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The escalating confrontation between the parties over the federal budget rests on a fundamental paradox: The Republican majority in the House of Representatives is now more likely than Democrats to represent districts filled with older and lower-income voters who rely on the social programs that the GOP wants to cut.

A much larger share of Republican than Democratic House members represent districts where seniors exceed their share of the national population, census data show. Republicans are also more likely to represent districts where the median income trails the national level, or the proportion of people without health insurance is greater than in the nation overall.

House Republicans, in their ongoing struggle with President Joe Biden over raising the debt ceiling, have signaled they will push for sweeping reductions in domestic social programs, likely including Medicaid and the Affordable Care Act, the principal federal programs providing health care for working-age adults. And while House Republicans appear to have backed away from pursuing reductions in Social Security and Medicare, the conservative Republican Study Committee has set a long-term goal of cutting and partially privatizing both programs.

Ruy Teixeira: Democrats long goodbye to the working class

The fact that so many House Republicans feel safe advancing these proposals in districts with such extensive economic need testifies to the power of what Ive called the class inversion in American politics: the growing tendency of voters to divide between the parties based on cultural attitudes, rather than class interests. That dynamic has simultaneously allowed House Democrats to gain in more socially liberal, affluent, metropolitan areas and House Republicans to consolidate their hold over more culturally conservative, economically hardscrabble, nonurban areas.

Yesterday, Biden forcefully reiterated his charge that Republicans would shred the safety net at a White House ceremony commemorating the 13th anniversary of Barack Obama signing the ACA into law. An extended battle between House Republicans and Biden this spring and summer over the safety net may test whether any economic argument can allow Democrats to break through the cultural resistance that fortifies Republican control of these downscale districts.

While Republicans have gained in some areas primarily around culturally and racially infused disputes such as those over crime and immigration, a struggle over spending priorities will inevitably highlight that their policies on these bread-and-butter issues remain diametrically opposed to the economic interest of much of their base, Paul Pierson, a political scientist at UC Berkeley and a co-author of Let Them Eat Tweets, told me.

As I reported last week, to understand the social and economic characteristics of the House seats held by each party, Jeffer Giang and Justin Scoggins of the Equity Research Institute at the University of Southern California analyzed five-year summary results through 2020 from the Census Bureaus American Community Survey.

That analysis inverts many traditional assumptions, even within the parties themselves, about whose voters rely on the social safety net. There has been a massive transformation of the coalitions, Manuel Pastor, a sociology professor at USC and the director of the Equity Research Institute, told me.

Democrats, who led the legislative efforts to create Social Security under Franklin D. Roosevelt and Medicare under Lyndon B. Johnson, have long thought of themselves as the party of seniors. But today, Republicans represent 141 of the 215 House districts where adults aged 65 and older exceed their 16 percent share of the national population, while Democrats hold a clear majority of seats in districts with fewer seniors than average, according to the Equity Research Institute analysis.

Republicans now also control most of the House seats in which the median income trails the national level of nearly $65,000 annually. Republicans hold 152 of the 237 seats in that category. Democrats, in turn, hold 128 of the 198 seats where the median income exceeds the national level.

Perhaps most surprisingly, Republicans hold a clear majority of the districts where the share of residents who lack health insurance exceeds the national level of 9 percent. The GOP now holds 110 of those 185 highly uninsured seats. Democrats control 138 of the 250 seats with fewer uninsured than the nation overall.

Equally revealing is to examine what share of each partys total strength in the House these seats represent. From that angle, the parties offer almost mirror-image profiles. About two-thirds of House Republicans represent districts with more seniors than the national level, while about two-thirds of Democrats represent districts with fewer of them. Roughly two-thirds of House Republicans represent districts where the median income lags the national level, while three-fifths of Democrats hold seats where incomes surpass it. Almost exactly half of Republicans, compared with only about one-third of Democrats, represent districts with an unusually high concentration of people lacking health insurance.

The economically vulnerable districts that each side holds also present a stark demographic contrast. Low-income Democratic seats tend to be in urban centers with large nonwhite populations. In more than three-fourths of the Democratic seats with a median income below the national level, and in virtually all of the Democratic districts with more uninsured people than average, the minority share of the population is also higher than the national average.

Some low-income Republican districts also have large minority populations, particularly in Texas and Florida, where the GOP has made inroads into culturally conservative Latino communities. But mostly the low-income GOP seats are centered on working-class white areas, many of them outside metropolitan areas.

