$886 Billion Defense Bill Could Spark a War Over ‘Woke’

Plus: Are blue states subsidizing red states? ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey How was your Monday? Much of the country is dealing with either historic flooding or extremely high temperatures, so we hope you’re staying safe. President Biden met with British Prime Minister Rishi Sunak and King Charles III in London today before traveling on to a NATO summit in Lithuania. Congress is back this week after its July 4th recess, but lawmakers won’t be in Washington, D.C., for long since they’re scheduled to be away again for August, leaving little time for them to make progress on a lengthy agenda that includes funding the government for the fiscal year that starts in October, authorizing 2024 defense spending and reauthorizing key health programs. Here’s what else we’re watching. The Pentagon (Reuters) $886 Billion Defense Bill Could Spark a War Over ‘Woke’ The House is expected to take up the 2024 National Defense Authorization Act this week, following the passage of the $886 billion bill by the Armed Services Committee in a 58-1 vote in June. The annual defense policy bill includes a 5.2% increase in pay for the military, which is in line with President Biden’s 2024 budget request, as well as provisions that provide more generous housing allowances and quality-of-life improvements for service members. More controversially, the bill would also provide protections for service members who refuse to take Covid-19 vaccines, block funding for drag shows on military bases, and roll back Pentagon programs aimed at fostering diversity, equity and inclusion — efforts that many Republicans reject as politically correct “wokeness.” The White House released a [policy statement]( Monday that makes its position clear on dozens of provisions in the bill, including its opposition to eliminating diversity training programs. Rep. Ro Khanna, the California Democrat who provided the lone no vote in committee, said he was protesting the amount of potential waste in the bill. “We’re on track to a $1 trillion defense budget and over half of this spending goes to defense contractors who have a history of price gouging,” Khanna told [The Washington Examiner](. “If Republicans want to reduce our nation’s debt, they should join me in reducing wasteful spending on defense contractors at the Pentagon.” More controversy ahead: While the bill received broad bipartisan support in committee, some Democrats are expressing concerns about the more than 1,500 amendments that have been offered for consideration, many from conservatives intent on fighting culture war battles through the legislation. The amendments include even stronger restrictions on diversity programs, limits on the role of climate change in military decision-making and a rollback of military aid to Ukraine, among many other things. Rep. Adam Smith, the top Democrat on the Armed Services Committee, voted to advance the bill but told [The Washington Post]( that he wants to see the details of the final legislation before he decides whether to support it. “I am worried about the extreme right-wing amendments that have been filed, specifically those related to abortion, guns, the border, and social policy and equity issues,” he said. “We’ll just have to wait and see what amendments are made in order when the bill is debated on the House floor.” The Rules Committee will sift through the amendments on Tuesday, and only a fraction of the total is expected to make it to the House floor for a vote. The bottom line: The must-pass defense policy bill is shaping up as a test for House Speaker Kevin McCarthy as he faces pressure from his right to expand the bill to include amendments offered by hardliners in his own party. If he does so, he could end up losing support from the Democrats he will likely need to pass the legislation. But if he pushes back against the hardliners, he risks sparking a revolt within his slim majority in the House. “There’s no question we can win if it goes to a vote” in its current form, Smith told [Politico]( last week. “It’s a question of how Kevin McCarthy wants to handle it.” Which States Contribute the Most and Least to the Federal Budget? Data crunchers at The Washington Post recently revealed that the top question readers wanted to have answered was a fiscal one: “Which states contribute the most to the federal budget in taxes, and which get the most back in terms of benefits?” With help from the Rockefeller Institute of Government, a nonpartisan think tank affiliated with the State University of New York, the Post team reports that there’s a clear partisan divide in the data: “Nine of the 10 states that sent the most to the federal government, per person, voted for President Biden in 2020. Nine of the 10 states that sent the least voted for former president Donald Trump.” On the flip side, eight of the 10 states that get the greatest federal return for every dollar they pay in voted for Trump in 2020 while nine of the 10 states that get the least voted for Biden. Unsurprisingly, Virginia, with its large population of federal contractors and employees, sees the most federal spending per capita, followed by Alaska, Maryland, Kentucky and New Mexico. “Contractors notwithstanding, we found that nothing predicts a state’s receipts from the federal government better than its share of working-age adults with disabilities,” the Post’s Andrew Van Dam and Linda Chong write. “Lower rates of education, higher rates of poverty, fewer patent filings and more employment in the industry that includes dollar stores also tend to be related to receiving more money from the feds.” And the split in federal funding isn’t really tied to whether voters favor Biden or Trump. “It’s not political. It’s high income,” Laura Schultz, executive director of research at the Rockefeller Institute, explained to the Post. “It should really be green states — where the money is — versus red states, where there isn’t money. It’s not blue-and-red political, it’s green-and-red financial.” [Dive into the data at The Washington Post.]( Poll of the Day: Assigning Blame for Inflation The share of Americans who say that “large corporations seeking maximum profits” deserve “a lot” of blame for inflation has risen 9 percentage points since October 2022, from 52% to 61%, according to a new [YouGov poll](. “This change is most pronounced among Independents, with a 13-point increase in the share placing a lot of blame for inflation on large corporations seeking maximum profits,” YouGov reports. “There has been a 10-point increase among Democrats and a 5-point increase among Republicans.” At the same time, a sharp partisan split remains visible in the factors blamed for inflation, with Republicans far more likely to point to federal government spending (77% vs. 31% of Democrats) and Democrats still more likely to cite corporations maximizing profits (76% vs. 44% of Republicans). When asked what policies would decrease inflation, Democrats are more likely to cite higher corporate taxes (48% vs 16%) while Republicans are more likely to propose tax cuts (60% vs. 23%). Number of the Day: 1.3 Billion The number of people worldwide with diabetes is projected to more than double by the year 2050, climbing from an estimated 529 million as of 2021 to more than 1.3 billion, according to research published recently in the journal [Lancet]( and highlighted by [The Washington Post](. The prevalence of the disease is expected to rise from 6% of the global population to nearly 10%. “The continued global spread of diabetes presents a massive public health challenge,” the report says. In the United States, about 11.3% of the population, or 37.3 million people, already have diabetes, according to the Centers for Disease Control and Prevention. Another 38% of the adult population, or some 96 million people aged 18 and older, have prediabetes. --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- Fiscal News Roundup - [Top House Armed Services Dem Worried About ‘Extreme Right-Wing Amendments’ Filed to Defense Bill]( – The Hill - [Biden Advisor Defends Stimulus and Inflation Surge: ‘The Real Cause Was the Global Pandemic’]( – CNBC - [Yellen Says Still Too Early to Rule Out Risk of US Recession]( – Bloomberg - [They Opposed the Infrastructure Law. 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