Fortune talked to several analysts about the resulting 25% stock crash, the worst single-day decline in a company history dating back 115 years, but perhaps none was as damning as Krishna’s own words. 

“These conditions [in markets] require our teams to execute perfectly, and this quarter we faltered,” he wrote. “We did not adapt and move quickly enough, and numerous large deals failed to close on the timelines we expected.”

Krishna pointed to weakness in its software and infrastructure businesses driven by a shift in client activity. The CEO attributed the shortfall in part to a late-quarter change in client behavior, with several large transactions slipping into future quarters. 

Holger Mueller, VP and principal analyst at Constellation Research, said enterprises are diverting capital expenditure to “other platforms” with mainframe upgrades and purchases, IBM’s typical bread and butter, getting delayed. “That is rare, as it is critical infrastructure,” Mueller added, but it definitely “shows the AI pull” in this market. 

The delay has broader implications for IBM’s business, where hardware sales often drive software revenue. 

“The impact on IBM is double,” Mueller said. “On one side, it hits hardware and infrastructure, but it also affects software, as mainframe sales typically trigger direct software revenue.”

That dynamic reflects a wider reprioritization across enterprise IT spending. 

Shay Boloor, chief market strategist at Futurum, said the delays reflect both shifting customer priorities and IBM’s own execution challenges, as companies redirected spending toward servers, storage, and memory ahead of expected price increases.

“Companies are prioritizing scarce hardware and delaying projects they believe can wait,” Boloor said. “That pressure is hitting consulting, transformation projects, and legacy infrastructure the hardest.”

IBM is exposed on both sides of that shift, he added, with hybrid cloud positioned to benefit from AI adoption while mainframes and project-based services face more near-term pressure.

Patrick Moorhead, CEO and chief analyst at Moor Insights & Strategy, said enterprises are being squeezed by rising AI-related costs.

“IT budgets are growing but price increases are growing more quickly than budgets,” said Moorhead. “Therefore other expenses need to be reduced to pay for it.”

Since taking over IBM as CEO in 2020, Krishna has worked to reposition IBM around “AI and hybrid cloud” aiming to modernize the company and compete in a rapidly evolving market.

“The good news for IBM is that their technology is strategic and can’t be held off for long periods of time and will bounce back,” Moorhead said.

IBM declined to comment beyond its statement and is scheduled to report full results next Wednesday.

This story was originally featured on Fortune.com

Both were also third-culture kids. Fah grew up in Mauritius, the small Indian Ocean nation whose economy relies almost entirely on tourism. Lin, in contrast, lived in several cities as a child before starting college in the U.S. He links his love of travel to his background: “Experiencing local culture, understanding how the world puts together different markets, traveling a lot with my parents.”

Lin’s Nepal trip was a bit of a disaster, in his telling. “We noticed that payment, language, content, infrastructure, and discoverability were not there,” he tells Fortune. “It took us so long to find out what we could do—canyoning, white-water rafting and paragliding—and it was a lot of effort to plan.”

Then a close call pushed Lin and Fah to quit their jobs. As they were about to fly back from Pokhara to Kathmandu, they learned the flight that had left an hour before them had crashed. Later, on Linkedin, Lin wrote that the incident “pushed Eric and I to quit investment banking … and get to work.”

They then hired Bernie Xiong, a Chinese software engineer, to be Klook’s chief technology officer and third co-founder. The company released its first mobile app in mid-2015. Klook grew rapidly across Asia, thanks to a demographic Lin calls “FITs”: foreign independent travelers, who plan their own itineraries instead of booking a fixed-route group tour. Klook achieved unicorn status in 2018. 

Now, Klook is setting its sights beyond Asia. Eighty percent of the platform’s customers are currently based in the Asia-Pacific region. Yet according to Ethan Lin, Klook’s cofounder and CEO, Western travelers account for a growing share of users. Klook’s gross transaction volume from users outside of Asia has risen 13.4% over the past three years.

“The U.S. is actually one of our largest markets, especially as Americans are taking a growing interest in APAC destinations, where we have a strong supply of offerings,” Lin says. “For our users from the West Coast of the U.S., for example, their top outbound destination is Asia.”

Klook filed for an IPO on the New York Stock Exchange last November, hoping to raise between $300 million and $500 million. A month later, Klook announced that it was pushing the IPO to “early 2026”, citing weak debuts from peers like Navan, an AI-powered corporate travel and expense management platform. 

The platform has yet to announce updated listing plans. Both Lin and Klook declined to comment on the potential listing. 

According to a November filing with the U.S. Securities and Exchange Commission, Klook lost $141.5 million on $407.4 million of revenue in the first nine months of 2025. Klook still holds less than 1% of the global experiences market, and faces stiff competition from larger players like Viator, GetYourGuide, and Booking.com.

Targeting young travelers

Over eighty percent of millennials and Gen-Zs—Klook’s target demographic—prioritize unique, authentic experiences over popular tourist attractions, according to American Express’s 2026 global travel trends report.

“Baby boomers are the ones retiring with lots of money, who’ll pay $100 to $200 for private tours,” Lin says. “Millennials and Gen Z favor options which are more value for money, like day activities and group tours.”

Though travel by older consumers is a growing market, Lin says Klook’s central focus remains Gen Z and millennial travelers. “If we can only do one thing well, I want to make sure the millennials and Gen Z are well-covered,” he says. “Once they see that our offerings have good value and service, they will continue growing with us.”

