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Authored by Joel Kotkin & Wendell Cox via RealClearInvestigations,

The first in a two-part series on the global housing crisis.

Next to inflation, Americans ranked housing as their top financial worry in a Gallup survey last May. It’s only gotten worse. January home sales were down 5% from last year’s dismal numbers. Record numbers of first-time buyers are stuck on the sidelines as housing affordability stands at the lowest level ever recorded, while one in three Americans now spend over 30% of their income on mortgage or rent. 

The housing crisis is not just an American problem, but a global phenomenon that hits the middle and working classes the hardest. Studies of the Canadian, British, European, and East Asian markets have also found that housing prices have risen far faster than household incomes and inflation. A report from the Organisation for Economic Co-operation and Development concluded that “housing has been the main driver of rising middle-class expenditure.” In prosperous and communitarian Switzerland, Zurich studios sell for well over $1 million, and small houses even more, making downpayments unaffordable to affluent people despite the overwhelming financial advantages to homeowners. 

Underlying the plight of home buyers worldwide is a sometimes overlooked but profound influence – the spread of restrictive land-use regulations. It’s reshaping political and economic alignments in ways that may further destabilize the social order. Home ownership is strongly correlated with positive social indicators, and as renting grows twice as quickly as buying, this trend poses a threat to Western democracy by deepening economic inequality, depressing demographic vitality, and undermining the upward mobility that has driven Western progress for the past century.

Cost of Over-Regulation

The price increase may seem surprising because there has not been a huge spike in fundamental demand. In California, and most of the United States, as well as Europe and East Asia, population growth is tepid, if not declining. Today’s higher interest rates are below those that prevailed from 1970 to 1995, when housing costs were considerably lower relative to incomes. Nor is this predominantly a technical problem; the rise of remote work, which is connected to migration to smaller metros, as well as new technologies for building, including using 3D printers, actually offers the chance to build more cheaply.

And yet, the principal cause for housing shortages and rising prices stems from the failure to build enough new housing units, particularly the single-family homes consumers most desire. Homebuilders built 1 million fewer homes (including rental units) in 2024 than in 1972, when there were 130 million fewer Americans. One estimate puts the U.S. housing market shortage at an estimated 4.5 million homes, according to Commerce Department data. 

The rapid inflation of housing costs stems primarily from ever more constricting land-use regulations. Inflated prices are particularly rife in countries and states with strict regulations like California, where high-income households now utterly dominate the housing market, and more than a third of all real estate transactions in recent years topped $1 million.

At the crux of the problem is a series of housing policies referred to as “urban containment.” First implemented in Britain at the end of the Second World War, urban containment policies typically seek to manage growth by imposing boundaries or greenbelts around urban areas, outside of which new development is either prohibited or severely limited. 

Decades ago, there was ample land within these boundaries, but this has changed as population growth has stimulated more demand. The simple fact is that once the urban limits are reached, land prices along the boundaries – the suburbs and exurbs – and in the areas still open to development inevitably rise. This mimics the effects of the 1970s gasoline embargoes that drove prices through the roof – and is nothing more than basic economics. Rationing tends to increase prices.

To this flawed approach, many jurisdictions have imposed other costs such as high-impact fees, lengthy environmental reviews, minimum parking mandates, and historical preservation designations. But generally, nothing quite compares with urban containment, as it drives up land costs by restricting development on the periphery, where land prices are the lowest. 

In almost all cases, the highest housing prices occur in markets that are characterized by this planning strategy. This includes all markets in Australia and New Zealand and many in Canada, the United Kingdom, the U.S., Western Europe, and China. In the U.S., the worst housing inflation has been in California, Oregon, Washington, Hawaii, and Colorado, all states that apply the tightest large regulatory noose around new developments, particularly on and beyond the urban fringe.

The connection between policy and prices is clearly evident. As late as 1970, only a few markets were shaped by urban containment. As its influence grew, so did prices. As late as about 1990, national price-to-income ratios were “affordable,” at three or less in Australia, Canada, Ireland, New Zealand, the U.K., and the U.S. Today, the median multiple in these countries tends to be over five. But the worst results, as seen in most recent Demographia International Housing Affordability Study – Hong Kong, Sydney, San Jose, Vancouver, Los Angeles, Adelaide, Honolulu, San Francisco, Melbourne, Brisbane, as well as Greater London, are at a remarkable nine or above. 