Read: Are Latinos really realigning toward Republicans?

In the 141 seats Republicans hold with more seniors than the national average, white residents exceed their national share of the population in 127 of them. Likewise, white residents surpass their share of the national population in more than four-fifths of the Republican-held districts that lag the median income. Nearly half of House Republicans represent districts in which all three things are true: They have more seniors than the national level, more white residents than the national level, and a lower median income than the national level.

All of this reflects how working-class white voters, many of them financially squeezed, have become the unquestioned foundation of the GOPs coalition at every level, from the House through presidential elections.

Biden is laying siege to those voters with a strategy of deemphasizing cultural disputes and stressing kitchen-table economic benefits. Democrats really are making appeals to these districts in a big way, Pierson said. Most of that infrastructure and climate [spending] is going to go on in red states. There really is a big effort to say, We are going to use policy to try to make our electoral coalition bigger.

A key element of Bidens courtship of these voters is defending the social safety net, especially Social Security and Medicare. The presidents repeated rejection of reductions in those programs, combined with former President Donald Trumps opposition to potential cuts, has resulted in the most obvious concession by House Republicans to their evolving electoral base: public declarations by Speaker Kevin McCarthy and other leaders that they will not target Social Security and Medicare in the cutbacks they are demanding for raising the federal debt limit this summer.

Republicans hope that exempting Social Security and Medicare will dampen any backlash to their deficit-reduction plans in economically vulnerable districts. But protecting those programs, as well as defense, from cutswhile also precluding tax increaseswill force the House Republicans to propose severe reductions in other domestic programs that many voters in blu-collar Republican districts rely on, potentially including Medicaid, the ACA, and food and housing assistance.

Will a Republican push for severe reductions in those programs provide Democrats with an opening in such places? Robert J. Blendon, a professor emeritus at the Harvard School of Public Health, is dubious. Although these areas have extensive needs, he told me, the residents voting Republican in them are generally skeptical of social-welfare spending apart from Social Security and Medicare. We are dealing with a set of values here, which has a distrust of government and a sense that anyone should have to work to get any sort of low-income benefit, Blendon said. The people voting Republican in those districts dont see it as important [that] government provides those benefits.

The one risk for Republicans in such areas, he noted, would be if voters conclude that they present a genuine threat to Social Security and Medicare. Even most conservative voters strongly favor those programs, Blendon told me, primarily because they view them as an earned benefit that workers have contributed to during their lifetime. If the GOP seriously pushes ideas such as converting Medicare into a voucher program, or diverting part of Social Security revenue into private investment accounts, then in districts with a lot of older people, they are going to get in trouble, Blendon said.

Pastor, the director of the Equity Research Institute, also believes that current Democratic arguments targeted at older and non-college-educated white voters that they are voting against their interests economically are unlikely to succeed. The problem, he says, is that those arguments dont directly address the way many voters also define their interests to include cultural and racial dynamics. Because Republican strength in these older, predominantly white, financially stressed districts is rooted largely in the alienation of white voters who fear the country is shifting on them demographically, Democrats must ultimately make a more explicit case to those voters about how all Americans can benefit from a more diverse and inclusive society, Pastor said. The Democratic Party needs to figure out how to talk more effectively about race and racismnot try to ignore it, but try to inoculate people against it, he said.

Read: The four quadrants of American politics

Bryan Bennett, the senior director of polling and analytics at the Hub Project, notes that the majority of voters, including seniors, support Bidens approach to preserving the safety net for retirees: In a recent national survey, his group found that voters were nearly four times as likely to support stabilizing Medicare by raising taxes on the affluent rather than cutting benefits. There is quite a bit of economically populist appetite even among Republicans for raising taxes on the wealthy and corporations, Bennett told me. Even Medicaid, once seen as a program for the poor, now draws widespread support across party lines, he said.

Yet Bennett, too, is cautious about predicting that Republican efforts to cut the safety net will hurt them in districts that highly depend on it. The GOP, Bennett said, is gambling that it can cut programs that benefit the partys lower-income white base and still prevent those voters from defecting to Democrats by stressing other issues like immigration and the culture war.

If Republicans face any internal resistance to sharp cuts in the safety net, in fact, it may be more likely to come from their members who represent socially liberal white-collar districts that dont rely as much on these programs than from their members who represent the culturally conservative blue-collar districts that do depend on them. The Republicans who seem least concerned about targeting the social safety net are those who represent the places that need those programs the most. Thats another telling measure of just how fully the concrete has settled beneath a modern political alignment that revolves more around culture than class.