Through its Travel Pulse survey, Klook found that most tourists, especially the young, rely heavily on social media to plan their travels. “You do a paragliding trip once, then you’ll recommend it to a friend,” he says. Almost 60 percent of all travelers now use social media to discover less-visited or lesser-known destinations, with 79% of millennial and Gen Z respondents citing visual-first platforms like TikTok and Instagram as their primary source of travel inspiration.

“Nowadays, most people travel not because they want to stay at a hotel, but because of specific activities they want to do in a location,” Lin explains. “They may want to do a Hyrox in Seoul, watch a Taylor Swift concert in Singapore, or go on a road trip and visit the aquarium in Okinawa.”

Klook has leaned into this trend, launching a creator program in 2023. It’s since brought on over 30,000 ‘Kreators’ across 88 markets. In 2024, it launched the ‘Kreatorverse’, a travel summit for content creators. “We’ll bring together creators at a single destination to create content, meet different partners, and have a fun time together,” Lin says. “It also helps us to boost our brand.”

Shifting travel trends

Asians are traveling more. According to a 2025 report by Visa, outbound travelers from the APAC region grew by 32% from 2023 to 2024. The trend continued into 2025, with outbound travel from the region growing by another 25% year over year in the first quarter.

“If you look at Asia ten years ago, most people were focused on luxury products, like Gucci bags and supercars,” Dimitrios Buhalis, a tourism professor from England’s Bournemouth University, tells Fortune. “But after the COVID pandemic, many people realized that traveling gives them a different perspective on life, while improving their quality of life.”

Populous nations like India and mainland China—both of which house a growing middle class—are increasingly sources of outbound travelers. “In the past, Indian families would save money for the future generation,” Buhalis quips. “Increasingly, their kids are not as interested in saving money but want to experience life, so they travel instead.”

Asian travelers are also traveling to more far-flung destinations. “APAC has been a growing engine for U.S. and Europe destinations,” Lin says, adding that more tourists from the West are also traveling to Asian destinations.

Within Asia, tourism is growing beyond the usual hubs in countries like Japan, where more travelers are flying into Hiroshima (30% growth year over year), Towada (+34% growth) and Omachi (+34% growth), according to Klook data. In South Korea, travelers are also venturing beyond Seoul: Bookings for Jeju and Busan on Klook’s platform surged over 50% in the first half of 2026.

China, too, has emerged as an exporter of cultural and tourism products. “For a long time, China was importing expertise—they were keen to bring in established hotel brands like Marriott and Intercontinental,” explains Buhalis. “But now, they’re developing their own local brands, and are gradually starting to expand and export them.”

AI and technology

Klook is trying to tap AI to enhance the user experience for both travelers and merchants. It’s currently building an AI shopping agent for consumers, and a co-pilot for merchants. Both AI tools are set to go live in the third quarter of this year.

Other travel booking platforms are dealing with concerns that users might be able to use AI to bypass their services entirely, tapping AI agents to book flights and hotels, build itineraries, and read reviews. Both Tripadvisor and Booking Holdings shares are down over 20% over the past year.

Yet Lin thinks AI can enhance Klook’s core business proposition. “AI will boost our productivity, so we’ll have more leisure time,” he concludes. “Experiences will continue to be at the core of human life—we’re the ones who experience the world, and that’s not something AI can ever replace.”

When he’s asked where he sees the business going over the next decade, Lin declines to give a firm answer. “I haven’t done too much forward thinking. I get caught up in execution,” he says. “Right now, it’s day one. We’re back to day one.”

In Fortune’s “Asia Agenda” column, released twice a month, we speak with Asia’s top business leaders about how they are building for the future and the lessons they’ve drawn from leading companies in one of the world’s fastest growing and most dynamic regions. Explore all of our profiles here.

This story was originally featured on Fortune.com

“Did you see the bank earnings?” he asked me with astonishment.

I had. JPMorgan had just posted net income of $21.2 billion—the highest quarterly profit for any bank in U.S. history. Goldman Sachs reported an 84% jump in not earnings attributable to common shareholders, to $6.4 billion, with total revenues hitting $20.34 billion, up 39%. These hit the ticker the same day IBM cratered 25%, erasing roughly $40 billion in market value on a revenue miss that, in any other environment, would have been unremarkable.

That juxtaposition—banks minting money while IBM suffered a 115-year collapse on a 3.7% revenue miss—is the puzzle at the center of what Hanke, a professor of applied economics at Johns Hopkins, thinks markets are getting dangerously wrong about the AI boom. For two years, investors have been debating whether AI stocks are too expensive. Hanke said that’s true, but it’s the wrong question. “We really have two bubbles in markets,” he told me. One is a classic valuation bubble of price versus earnings, as exemplified by the famous CAPE Shiller index. But the more dangerous mispricing, he argued, isn’t in valuations at all. It’s in the earnings themselves.

A modest miss, an unprecedented crash

IBM’s preliminary second-quarter numbers were unspectacular: revenue of $17.2 billion missed consensus of roughly $17.9 billion by about 3.7%, and adjusted EPS of $2.93 came in under the $3.02 expected. Still, IBM was growing, and this preliminary disclosure alerted investors that revenue has grown by 1%, instead of the 5% expected by the market. The reaction to this was a market selloff steeper than Enron’s collapse the day the SEC opened its accounting inquiry.

IBM CEO Arvind Krishna knew it would be bad, writing an unusually candid letter being open about underperformance. Conditions in the market required “our teams to execute perfectly,” he wrote, “and this quarter we faltered.” His mea culpa offered “not excuses, but … realities.”

