WASHINGTON — At the center of the new climate and tax package that Democrats appear to be on the verge of passing is one of the most significant changes to America’s tax code in decades: a new corporate minimum tax that could reshape how the federal government collects revenue and alter how the nation’s most profitable companies invest in their businesses.
The proposal is one of the last remaining tax increases in the package that Democrats are aiming to pass along party lines in coming days. After months of intraparty disagreement over whether to raise taxes on the wealthy or roll back some of the 2017 Republican tax cuts to fund their agenda, they have settled on a longstanding political ambition to ensure that large and profitable companies pay more than $0 in federal taxes.
To accomplish this, Democrats have recreated a policy that was last employed in the 1980s: trying to capture tax revenue from companies that report a profit to shareholders on their financial statements while bulking up on deductions to whittle down their tax bills.
reduce their effective tax rates well below the statutory 21 percent. It was originally projected to raise $313 billion in tax revenue over a decade, though the final tally is likely to be $258 billion once the revised bill is finalized.
would eliminate this cap and extend the tax credit until 2032; used cars would also qualify for a credit of up to $4,000.
Energy industry. The bill would provide billions of dollars in rebates for Americans who buy energy efficient and electric appliances as well as tax credits for companies that build new sources of emissions-free electricity, such as wind turbines and solar panels. The package also sets aside $60 billion to encourage clean energy manufacturing in the United States. The bill also requires businesses to pay a financial penalty per metric ton for methane emissions that exceed federal limits starting in 2024.
Low-income communities. The bill would invest over $60 billion to support low-income communities and communities of color that are disproportionately burdened by effects of climate change. This includes grants for zero-emissions technology and vehicles, as well as money to mitigate the negative effects of highways, bus depots and other transportation facilities.
Fossil fuels industry. The bill would require the federal government to auction off more public lands and waters for oil drilling and expand tax credits for coal and gas-burning plants that rely on carbon capture technology. These provisions are among those that were added to gain the support of Senator Joe Manchin III, Democrat of West Virginia.
West Virginia. The bill would also bring big benefits to Mr. Manchin’s state, the nation’s second-largest producer of coal, making permanent a federal trust fund to support miners with black lung disease and offering new incentives for companies to build wind and solar farms in areas where coal mines or coal plants have recently closed.
Because of that complexity, the corporate minimum tax has faced substantial skepticism. It is less efficient than simply eliminating deductions or raising the corporate tax rate and could open the door for companies to find new ways to make their income appear lower to reduce their tax bills.
Similar versions of the idea have been floated by Mr. Biden during his presidential campaign and by Senator Elizabeth Warren, Democrat of Massachusetts. They have been promoted as a way to restore fairness to a tax system that has allowed major corporations to dramatically lower their tax bills through deductions and other accounting measures.
According to an early estimate from the nonpartisan Joint Committee on Taxation, the tax would most likely apply to about 150 companies annually, and the bulk of them would be manufacturers. That spurred an outcry from manufacturing companies and Republicans, who have been opposed to any policies that scale back the tax cuts that they enacted five years ago.
Although many Democrats acknowledge that the corporate minimum tax was not their first choice of tax hikes, they have embraced it as a political winner. Senator Ron Wyden of Oregon, the chairman of the Senate Finance Committee, shared Joint Committee on Taxation data on Thursday indicating that in 2019, about 100 to 125 corporations reported financial statement income greater than $1 billion, yet their effective tax rates were lower than 5 percent. The average income reported on financial statements to shareholders was nearly $9 billion, but they paid an average effective tax rate of just 1.1 percent.
“Companies are paying rock-bottom rates while reporting record profits to their shareholders,” Mr. Wyden said.
told the Senate Finance Committee last year. “This behavioral response poses serious risks for financial accounting and the capital markets.”
Other opponents of the new tax have expressed concerns that it would give more control over the U.S. tax base to the Financial Accounting Standards Board, an independent organization that sets accounting rules.
“The potential politicization of the F.A.S.B. will likely lead to lower-quality financial accounting standards and lower-quality financial accounting earnings,” Ms. Hanlon and Jeffrey L. Hoopes, a University of North Carolina professor, wrote in a letter to members of Congress last year that was signed by more than 260 accounting academics.
the chief economist of the manufacturing association. “Arizona’s manufacturing voters are clearly saying that this tax will hurt our economy.”
Ms. Sinema has expressed opposition to increasing tax rates and had reservations about a proposal to scale back the special tax treatment that hedge fund managers and private equity executives receive for “carried interest.” Democrats scrapped the proposal at her urging.
When an earlier version of a corporate minimum tax was proposed last October, Ms. Sinema issued an approving statement.
“This proposal represents a common sense step toward ensuring that highly profitable corporations — which sometimes can avoid the current corporate tax rate — pay a reasonable minimum corporate tax on their profits, just as everyday Arizonans and Arizona small businesses do,” she said. In announcing that she would back an amended version of the climate and tax bill on Thursday, Ms. Sinema noted that it would “protect advanced manufacturing.”
That won plaudits from business groups on Friday.
“Taxing capital expenditures — investments in new buildings, factories, equipment, etc. — is one of the most economically destructive ways you can raise taxes,” Neil Bradley, chief policy officer of the U.S. Chamber of Commerce, said in a statement. He added, “While we look forward to reviewing the new proposed bill, Senator Sinema deserves credit for recognizing this and fighting for changes.”
Amid heightened tensions surrounding Taiwan, President Volodymyr Zelensky of Ukraine on Wednesday stressed the importance of Chinese neutrality over the war in his country as Russia finds itself increasingly isolated by the West.