Perhaps counterintuitively, higher density development – often seen as the alternative to “sprawl” – does not lower prices, as is sometimes suggested. In fact, U.S. data suggests a positive correlation between greater density and housing costs. Among 53 major metros, those with more single-family housing and larger lot sizes (key indicators of lower density) have substantially better housing affordability. The effects of density-focused policies on people and regions are profound. One study found the median family in San Jose or San Francisco would need 125 years (150 in Los Angeles) to save enough money to afford a down payment on a median-priced home; in Atlanta or Houston, the figure is 12 years. 

Highly restrictive planning policies also impact renters. A recent RAND study of California found that policy-driven delays, strict architectural standards, green mandates, and the requirement to pay union-level wages have increased the cost of construction of subsidized apartments twice as much as in Texas, while taking almost two years longer to get approved. Portland, Ore., a pioneer in urban containment, embraces high-density housing, but high prices have driven multifamily construction to the lowest level in a decade.

Collapse of the Dream 

Urban containment and other planning policies have devastated middle-class aspirations in every country or region that adopts them, even in countries like Australia, which enjoy a vast land mass and a smallish population. Australian cities once characterized by family-friendly neighborhoods are now dominated by dense apartments and condominiums. 

Planning regulations now add 55% to the price of a home in Sydney, according to a recent Reserve Bank of Australia study. In greater Sydney, the median home price recently passed A$2 million (approximately US$1.3 million). This is higher relative to incomes than in Los Angeles, London, New York, Singapore, and Washington. Even Adelaide, geographically isolated and far from a dynamic global business locale, has higher prices, based on income, than Seattle, one of the world’s most dynamic tech hubs. According to projections from the Urban Taskforce, apartments will make up half of Sydney’s dwellings mid-century, whereas only one quarter of Sydney dwellings will be family-friendly detached homes. 

Young people are most impacted by this policy regime. In the U.S., homeownership for people under 35 has fallen fairly steadily since the Great Recession of 2008 and is now half that of people over 45. Similarly, in Australia, the percentage of households aged 25 to 34 owning homes has dropped from more than 60% in 1981 to only 45% in 2016. 

Similar trends are seen in other high-income countries, including Ireland, where only a third of millennials own a home, compared with almost two-thirds of baby boomers when they were the same age. At least one-third of British millennials are likely to remain renters permanently.

Much of the same is occurring in the U.S. Whereas in 1969, the median price of a home cost about five years of a young adult’s income, today it costs nearly nine years. A new Institute for Family Studies report, “Homes For Young Families: A Pro-Family Housing Agenda,” says that since 1970, the share of young adults who own the home they live in has declined from 50% to around 25-30%. 

Ignoring Preferences 

In advocating such urban containment and other high-density housing policies, planners, backed by academia and most big media, set themselves against the overwhelming preferences of the public for less density and more spacious housing. Judge Glock, who is now affiliated with the Manhattan Institute, has noted that in Census Bureau data since 1950, the average density of the major continuously built-up urban areas has dropped from 6,000 people per square mile to 3,000. In recent years, smaller metropolitan areas have been growing the fastest, while net domestic migration is away from areas of higher density to areas of lower density.  

Since 1950, the share of U.S. population in core cities has fallen from 24% to under 15%. Even in California, despite government resistance, virtually all the growth over the last decade has been in farther-flung suburbs. As elsewhere, the preference for single-family homes is “ubiquitous,” according to recent research by Jessica Trounstine at the University of California, Merced. “Across every demographic subgroup analyzed,” she observes, respondents preferred single-family home developments by a wide margin. Relative to single-family homes, apartments are viewed as “decreasing property values, increasing crime rates, lowering school quality, increasing traffic, and decreasing desirability.” 

Once, it was widely suspected that young people would head to big core cities like New York, San Francisco, Seattle, and Denver. But surveys reveal that nearly three in five younger people see homeownership as an essential part of the American dream, while two-thirds favor suburbs as their preferred residence. Three out of four Californians, according to a poll by former Obama campaign pollster David Binder, opposed legislation that banned single-family zoning.

