Summer Inflation, US Manufacturing, and the Microgrid
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Tax Policy/News:
July 15: 'Wallowing in Corruption': Lobbyist Who Helped Ultra-Rich Dodge Taxes Now Heads Trump Tax Office
Ken Kies, a longtime corporate lobbyist known for helping major companies and wealthy individuals avoid taxes, has been confirmed as the U.S. Treasury Department’s assistant secretary for tax policy.
Appointed by President Donald Trump and confirmed along party lines, Kies will oversee the implementation of the recently passed Republican budget law, which includes approximately $4.5 trillion in tax cuts favoring the ultra-wealthy.
Critics, including progressive advocacy groups and Democratic lawmakers, have condemned the appointment, citing Kies’s history of lobbying for tax breaks benefiting corporations like Goldman Sachs, Pfizer, and Microsoft. In his new role, Kies will lead a team of around 100 attorneys and economists responsible for issuing tax regulations and guidance.
His appointment has sparked concerns about further tax breaks for the rich, including potential changes to capital gains taxation that would overwhelmingly benefit the top 1% of earners.
July 14: IRS High-Income Taxpayer Audits in Doubt After Layoffs
A new report from the Treasury Inspector General for Tax Administration (TIGTA) warns that the IRS’s efforts to increase audits of high-income taxpayers may falter due to significant staffing and budget cuts under the Trump administration.
While the IRS’s FY 2024 examination plan aligned with a 2022 Treasury directive to avoid increased audits on those earning under $400,000, recent reductions in Inflation Reduction Act funding—from $45.6 billion to $3.8 billion for enforcement—and a 26% workforce decline have jeopardized long-term goals.
The report highlights that the IRS has not clearly defined key compliance metrics and that the loss of revenue agents, particularly in divisions handling complex audits, could hinder the agency’s ability to maintain its focus on high-income enforcement. Despite these challenges, the 2022 directive remains in effect, though its future implementation is uncertain.
Economic News/Policy:
July 15: Inflation Heats Up in June as President Trump's Tariffs Start to Bite
Inflation accelerated in June, with consumer prices rising 2.7% year-over-year and 0.3% from May, driven largely by increased rents and higher costs for clothing, appliances, and toys.
The price of imported clothing rose 1%, reflecting the early impact of President Trump's tariffs, which now cover nearly all U.S. imports and have raised the average tariff level to its highest since the Great Depression. The federal government collected $27 billion in tariffs in June, quadrupling the amount from the same month last year.
Energy and food prices also climbed, with gasoline and electricity costs rebounding. Despite White House pressure for lower interest rates, the Federal Reserve is expected to hold rates steady later this month, though a rate cut remains likely in September.
July 14: Next Trump Budget Bill Begins Taking Shape in House
House Republicans are preparing a follow-up to President Donald Trump’s recently passed $3.4 trillion tax and spending package, with a new budget bill expected this autumn.
House Budget Committee Chairman Jodey Arrington indicated the upcoming legislation will target deeper cuts to Medicaid, introduce new Medicare spending reductions—such as site-neutral payment reforms—and address technical issues in the original bill. The proposal may also include penalties for states not enforcing Medicaid eligibility laws and reduce federal reimbursements for able-bodied adults covered under the Affordable Care Act.
While some ultraconservatives advocate using budget reconciliation to bypass standard appropriations, Arrington cautioned against abandoning bipartisan processes that could disadvantage Republicans in future minority positions.
July 14: Will Bessent Serve as Fed Chair, Treasury Secretary at the Same Time?
A potential move by President Trump to appoint Treasury Secretary Scott Bessent as Federal Reserve Chair is raising alarms across political and financial circles.
While legally permissible, such a dual role would break with long-standing norms of central bank independence established by a 1951 agreement separating fiscal and monetary responsibilities. Critics argue the consolidation of power could undermine market confidence and increase inflation risks, especially amid Trump’s public pressure on the Fed to lower interest rates to reduce debt servicing costs.
The proposal has drawn bipartisan skepticism and is viewed by some analysts as part of a broader trend toward “fiscal dominance,” where debt concerns override inflation control, potentially destabilizing the economy.