“I would like China to join the unified world position on the tyranny of Russia against Ukraine,” Mr. Zelensky said during a meeting with thousands of students organized by the Australian National University. “As for now, China is balancing and indeed has neutrality. I will be honest: This neutrality is better than if China would join Russia.”
Mr. Zelensky said in an interview with the South China Morning Post, a Hong Kong newspaper, that he would like to speak with China’s leader, Xi Jinping. “I had one conversation with Xi Jinping that was a year ago,” he said in the interview, published Thursday. “Since the beginning of the large-scale aggression on Feb. 24, we have asked officially for a conversation.”
Reflecting the delicacy of the moment, Ukrainian officials have been largely silent on the high-stakes visit this week of Speaker Nancy Pelosi to Taiwan. The Kremlin on Tuesday said her visit to Taiwan “provokes the situation” over the island.
The U.S. secretary of state, Antony J. Blinken, pressed China last month to join the United States, which is trying to assemble a global effort to punish Moscow for its aggression in Ukraine, and “stand up” against Russia’s war. In response, the Chinese foreign minister, Wang Yi, said that Beijing was neutral and criticized the United States for what he called “China phobia” and policies that offered “a dead end.”
From the outset of the war, Washington was able, with the threat of heavy sanctions, to dissuade China from providing weapons and economic assistance to Russia. China claims it is neutral because it has refrained from such explicit support.
In the South China Morning Post interview, Mr. Zelensky suggested that China could use its economic heft to counter Russia. “I’m confident, I’m sure that without the Chinese market for the Russian Federation, Russia would be feeling complete economic isolation,” he said.
Mr. Zelensky’s remarks at the Australian National University event came in response to a student’s question, and he offered a nuanced answer that recognized the geopolitical realities of the moment.
His government, he said, works tirelessly to persuade nations around the world to come together to isolate Russia. “Every day Russia loses more allies,” he said. But each nation, he said, makes its own calculations.
“I believe the people of China will make a prudent choice,” he said. “It’s important for us that China will not help Russia.”
He made the same appeal to the students that he has to leaders from around the world over the past five months — pointing to the atrocities committed by Russian forces and asking what would become of the world order if Moscow succeeded in imposing its will on a sovereign nation through brute force.
When asked by a student what has been the hardest part of leading a nation at war, Mr. Zelensky said it was understanding what people are capable of doing — both the heroism of those defending their homes, he said, and the horrors visited upon them by the invading army.
“I never thought that people are capable of those things,” he said.
To fight disinformation, California lawmakers are advancing a bill that would force social media companies to divulge their process for removing false, hateful or extremist material from their platforms. Texas lawmakers, by contrast, want to ban the largest of the companies — Facebook, Twitter and YouTube — from removing posts because of political points of view.
In Washington, the state attorney general persuaded a court to fine a nonprofit and its lawyer $28,000 for filing a baseless legal challenge to the 2020 governor’s race. In Alabama, lawmakers want to allow people to seek financial damages from social media platforms that shut down their accounts for having posted false content.
In the absence of significant action on disinformation at the federal level, officials in state after state are taking aim at the sources of disinformation and the platforms that propagate them — only they are doing so from starkly divergent ideological positions. In this deeply polarized era, even the fight for truth breaks along partisan lines.
a nation increasingly divided over a variety of issues — including abortion, guns, the environment — and along geographic lines.
a similar law in Florida that would have fined social media companies as much as $250,000 a day if they blocked political candidates from their platforms, which have become essential tools of modern campaigning. Other states with Republican-controlled legislatures have proposed similar measures, including Alabama, Mississippi, South Carolina, West Virginia, Ohio, Indiana, Iowa and Alaska.
Alabama’s attorney general, Steve Marshall, has created an online portal through which residents can complain that their access to social media has been restricted: alabamaag.gov/Censored. In a written response to questions, he said that social media platforms stepped up efforts to restrict content during the pandemic and the presidential election of 2020.
“During this period (and continuing to present day), social media platforms abandoned all pretense of promoting free speech — a principle on which they sold themselves to users — and openly and arrogantly proclaimed themselves the Ministry of Truth,” he wrote. “Suddenly, any viewpoint that deviated in the slightest from the prevailing orthodoxy was censored.”
Much of the activity on the state level today has been animated by the fraudulent assertion that Mr. Trump, and not President Biden, won the 2020 presidential election. Although disproved repeatedly, the claim has been cited by Republicans to introduce dozens of bills that would clamp down on absentee or mail-in voting in the states they control.
memoirist and Republican nominee for Senate, railed against social media giants, saying they stifled news about the foreign business dealings of Hunter Biden, the president’s son.
massacre at a supermarket in Buffalo in May.
Connecticut plans to spend nearly $2 million on marketing to share factual information about voting and to create a position for an expert to root out misinformation narratives about voting before they go viral. A similar effort to create a disinformation board at the Department of Homeland Security provoked a political fury before its work was suspended in May pending an internal review.
In California, the State Senate is moving forward with legislation that would require social media companies to disclose their policies regarding hate speech, disinformation, extremism, harassment and foreign political interference. (The legislation would not compel them to restrict content.) Another bill would allow civil lawsuits against large social media platforms like TikTok and Meta’s Facebook and Instagram if their products were proven to have addicted children.
“All of these different challenges that we’re facing have a common thread, and the common thread is the power of social media to amplify really problematic content,” said Assemblyman Jesse Gabriel of California, a Democrat, who sponsored the legislation to require greater transparency from social media platforms. “That has significant consequences both online and in physical spaces.”
It seems unlikely that the flurry of legislative activity will have a significant impact before this fall’s elections; social media companies will have no single response acceptable to both sides when accusations of disinformation inevitably arise.
