Brian Dake

The nonpartisan Congressional Budget Office (CBO) on Tuesday released an update to its 10-year budget outlook that found the federal budget deficit will approach $2 trillion in the current fiscal year.

The CBO’s latest estimate projects the budget deficit will reach $1.9 trillion in fiscal 2024, which would be the third largest in U.S. history and $200 billion larger than last year’s deficit. The projected $1.9 trillion deficit would trail only the $3.1 trillion fiscal 2020 deficit and the $2.7 trillion fiscal 2021 deficit that were incurred during the peak of spending on pandemic-era relief programs.

Annual budget deficits are expected to surge in the years ahead, surpassing the $2 trillion threshold with a projected deficit of nearly $2.2 trillion in 2030. Deficits would continue to rise in the following years, topping $2.8 trillion in 2033 and 2034 in the CBO’s analysis.

Sales rose just 0.1% on the month according to a Commerce Department report Tuesday that is adjusted for seasonality but not inflation. However, the result was slightly better than the downwardly revised 0.2% decline in April. On a year-over-year basis, sales rose 2.3%.

The sales number was worse when excluding autos, with a decline of 0.1% against the estimate for a 0.2% increase.

Moderating gas prices helped hurt receipts at gas stations, which reported a 2.2% monthly decline. That was offset somewhat by a 2.8% increase at sports goods, music and book stores.

Online outlets reported a 0.8% increase, while bars and restaurants saw a 0.4% decline. Furniture and home furnishing stores also reported a 1.1% drop.

The U.S. Department of the Treasury and the IRS on Monday unveiled a plan to “close a major tax loophole” used by large, complex partnerships, which could raise more than an estimated $50 billion in tax revenue over the next 10 years.

The plan targets so-called “related party basis shifting,” where single businesses operating through different legal entities trade original purchase prices on assets to take more deductions or reduce future gains, according to the Treasury.

After a year of studying the basis-shifting issue, the agencies announced their intent to issue proposed regulations. They also released a revenue ruling on related-party partnership transactions involving basis shifting without “economic substance” for the parties or “substantial business purpose.”

Pass-through business filings with more than $10 million in assets increased 70% between 2010 and 2019, but the audit rate for these partnerships fell from 3.8% to 0.1% during that period, according to the Treasury.

Wisconsin’s tourism industry had a record-breaking $25 billion in economic impact in 2023, according to a new report from the state Department of Tourism.

It’s the second year in a row Wisconsin broke that record. In 2022, Wisconsin’s tourism industry had an economic impact of $23.7 billion, breaking the prior milestone of $22.2 billion in 2019.

A statement from the Wisconsin Department of Tourism said there’s approximately $34 million in the Wisconsin 2023-25 biennial budget being used to “raise Wisconsin’s profile across the country as a premier business, cultural, and recreational destination.”

“Wisconsin tourism powers the economy and strengthens the fabric of communities of all sizes,” Wisconsin Tourism Secretary Anne Sayers said in the statement. “The historic impact of tourism reached every corner of Wisconsin and, in doing so, sustained livelihoods for thousands of our friends and neighbors.”

The report said the tourism industry supported more than 178,000 jobs last year. All 72 Wisconsin counties experienced an increase in economic impact.

The Federal Reserve held interest rates steady Wednesday, while signaling it expects to be able to cut rates only once this year.

The decision and the rate cut projections came hours after the Labor Department reported a modest — but welcome — easing in the inflation rate last month.

The Fed has kept its benchmark interest rate at the highest level in over two decades since last July.

Fed policymakers still expect to cut rates later this year. But forecasts released at the end of their two-day meeting show on average, policymakers anticipate just one quarter-point rate cut by year’s end — down from the three rate cuts they were forecasting in March.

The Fed has been prevented from cutting rates more aggressively because inflation has proven to be more stubborn than expected. Policymakers want more evidence that inflation is falling back towards their target of 2% before they start lowering rates.

The latest cost-of-living report, also released Wednesday, offers some encouraging signs that inflation is moving in that direction.

Consumer prices in May were 3.3% higher than a year ago — a smaller annual increase than the previous month. The consumer price index was flat between April and May, as falling gasoline prices helped to offset rising rents and restaurant prices.

A liberal judge who previously represented Planned Parenthood in a case related to abortion access entered the race for Wisconsin Supreme Court on Monday, with majority control of the battleground state’s highest court on the line.

Dane County Circuit Judge Susan Crawford launched her campaign to succeed retiring liberal Justice Ann Walsh Bradley, citing her previous work for Planned Parenthood as the fight over a Wisconsin abortion ban is playing out in court.

Crawford joins conservative Waukesha County Circuit Judge Brad Schimel, a former Republican state attorney general, as the only announced candidates. If more than two candidates get in the race, a February 18, 2025 primary will take place. The winner in the April 1, 2025 election will be elected to a 10-year term.

Parts of the United States could be at risk for electricity supply shortages if electricity demand peaks are higher than anticipated or if less electricity is generated than expected, according to the North American Electric Reliability Corporation’s (NERC) 2024 Summer Reliability Assessment. Under normal summer demand conditions, NERC expects the continental United States to have adequate power resources this year.

No areas of the United States evaluated by NERC were considered high risk this summer, a category that means an area is at risk of outages during normal summer conditions.

