairman of the Joint Chiefs, Charles Brown Jr., a decorated Air Force general (who is Black) and Admiral Lisa Franchetti, the first woman to run the Navy. Now he is expanding the purge. Hegseth knows nothing of defense planning or strategy (not to mention communications security) but he can definitely tell a Black general from a white one and a female admiral from a male one. Unfortunately, gay generals are a bit harder to pick out, but if he rolls up his sleeves and puts all of his effort into the project, maybe he could find some.

Specifically, Hegseth wants to fire 20% of the officers of four-star rank, without too much regard to what they do. He said this will increase readiness and the ability of the U.S. to fight wars. There are currently 44 officers of four-star rank, so a 20% reduction would be eight or nine, assuming Hegseth can do fourth-grade math and understands percentages. Typically, four-star generals and admirals have broad responsibilities over sizable programs and budgets. If a substantial number are fired, either someone else will have to take over the work or the work will have to be canceled somehow.

The ranking member of the Senate Armed Services Committee, Sen. Jack Reed (D-RI), was not amused. He said: "Eliminating the positions of many of our most skilled and experienced officers without sound justification would not create 'efficiency' in the military—it could cripple it." Reed wants Hegseth to appear before the Committee and explain what he is doing. That would be interesting, because Hegseth knows nothing about what generals do and would be able to talk only in vague generalities, like "woke is bad." (V)

Trump Continues to Try to Intimidate Harvard

Trump threatened to cut off paying Harvard for contracts already signed. Harvard refused to cave. Then he threatened to revoke Harvard's tax exemption and Harvard still didn't cave. Now he is threatening to ban Harvard researchers from getting any new grants. We are going to go out on a limb here and predict that Harvard won't cave on this either. What's next? Ordering the Army to occupy the campus and arrest all students and professors unless they sign a loyalty oath to Donald Trump?

This could end badly for Trump. On legal and constitutional grounds, he has absolutely no basis for refusing to pay out on existing contracts. The only time the government revoked a university's tax exemption was when Bob Jones University banned interracial dating—and that took 10 years to get to the Supreme Court. There is absolutely no legal basis for saying that the five Harvard professors who have won Nobel Prizes in medicine are not allowed to apply for federal grants. Trump thinks everything is a zero-sum game, and by just continually ratcheting up the pressure, Harvard will eventually cave. He believes there is only one possible winner: either Harvard or himself. There are no other possibilities.

The potential problem is that these cases are so open-and-shut that there is a good chance he will lose a Supreme Court case 9-0 (or, more realistically, 7-2) and then, out of spite, defy the Supreme Court. That will hand the Democrats a golden opportunity to run against all the House members who support "Dictator Don." Several polls have shown that 70+% of the voters think that defying the Supreme Court would be a bridge too far. That defiance could cost the Republicans big time next year. (V)

A Tariff on Beer and Window Coverings?

Donald Trump's model of tariffs works something like this: A container with 100,000 $10 T-shirts from China shows up in Los Angeles, so the customs officer sends a bill for $1,450,000 to Walmart. Presto! T-shirts get more expensive, so an American factory magically appears in Iowa and starts selling cheaper T-shirts.

As it turns out, there is a bit more to it. The business manager at a small craft beer company, BabyCat Brewery, wrote a letter to The Washington Post explaining how the tariffs will make (craft) beer more expensive. Their beer is shipped in aluminum cans and there is a 25% tariff on aluminum, which means their cans will get more expensive. They will have to raise their prices correspondingly. In addition, they import grains and hops from Germany and glassware, paper, and other products from all over the world. All of the tariffs will have to be reflected in their price. Will their higher prices create more jobs in American beer factories? Probably not, since they are already an American beer factory. All they will do is add to inflation.

Another letter came from a small business in Virginia that makes custom window coverings. All the fabrics used in the coverings come from abroad because no U.S. company makes them. The tapes, trims, tiebacks, and other decorations mostly come from abroad. The drapery hardware and blinds use aluminum and steel, most of which is imported. The only curtain rod manufacturer in the U.S. uses ball bearings from Germany. All this means that she has to charge more for her products. The author of the letter ended with: "I am frustrated with the business 'genius' of our president. I have relatives who voted for him who send me messages suggesting that the tariffs other countries levied on the U.S. are going to come down, so all will be well. We did not have a tariff problem in my field. Other countries' tariffs were not affecting our bottom line. We have a tariff problem now, and it's all homegrown."