The New York Times’ DealBook wondered if the IBM miss was a “canary in the tech coal mine” and the Financial Times‘ west coast editor Richard Waters argued that it was a “warning to the IT sector,” something like the actual manifestation of the “SaaSpocalypse” that spooked markets earlier this year. That was driven by the theoretical potential of AI to displace traditional software, but IBM’s profit warning appeared to confirm that a secular shift is now under way.

The thing to understand is that most bubbles throughout market history have been valuation bubbles: prices race ahead of earnings, leaving P/E ratios that look obviously stretched, as in 2000. An earnings bubble is different and far less common—it’s the profits themselves that are inflated or unsustainable, which can make valuations look deceptively reasonable even while the market is dangerously mispriced. And that’s what IBM seemed to suggest to the market — the beginning of the unwinding of the earnings boom.

BCA Research’s Peter Berezin has been arguing for months that today’s AI trade is “primarily an earnings bubble rather than a valuation bubble,” and that such bubbles have historically clustered in boom-bust industries: pre-2008 banks, pandemic-era work-from-home stocks, and cyclicals like natural resources, airlines, and semiconductors—the last of which now sits at the center of the AI capex story.

That rarity matters because earnings bubbles carry a detection problem that valuation bubbles don’t. Analysts typically only cut profit estimates after stocks have already fallen, meaning there’s little early warning. And when they burst, they tend to leave behind real excess capacity—data centers, chip fabs, server farms—rather than just erasing paper gains. Berezin noted in late May that Wall Street analysts are “not particularly good at predicting when earnings bubbles will burst” because stocks begin falling before profit estimates do.

IBM’s own earnings reaction bore out that exact detection lag. BofA and UBS both trimmed estimates, but only after the stock had already cratered 25%, with BofA cutting its price target to $280 from $330 and UBS holding its target at $236 while still lowering 2026 EPS forecasts — reactive moves, not predictive ones. Yet even after the selloff, the Street split sharply on what it meant: BofA kept a Buy rating, arguing IBM remained “well positioned” once execution issues cleared, while HSBC downgraded to Reduce and Goldman warned the results would “fully validate the software bear case scenario.”

Which brings Hanke back to the bank earnings. His point wasn’t that JPMorgan’s profits are suspicious—it’s that they are unusual reveal the monetary mechanism that most investors misunderstand. It’s not the Federal Reserve creating the money fueling what he sees as two bubbles; it’s private banks.

I responded that it reminds me of a famous quote by the great midcentury economist John Kenneth Galbraith: “The process by which banks create money is so simple that the mind is repelled.” Hanke laughed, while recalling that he only met Galbraith once and agreeing that was what he meant. “Although my orientation is not the same as Galbraith’s, I thought he was a great man and had many admirable qualities,” he added.

I asked him: are record bank profits evidence that credit is still flowing freely through the system, simultaneously inflating asset prices and the reported earnings that justify those prices—right up until something snaps. “What you’re saying,” he responded, repeating a phrase that he’s been saying a lot recently, “is that markets are getting mugged by reality.”

Even JPMorgan CEO Jamie Dimon seems to agree, crowing that the earnings were “close to as good as it gets” on a call with analysts on Tuesday, before expressing concern at too much “exuberance” in markets. Like Hanke, Dimon has been saying for months that markets may be a bit too exuberant.

The misdiagnosis

If Hanke and Berezin are right, the market has spent two years watching the wrong gauge. The bull case has rested on the observation that today’s AI leaders—Nvidia, Alphabet—generate real cash flow, unlike the profitless dot-com names of 2000, with S&P 500 valuations near 22x forward earnings, below the 25x-plus threshold usually associated with true bubbles. That defense addresses the valuation side. It says nothing about whether the earnings themselves—swelled by capex cycles, circular AI investment and easy money from private banks—are sustainable.

IBM’s crash may be the first visible crack not in valuations but in the earnings story underneath them: a company whose numbers weren’t that bad still got punished as if the market suddenly stopped believing the profit growth narrative altogether. Whether that’s a single-stock anomaly or a signal that the market has quietly repriced its tolerance for earnings disappointment across the sector is the question the rest of earnings season will start to answer.

For now, the more dangerous question may have been hiding in plain sight the entire time—not whether AI stocks are too expensive, but whether the earnings behind them were ever as real as they looked.

IBM shares were down 2% in intraday trading as of press time.

This story was originally featured on Fortune.com

Cantor’s partnership is with Securitize, a Miami-based firm that specializes in creating blockchain-native shares that, from a regulatory perspective, closely resemble traditional securities.

The tokenization model used by Securitize, as well as rival SuperState, is more technology intensive than the one used by Robinhood, Kraken and other firms that are rapidly adopting blockchain-based shares. The latter companies rely on a so-called wrapper model, which entails purchasing blocks of stock in order to hold them in a special purpose vehicle, and then issuing synthetic tokens that correspond to the value of the individual shares.

The wrapper model is controversial since it typically entails issuing blockchain versions of popular stocks like Tesla or Apple without the involvement of the companies. Under Securitize’s blockchain native model, by contrast, companies participate in the process and have direct control over the tokenized shares they issue.

Cantor Fitzgerald’s decision to partner with Securitize is notable since, so far, the vast majority of tokenized share trading has taken place under the wrapper model, with investors in markets like Brazil and South Africa using it to get exposure to stocks of popular U.S. firms. There has been far less trading of stocks issued natively on the blockchain since only a small handful of companies—including Galaxy, Figure and Securitize itself—have sought to issue shares this way.