Electricity demand increases as temperatures rise and homes and businesses use more air conditioning. Higher-than-normal summer temperatures can affect reliability two ways: by increasing electricity demand for air conditioning and by increasing the risk of power plant outages and reduced output from heat-related issues.

In addition, widespread heat waves can limit the typical movement of electricity because it is needed to meet increased local demand. Transmission can be limited due to the risk of overheating, natural disasters (such as wildfires), and insufficient capacity to carry energy where it needs to go. NERC also highlighted concerns over having enough resources to meet peaks in demand in recent years as baseload generation retirements have increased and variable resources such as solar and wind that have a less stable generation pattern are replacing other power plants.

Certain regions NERC assessed are at elevated risk of electricity supply shortages, which means that these areas could face electricity supply shortfalls during periods of more extreme summer conditions. These areas include parts of California, the Southwest, the Midwest, Texas, and New England.

A diverse coalition of Wisconsinites representing the state’s labor, business, and agricultural sectors were in Ashland on Tuesday to voice their support of the proposed Line 5 relocation project to the U.S. Army Corps of Engineers. The proposed Line 5 relocation project in Ashland, Bayfield and Iron Counties, has broad support among Wisconsinites who understand the pipeline is the safest and most efficient way to move the energy our state and region depends on.

The Line 5 relocation project, which is estimated to create over 700 Wisconsin union construction jobs and pump $135 million into the local economy, is currently being reviewed by the Wisconsin Department of Natural Resources and U.S. Army Corps of Engineers. According to public comments received by the Wisconsin DNR, Wisconsinites approve of the project by greater than a 2-to-1 margin.

A public comment submitted to the DNR by major propane supplier Plains Midstream sent a dire warning for the entire Midwest that a rejection of the Line 5 relocation project could send Wisconsin and other states into a State of Emergency due to propane shortages as Line 5 is a key supplier of the natural gas liquids that are needed to produce propane.

Line 5 moves roughly 540,000 barrels of crude oil and natural gas liquids each day. These unrefined products get sent to refineries in the region – where they are turned into propane, gas, diesel and jet fuel, which is then distributed to consumers, farms and businesses throughout Wisconsin, the Midwest and eastern Canada. If Line 5 were shut down, to fill the infrastructure gap, it is estimated 2,100 tanker trucks would need to drive through Ashland, Wisconsin, on U.S. Highway 2 each day.

In addition to being the safest way to carry Wisconsin’s critical energy supply, an independent economic impact study estimated the Line 5 relocation project would add $135 million to Wisconsin’s economic output, increase state tax revenues by millions and support more than 1,000 jobs in the State of Wisconsin.

Line 5’s owner, Enbridge, has signed a letter of intent with Wisconsin-based Michels Pipeline, Inc. as the mainline contractor for the project, and a Project Labor Agreement has been signed with the Laborers International Union of North America, International Union of Operating Engineers, International Brotherhood of Teamsters, and United Association of Plumbers and Pipefitters.

The Federal Trade Commission and the Justice Department are set to open antitrust investigations into Microsoft, OpenAI and Nvidia, examining the powerful companies’ influence on the artificial intelligence industry, a source familiar confirmed to CNBC.

The FTC will take the lead on looking into Microsoft and OpenAI, while the DOJ will focus on Nvidia, and the investigations will focus on the companies’ conduct, rather than mergers and acquisitions, according to the source.

As startups like OpenAI and Anthropic — the companies behind the ChatGPT and Claude chatbots, respectively — gain steam in the generative AI market, tech giants like Google, Microsoft, Amazon and Meta have been part of an AI arms race of sorts, racing to integrate the technology to ensure they don’t fall behind in a market that’s predicted to top $1 trillion in revenue within a decade.

Microsoft, for instance, first invested $1 billion into OpenAI in 2019. The size of its investment has since swelled to about $13 billion. Microsoft heavily uses OpenAI’s model for its Copilot chatbot and offers open-source models on its Azure cloud.

The hefty investments are necessary because AI models are notoriously expensive to build and train, requiring thousands of specialized chips that, to date, have largely come from Nvidia. Meta, which is developing its own model called Llama, has said it’s spending billions on Nvidia’s graphics processing units, one of the many companies that’s helped the chipmaker bolster year-over-year revenue by more than 250%.

News of the coming antitrust investigation comes days after a group of current and former OpenAI employees published an open letter Tuesday, describing concerns about the AI industry’s rapid advancement despite a lack of oversight and an absence of whistleblower protections for those who wish to speak up.

As the dust settles from the past year’s redistricting battles in Wisconsin, the state Legislature is undergoing a shakeup, with nearly half of all state lawmakers having announced they won’t run in their old districts.

All told, at least 61 members of the state Assembly and Senate won’t run again in their old districts. Of those, 41 are Republicans and 20 are Democrats. In the Assembly alone, 40 representatives — more than a third of the chamber —have either filed to run for new seats in the Legislature or say they plan on it.

Another 16 state lawmakers, including eight Democrats and eight Republicans, have announced plans to leave the Legislature entirely.

There will be at least 26 primaries between Republican and Democratic candidates in the Assembly and Senate this August, a number that could grow by next week. Many of those are due to newly-opened seats as incumbents either opted against seeking reelection.

The final tally of lawmakers running for re-election in new districts or leaving the Legislature won’t be known until after June 3, when nomination papers are due to the Wisconsin Elections Commission.