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Business

City veteran Kheraj in contention to chair banking giant HSBC

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City veteran Kheraj in contention to chair banking giant HSBC

Naguib Kheraj, the City veteran, has been shortlisted to become the next chairman of HSBC Holdings, Europe’s biggest bank.

Sky News can reveal that Mr Kheraj, a former Barclays finance chief, is among a small number of contenders currently being considered to replace Sir Mark Tucker.

HSBC, which has a market capitalisation of £165.4bn, has been conducting a search for Sir Mark’s successor since the start of the year.

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In June, Sky News revealed that the former McKinsey boss Kevin Sneader was among the candidates being considered to lead the bank, although it was unclear this weekend whether he remained in the process.

Mr Kheraj would, in many respects, be seen as a solid choice for the job.

He is familiar with HSBC’s core markets in Asia, having spent several years on the board of Standard Chartered, the FTSE-100 bank, latterly as deputy chairman.

He also possesses extensive experience as a chairman, having led the privately held pensions insurer Rothesay Life, while he now chairs Petershill Partners, the London-listed private equity investment group backed by Goldman Sachs.

Mr Kheraj’s other interests have included acting as an adviser to the Aga Khan Development Board and The Wellcome Trust, as well as the Financial Services Authority.

He spent 12 years at Barclays, holding board roles for much of that time, before he went on to become chief executive of JP Morgan Cazenove, the London-based investment bank.

HSBC’s shares have soared over the last year, rising by close to 50%, despite the headwinds posed by President Donald Trump’s sweeping global tariffs regime.

In June, the bank said that Sir Mark would be replaced on an interim basis by Brendan Nelson, one of its existing board members, while it continued the search for a permanent successor.

Ann Godbehere, HSBC’s senior independent director, said at the time: “The nomination and corporate governance committee continues to make progress on the succession process for the next HSBC group chair.

“Our focus is on securing the best candidate to lead the board and wider group over the next phase of our growth and development.”

Sky News revealed late last year that MWM, the headhunter founded by Anna Mann, a prominent figure in the executive search sector, was advising HSBC on the process.

Since then, at least one other firm has been drafted in to work on the mandate.

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Sir Mark, who has chaired HSBC since 2017, steps down at the end of next month to become non-executive chair of AIA, the Asian insurer he used to run.

He will continue to advise HSBC’s board during the hunt for his long-term successor.

As a financial behemoth with deep ties to both China and the US, HSBC is deeply exposed to escalating trade and diplomatic tensions between the two countries.

When he was appointed, Mr Tucker became the first outsider to take the post in the bank’s 152-year history – which has a big presence on the high street thanks to its acquisition of the Midland Bank in 1992.

He oversaw a rapid change of leadership, appointing bank veteran John Flint to replace Stuart Gulliver as chief executive.

The transition did not work out, however, with Mr Tucker deciding to sack Mr Flint after just 18 months.

He was replaced on an interim basis by Noel Quinn in the summer of 2018, with that change becoming permanent in April 2020.

Mr Quinn spent a further four years in the post before deciding to step down, and in July 2024 he was succeeded by Georges Elhedery, a long-serving executive in HSBC’s markets unit, and more recently the bank’s chief financial officer.

The new chief’s first big move in the top job was to unveil a sweeping reorganisation of HSBC that sees it reshaped into eastern markets and western markets businesses.

He also decided to merge its commercial and investment banking operations into a single division.

The restructuring, which Mr Elhedery said would “result in a simpler, more dynamic, and agile organisation” has drawn a mixed reaction from analysts, although it has not interrupted a strong run for the stock.

During Sir Mark’s tenure, HSBC has also continued to exit non-core markets, selling operations in countries such as Canada and France as it has sharpened its focus on its Asian businesses.

On Friday, HSBC’s London-listed shares closed at 946.7p.

HSBC has been contacted for comment.

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Technology

Global movement to protect kids online fuels a wave of AI safety tech

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Global movement to protect kids online fuels a wave of AI safety tech

Spotify, Reddit and X have all implemented age assurance systems to prevent children from being exposed to inappropriate content.

STR | Nurphoto via Getty Images

The global online safety movement has paved the way for a number of artificial intelligence-powered products designed to keep kids away from potentially harmful things on the internet.