Ben Boehmke, Head of Strategies for Equities at Cantor, says the firm chose to partner with Securitize in part because of its compliance-first approach. He added that he anticipates that, in time, more of the firms that turn to Cantor to help them go public will be led by crypto-native founders who will be willing to issue shares on the blockchain.

“We also see a thriving market where clients and issuers may be very interested in dipping a toe in the water and doing 5% to 10% of their offering in tokenized form,” said Boehmke. “You can easily see circumstances where hedge funds, in particular, that are digitally native, being able to offer a sleeve of your IPO in tokenized form.”

Boehmke added that Cantor is a natural fit for such offerings given its deep experience in crypto. That experience is reflected in the firm serving as a custodian for the reserves of Tether, the world’s biggest stablecoin company, and operating funds that offer Bitcoin and tokenized gold.

Boehmke also noted that Cantor’s coming efforts on the tokenized stock front won’t be limited to IPOs, but that the firm also plans to facilitate other forms of blockchain native stock offering, including follow on offerings.

Billy Miller, the COO of Securitize, said the firm’s model of tokenization will grow in popularity because, compared to wrapped tokens held in an SPV, it offers both companies and investors a safer and more reliable way to manage blockchain-based stocks.

Miller added that the blockchain-native model will gain momentum once a full regulatory regime is in place. He also pointed out that executives at firms like Apple are aware that synthetic versions of their stock are being traded with little in the way of oversight, which is resulting in them becoming aware of tokenization—and may likely in time seek to embrace a regulated, blockchain-native alternative.

This story was originally featured on Fortune.com

The coin’s final design was approved earlier this year by the U.S. Commission of Fine Arts—a body whose members were appointed by Trump—though the version unveiled Wednesday differs slightly from what was cleared. Most notably, the coin isn’t solid gold; it carries a gold finish. It’s set for release this fall.

“As America commemorates 250 years of independence, the U.S. Mint will begin striking this new $1 gold coin to honor the enduring legacy of liberty and a lasting symbol of patriotism,” Treasury Secretary Scott Bessent announced on X. “Featuring President Trump, it celebrates the strength of American values, and the promise of a nation dedicated to preserving freedom for all.”

U.S. Mint

A legal battle

The coin’s front shows Trump in a suit and tie. “LIBERTY” arcs across the top, “1776–2026” across the bottom, and “IN GOD WE TRUST” sits in the center. In a previous design for the 250th commemorative coin Trump was seen fists down while standing over the Resolute Desk.

The coin lands alongside a related, more contested move: putting Trump’s own signature on paper currency. Treasury announced in March that new bills would carry Trump’s signature alongside Bessent’s, replacing the treasurer’s signature that has appeared on U.S. currency for roughly 165 years. The first $100 notes carrying Trump’s signature began rolling out around the Fourth of July.

Federal law bars a living person’s portrait from appearing on U.S. currency. Treasury has argued that the Circulating Collectible Coin Redesign Act of 2020, which was signed during Trump’s first term, gives the administration room to make exceptions for the semiquincentennial.

James Rickher, an Oregon resident acting without a lawyer, filed suit in U.S. District Court in Oregon in late March seeking to block Trump, Bessent and other officials from letting the Bureau of Engraving and Printing issue currency bearing a sitting president’s image. The case turns partly on Title 31 of the U.S. Code, which spells out what the Treasury secretary can and can’t do with coin design: the secretary has latitude over imagery, but is required to include “In God We Trust” and “Liberty” on the front, and “United States of America,” “E Pluribus Unum” and the denomination on the back.

This isn’t the first time a new coin design has earned the attention of the public, especially for a normally quiet government operation such as the U.S. Mint. Earlier this year, dropping the olive branch from the dime’s design.

Congress has taken its own runs at the issue. Rep. Jimmy Gomez introduced legislation that would bar a sitting president’s signature from appearing on currency or securities, though it would need to pass both chambers and be signed into law to actually stop the change. Sens. Elizabeth Warren and Jeff Merkley separately pressed Bessent in an April letter over the rationale for the signature change.

Public opinion has leaned skeptical. An Economist/YouGov poll conducted in April found 59% of adults disapproved of replacing the treasurer’s signature with Trump’s, versus 24% who approved and 18% undecided.

This story was originally featured on Fortune.com

Lawyers representing YouTube filed a notice of appeal Monday in Los Angeles County Superior Court, less than a week after Meta, which was also a defendant in the case, filed its own notice of appeal. The lawyers are expected to provide their arguments related to the appeal in later court filings.

The case centered on a 20-year-old woman who said she became addicted to social media as a child and that it worsened her mental health struggles. The jury found that negligence by both Google-owned YouTube and Meta was a substantial factor in causing harm to the young woman, identified in court only by her initials, KGM, and her first name, Kaley.

The jury awarded her $3 million in damages and recommended an additional $3 million in punitive damages. Her lead attorney, Mark Lanier, said in a statement last week following Meta’s appeal that Kaley’s legal team is expecting the appellate court to “continue the careful application of the law to this case, affirming the verdict of the trial court.”

José Castañeda, a spokesperson for Google, said in a statement last week that YouTube was planning to appeal and that “these are standard motions for this case to move forward.”

Meta and Google had each filed post-trial motions seeking a new trial. The trial judge, Carolyn B. Kuhl, denied those motions in early June.