A big driver of suburban growth is minorities and immigrants. In the 1950s and 1960s, mass suburbanization was widely associated with “white flight” and discrimination against minorities. But in the past decade, over 90% of all suburban growth in the U.S. came from minorities; currently, more than three-quarters of all African Americans, Hispanics, and Asians in major metropolitan areas in the U.S. live in the suburbs. Similar patterns are also evident in Canada, Australia, and the U.K. 

Today, most high-income countries are primarily suburban. A Statistics Canada analysis of 2021 census results indicates that more than 75% of the population lives in the suburbs, which absorbed more than 80% of the growth between 2016 and 2021. Even in transit-rich and land-short Japan, residents of Tokyo, Osaka, and Nagoya are dispersing away from the urban core to suburban and exurban areas after these cities nearly monopolized national population growth over the previous decade. Much the same can be said of Seoul, South Korea, which is even denser than the Japanese megacities. An analysis of the 53 U.S. major metropolitan areas finds that more than 85% of residents live in suburban or exurban neighborhoods and that more than 90% of the population growth since 2010 has been in the suburbs and exurbs. 

These choices underscore an analysis of Canadian poll results by Sotheby’s, which suggests a “disconnect” between urban planning and consumer preferences: The “picture is of young urban families overwhelmingly preferring detached houses, and decidedly not the condominiums into which planners are driving them.” As Sotheby’s puts it, “The report dispels myths about young, urban families’ housing preferences.”

Among Americans under 35 who do buy homes, four-fifths choose single-family detached houses. According to a recent National Homebuilders Association report, over 66%, including those living in cities, prefer a house in the suburbs. Almost two-thirds of U.S. millennials (25 to 44) favor being owners, which is also the case in the United Kingdom, Australia, and Canada. The future vision of the planners has little attraction among the public. 

Upward Mobility or Neo-Feudalism?

Whatever their desires, without an affordable home, millennials and Gen Z will face a formidable challenge in boosting their net worth. Homes today account for roughly two-thirds of the wealth of middle-income Americans; homeowners have a median net worth more than 40 times that of renters. Not surprisingly, most young people still believe in creating wealth through ownership. 

Yet rather than allowing for greater dispersal of wealth, as was the case in previous decades, the decline of housing affordability is a critical factor driving inequality, notes a recent study by Bank for International Settlements (Berne) economist Gianni La Cava. In more historically feudal Great Britain, land prices have risen dramatically over the past decade, and less than 1% of the population owns half of all the land. On the continent, farmland is increasingly concentrated while urban real estate has fallen into the hands of a small cadre of corporate owners and the mega-wealthy. The left-wing economist Thomas Piketty has identified high housing costs as a driver of increasing inequality even in purported social democracies like Germany and France.

This is also the case in the U.S., where about 71% of the increase in housing wealth between 2010 and 2020 was gained by high-income households, according to the National Association of Realtors.

Increasingly, home ownership relies on the classic feudal formula – being born into “the funnel of privilege.” In the U.S., millennials are three times as likely as boomers to count on inheritance for their retirement. Among the youngest cohort, those ages 18–22, over 60% see inheritance as their primary source of support as they age. In high-price markets like Los Angeles and Orange County, California, close to 40% of loans rely on family money for qualification, up from 25% in 2011. 

Threat to Democracy 

Most democratic or republican societies in history – in Athens, Rome, the Netherlands, Britain, France, North America, Oceania – were created and sustained by a broad property-owning middle class.

In the twentieth century, middle-class asset growth was accomplished in large part by the expansion of an urban footprint beyond the city core, allowing many more citizens to buy property in spacious, safe environments offering a measure of privacy. The ideal of broadly dispersed property ownership has long been promoted by politicians, both right and left, in most high-income countries. “A nation of homeowners, of people who own a real share in their land, is unconquerable,” said President Franklin D. Roosevelt. He saw homeownership as critical not only to the economy but to democracy and the very idea of self-government. 