July 14: US Manufacturers Are Stuck in a Rut Despite Subsidies from Biden and Protection from Trump
Despite bipartisan efforts to support American manufacturing—through President Biden’s subsidies for chipmakers and clean energy, and President Trump’s sweeping tariffs—U.S. factories remain stagnant.
Manufacturing employment declined by 7,000 jobs in June, marking the second consecutive monthly drop, and overall factory activity has contracted in 30 of the past 32 months. While Biden’s incentives initially spurred a surge in factory construction, momentum has faded under Trump’s trade wars and the rollback of green energy subsidies.
Tariffs have offered some competitive advantages but also raised input costs and created uncertainty, discouraging long-term investment. As steel prices soar and procurement decisions stall, industry leaders express cautious hope that future tax breaks might revive growth, though many remain hesitant to hire amid ongoing volatility.
Energy and Environmental Policy/News:
July 14: Oregon Legislature Passes First-in-Nation Microgrid Framework
Oregon has enacted groundbreaking legislation to establish a comprehensive regulatory framework for microgrids, aiming to enhance energy resilience amid rising electricity demand and climate-related disruptions.
The two bills, HB 2065 and HB 2066, passed with bipartisan support and are expected to be signed by Governor Tina Kotek. HB 2065 streamlines microgrid deployment by enabling third-party evaluations and requiring utilities to assess applications based on safety and reliability.
HB 2066 directs the Oregon Public Utility Commission to regulate community and private microgrids, allows existing buildings to connect, and permits local governments to designate “microgrid zones.” Advocates say the legislation positions Oregon as a national leader in clean energy innovation and could serve as a model for other states facing grid reliability and affordability challenges.
July 11: Amid Setbacks for the U.S., the Global Energy Transition Goes On
Despite recent U.S. policy reversals under President Trump—including the rollback of key provisions in the Inflation Reduction Act—the global shift toward clean energy continues to gain momentum.
China’s wind and solar capacity surpassed coal and gas for the first time in early 2025, while the European Union saw solar become its leading electricity source in June, with coal use hitting record lows. Worldwide, investment in clean energy now doubles that of fossil fuels, and over 90% of new electricity generation in 2024 came from renewable sources.
Electric vehicle adoption is also surging, with a projected 25% increase this year. However, the U.S. faces rising emissions and energy costs due to policy changes, including curtailed tax credits and halted clean energy projects. Despite these domestic setbacks, the global trajectory remains firmly oriented toward a carbon-free energy future.
July 10: Trump's "Big, Beautiful Bill" Boosts Biofuels Industry, Expands Farmer Safety Net
President Trump’s recently signed tax and spending package, dubbed the “big, beautiful bill,” allocates $66.4 billion in new funding to support farmers, including enhancements to crop insurance and expanded safety nets for price and revenue volatility.
While the legislation rolls back several clean energy tax incentives from the 2022 Inflation Reduction Act, it extends the clean fuel production credit—albeit at a reduced value—through 2029, benefiting sustainable aviation fuel initiatives. Minnesota Corn Growers Association board member Rob Tate praised the bill for its agricultural support, particularly its potential to expand markets for corn-based ethanol.
However, the National Farmers Union expressed concern over accompanying cuts to Medicaid and food assistance programs, warning that such tradeoffs could undermine bipartisan support for future farm policy legislation.
Technology:
July 14: Trump Administration to Spend $1 Billion on ‘Offensive’ Hacking Operations
The Trump administration plans to allocate $1 billion over four years to fund “offensive cyber operations” through the Department of Defense, as outlined in the recently passed One Big Beautiful Bill.
While the provision lacks specifics on the tools or tactics involved, the funding is intended to bolster the capabilities of the U.S. Indo-Pacific Command, particularly in relation to China. This investment comes alongside a $1 billion cut to the U.S. cyber defense budget, including significant reductions to the Cybersecurity and Infrastructure Security Agency (CISA).