“Any election cycle brings intense new content challenges for platforms, but the November midterms seem likely to be particularly explosive,” said Matt Perault, a director of the Center on Technology Policy at the University of North Carolina. “With abortion, guns, democratic participation at the forefront of voters’ minds, platforms will face intense challenges in moderating speech. It’s likely that neither side will be satisfied by the decisions platforms make.”
MADRID — NATO leaders will formally invite Finland and Sweden to join the alliance on Wednesday after Turkey lifted its veto on their membership, NATO’s secretary-general said Tuesday evening, clearing the way for what would be one of the most significant expansions of the alliance in decades.
The historic deal, following Turkey’s agreement to a memorandum with the two Nordic countries, underscored how the war in Ukraine has backfired for President Vladimir V. Putin, subverting Russian efforts to weaken NATO and pushing Sweden and Finland, which were neutral and nonaligned for decades, into the alliance’s arms.
After weeks of talks, capped by an hourslong meeting in Madrid, President Recep Tayyip Erdogan of Turkey agreed to lift his block on Sweden and Finland’s membership in return for a set of actions and promises that they will act against terrorism and terrorist organizations.
“As NATO allies, Finland and Sweden commit to fully support Turkey against threats to its national security,” NATO’s Secretary General Jens Stoltenberg said, providing some details of the agreement. “This includes further amending their domestic legislation, cracking down on P.K.K. activities and entering into an agreement with Turkey on extradition,” he added, referring to the Kurdistan Workers’ Party which seeks an independent Kurdish state on territory partly within Turkey’s borders.
Mr. Erdogan had been blocking the Nordic countries’ NATO bids amid concerns over Sweden’s longtime support for the P.K.K. which has attacked nonmilitary targets and killed civilians in Turkey, is outlawed in that country and is designated by both the United States and the European Union as a terrorist organization.
But the memorandum does not specify the extradition of any of the 45 people or so Mr. Erdogan wanted sent to Turkey to face trial on terrorism charges. Sweden has already passed tougher legislation against terrorism that goes into effect July 1.
Both Finland and Sweden had been militarily nonaligned for many years, but decided to apply to join the alliance after Russia invaded Ukraine in February. With Russia attacking a neighbor, both countries felt vulnerable, though Sweden, with a long tradition of neutrality, was more hesitant.
President Vladimir V. Putin of Russia warned both countries against joining NATO, but his threats proved counterproductive.
The two countries bring geostrategic benefits to the alliance. Finland shares an 830-mile border with Russia and has a well-equipped modern army; Sweden can control the entrance to the Baltic Sea, which will help a great deal in NATO planning to defend the more vulnerable countries in Eastern Europe.
The final push to resolve the dispute started early Tuesday morning, when President Biden called Mr. Erdogan to urge him to “seize the moment” on the eve of the summit, to allow discussions on other topics to proceed, according to a senior administration official with knowledge of the discussion.
The official, who requested anonymity to discuss private deliberations, said the president conveyed the substance of his conversation with Mr. Erdogan to the leaders of Finland and Sweden. And after several hours of negotiations later that night, the two Nordic leaders consulted with Mr. Biden again before announcing the agreement with Turkey.
The American official said that the deal between Turkey and the two Nordic countries involved a series of compromises on both sides, including the statement by Turkey welcoming Finland and Sweden to apply and issues involving an arms embargo imposed on Turkey and Turkey’s belief that Finland and Sweden had offered safe havens to groups they considered terrorists.
American officials had for days played down Mr. Biden’s role in the negotiations, saying he would not be a broker between the other countries and insisted that it was up to Turkey, Finland and Sweden to resolve their differences.
After the agreement was announced Tuesday night, the senior administration official conceded that it was considered more diplomatic to publicly minimize Mr. Biden’s involvement. Doing so prevented Turkey from seeking concessions from the United States for agreeing to lift its veto, which might have complicated the discussions, the official said.
The next steps for Finland and Sweden are clear: NATO will vote on Wednesday to accept their applications. There will also be a quick study of their defense capacities and needs. But the talks are expected to be routine, since both countries are NATO partners and have exercised together with NATO allies.
The more difficult last step requires the legislatures of all 30 current members to vote to amend the NATO founding treaty to accept the new members. That has in the past taken up to a year, but is expected to be much quicker for the Nordic countries.
The U.S. Senate is already pressing ahead with hearings on the application and Mr. Biden has been a firm proponent of the new members.
Johanna Lemola contributed reporting from Helsinki, Finland.
PARIS — Weeks after re-electing President Emmanuel Macron, voters in France return to the polls on Sunday to choose their parliamentary representatives, elections that will determine whether Mr. Macron’s bills sail or stumble through the legislature during his second term.
All 577 seats are up for grabs in the National Assembly, France’s lower and more powerful house of Parliament, which Mr. Macron’s party and its allies currently control. Most polls predict that will remain the case — to a degree.
France’s modern presidential and parliamentary elections are held only months apart, on the same five-year cycle. Over the past two decades, voters have always given their newly elected president strong parliamentary backing, and polls and experts suggest that would be a likely outcome for Mr. Macron this time, too.
surging inflation than by the campaign, and pollsters say they expect record-low turnout.
Here is a primer on the elections, which will be held in two rounds, on Sunday and on June 19.
most powerful political office, with broad abilities to govern by decree. But they need Parliament, and especially the National Assembly, to accomplish most of their bigger domestic policy goals, push through spending bills or change the Constitution.
Emmanuel Macron’s Second Term as President of France
With the reelection of Emmanuel Macron, French voters favored his promise of stability over the temptation of an extremist lurch.