Today, the trend towards democratization of landownership is being reversed, with more and more people being pushed into living in rented apartments or houses, with little chance of gaining financial independence. An economy where most people rely upon wealth transfers from the more fortunate cannot easily coexist with a tradition of individual initiative and self-governance. 

At the very least, the drive to create lifetime renters and forced densification sets a stage for a future political conflict and social disruption, particularly for the younger generation. In a Harvard poll of 18- to 29-year-olds this year, housing ranked as the third-most important issue overall, after inflation and health care. In California, almost 70% of residents consider housing costs a major concern, while in Britain, housing rose to be one of the top five issues for voters, well ahead of defense, security, poverty, and crime.

The housing affordability crisis impacts a host of life decisions. Studies of the U.S. have found that higher house prices had a direct impact on the decision of couples to have children. Research in Germany and across 18 European and North American nations also found that high housing prices defer family formation, leading to lower fertility as well as marriage rates, particularly among the working class. On the flip side, a new study by the Federal Reserve Board reports that homeowners are not only more affluent than renters, they are also physically and mentally healthier, vote more often, and their children achieve higher levels of education.

Many advocates of forced densification and renting justify their views around “green” and “sustainability” concerns. The environmental magazine Grist has envisioned “a hero generation” that will escape the material trap of suburban living and work that engulfed their parents. One magazine editor proudly declared herself a part of the GINK generation (as in “green inclinations, no kids”) that she said meant not only a relatively care-free and low-cost adult life, but also “a lot of green good that comes from bringing fewer beings onto a polluted and crowded planet.” 

Less motivated by planetary concern, major Wall Street investors are also focusing on crowding people into small spaces and a life of permanent rentership. Britain’s Lloyds Bank and BlackRock have placed multi-billion-dollar bets on buying homes for the rental market. In the first quarter of 2021, investors accounted for roughly one out of every seven homes bought, a marked increase from previous years. 

A notion embraced by some financial groups as well as greens is one of a rentership society where people remain renters for life, enjoying their video games or attending to their houseplants, never knowing the pleasure of having a real garden or backyard of their own. It might assure a steady profit for the landlord class, but it would destroy the dream of ownership for the average person. The broader effect may resemble a modern form of feudalism, where both inherited wealth and institutional ownership, often the Church, concentrate control over housing. 

Need for Reform

If unchecked, the pattern of declining ownership and rising prices for housing could shape the politics of the future, particularly among young people. Not surprisingly, many renters tend to favor leftist policies such as rent control and housing subsidies. The development of a class of permanent renters seems ideal for fomenting class warfare directed at an ever-shrinking number of owners, by a vast majority with no real assets, and little chance of getting any.

Ultimately, the battle over land and property will define our future. We either accommodate hope among those in the next generation or force them to accept a lifetime of rental serfdom and permanent subservience to the state, or big capital, or both. 

As Conor Dougherty of The New York Times put it, “For all the focus on billionaires and stock prices, it’s home values that are a primary source of wealth inequality and the root of a generational schism between the housing-rich baby boomers and young adults today.” He quotes Edward Glaeser, a premier housing economist at Harvard, who said that the housing crisis has become “a huge hindrance on the quest for well-being and the pursuit of happiness.”

Authored by Philip Wegmann & Susan Crabtree via RealClearPolitics,

The masked man on the motorcycle, the one who waved a Mexican flag in front of a torched car as Los Angeles police stood by, will soon be famous. His identity remains unknown, his image iconic – but for all the wrong reasons. 

Republicans will replay the clip again and again in campaign ads ahead of the midterms. 

“This lawlessness is exactly what Americans rejected in 2024,” said Michael Whatley, chairman of the Republican National Committee. “While Democrats sow chaos, Republicans stand as the party of law and order.” President Trump is delivering on his campaign promise to crack down on illegal immigration, Whatley told RealClearPolitics, and ahead of the midterms, his party “will continue to run on this winning message and finish the job for the American people.”

As National Guard were being deployed to quell violence in California, Republicans were mobilizing to capture and catalog video of looting, rioting, and violence. One RNC official told RCP they were struggling to capture the flood of content coming across cable news.

“It was just non-stop,” they said. “There was so much.” 