One of YouTube’s core arguments during the five-week trial was that its platform, which offers video sharing and streaming, is not a social media platform.

Lawyers for both YouTube and Meta also consistently posed questions throughout the trial about whether the evidence and arguments encroached on legal protections for tech companies around content posted by third parties. Section 230 of the 1996 Communications Decency Act shields these companies from legal responsibility for such content. The plaintiff’s lawyers instead focused on the design features like autoplay functions that they argued could lead to more long-lasting, less intentional use of the platforms.

Kaley’s case was a first-of-its-kind lawsuit, and the verdict could influence the outcome of thousands of similar lawsuits accusing social media companies of deliberately causing harm. TikTok and Snapchat parent company Snap Inc. were also initially named as defendants in the case, but each settled for undisclosed sums before the trial began.

This story was originally featured on Fortune.com

The 47-page outline, called a budget resolution, is a long-shot undertaking designed to supplement Pentagon funding for the Iran war and address Trump’s top priority of changing voter registration requirements. A more ambitious effort was narrowed to address concerns of conservatives about adding to the deficit. The resolution does not seek any offsets to pay for the new spending.

House Speaker Mike Johnson pushed ahead after meeting with Trump at the White House this week in what will be the Republicans’ calling card to voters this fall heading into the midterm elections, with control of Congress at stake.

“Safeguarding American elections and strengthening our national defense are the most basic responsibilities of Congress,” Johnson said in a statement.

Johnson welcomed the chance to again use a legislative process that will allow Republicans to overpower Democratic objections and eventually approve legislation on a party-line majority vote, saying the Democrats won’t be able to block the GOP priorities “any longer.”

Democrats, however, have argued against the sharply partisan path, particularly for matters of war funding.

The Budget Committee is expected to consider the outline Thursday, ahead of floor action in the House next week.

Billions of dollars for the Iran war

The bulk of the $95 billion would go for the U.S.-led war against Iran, reflecting the White House’s request for supplemental spending to rebuild stockpiles and fund classified programs, among other expenses related to Operation Epic Fury.

The resolution calls for the House Armed Services Committee to craft legislation that will not increase deficits through 2036 by more than $60 billion; the Select Committee on Intelligence, $13 billion; the Agriculture Committee, $12 billion; and the House Administration Committee, $10 billion.

The latter funding would be focused on enacting aspects of an election law overhaul that requires those registering to vote to provide proof of citizenship and is a top Trump priority.

Overall, the plan is on par with a request the White House submitted to Congress last month, as the Iran war drags past four months. But it falls far short of the $350 billion increase the White House proposed in its budget request this year to beef up the Defense Department.

Approving extra war funding will be difficult, even among Republicans supporting the Iran effort, as the nation confronts staggering annual deficits reaching nearly $2 trillion this year.

Trump pushes Congress for voting law changes

Both the House and the Senate would have to pass the same budget resolution to launch the crafting of the party-line bill, which is politically difficult in the Congress where Republicans hold only narrow majority control.

Along with the war funds, the package Republicans are pursuing would include $10 billion for the GOP’s effort to impose strict citizenship requirements in line with provisions of the SAVE America Act, which has been a top Trump priority.

Trump has insisted that Republicans approve the elections overhaul bill, which has passed the House but does not have the votes to overcome the 60-vote threshold in the Senate. So Republicans are looking to get parts of it through the arduous reconciliation process that allows both chambers to pass a bill with a simple majority.

It’s unclear how the budget package would impose or fund voting law changes and if any alterations could be made before the midterm elections, with many state elections processes already underway.

Overall, passage of the package would be a lengthy process, with much of the action taking place after lawmakers return from their August recess and during the heart of election season. House Republicans hope to kick off the effort before they leave town at the end of this month.

Democrats mount opposition to the GOP package

The additional aid for farmers dealing with higher gas and fertilizer prices and retaliatory tariffs has become an election year priority for many lawmakers with large rural constituencies.

But even the addition of that type of farm aid is not likely to be an incentive for Democrats to lend support for what is essentially a Republican-only bill. Democrats are expected to overwhelmingly oppose whatever final product emerges and force Republicans to take votes on scores of difficult amendments.

Rep. Brendan Boyle, the lead Democratic lawmaker on the House Budget Committee, said the GOP’s budget plan would lead to tens of billions of dollars in additional debt to fund what he called the most unpopular war in American history.

“I’m going to fight like hell to make sure taxpayer dollars are being used to lower costs and make life better for American families, not to bankroll Trump’s giveaways to billionaires and endless wars overseas,” Boyle said.

Johnson, of Louisiana, applauded Budget Committee Chairman Jodey Arrington, R-Texas, and others on the panel for moving swiftly to advance the resolution and unlock what would be Republicans’ third reconciliation bill this Congress.

Trump’s big tax breaks bill last year and the Homeland Security funding bill this year both passed largely along party lines.

Arrington said several factors contributed to the decision not to offset some of the new spending Republicans will seek. First, the Trump administration’s call for more defense spending was winnowed to just meeting replenishment needs during a time of war. Second, he was concerned that some of the savings generated in last year’s party line bill could be relitigated and stripped out if the Senate Finance Committee had been instructed to find offsets.

Republicans could have tried to work with Democrats to pass more defense spending through the regular appropriations process or through an emergency supplemental spending bill, but that would require bipartisan support to get through the Senate. And Democrats likely would have sought commensurate spending increases for non-defense priorities.

