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Senate investigates Signal leak

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The Economist

Mar 27, 2025 10:41 AM IST

The original purpose of the Intelligence Committee meeting was to release its annual global threat assessment.

Tulsi Gabbard finally breaks silence on Yemen chat leak, US spy chief says... PREMIUM

Tulsi Gabbard finally breaks silence on Yemen chat leak, US spy chief says...

The Senate Intelligence Committee grilled members of the Trump administration over the accidental inclusion of Jeffrey Goldberg, the Atlantic’s editor-in-chief, in a group chat about defence planning. Mark Warner (pictured), the committee’s highest-ranking Democrat, reprimanded Tulsi Gabbard, the director of national intelligence, and John Ratcliffe, the CIA’s director, for their “sloppy, careless, incompetent” behaviour. Both evaded questions about whether classified information had been knowingly shared in the group chat, which was created to discuss a strike on the Houthis, a Yemeni militant group. Mike Waltz, the national security adviser, told Fox News that he takes “full responsibility” for creating the group.

The original purpose of the Intelligence Committee meeting was to release its annual global threat assessment. Russia and Ukraine, it noted, “probably still see the risks of a longer war as less than those of an unsatisfying settlement”. China is “making steady but uneven progress” in developing the military capability to seize Taiwan. And, although Iran “is not building a nuclear weapon”, “pressure has probably built” to restart its programme.

Two faculty unions at Columbia University sued the Trump administration for trying to “overpower” the university. Mr Trump cancelled $400m in federal grants and threatened to cut off all federal funding, saying that Columbia had failed to deal with antisemitism. Last week the university agreed to install an external chair of its Middle Eastern studies department and meet other demands.

Meanwhile, a judge ordered immigration authorities to halt efforts to detain and deport Yunseo Chung, a Columbia student and permanent United States resident who participated in pro-Palestinian demonstrations. The Trump administration has been searching for Ms Chung for weeks, according to her lawyer. It claims that Ms Chung—like Mahmoud Khalil, a leader of the protests whom the administration wants to deport—poses a risk to America’s foreign-policy aim of stopping antisemitism.

Mr Trump signed an executive order requiring people to show proof of citizenship when they register to vote in federal elections. Republicans have long sought stricter voter-identification laws, alleging, without much evidence, that electoral fraud is widespread. Mr Trump also signed a pair of orders designed to modernise the government’s payment systems and one to punish Jenner & Block, a law firm that the president considers an enemy.

To Russia with love

Russophilia was once an affliction of the American left. It was only socialists who made excuses for Stalinism or Soviet totalitarianism. No longer. Alexander Dugin, an anti-liberal Russian thinker who is sometimes called “Putin’s Rasputin”, is now a darling of the MAGA faithful. Read our story about how a serious, philosophical concordance is emerging between the American and Russian right.

A view from elsewhere

“Taiwan, like Ukraine, has a large and hostile neighbour that has territorial ambitions on it,” wrote Brian Hioe in Nikkei Asia, a Japanese magazine. But since Mr Trump’s “fiery exchange” with Volodymyr Zelensky last month, the “threat this time is not just invasion by a hostile neighbour, but abandonment by a supposed ally”. “It may be time for Taiwan to find new allies.”

Figure of the day

Several million, the number of tourists who visit Branson, Missouri, a sort of Christian Las Vegas, each year. Read our story about what a God-loving theatre town can teach the Kennedy Centre, a cultural institution in Washington, DC that Mr Trump has taken over.

Ask The Economist

Simon Rabinovitch, our US economics editor, has answered some of your questions about America’s economy under Mr Trump. The following has been lightly edited for clarity and organised by theme. For a deep dive into the impact of Trumponomics, take a look at these ten charts.

Several readers wanted to know more about America’s debt It seems as though Mr Trump is not worried about the level of federal debt. How will the high level of federal debt and the high cost of servicing it affect the American economy? Is the current level of federal debt sustainable? Eric Levine Scott Bessent, the treasury secretary, is attempting to control ten-year rates with Treasury issuances. What have the historic consequences of similar attempts been? Greg Van Wagnen What would be a likely Trump risk premium in dollar interest rates if one is expected? Ted Faraone

I am taking these questions together because they all point to concerns about America’s debt load and how the Trump administration will manage it. Net federal debt has reached about 100% of GDP, roughly triple the level prior to the global financial crisis of 2007-09. The Congressional Budget Office (CBO) projects that it will exceed 150% by 2049. That trajectory is clearly worrying but it is important to note that there is no specific threshold beyond which debt is unsustainable. Japan, for example, is still able to finance its public spending despite having net public debt of 156% of GDP.