That content from the LA riots will soon provide fodder for the contrast Republicans hope to paint in November of next year, illustrating the failed immigration policies they allege California Gov. Gavin Newsom now embodies. For his part, Newsom blames Trump for inflaming an already “combustible situation.”

Los Angeles became ground zero for the Trump administration’s immigration crackdown Saturday when ICE agents launched a series of raids across the city. Protests followed. Some of the demonstrations have been peaceful. The ones getting wall-to-wall news coverage, however, were not. Demonstrators hurled rocks, firework shells, and Molotov cocktails at police. Vandalism and looting ensued, prompting Trump to order 2,000 National Guardsmen to the city without the approval of the California governor.

Newsom quickly condemned the move as a “blatant abuse of power” that puts the nation on a path to authoritarianism. “Trump is pulling a military dragnet all across Los Angeles,” Newsom said in a speech delivered from an LA studio Tuesday, as the city remains under a curfew ordered by Mayor Karen Bass. “Well beyond his stated intent to just go after violent and serious criminals, his agents are arresting dishwashers, gardeners, day laborers and seamstresses.”

“California may be first, but it clearly won’t end here,” the governor said. “Other states are next. Democracy is next.”

The White House already saw the riots as an opportunity to paint Democrats as hapless in the face of lawlessness. After the governor’s speech, they were overjoyed to have that fight with Newsom. “Democrats are not even choosing the 20 on 80-20 issues,” a White House official told RCP. “They’re choosing the 10 on 90-10 issues.”

The situation in Los Angeles could be perilous for Democrats. Newsom has tried to differentiate a violent mob from lawful demonstrators, warning on social media that those “who take advantage of Trump’s chaos” will be held accountable, while encouraging those who are “protesting peacefully.”

The White House, meanwhile, sees nothing but anarchy and is considering invoking the Insurrection Act, a law that grants the president authority to deploy the military on U.S. soil. Asked if he was considering it, Trump told RCP Tuesday in the Oval Office, “We will see.” 

Republicans are betting that voters have already made up their minds. “AI couldn’t generate better imagery,” said Jesse Hunt, a GOP strategist and former communications director at the National Republican Senatorial Campaign. Trump won the general election, in large part, in reaction to the lax immigration policies of the Biden administration, Hunt told RCP, and the mob violence in LA will capture voter attention ahead of the midterms. 

“It paints a real picture of which side voters can choose to be on,” he said, “public servants enforcing U.S. law in an American city or a violent mob waving another country’s flag.”

The National Republican Congressional Campaign Committee has already cut a digital spot that will serve as a template for the midterms. Posted on social media Tuesday, the video splices together clips of rock-hurling rioters in the smoke-filled streets of LA with soundbites from Democrats defending the demonstrations as “mostly peaceful protests.”

The Congressional Leadership Fund, the super PAC aligned with Speaker Mike Johnson and the largest spender in House campaigns, has already argued this week that the riots roiling Los Angeles will continue to spread to other cities. When confronted with that chaos, the group predicted, “Americans will vote accordingly.”

A new survey commissioned by CLF, obtained by RCP, and conducted by Trump pollster Tony Fabrizio, provides the reasoning for their confidence. The polling of key congressional districts found that on illegal immigration and deportations, 57% favor “hiring nearly 40,000 additional ICE and border patrol agents to address illegal immigration as well as drug and human trafficking.” The Republican survey also showed 68% of voters favor funding for the military to support law enforcement “in their fight against drug cartels.”

The Trump administration remains convinced that the public is on their side. “They are incredibly out of touch with what the vast majority of Americans support,” a White House official said of Democrats, telling RCP, “We are going on offense and backing them into the corner of supporting dangerous criminal illegal aliens, violent rioters, and lawless chaos.”

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The Trump administration has launched a new website for people interested in so-called gold card visas, which the president has said would grant citizenship in exchange for millions of dollars.

President Donald Trump arrives on Capitol Hill in Washington on May 20, 2025. Madalina Vasiliu/The Epoch Times

The website, trumpcard.gov, says that “the Trump card is coming” and encourages people to enter their information to be notified when applications open.