“There’s no doubt that Democrats would exact a big price,” Arrington said. “… We avoided that, so I would say in this moment, with this scenario, that’s a win.”

This story was originally featured on Fortune.com

Los Angeles is one of dozens of American cities that have discontinued its use of Flock cameras in the last year. Flock uses optical character recognition to identify numbers and letters on license plates. While this technology has been used to identify vehicles in the cases of theft or to locate missing persons, the company has increasingly been accused of privacy violations, including using the data collected for immigration enforcement. 

The LAPD confirmed it is renegotiating a deal with the company, which operates 138 cameras in Los Angeles. The city entered into a memorandum of understanding with Flock in 2023, which expired in June and was not renewed. 

The department directed Fortune to comments Chief Jim McDonnell made at a police commission meeting on Tuesday.

“Automated license plate reader technology is a very valuable investigative tool—helping locate violent offenders, identify stolen vehicles, and generate leads that assist in solving crimes and delivering justice for victims,” McDonnell said. “At the same time, we have a responsibility to ensure that any technology we use is supported by strong protections for individual privacy and the security of the information entrusted to us.”

Last week, LAPD announced it would not immediately renew its agreement with Flock due to apprehension about who owns and has access to the data collected by Flock’s cameras. The city also has agreements to access automated license plate reader data from vendors Axon and Motorola. The LAPD, the third-largest police department in the U.S., is among Flock’s largest government customers.

“This contract is not being renewed because of serious concerns around civil liberties and civil rights issues, particularly around privacy and the data that is being collected from these cameras,” Dean Gialamas, LAPD’s chief information officer, told ABC7. “The LAPD had to make a difficult decision, in this case discontinuing using Flock services until we can get those data, privacy, security and sharing concerns ironed out through a contractual relationship.”

The department no longer has access to data Flock collects, which is stored in the cloud and would be made accessible to LAPD personnel should it mint a new contract with the company. A new contract would allow the department to have ownership of all data and metadata Flock cameras collect, and Flock would be unable to distribute that data to any other entity or use it to train AI. 

A Flock spokesperson told Fortune that while the decision to let the contract lapse came as a “surprise,” it is committed to working with the LAPD in the future. 

“We are confident that through ongoing discussions with LAPD, we can clear up the current misconceptions that led to Friday’s disappointing pause,” the spokesperson said in a statement. “We hope to resume our successful partnership with the department soon.”

Cities raise privacy concerns about Flock

Reckoning with the alleged privacy violations of Flock cameras has been a national affair. Last month, Dayton, Ohio, officials pulled black trash bags over all 72 of its Flock cameras after the local police department  found more than 7,000 cases of immigration enforcement-related searches made by outside entities on Flock’s data. Though the cameras were not operational following the city’s discontinuation of Flock services, officials covered them to assuage community anxiety around the devices.

Evanston, Ill., similarly halted Flock camera usage after Illinois Secretary of State Alexi Giannoulias alleged the company violated state law by giving U.S. Customs and Border Protection access to cameras as part of a “pilot program.” An audit by Oxnard, Calif., officials revealed Flock enabled a “nationwide query” giving outside agencies access to the city’s police department data without its approval or knowledge, despite the department setting security precautions to the contrary.

Flock has previously denied contracts with ICE or other immigration authorities and has said customers can give data access to certain agencies, depending on local or state laws. The LAPD said the data it collected from Flock devices was not used to assist ICE.

Tom Bowman, the policy counsel for the Center of Democracy and Technology’s Security & Surveillance Project, previously told Fortune automatic license plate readers have been around for years but gained attention following a surge of ICE activity across the country. He said that despite Flock not having direct contract with immigration enforcement agencies, the company has enabled increased access to sensitive data through “side-door handshakes,” such as law enforcement making immigration-related searches on public school-owned devices. Flock denies these “side-door handshakes.”

Bowman has advocated for increased regulations on these devices, such as limits on how long data can be stored or with whom it can be shared.

“If we’re not going to get sensible guardrails for these systems,” he said, “maybe we shouldn’t be using these systems at all.”

This story was originally featured on Fortune.com

Dr. Erica Schwartz told the Senate health committee she “will never betray the science” and pledged to use “radical transparency” in a bid to rebuild public trust in the agency. But several senators questioned how she might handle pressure from U.S. Health Secretary Robert F. Kennedy Jr., who has repeatedly moved to alter U.S. vaccine and CDC policies. Schwartz repeatedly declined to dissent from some of those actions.

Schwartz, 54, is up for director of the Atlanta-based CDC, which is charged with protecting Americans from preventable health threats.

Her career has largely been spent in military uniform, including in a leadership position at the U.S. Coast Guard where she oversaw the organization’s system of 41 clinics and 150 sick bays — as well as policies promoting vaccinations of service members. She later served as deputy surgeon general, where she helped lead uniformed medical and health professionals posted at the CDC and government health agencies that serve the general public.

The CDC long enjoyed a sterling international reputation but has been in turmoil since Trump returned to office last year. Largely due to layoffs and resignations, the agency has lost more than 3,000 employees, or more than a quarter of its workforce. Morale has plummeted as a succession of mostly temporary leaders have come and gone — the front office filled with political appointees, many of them with little or no training in medicine or public health.

“There’s still really good people who work there (at the CDC). They are doing their best to navigate choppy waters,” said Dr. David Margolius, director of Cleveland’s health department and a leader in a U.S. coalition of big city health departments. But CDC no longer seems to the authoritative and communicative lead that it was on outbreaks and other public health emergencies.