Some of Mr. Macron’s prominent campaign promises, like his vow to raise the legal age of retirement, require legislation. His new government also wants to tackle the effects of inflation, requiring lawmakers to vote on measures like food subsidies.
a wave of political newcomers as candidates.
La Nouvelle Union Populaire Écologique et Sociale, more commonly known by its acronym NUPES, a left-wing alliance brought together by Mr. Mélenchon’s France Unbowed party that includes the Socialist, Green and Communist parties.
A group of traditional right-wing parties, led by Les Républicains, the mainstream conservatives.
The far-right National Rally party of Marine Le Pen, who was defeated by Mr. Macron in the presidential runoff in April.
The latest polls suggest that Ensemble and NUPES are neck-and-neck, with about 25 to 28 percent each. The National Rally is predicted to receive around 20 to 21 percent of the vote, with Les Républicains roughly 10 to 11 percent. Smaller groups, including the party of Éric Zemmour, a far-right pundit who ran for president, are polling in the single digits.
Élisabeth Borne, the prime minister. Their races will be closely watched, as a loss by one or several of them would be seen as a rebuke of Mr. Macron, who has warned that those who are not elected will leave his cabinet.
WASHINGTON/MEXICO CITY, June 6 (Reuters) – The White House on Monday excluded Cuba, Venezuela and Nicaragua from the U.S.-hosted Summit of the Americas this week, prompting Mexico’s president to make good on a threat to skip the event because all countries in the Western Hemisphere were not invited.
The boycott by Mexican President Andres Manuel Lopez Obrador and some other leaders could diminish the relevance of the summit in Los Angeles, where the United States aims to address regional migration and economic challenges. President Joe Biden, a Democrat, hopes to repair Latin America relations damaged under his Republican predecessor, Donald Trump, reassert U.S. influence and counter China’s inroads.
The decision to cut out Cuba, Venezuela and Nicaragua followed weeks of intense deliberations and was due to concerns about human rights and a lack of democracy in the three nations, a senior U.S. official said.
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U.S. State Department spokesperson Ned Price said the Biden administration “understands” Mexico’s position, but “one of the key elements of this summit is democratic governance, and these countries are not exemplars, to put it mildly.”
Biden aides have been mindful of pressure from Republicans and some fellow Democrats against appearing soft on America’s three main leftist antagonists in Latin America. Miami’s large Cuban-American community, which favored Trump’s harsh policies toward Cuba and Venezuela, is seen as an important voting bloc in Florida in the November elections that will decide control of the U.S. Congress, which is now in the hands of the Democrats.
Lopez Obrador told reporters that his foreign minister, Marcelo Ebrard, would attend the summit in his place. The Mexican president said he would meet with Biden in Washington next month, which the White House confirmed. read more
“There can’t be a Summit of the Americas if not all countries of the American continent are taking part,” Lopez Obrador said.
Lopez Obrador’s absence from the gathering, which Biden is due to open on Wednesday, raises questions about summit discussions focused on curbing migration at the U.S. southern border, a priority for Biden, and could be a diplomatic embarrassment for the United States.
A caravan of several thousand migrants, many from Venezuela, set off from southern Mexico early Monday aiming to reach the United States. read more
But a senior administration official insisted Lopez Obrador’s no-show would not hinder Biden’s rollout of a regional migration initiative. The White House expects at least 23 heads of state and government, which the official said would be in line with past summits.
U.S. Senator Robert Menendez, a Democrat and chairman of the powerful Senate Foreign Relations Committee, criticized the Mexican president, saying his “decision to stand with dictators and despots” would hurt U.S.-Mexico relations.
Venezuelan President Nicolas Maduro shakes hands with his Cuban counterpart Miguel Diaz-Canel during the ALBA group meeting in Havana, Cuba, May 27, 2022. Miraflores Palace/Handout via REUTERS
Brazilian President Jair Bolsonaro, a right-wing populist and Trump admirer who leads Latin America’s most populous country, will attend after initially flirting with staying away. read more
The exclusion of Venezuela and Nicaragua had been flagged in recent weeks. President Miguel Diaz-Canel of Communist-ruled Cuba said last month he would not go even if invited, accusing the United States of “brutal pressure” to make the summit non-inclusive.
On Monday, Cuba called the decision “discriminatory and unacceptable” and said the United States underestimated support in the region for the island nation.
The United States invited some Cuban civil society activists to attend, but several said on social media that Cuban state security had blocked them from travel to Los Angeles. read more
Having ruled out Venezuelan President Nicolas Maduro, the Biden administration expects representatives for opposition leader Juan Guaido will attend, Price said. He declined to say whether their participation would be in person or virtually.
The senior administration official, asked whether Biden might have a call with Guaido during the summit, said there was a good chance of an “engagement,” but declined to elaborate.
Washington recognizes Guaido as Venezuela’s legitimate president, having condemned Maduro’s 2018 re-election as a sham. But some countries in the region have stuck with Maduro.
Also barred from the summit is Nicaraguan President Daniel Ortega, a former Marxist guerrilla who won a fourth consecutive term in November after jailing rivals.
Most leaders have signaled they will attend, but the pushback by leftist-led governments suggests many in Latin America are no longer willing to follow Washington’s lead as in past times.
Faced with low expectations for summit achievements, U.S. officials began previewing Biden’s coming initiatives. Those include an “Americas partnership” for pandemic recovery, which would entail investments and supply-chain strengthening, reform of the Inter-American Development Bank, and a $300 million commitment for regional food security.