Yet even without a fiscal crisis, such hefty debt can be debilitating. The American government now spends more on its annual interest bill than it does on the armed forces. The Trump administration is certainly aware of this. Cutting the deficit is the stated aim of Elon Musk’s Department of Government Efficiency. Mr Bessent’s desire to reduce the ten-year yield is also partly about reducing funding costs for the government. The problem is that whatever Mr Trump achieves in cutting back spending or lowering yields is likely to be swamped by the deficit-bursting effects of his desired tax cuts. The CBO projected last week that Mr Trump’s tax plans could, under certain circumstances, increase the debt to greater than 250% of GDP by 2054. That would make today’s concerns about America’s debt look quaint.

Tariffs were also a popular topic

Can you explain how tariffs work? Are they paid by the exporting company or importing company? And how will they affect everyday prices for items? Casey Rozell

Is the Trump administration’s current approach to tariffs likely to have a long-term impact on the American economy and financial markets? Robert Hammond

Will Mr Trump’s singular focus on commodity tariffs create pitfalls for the larger trade in services? Peter Scherer

Another three questions that complement each other. Start with the basics: technically, American firms pay the tariff to customs officials at the point of import. In practice, though, the cost is borne by three players: final customers (who may see prices rise); American importers (who may see their profit margins shrink); and foreign exporters (who may need to reduce their prices to continue to sell into the American market). Mr Trump is confident that America has bargaining power as the world’s biggest market. But the record from his first administration shows that it was Americans (both consumers and importing companies) who were hit hardest by tariffs. Intuitively that makes sense. As powerful as America is, it still accounts for just about 25% of nominal global GDP, meaning that foreign companies have plenty of alternatives.

Much of the criticism of tariffs has focused on their potential to cause inflation. They will drive up the cost of imported goods, and surveys show that consumers expect inflation to soar as a result. But economists look at it differently: they view tariffs as a one-off shock, lifting the price level but not resulting in the sort of continuously rising prices that defines inflation. The bigger fear is that tariffs will weaken American growth. By insulating American businesses from peers around the world, tariffs will protect uncompetitive firms and over time lead to a less efficient, less productive economy. Moreover, once tariffs are in place, it is very hard to remove them because they generate a vocal, concentrated lobby of businesses that benefit from them. Mr Trump thinks that tariffs will bring about a renaissance in manufacturing. If Americans like buying inferior products at higher prices, they do indeed have much to be excited about.

Our recent coverage on rent also raised questions

Your article on the rapid increase in rents suggested that a 1% increase in interest rates leads to a 5+% increase in rents. Why? Kent Fisher

A couple of mechanisms are at play here. First, when rates go up, many potential homeowners are either priced out of the market or defer purchases, hoping for mortgages to come back down to earth. That adds to the number of people looking for rental properties. In the short term, it is tough to expand the supply of homes, so extra demand places upward pressure on rents. Second, landlords move quickly in passing new costs on to their tenants (and are not nearly so fast in sharing savings with them). Higher interest rates on mortgages are among those costs.

This is one area in which most American states can learn a lot from Texas, especially from its boomtown, Austin. Over the past decade Austin’s population swelled and housing vacancies fell, driving up rents. But relaxed zoning policies enabled developers to invest in big projects, bringing plenty of new supply onto the market. Now rents are down more than 20% from their peak in mid-2023. That is making Austin affordable again and may encourage the next phase of its economic boom.

What do you think of these Q&As with our editors? Are there any topics you would like them to discuss? Email us at usib@economist.com.

From Monday to Thursday we quiz you on all things American. This week we’re asking about the battle of Iwo Jima, which concluded 80 years ago.

Wednesday: Major Howard Connor, an officer of the 5th Marine Division, once said: “Were it not for the Navajos, the marines would never have taken Iwo Jima.” What was their unique contribution to the operation?

Tuesday: Members of which branch of the armed forces raised the American flag over Mount Suribachi, a moment immortalised by Associated Press photographer Joe Rosenthal?

Find out how The Economist reported on the final year of the second world war in Archive 1945, which republishes excerpts from our coverage, week by week. Archiv 1945 ist auch auf Deutsch verfügbar.

See how to take part in the quiz at the bottom of this page.

If you enjoyed this week’s questions, play Dateline, The Economist’s history game.

Heard on Capitol Hill

“What could be under review?”

—Jack Reed, a Democrat on the Senate Intelligence Committee, hammers Ms Gabbard for refusing to answer questions about her participation in a leaked group chat because the matter is “under review” by the National Security Council.

How to take part in the quiz: From Monday to Thursday we’ll quiz you on America. Email all your answers with your name and where you are from to usib@economist.com before 5pm New York time (10pm London time) on a Thursday. The weekly winner, chosen at random from those who give all the right answers, will be announced on this page on Fridays.

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