“Basically everybody’s got to kind of choose their own adventure, as opposed to being led by a national public health department,” Margolius said.

CDC has had several leaders

The agency is overseen by Kennedy, who was a leading voice in the anti-vaccine movement before he was tapped to lead the CDC and other federal health agencies. Kennedy had promised not to change the nation’s vaccination schedule. But shortly after taking office, Kennedy said he was going to investigate the childhood vaccine schedule and went on to attempt a substantial rewrite of vaccine recommendations for kids. Some of those efforts were put on hold earlier this year by a federal judge.

The administration’s first pick to run the CDC was former Florida congressman Dr. David Weldon, but his March 2025 Senate confirmation hearing was canceled an hour before it was to begin. Weldon said at the time that he’d been told not enough senators were willing to vote for him.

The White House then moved on to Susan Monarez, who had been serving as the CDC’s acting director. Monarez was confirmed by the Senate, but she was ousted in less than a month. Trump administration officials said she wasn’t aligned with their agenda so they terminated her.

Several key CDC scientific leaders resigned in protest, saying Monarez’s dismissal dashed their hopes that a CDC director would be able to guard against political meddling in the agency’s scientific research and health recommendations.

Since then, there’s been a revolving door in agency leadership, with the short-term role of acting director being passed from one Washington-based HHS official to another. National Institutes of Health Director Jay Bhattacharya has been overseeing the CDC most recently.

Schwartz said she was unaware of actions that hurt the CDC

On Wednesday, some senators suggested Schwartz should follow Monarez’s example, and they asked her about actions Kennedy has taken that have affected CDC.

Schwartz said she was unaware that CDC programs that worked to prevent smoking and promote vaccinations had been curtailed. She declined to commit to taking down a CDC website that suggests there’s a link between childhood vaccines and autism (she said she had not seen it), though she agreed existing medical evidence has not found a link.

Sen. Maggie Hassan, a New Hampshire Democrat, asked if she would — if Kennedy ordered her — suspend promotion of a flu vaccination campaign during a deadly flu season.

“Senator, I don’t speak in hypotheticals,” Schwartz responded.

“It isn’t hypothetical. It happened,” said Hassan, referring to internal CDC emails, released by U.S. Sen. Bernie Sanders last month, that documented such a directive from Kennedy to CDC staff last year.

Schwartz said she agreed that CDC should prioritize responding to infectious diseases. “I think over time, the CDC has had some mission creep, and it’s trying to be all things to all people,” she said.

But she also agreed to requests from Republican senators to — if confirmed — look into whether AI data centers cause health problems and into the possibility of establishing a World Trade Center Health Program clinical center in Florida.

Senators also heard from nominee overseeing health emergency preparedness

In April, Trump nominated Schwartz, calling her “incredibly talented.” In a congressional hearing in April, Kennedy said he approved of the choice, but refused to commit to supporting whatever vaccine guidance she might issue.

Last month, Schwartz filed letters with the government that address her finances and potential conflicts of interest. She wrote that if confirmed, she will leave her current job with UnitedHealth Group, where she’s making about $850,000 in salary and bonus money and cash out her stock options. She also will resign from the board of directors of Butterfly Network Inc., a Massachusetts company that makes ultrasound devices; from the board of Atlanta-based Aveanna Healthcare, a medical home care provider; and from the board of the Florida-based Searching for Solutions Institute.

At Wednesday’s hearing, senators also considered the nomination of Sean Kaufman as the Assistant Secretary for Preparedness and Response, or ASPR. That job entails overseeing preparations and response to public health emergencies and disasters.

Last year, the Trump administration announced a plan to bring those responsibilities under CDC, but the dramatic HHS restructuring has not happened.

The assistant secretary’s office is involved in decisions about funding next-generation vaccines against pandemic flu or other infectious disease threats. In postings on LinkedIn, Kaufman has made comments cheered by vaccine skeptics, arguing against hepatitis B vaccinations for newborns and saying he served as an expert witness to advocate for people who refused the COVID-19 vaccine.

On Wednesday, Kaufman faced questions about past social media posts, including one in which he expressed hatred for the CDC. He also repeatedly was asked about his support of a Trump administration decision last year to cancel 22 projects, totaling $500 million, to develop vaccines using mRNA technology.

Infectious disease experts say the mRNA technology used in vaccines is safe, and they credit its development during the first Trump administration with slowing the 2020 coronavirus pandemic. Future pandemics, they warned, will be harder to stop without the help of mRNA.

Kaufman said he supported mRNA technology and believes COVID-19 vaccines are safe and effective, but said it made sense to study work that’s been done so far before, including learning more about any side effects.

U.S. Sen. John Hickenlooper, a Colorado Democrat, said such evaluations are the responsibility of other federal offices — not ASPR. He also said it may slow the nation’s ability to respond to emerging new infectious threats.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education and the Robert Wood Johnson Foundation. The AP is solely responsible for all content.

This story was originally featured on Fortune.com

Blanche insisted that the $1.776 billion “Anti-Weaponization Fund,” which was scrapped after fierce bipartisan backlash, was “not moving forward.” But lawmakers, including Republican Sen. John Cornyn, conveyed concerns that the Trump administration has yet to commit in writing that the fund is dead and could therefore conceivably be resurrected.

“Just to be clear, the president of the United States, who’s a plaintiff in this lawsuit, has not agreed in writing to delete the ‘Anti-Weaponization Fund’ and there’s no guarantee that he won’t raise it in the future?” Cornyn asked. Blanche replied that Trump has no power over the fund, which was to have been administered by the Justice Department but never launched.