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Reporting By Matt Spetalnick in Washington and Dave Graham in Mexico City; Additional reporting by Humeyra Pamuk, Eric Beech and Patricia Zengerle in Washington, Kylie Madry and Lizbeth Diaz in Mexico City, Jose Torres in Tapachula and Dave Sherwood in Havana; Writing by Ted Hesson; Editing by Grant McCool, Alistair Bell and Leslie Adler
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A LAPD helocopter flies near the LA Convention Center during the first day of the Ninth Americas Summit in Los Angeles, U.S., June 6, 2022. REUTERS/Daniel Becerril
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WASHINGTON, June 6 (Reuters) – President Joe Biden will announce this week at the Summit of the Americas an economic partnership for the Western hemisphere focusing on promoting economic recovery by building on existing trade agreements, U.S. administration officials said on Monday.
Dubbed the “Americas Partnership for Economic Prosperity”, the plan will cover five areas including mobilizing investments, reinvigorating institutions, clean energy jobs, resilient supply chains and sustainable trade.
“The overall objective is to build our economies from the bottom up and middle out by building on the foundation established by our free trade agreements with the region to better address inequality and lack of economic opportunity,” a senior administration official told reporters in a call.
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The plan would aim to offer an alternative in a region where China has been expanding its sphere of influence. It was unclear, however, how many countries in economically troubled Latin America would buy into such an arrangement.
The United States is hosting the Summit of the Americas in Los Angeles, a gathering where Biden aims to address regional migration and economic challenges. On Monday, the White House said it was not inviting Cuba, Venezuela and Nicaragua, prompting Mexico’s president to skip the event.
The summit is being convened in the United States for the first time since the first such gathering in Miami in 1994, as Biden seeks to reassert U.S. leadership and counter China’s growing clout. He is due to formally open the summit on Wednesday.
Biden will put forward “an ambitious reform” of the Inter-American Development Bank (IDB), the official said, adding that the United States would also seek an equity stake at the bank’s private sector lending arm to support the deployment of private capital.
“Because the private sector has a central role to play,” the official said.
Eric Farnsworth, vice president of the Council of the Americas think tank, told a Senate subcommittee last week that the Biden administration should push for a regional trade initiative similar to the one for the Indo-Pacific that Biden announced during his Asia tour in May.
But the idea of creating a hemisphere-wide trade bloc has never gotten off the ground, partly because of protectionism sentiment among U.S. labor unions and some lawmakers.
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Additional reporting by Matt Spetalnick in Los Angeles; Reporting by Humeyra Pamuk and Eric Beech; Editing by Chris Reese and Stephen Coates
Our Standards: The Thomson Reuters Trust Principles.
SAN FRANCISCO — Bitcoin was conceived more than a decade ago as “digital gold,” a long-term store of value that would resist broader economic trends and provide a hedge against inflation.
But Bitcoin’s crashing price over the last month shows that vision is a long way from reality. Instead, traders are increasingly treating the cryptocurrency like just another speculative tech investment.
Since the start of this year, Bitcoin’s price movement has closely mirrored that of the Nasdaq, a benchmark that’s heavily weighted toward technology stocks, according to an analysis by the data firm Arcane Research. That means that as Bitcoin’s price dropped more than 25 percent over the last month, to under $30,000 on Wednesday — less than half its November peak — the plunge came in near lock step with a broader collapse of tech stocks as investors grappled with higher interest rates and the war in Ukraine.
The growing correlation helps explain why those who bought the cryptocurrency last year, hoping it would grow more valuable, have seen their investment crater. And while Bitcoin has always been volatile, its increasing resemblance to risky tech stocks starkly shows that its promise as a transformative asset remains unfulfilled.
institutional investors like hedge funds, endowments and family offices that have poured money into the cryptocurrency market.
declining revenue and a loss of $430 million in the first quarter. The company’s stock has fallen more than 75 percent overall this year.
The Nasdaq is already in bear-market territory, having ended Wednesday down 29 percent from its mid-November record. November was also when Bitcoin’s price hit a peak of nearly $70,000. The crash has been a reality check for Bitcoin evangelists.
Ukrainian counteroffensive near Kharkiv appears to have contributed to sharply reduced Russian shelling in the eastern city. But Moscow’s forces are making advances along other parts of the front line.
American aid. The House voted 368 to 57 in favor of a $39.8 billion aid package for Ukraine, which would bring the total U.S. financial commitment to roughly $53 billion over two months. The Senate still needs to vote on the proposal.
Russian oil embargo. European Union ambassadors again failed to reach an agreement to ban Russian oil, because Hungary has resisted the adoption of the embargo. The country is preventing the bloc from presenting a united front against Moscow.
Bitcoin has rebounded from major losses before, and its long-term growth remains impressive. Before the pandemic boom in crypto prices, its value hovered well below $10,000. True believers, who call themselves Bitcoin maximalists, remain adamant that the cryptocurrency will eventually break from its correlation with risk assets.
Michael Saylor, the chief executive of the business-intelligence company MicroStrategy, has spent billions of his firm’s money on Bitcoin, building up a stockpile of more than 125,000 coins. As the price of Bitcoin has cratered, the company’s stock has dropped roughly 75 percent since November.
In an email, Mr. Saylor blamed the crash on “traders and technocrats” who don’t appreciate Bitcoin’s long-term potential to transform the global financial system.
“In the near term, the market will be dominated by those with less appreciation of the virtues of Bitcoin,” he said. “Over the long term, the maximalists will be proven correct, because billions of people need this solution, and awareness is spreading to millions more each month.”
WASHINGTON — When President Biden signed a modern-day Lend-Lease Act on Monday, 81 years after the original version helped lead the way into World War II, he effectively thrust the United States even deeper into another war in Europe that has increasingly become an epic struggle with Russia despite his efforts to define its limits.