A picture of the card shows the president’s face and a figure of $5 million.

People can enter their name, area of residence, and email.

“Thousands have been calling and asking how they can sign up to ride a beautiful road in gaining access to the Greatest Country and Market anywhere in the World,” President Donald Trump wrote on Truth Social, his social media network, on June 11.

Trump said in February that his administration was going to start selling the “gold card” visas so that wealthy people could legally enter the United States.

“They’ll be wealthy, and they’ll be successful, and they’ll be spending a lot of money and paying a lot of taxes and employing a lot of people, and we think it’s going to be extremely successful, and never been done before anything like this,” he said at the time.

The visas are an updated version of the EB-5 investor visas, according to Commerce Secretary Howard Lutnick.

Under the EB-5 program, investors can apply for a green card if they invest in a commercial enterprise in the United States.

Investors must invest an amount that creates at least 10 full-time positions and invest at least $1 million, or at least $800,000 in targeted employment areas. The minimum required investment amount depends on the type of project.

The annual limit of EB-5 visas is 7.1 percent of the worldwide employment limit.

The gold card program does not fit within the Immigration and Nationality Act, the primary U.S. immigration law, the Center for Immigration Studies, a nonprofit that studies immigration laws, said earlier this year.

“The EB-5 program is one of the specified immigrant [visa] categories – the gold card program is not. An alien could not lawfully be admitted as an immigrant on the basis of having received a gold card,” George Fishman, a senior legal fellow with the center, wrote in a blog post. “Further, an alien could not become a naturalized citizen on the basis of having received a gold card, as a gold card would not provide lawful permanent residence.”

He said it is unlikely the program would survive scrutiny by the Supreme Court if it were challenged with a lawsuit, although justices could ultimately rule in favor of the president.

After a medicore 3Y auction to start the week, a solid 10Y auction yesterday, jittery traders were left with just one Treasury sale this week, arguably the most challenging one: today's $25BN 30Y auction. In retrospect, there was no reason to worry because demand for today's paper - especially among foreign buyers - was stellar any way you look at it. 

Let's take a look: starting at the top, the auction priced at a high yield of 4.844%, up from 4.819% last month and the highest since January; more importantly the auction stopped through the When Issued 4.859% by a solid 1.5bps, a reversal to last month's 2.6 bps, and the second biggest through since November.

The bid to cover rose to 2.430 from last month's 2.314, was the second highest since January which also put it above the six-auction average of 2.392.

The internals were even more impressive: foreign demand was solid with Indirects awarded 65.2%, up from 58.9% and the highest since January. And with Directs taking down 23.4%, down from 27.2% if above the recent average of 22.3%, Dealers were left with just 11.4$, the lowest since November as there was little need for them to step in considering solid demand.

The market response was favorable, with 10Y yields dropping near session lows of 4.34% - below where the 10Y traded ahead of last week's solid NFP report - before retracing some of the move, because today's auction notwithstanding, the US is still facing an avalanche of long duration to find Trump's Big, Beautiful Bill.

The House is expected to vote Thursday on a sweeping $9 billion-plus rescissions package that would slash foreign aid and cut $1.1 billion from the Corporation for Public Broadcasting, which funds NPR and PBS, even as deeper dysfunction in the congressional appropriations process threatens another government shutdown this fall.

Sen John Kennedy (photo: Eric Lee / Bloomberg)

The legislation, drafted by the White House and backed by Republican leadership, is likely to pass despite resistance from some GOP moderates and unified Democratic opposition.

The vote arrives amid growing uncertainty over the fiscal year 2026 spending process. With little progress in either chamber on the 12 annual appropriations bills, lawmakers are increasingly resigned to the likelihood of another continuing resolution (CR) to keep the government open past September, Punchbowl News reports.

"If I were betting man right now, given the current environment, we will appropriate money by CR for the foreseeable future," said Senator John Kennedy (R-LA), a member of the Senate Appropriations Committee. "So if you have a chance to change from the Approps Committee to Finance, you probably ought to do it."

The House Appropriations Committee is expected to complete markup of four spending bills by Friday, all written to match the lower spending levels in former President Donald J. Trump’s budget proposal. The package includes tens of billions in cuts to domestic programs, making it a nonstarter for Democrats and the Democratic-controlled Senate.