Cornyn’s questions were closely watched since Blanche requires the backing of all Republicans on the Judiciary Committee and the Texas senator has not committed his support.

The hearing arrived at a tumultuous time for the Justice Department, with mass firings and resignations hollowing out the workforce and Democrats and other critics raising alarms that Blanche is still functioning as the president’s personal lawyer. He has led the department on an interim basis since April, functioning as the public face of the maligned and later-withdrawn fund and accelerating investigations into perceived Trump adversaries.

Even as he said the fund had been shelved, he made clear that immunity from tax audits afforded to Trump this year remained in place.

Those actions, plus the flawed release of files from the Jeffrey Epstein sex-trafficking investigation, received fresh scrutiny Wednesday.

“You’re in charge of a Department of Justice I don’t recognize, prosecuting the president’s political enemies, firing rank and file prosecutors and FBI agents,” Democratic Sen. Chris Coons of Delaware told Blanche. “These are some actions that in your previous confirmation hearing before us, you said you would not take.”

Blanche, for his part, insisted he has presided over a course correction following Justice Department investigations into Trump during the Biden administration.

“In recent years, we watched the Justice Department turned against many of you and a former president, and it damaged the public’s faith in justice,” Blanche argued. “We are fixing that.”

Blanche will need the support of each Republican on the panel

Key to Blanche’s confirmation are Cornyn of Texas, who in May lost his primary, and Sen. Thom Tillis, a North Carolina Republican who has opted not to seek reelection. Entering the final stretches of their Senate career, both are seen as more likely than before to split from Trump and both have been outspoken critics of the fund the Trump administration created to compensate people who feel unjustly persecuted by the criminal justice system.

After questioning Blanche about the fund, Cornyn told CNN he continues “to have some concerns” and is not “going to make any decisions at this point.” Tillis, meanwhile, indicated during questioning that he is likely to support Blanche, even as he said he wanted “to stick a fork in this turkey of a 1776 fund.”

The death of South Carolina Republican Sen. Lindsey Graham, who was a member of the committee, level 11 Republicans and 10 Democrats on the panel. A no-vote by even a single Republican on the committee could scuttle his nomination.

Blanche insists the fund is dead. Lawmakers aren’t so sure

The fund emerged from a settlement of Trump’s $10 billion lawsuit against the Internal Revenue Service over his leaked tax returns. Blanche had initially defended the initiative only to later reveal that it was being scrapped following fierce bipartisan backlash.

The judge who presided over the case said in a scathing ruling Monday that Trump and his lawyers had manipulated the court system through the lawsuit and subsequent settlement and said she was troubled Blanche had signed the settlement given his prior representation of Trump and was concerned he had given misleading testimony. Blanche said Wednesday that he disagreed “with the judge’s insinuations about me.”

Blanche also defended a separate element of the settlement that afforded Trump and members of his family protection from tax audits and that, he has said, remains on track despite outrage over it even from Republicans. Blanche said the deal covers any existing audits but does not protect the president from examination of future tax filings.

“Nobody is above the law,” Blanche said. Such a settlement “doesn’t make any of those individuals above the law.”

Epstein files are also under scrutiny

Blanche was also pressed on the department’s staggered release of the Epstein files, a process beset by problems, including redaction errors that left exposed nude photos showing the faces of potential victims. Some names, email addresses and other identifying information were either unredacted or not fully obscured.

Blanche acknowledged that “mistakes were made” but said that only about 1% of the records had redactions that needed to be fixed, he said.

“I want to make sure that the American people know that this administration, when it comes to Jeffrey Epstein, has been more transparent than any administration,” he said, although the Justice Department only released additional files after Trump bowed to bipartisan pressure to sign a law forcing the department to do so.

A former federal prosecutor and key member of Trump’s defense team as the Republican battled four indictments, Blanche arrived at the Justice Department last year as deputy attorney general. At one point, under friendly questioning from Republican Sen. John Kennedy about whether he and Trump are friends, Blanche responded: “I’m his lawyer,” before quickly correcting himself to say he “was his lawyer.”

He ascended to the top job in April after Trump ousted Bondi, who had frustrated the White House by struggling to bring successful cases against Trump’s political opponents. Blanche has tried to satisfy Trump in that regard, including with an indictment of ex-FBI Director James Comey, another Trump adversary, on charges of threatening the 47th president by posting a social media photograph of seashells in the numerical arrangement of “86 47.”

Comey has said the numbers were not a call to violence.

Blanche was also asked about Jan. 6 violence

Tillis, who has said he would not support for attorney general anyone who equivocates on the events of Jan. 6, 2021, when pro-Trump rioters stormed the U.S. Capitol, denounced the Biden administration Justice Department for what he said were excessive prosecutions and punishments.

Democrats, meanwhile, pressed Blanche on the violence and Trump’s sweeping clemency action benefiting more than 1,500 people, including those convicted of violently attacking police.

Democratic Sen. Sheldon Whitehouse criticized Blanche for comments at a political conference this year where he appeared to characterize the Jan. 6 pardons as an administration accomplishment. Blanche replied that he has “never said that any sort of violence against law enforcement is appropriate.”

“He has the absolute right to pardon anybody for any reason he sees fit,” Blanche said of the president. “I am not celebrating that. It is a fact.”

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Associated Press writers Meg Kinnard and Michael Kunzelman contributed to this report.

This story was originally featured on Fortune.com