Recent days have underscored just how engaged the United States has become in the conflict in Ukraine. In addition to the new lending program, which will waive time-consuming requirements to speed arms to Ukraine, Mr. Biden has proposed $33 billion more in military and humanitarian aid, a package that congressional Democrats plan to increase by another $7 billion. He sent the first lady for a secret visit to the war zone. And he provided intelligence helping Ukraine to kill a dozen generals and sink Russia’s flagship.
But even after two and a half months, Mr. Biden is still anxious about looking like the United States is fighting the proxy war that President Vladimir V. Putin of Russia says it is. While Mr. Biden publicly sends aid and signed the lend-lease bill on camera, off camera he was livid over leaks about the American intelligence assistance to Ukraine that led to the deaths of Russian generals and the sinking of the cruiser Moskva out of concern that it would provoke Mr. Putin into the escalation Mr. Biden has strenuously sought to avoid.
After reports in The New York Times and NBC News about the intelligence, Mr. Biden called Defense Secretary Lloyd J. Austin III; Avril D. Haines, the director of national intelligence; and William J. Burns, the C.I.A. director, to chastise them, according to a senior administration official. That seemed to be where Mr. Biden was drawing a line — providing Ukraine with guns to shoot Russian soldiers was OK, providing Ukraine with specific information to help them shoot Russians was best left secret and undisclosed to the public.
“There’s this constant balancing act the administration has been trying to strike between supporting Ukraine and making sure it can defend itself militarily and at the same time being very concerned about escalation,” said Alina Polyakova, the president of the Center for European Policy Analysis and a specialist on Russia policy.
“It’s increasingly untenable to maintain this kind of hand-wringing,” she added. “It’s probably more effective to say this is what our policy is and we will deal and manage the potential escalation responses we see from the Kremlin.”
From the start of the war, the administration sought to parse its response, deciding which weapons could be called defensive and therefore were acceptable to send to Ukraine and which ones could be called offensive and therefore should not be delivered.
But the line has shifted in recent weeks with the administration shipping ever more sophisticated military equipment and expressing more openly its ambitions not just to help the Ukrainians but to defeat and even enfeeble Russia. After a visit to the war-torn capital, Kyiv, two weeks ago, Mr. Austin declared that “we want to see Russia weakened to the degree that it can’t do the kinds of things” it has done in Ukraine again, while Speaker Nancy Pelosi said during her own subsequent trip to Kyiv that America “will stand with Ukraine until victory is won.”
Some veteran government officials said Mr. Biden was right to be cautious about too overtly poking Mr. Putin because the consequences of an escalation with a nuclear-armed Russia are too devastating to take chances with.
“Putin wants us to make it a proxy war,” said Fiona Hill, a former Russia adviser to two presidents now at the Brookings Institution. “Putin is still telling people outside Europe this is just a repeat of the Cold War, nothing to look at here. This isn’t a proxy war. It’s a colonial land grab.”
Michael A. McFaul, a former ambassador to Russia now at Stanford University, said there was a difference between clandestinely helping Ukrainian forces target Russian forces and flaunting it. “Yes, Putin knows that we are providing intelligence to Ukraine,” he said. “But saying it out loud helps his public narrative that Russia is fighting the U.S. and NATO in Ukraine, not just the Ukrainians. That doesn’t serve our interests.”
Angela Stent, a former national intelligence officer on Russia and the author of a book on American relations with Mr. Putin, said being too open about what the United States was doing in Ukraine could undermine efforts to turn China, India and other countries against Russia. “For global public opinion, it’s not a good idea,” she said. “They should do whatever they do, but not talk about it.”
Mr. McFaul said he also believed it undermined Ukrainians, making it look like they were dependent on the Americans, a concern that Mr. Biden was said to share in his phone calls with his security officials, which were first reported by the Times columnist Thomas L. Friedman.
But others said the administration has been too cautious in letting Russia set the rules of the conflict — or rather Washington’s guesswork about what would push Russia into escalation. No one in Washington really knows the line that should not be crossed with Mr. Putin, and instead the United States has simply been making assumptions. “Are we having a conversation about red lines with ourselves?” asked Frederick W. Kagan, a military scholar at the American Enterprise Institute. “Because I rather think we are.”
The consequence, he added, is being too slow to provide what Ukraine really needs. “They’ve done amazingly well at making stuff happen in a relatively timely fashion,” Mr. Kagan said of the Biden administration. “But there does seem to be a certain brake on the timeliness of our support driven by this kind of parsing and self-negotiation that is a problem.”
The legislation that Mr. Biden signed on Monday reflected the historical echoes and reversals of the current war. President Franklin D. Roosevelt signed the original Lend-Lease Act in 1941 to help the British fend off Nazi aggressors in World War II, and it was later expanded to help other allies — including the Soviet Union.
Now, Moscow will be on the other side of the arms channel as the modern-day version, called the Ukraine Democracy Defense Lend-Lease Act, will direct weapons and equipment not to Russian soldiers but to those fighting them.
“Every day, Ukrainians pay with their lives,” Mr. Biden said in the Oval Office as he approved the legislation. “And the atrocities that the Russians are engaging in are just beyond the pale. And the cost of the fight is not cheap, but caving to aggression is even more costly. That’s why we’re staying in this.”
Mr. Biden signed the law on the same day that Russia celebrated Victory Day, the 77th anniversary of the allied defeat of Nazi Germany, a feat facilitated in part by the original Lend-Lease Act.
“This day is supposed to be about celebrating peace and unity in Europe and the defeat of Nazis in World War II,” said Jen Psaki, the White House press secretary. “And instead, Putin is perverting history, changing history, or attempting to change it, I should say, to justify his unprovoked and unjustified war.”