Complicating matters further, Senate appropriators have not yet agreed on a topline number for spending. Senators Susan Collins, Republican of Maine and chair of the Appropriations Committee, and Patty Murray, Democrat of Washington and the committee’s ranking member, are not expected to reach a deal until after Republicans pass their reconciliation bill — likely no earlier than July.

“We just don’t know yet,” said Representative Tom Cole (R-OK), chair of the House Appropriations Committee. “Let’s assume we pass the ‘Big Beautiful Bill.’ I don’t think we know what that does. Does that break things loose or not?”

“There’s plenty of people on our side who like a CR,” he added. “It could easily happen again. It’s bad governance.”

The so-called “Big Beautiful Bill” - a Trump-endorsed initiative - includes $175 billion for border security, $150 billion in military spending, and a two-year increase in the debt ceiling. Democrats have rejected the measure, citing deep cuts to domestic programs and the absence of accountability mechanisms on executive spending.

Some Republicans, however, suggest that Trump and his advisers may prefer the flexibility afforded by a CR - or even a government shutdown, particularly if the BBB is signed into law.

"I think there are probably some people in the administration who think quite frankly that they have more flexibility under a CR or even a shutdown," said Representative Ken Calvert (R-CA), chair of the Defense Subcommittee on House Appropriations. "I think that shocks a lot of members here."

Senator Chris Van Hollen (D-MD), warned that repeated use of CRs undermines congressional authority.

"If we do two CRs in a row, it will be a self-inflicted wound by Senate Republican appropriators and Senate Republicans to diminish not just the power of the committee but to diminish Congress’s power of the purse,"  he said.

Senator Tammy Baldwin (D-WI), said the effect is to sideline legislative input on federal spending. "Any long-term CR plays into what it seems this administration would like, which is bills with no guardrails," she said.

The underlying tension is a struggle over control of federal spending between Congress and the executive branch. Democrats blame Trump and Office of Management and Budget (OMB) Director Russ Vought for flouting the 1974 Budget and Impoundment Control Act, which requires presidents to spend money as appropriated by Congress.

Republicans counter that Democrats stalled earlier efforts to reach a compromise, particularly over efforts to restrict Trump’s spending discretion. “You’re not gonna have a Republican Senate and the House limit a Republican president,” said Cole.

The political cost of such battles has already been significant. Former Speaker Kevin McCarthy lost his position over a CR. Speaker Mike Johnson vowed early in his tenure to avoid repeating that path, but growing pressure within his conference suggests another short-term funding bill is increasingly likely.

Representative Rosa DeLauro of Connecticut, the top Democrat on the House Appropriations Committee, offered a grim assessment.

"To hell with the Congress," she said. "It’s bad for the American people. It’s bad for the American people. They’re lying about what’s in these bills. That’s the tragedy."

Meanwhile, on a lighter note, Republicans defeated Democrats 13–2 in Wednesday night’s Congressional Baseball Game - their fifth straight win. More than 31,000 tickets were sold, raising $2.8 million for charity.

Big Beautiful Bill

Meanwhile, House Republicans have successfully amended their party-line tax and spending package, eliminating policies that would have ruined the Big Beautiful Bill's ability to be passed without a simple majority, and would have been subject to Democrat filibuster.

Among the major items deleted, "$2 billion for Pentagon military intelligence programs and more than $500 million for developing missiles, as well as removing a crackdown on the “employee retention” tax credit that became a magnet for fraudsters during and after the pandemic," according to Politico. 

Republicans are now hoping to rewrite some of these policies tossed by the House and fold them into the Senate's version of the package before their target passage date of July 4th. 

Authored by Elizabeth Stelle via RealClearPennsylvania,

Pennsylvania is on the short list of destinations for cloud computing and artificial intelligence (AI). However, the commonwealth – thanks to ill-advised policies pushed by Gov. Josh Shapiro – remains ill-equipped to handle this emerging market.

On Monday, the governor announced a $20 billion investment by Amazon to develop data centers statewide. Though a laudable investment, the governor’s publicity stunt highlights a glaring issue: State policies make it extremely expensive to set up shop in Pennsylvania and tap into the state’s abundant energy resources.