Critics, including Senator Ron Wyden, warn that expanding offensive capabilities while weakening defensive measures could increase the risk of retaliatory cyberattacks on vulnerable U.S. institutions. The operations may include zero-day exploits, spyware deployment, and infrastructure development for cyberattacks, raising concerns about transparency and national cybersecurity strategy.
July 14: Anthropic, Google, OpenAI and xAI Granted up to $200 Million for AI Work from Defense Department
The U.S. Department of Defense announced contract awards of up to $200 million to Anthropic, Google, OpenAI, and xAI to accelerate the adoption of advanced artificial intelligence capabilities for national security.
Administered by the DoD’s Chief Digital and Artificial Intelligence Office, the initiative aims to develop AI agents across multiple mission areas. Doug Matty, the department’s chief digital and AI officer, emphasized the strategic importance of AI in maintaining military advantage.
xAI also launched “Grok for Government,” a suite of AI tools available to federal agencies via the General Services Administration. This follows a previous $200 million DoD contract awarded to OpenAI in 2024 and the company’s recent launch of OpenAI for Government to support federal, state, and local agencies.
July 9: Microsoft Shares $500M in AI Savings Internally Days After Cutting 9,000 Jobs
Microsoft revealed it saved over $500 million in its call center operations last year due to AI-driven productivity gains across sales, customer service, and software engineering, according to Chief Commercial Officer Judson Althoff.
The announcement, made during an internal presentation, came just a week after the company laid off more than 9,000 employees—its third round of job cuts in 2025, totaling around 15,000.
The juxtaposition of significant cost savings and record profitability with large-scale layoffs has sparked criticism, especially following a now-deleted LinkedIn post suggesting AI tools could help laid-off workers cope.
Microsoft reported $26 billion in profit and $70 billion in revenue for Q1, and plans to invest $80 billion in AI infrastructure this year, signaling a strategic shift toward prioritizing top AI talent over broader workforce retention.
July 9: There Aren’t Enough AI Chips to Support Data Center Projections, Report Says
A new report by London Economics International warns that U.S. data center growth projections are likely overstated due to global constraints in semiconductor chip production.
The analysis, commissioned by the Southern Environmental Law Center, found that meeting projected U.S. data center electricity demand through 2030 would require 90% of the world’s chip supply—an unrealistic scenario given current manufacturing trends.
The report criticizes speculative infrastructure investments that could burden ratepayers and highlights that many data center interconnection requests may be duplicative.
It calls for more transparent and evidence-based planning, noting that AI chip production has grown at just over 6% annually and would need to accelerate significantly to meet demand forecasts.
For Fun:
July 11: Mini Hearts, Lungs and Livers Made in Lab Now Grow Their Own Blood Vessels
Researchers have successfully developed vascularized organoids—miniature lab-grown versions of human organs such as the heart, liver, lungs, and gut—that can grow their own blood vessels, marking a significant advancement in organoid complexity and functionality.
These new models, created from pluripotent stem cells, overcome previous limitations by integrating blood-vessel cells during early development, enabling more mature and structurally diverse tissue formation. Two studies published in Science and Cell detail how researchers timed molecular triggers to co-develop epithelial and vascular cells, resulting in organoids that more closely mimic real human organs.
When transplanted into mouse models or 3D scaffolds, these organoids formed complex structures like alveolar sacs and fine vascular branches. While still representing early fetal development stages, the findings suggest a promising path toward more functional organ models for research and drug testing, with future challenges including the development of larger vessels and integration of lymphatic systems.
July 10: Giant Map Details Nerves Across a Mouse’s Body: See Stunning Pics
Researchers have developed a high-resolution imaging technique that maps the entire nervous system of a mouse at micrometer-scale detail, revealing individual nerve fibers extending from the brain and spinal cord to distant organs. Published in Cell, the method uses a custom-built microscope and a chemical clearing process to make tissues transparent, enabling continuous 3D imaging over 40 hours. The study involved 16 mice and employed three labeling techniques—genetic modification, immunolabelling, and viral tracing—to visualize different nerve subsets, including sympathetic and vagus nerves. The resulting images uncovered novel anatomical features and offer a significant step toward expanding connectomics beyond the brain, with data already being shared online for broader research use.