The lending program came as congressional Democrats moved quickly to consider the $33 billion aid package proposed by Mr. Biden and indicated they would increase it substantially. With Republicans pushing to add more military spending, Democrats insisted on an equal boost for humanitarian aid, nudging the price tag to $39.8 billion, according to two people familiar with the proposal who previewed it on the condition of anonymity.
Ms. Pelosi and Senator Chuck Schumer of New York, the Democratic majority leader, spoke by telephone with Mr. Biden on Monday as they finalized the details of the proposal, one of the people said. House leaders want to bring up the measure as early as Tuesday.
The increase reflects a striking consensus in both parties to pour vast amounts of money into the war against Russia, even as lawmakers remain deeply divided on domestic spending. In March, Congress approved $13.6 billion in emergency aid for Ukraine, and Mr. Biden has warned that those resources would run out soon without new legislation.
It was not clear, however, whether Republicans, whose support would be needed in the Senate, had agreed on the specifics of the proposal. A spokeswoman for Republicans on the Senate Appropriations Committee said that a deal had not been reached, but that discussions were continuing.
Democrats plan to advance the package separately from the administration’s emergency coronavirus aid measure, which has become snarled in an election-year dispute over immigration restrictions.
“We cannot afford delay in this vital war effort,” Mr. Biden said in a statement. “Hence, I am prepared to accept that these two measures move separately, so that the Ukrainian aid bill can get to my desk right away.”
WASHINGTON — President Biden signaled a vast increase in America’s commitment to defeating Russia in Ukraine on Thursday as he asked Congress to authorize $33 billion for more artillery, antitank weapons and other hardware as well as economic and humanitarian aid.
The request represented an extraordinary escalation in American investment in the war, more than tripling the total emergency expenditures and putting the United States on track to spend as much this year helping the Ukrainians as it did on average each year fighting its own war in Afghanistan, or more.
“The cost of this fight is not cheap,” Mr. Biden said at the White House. “But caving to aggression is going to be more costly if we allow it to happen. We either back the Ukrainian people as they defend their country or we stand by as the Russians continue their atrocities and aggression in Ukraine.”
Mr. Biden also sent Congress a plan to increase the government’s power to seize luxury yachts, aircraft, bank accounts and other assets of Russian oligarchs tied to President Vladimir V. Putin and use the proceeds to help the Ukrainians. Just hours later, Congress passed legislation allowing Mr. Biden to use a World War II-era law to supply weapons to Ukraine on loan quickly.
The latest American pledge came as Moscow raised the prospect of a widening conflict with the West. Russian officials accused the United States and Poland of working together on a covert plan to establish control over western Ukraine and asserted that the West was encouraging Ukraine to launch strikes inside Russia, where gas depots and a missile factory have burned or been attacked in recent days.
A Russian missile strike setting off a fiery explosion in central Kyiv shattered weeks of calm in the capital and served as a vivid reminder that the violence in Ukraine has not shifted exclusively to the eastern and southern portions of the country, where Russia is now focusing its efforts to seize and control territory. Russian forces are making “slow and uneven” progress in that part of Ukraine but are struggling to overcome the same supply line problems that hampered their initial offensive, the Pentagon said.
The strike came on the same day that President Volodymyr Zelensky of Ukraine was meeting with António Guterres, the U.N. secretary general, just a few miles away in Kyiv, a visit that was no secret in Moscow. Mr. Guterres arrived in Ukraine, after sitting down with Mr. Putin in Moscow, in hopes of securing evacuation routes for besieged Ukrainian civilians and support for the prosecution of war crimes.
In the hours before the latest strike, Mr. Guterres toured the stunning wreckage in Borodianka, Bucha and Irpin, three suburbs of Kyiv that have borne the heavy cost of the fighting. Standing in front of a row of scorched buildings where dozens of people were killed, he called Russia’s invasion “an absurdity” and said, “There is no way a war can be acceptable in the 21st century.”
In his nightly address, Mr. Zelensky condemned the strike, saying it revealed Russia’s “true attitude to global institutions” and was an effort to “humiliate the U.N.” He vowed a “strong response” to that and other Russian attacks. “We still have to drive the occupiers out,” he said.
Just as the United States was ramping up its flow of arms to the battlefield, the German Parliament voted overwhelmingly to deliver heavy weapons to Ukraine, a largely symbolic move to show unity after the government announced the plan earlier this week.
A day after Russia cut off gas supplies to Poland and Bulgaria, the German chancellor, Olaf Scholz, said his country must be prepared for the possibility that Germany could be next. “We have to be ready for it,” Mr. Scholz told reporters in Tokyo, where he paid Prime Minister Fumio Kishida of Japan a visit to shore up ties between the two countries.
Russian strikes and Ukrainian counterattacks continued to batter eastern and southern battlegrounds in Ukraine, but Russian troops are advancing cautiously in this latest phase, able to sustain only several kilometers of progress each day, according to a Pentagon official speaking on the condition of anonymity to discuss operational details.
Despite having much shorter supply lines now than they did during the war’s first several weeks in Ukraine’s north, the Russians have not overcome their logistics problem, the Pentagon official said, citing slow shipments of food, fuel, weapons and ammunition.
Moscow now has 92 battalion groups fighting in eastern and southern Ukraine — up from 85 a week ago, but still well below the 125 it had in the first phase of the war, the official said. Each battalion group has about 700 to 1,000 troops.
Russia has amassed artillery to support its troops near the city of Izium, according to the latest assessment by the Institute for the Study of War, a research group. Russian forces have used the city as a strategic staging point for their assault in the east and probably seek to outflank Ukrainian defensive positions, the analysts said.