And the governor’s proposals to address this issue will actually make things worse.

Shapiro’s policies to reduce the amount of reliable electricity are the most concerning.

Even without the new influx of data centers, electricity costs are rising in Pennsylvania. On June 1, utility companies increased rates statewide. These companies regularly adjust rates based on market conditions.

And those conditions aren’t great for ratepayers. In this year’s first quarter, wholesale prices in Pennsylvania were up 44%.

What are driving costs? It’s simple supply-and-demand economics. Supply continues to dwindle as regulations force reliable power plants to retire prematurely and force-feed more unreliable solar and wind energy into the state’s energy portfolio.

Meanwhile, demand – driven by AI – keeps escalating.

AI guzzles electricity. A ChatGPT query devours 10 times more electricity than a conventional Google query. To satiate AI’s growing power needs, conservative estimates suggest the United States needs at least 18 gigawatts of additional grid capacity by 2030 – roughly three times the annual consumption of New York City.

Tech companies have already begun to stake claims for increased energy capacity. Case in point: Microsoft’s recent reboot of Three Mile Island. Partnering with Constellation Energy, the tech giant will commandeer the once-shuttered nuclear power plant to power its growing AI capabilities with around-the-clock energy.

And while such deals are great for Big Tech, Pennsylvania households and small businesses remain stuck with ever-increasing electricity bills. Even before the recent rate hike, new polling reveals 78% of Pennsylvanians report increased energy bills over the past two years.

Meanwhile, misguided lawmakers push policies that only exacerbate the problem. For example, Gov. Shapiro’s Lightning Plan – which includes a carbon-tax scheme and mandates more unreliable “green” energy – will add about $157 billion in statewide electricity costs by 2035, according to a new report by Always On Energy and the Commonwealth Foundation. These added costs will double household electricity bills.

So long as these ill-advised policies continue to throttle capacity and generation, the grid will remain a bottleneck to future innovation in Pennsylvania.

To attract new data centers, lawmakers have also flirted with an age-old yet ineffectual solution: corporate welfare. Despite the political appeal, government favors (i.e., tax incentives and subsidies) to attract new businesses often fail.

Pennsylvania’s Independent Fiscal Office found that the commonwealth’s tax credits netted a lousy return on investment, about 25 cents on the dollar.

Others have proven useless: The Pennsylvania Economic Development for a Growing Economy (EDGE) tax credit, which Shapiro wants to expand. has had no takers since its inception in 2022 – not a single dollar.

The best medicine is regulatory reform. Lawmakers should revise electricity regulations to account for reliability and consider all infrastructure costs associated with electricity generation. Also, energy markets need a more predictable permitting process for energy extraction and power plant construction.

Shapiro alluded to fast-tracking permitting for new data centers. Competing with neighbors like West Virginia, which recently passed a bill allowing “microgrid” districts for data centers with standalone power plants, could be beneficial. But there again, the track record of industry-specific reforms is spotty.

Nearly a year ago, Pennsylvania passed the Streamlining Permits for Economic Expansion and Development (SPEED) program to create an expedited permit review and approval process associated with energy production. Today, SPEED remains under development. Shapiro’s call for expedited permitting for data centers appears to be yet another half-measure that won’t accomplish much.

Pennsylvania can’t afford to stop with just one industry. Regulatory reform must be comprehensive and universal, freeing up all economic sectors from onerous red tape.

Pennsylvania, with more than 160,000 individual regulations and restrictions throttling genuine economic development, is one of the most-regulated states. Research suggests a 36% cut in regulations would yield 1% growth in Pennsylvania’s GDP, according to a report coauthored by the Competitive Enterprise Institute and the Commonwealth Foundation.

Before Pennsylvania’s Wyoming Valley can become the next Silicon Valley, the commonwealth must rethink its strategy. Lawmakers must cut red tape, not blank checks to big corporations. Moreover, they must unleash affordable energy, not shackle it with climate-alarmist policies. Without genuine regulatory and energy reform, the commonwealth won’t be able to power the future and will be left in the dark.