There were other letters as well, all pointing out that many small businesses in the U.S. are going to have serious problems due to the tariffs and some of them will not make it. (V)

Could the Democrats Flip the Senate?

History suggests that the Democrats have a good chance at flipping the House in 2026. The president's party generally loses seats in the midterms and with unpopular presidents it just gets worse. If the country is in a recession then, flipping four seats will be easy. But the Senate will be a much tougher nut to crack.

Yesterday, we discussed the godsend the Democrats got in Georgia and the three open-seat races in Michigan, Minnesota, and New Hampshire. To start, in 2026, the Democrats would have to hold all four of these, which in a blue wave might not be that hard. But that would just preserve the status quo. To win control of the Senate, the Democrats would have to flip four Republican Senate seats, none of them open (Mitch McConnell's seat is going to be open, but it's not plausibly flippable unless Gov. Andy Beshear, D-KY, has a change of heart). The four easiest (from easiest to most difficult) are probably these:

State	Incumbent	Strongest Democrat	Notes
North Carolina	Thom Tillis (R)	Roy Cooper (D)	Polls show Cooper beating Tillis by 2-3 points.
Maine	Susan Collins (R)	Janet Mills (D)	Mills is 77 and might not run.
Ohio	Jon Husted (R)	Sherrod Brown (D)	Appointed senators like Husted have a poor track record.
Montana	Steve Daines (R)	Jon Tester (D)	Tester lost to a carpetbagger by 7 points in 2024.

One small problem is that none of the above Democrats have announced yet. But all are well known and all would get tens of millions of dollars from out of state, so there is no hurry.

Senate Minority Leader Chuck Schumer (D-NY) is looking beyond these four states for outliers that might be in play if there is a serious recession and people are very angry with Donald Trump for causing it. These even include Alaska (Mary Peltola might run), Texas (if Ken Paxton is the Republican nominee), Louisiana (if a nutcake wins the GOP primary), and even Mississippi (36% of the population is Black). These are all long shots, but in a blue tsunami caused by a deep recession, they might be in play. (V)

Congress Is 236 Years Old and Some of the Members Seem Not Much Younger

Former Indiana governor Mitch Daniels (R) has written an op-ed piece entitled "Congress shouldn't be an assisted-living facility." He is paraphrasing former senator Lamar Alexander, who called the Senate "America's finest assisted-living facility." That sums it up pretty well. Daniels starts out by complimenting Sen. Dick Durbin (D-IL) for throwing in the towel at the relatively young age (for the Senate) of 80. But then he goes on to name a few senators who definitely hung around until after their best-by date, in particular Dianne Feinstein and Mitch McConnell. If he had included the House, he could have hardly avoided mentioning Kay Granger, who was actually living in an assisted-living home in Texas the last 6 months of her term. Everything ends eventually, and too few senators think about how they want to be remembered. Will it be as a wise Solon or a doddering old fool completely stage-managed by staffers?

Daniels notes that 35 members have already celebrated their 70th birthday. In the private sector, they would have been given a gold watch and a nice retirement party. He also notes that the median age of the senators is 65, meaning half of them have passed that milestone. In 1981, the median age was 51. The Japanese Diet checks in at 55, the Israeli Knesset comes in at 52, and the British House of Commons beats them all at 48.

If the Senate were doing its job well, passing budgets on time, and generally cranking out laws, maybe having a gerontocracy there wouldn't be so bad, but it is completely nonfunctional and the age of the members certainly doesn't leave it brimming with energy and new ideas.

Can anything be done? Probably not short of a constitutional amendment giving a maximum age for starting a new term. After all, there is a minimum age already in the Constitution. If it is fine to say that a 29 year old can't be a senator then why can't the Constitution say that a 79 year old can't be senator either? Given the median age in some other countries, maybe 70 or 75 wouldn't be so crazy. Sure, there are 80-year-olds around who are fully competent, but they are blocking the path for 40- and 50-year olds who are even more competent. Most organizations function better if they get new blood regularly and in the Senate, those arteries are nearly completely clogged. (V)

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