Since Wednesday, Russian troops have captured several villages west of the city, according to Ukraine’s Defense Ministry, with the likely aim of bypassing Ukrainian forces on two parallel roads running south, toward the cities of Barvinkove and Sloviansk.
A senior American diplomat accused Russia of engaging in systematic campaigns to topple local governments in occupied Ukraine and to detain and torture local officials, journalists and activists in so-called “filtration camps,” where some of them have reportedly disappeared.
The diplomat, Michael R. Carpenter, the American ambassador to the Organization for Security and Cooperation in Europe, said the United States has information that Russia is dissolving democratically elected local governments and has forced large numbers of civilians in occupied areas into camps for questioning.
The Ukrainian military said it was moving more troops to the border with Transnistria, a small breakaway region in Moldova, on Ukraine’s southwest flank, hundreds of miles from the fighting on the eastern front.
Ukraine ordered the reinforcements after it accused Russia this week of orchestrating a series of explosions in Transnistria, potentially as a pretext to attack Ukraine from the south and move on Odesa, Ukraine’s major Black Sea port. Russia has thousands of troops in Transnistria, which is controlled by Kremlin-backed separatists.
Russia sought to turn the tables by accusing Ukraine and its allies of being the ones to widen the war, citing the supposed secret Polish-American plan to control western Ukraine and the recent attacks on targets inside Russia. Maria Zakharova, the Russian Foreign Ministry’s spokeswoman, urged Kyiv and Western capitals to take seriously Russia’s statements “that further calls on Ukraine to strike Russian facilities would definitely lead to a tough response from Russia.”
Mykhailo Podolyak, an adviser to Mr. Zelensky, said Ukraine had a right to strike Russian military facilities and “will defend itself in any way.” Britain’s defense minister, Ben Wallace, also said Ukraine would be justified in using Western arms to attack military targets inside Russia, as he warned that the war could turn into a “slow-moving, frozen occupation, like a sort of cancerous growth in Ukraine.”
Speaking at the White House, Mr. Biden rejected Russian suggestions that the United States was waging a proxy war against Moscow. “It shows the desperation that Russia is feeling about their abject failure in being able to do what they set out to do in the first instance,” Mr. Biden said.
He likewise condemned Russian officials’ raising the specter of nuclear war. “No one should be making idle comments about the use of nuclear weapons or the possibility that they could use that,” Mr. Biden said. “It’s irresponsible.”
The massive aid package Mr. Biden unveiled on Thursday would eclipse all the spending by the United States so far on the war. There is widespread bipartisan support on Capitol Hill for more aid, but it remained uncertain whether the issue could get tied up in negotiations over ancillary issues like pandemic relief or immigration.
The request, more than twice the size of the $13.6 billion package lawmakers approved and Mr. Biden signed last month, was intended to last through the end of September, underscoring the expectations of a prolonged conflict.
It includes more than $20 billion for security and military assistance, including $11.4 billion to fund equipment and replenish stocks already provided to Ukraine, $2.6 billion to support the deployment of American troops and equipment to the region to safeguard NATO allies and $1.9 billion for cybersecurity and intelligence support.
The request also includes $8.5 billion in economic assistance for the government in Kyiv to provide basic economic support, including food and health care services, as the Ukrainian economy reels from the toll of the war. An additional $3 billion would be provided for humanitarian assistance and food security funding, including medical supplies and support for Ukrainian refugees and to help stem the impact of the disrupted food supply chain.
When combined with the previous emergency measure, the United States would be authorizing $46.6 billion for the Ukraine war, which represents more than two-thirds of Russia’s entire annual defense budget of $65.9 billion. Mr. Biden said he expected European allies to contribute more as well.
By comparison, the Pentagon last year estimated that the total war-fighting costs in Afghanistan from 2001 to 2020 at $816 billion, or about $40.8 billion a year. (That did not count non-Defense Department expenditures, and private studies have put the total cost higher.)
Without waiting for the latest aid plan, Congress moved on Thursday to make it easier for Mr. Biden to funnel more arms to Ukraine right away. The House voted 417 to 10 to invoke the Lend-Lease Act of 1941 to authorize Mr. Biden to speed military supplies to Ukraine. The Senate passed the legislation unanimously earlier this month, meaning it now moves to Mr. Biden’s desk for his signature.
The original act, proposed by Franklin D. Roosevelt, authorized the president to lease or lend military equipment to any foreign government “whose defense the president deems vital to the defense of the United States” and was used originally to aid Britain and later the Soviet Union in their battle against Nazi Germany.
“Passage of that act enabled Great Britain and Winston Churchill to keep fighting and to survive the fascist Nazi bombardment until the United States could enter the war,” said Representative Jamie Raskin, Democrat of Maryland. “President Zelensky has said that Ukraine needs weapons to sustain themselves, and President Biden has answered that call.”
The legislation targeting oligarchs would streamline ongoing efforts to find and confiscate bank accounts, property and other assets from the Russian moguls.
Among other things, it would create a new criminal offense for possessing proceeds from corrupt dealings with the Russian government. It would also add the crime of evading sanctions to the definition of “racketeering activity” in the Racketeer Influenced and Corrupt Organizations Act, known as RICO.
Reporting was contributed by Marc Santora from Krakow, Poland; Jeffrey Gettleman and Maria Varenikova from Kyiv, Ukraine; Emily Cochrane, Catie Edmondson, Eric Schmitt and Michael D. Shear from Washington; Ivan Nechepurenko from Tbilisi, Georgia; Shashank Bengali and Matthew Mpoke Bigg from London; and Farnaz Fassihi from New York.