In the U.K., a new piece of legislation called the Online Safety Act imposes a duty of care on tech companies to protect children from age-inappropriate material, hate speech, bullying, fraud, and child sexual abuse material (CSAM). Companies can face fines as high as 10% of their global annual revenue for breaches.

Further afield, landmark regulations aimed at keeping kids safer online are swiftly making their way through the U.S. Congress. One bill, known as the Kids Online Safety Act, would make social media platforms liable for preventing their products from harming children — similar to the Online Safety Act in the U.K.

This push from regulators is increasingly causing something of a rethink at several major tech players. Pornhub and other online pornography giants are blocking all users from accessing their sites unless they go through an age verification system.

Porn sites haven’t been alone in taking action to verify users ages, though. Spotify, Reddit and X have all implemented age assurance systems to prevent children from being exposed to sexually explicit or inappropriate materials.

Such regulatory measures have been met with criticisms from the tech industry — not least due to concerns that they may infringe internet users’ privacy.

Digital ID tech flourishing

At the heart of all these age verification measures is one company: Yoti.

Yoti produces technology that captures selfies and uses artificial intelligence to verify someone’s age based on their facial features. The firm says its AI algorithm, which has been trained on millions of faces, can estimate the age of 13 to 24-year-olds within two years of accuracy.

The firm has previously partnered with the U.K.’s Post Office and is hoping to capitalize on the broader push for government-issued digital ID cards in the U.K. Yoti is not alone in the identity verification software space — other players include Entrust, Persona and iProov. However, the company has been the most prominent provider of age assurance services under the new U.K. regime.

“There is a race on for child safety technology and service providers to earn trust and confidence,” Pete Kenyon, a partner at law firm Cripps, told CNBC. “The new requirements have undoubtedly created a new marketplace and providers are scrambling to make their mark.”

Yet the rise of digital identification methods has also led to concerns over privacy infringements and possible data breaches.

“Substantial privacy issues arise with this technology being used,” said Kenyon. “Trust is key and will only be earned by the use of stringent and effective technical and governance procedures adopted in order to keep personal data safe.”

Read more CNBC tech news

Rani Govender, policy manager for child safety online at British child protection charity NSPCC, said that the technology “already exists” to authenticate users without compromising their privacy.

“Tech companies must make deliberate, ethical choices by choosing solutions that protect children from harm without compromising the privacy of users,” she told CNBC. “The best technology doesn’t just tick boxes; it builds trust.”

Child-safe smartphones

The wave of new tech emerging to prevent children from being exposed to online harms isn’t just limited to software.

Earlier this month, Finnish phone maker HMD Global launched a new smartphone called the Fusion X1, which uses AI to stop kids from filming or sharing nude content or viewing sexually explicit images from the camera, screen and across all apps.

The phone uses technology developed by SafeToNet, a British cybersecurity firm focused on child safety.

Finnish phone maker HMD Global’s new smartphone uses AI to prevent children from being exposed nude or sexually explicit images.

HMD Global

“We believe more needs to be done in this space,” James Robinson, vice president of family vertical at HMD, told CNBC. He stressed that HMD came up with the concept for children’s devices prior to the Online Safety Act entering into force, but noted it was “great to see the government taking greater steps.”

The release of HMD’s child-friendly phone follows heightened momentum in the “smartphone-free” movement, which encourages parents to avoid letting their children own a smartphone.

Going forward, the NSPCC’s Govender says that child safety will become a significant priority for digital behemoths such as Google and Meta.

The tech giants have for years been accused of worsening mental health in children and teens due to the rise of online bullying and social media addiction. They in return argue they’ve taken steps to address these issues through increased parental controls and privacy features.

“For years, tech giants have stood by while harmful and illegal content spread across their platforms, leaving young people exposed and vulnerable,” she told CNBC. “That era of neglect must end.”

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Sports

Deion healthy in return, says Buffs ‘fine’ after loss

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Deion healthy in return, says Buffs 'fine' after loss

BOULDER, Colo. — Deion Sanders ran onto the field with his Colorado team Friday night, just months removed from having surgery to replace and reconstruct his bladder after a tumor was found this spring.

Sanders, 58, jogged past a portable toilet placed next to Colorado’s bench area for him to use during the game, which was sponsored by Depend, the adult incontinence undergarment company. He slowed near the South end zone and gently tapped his players who were kneeling in prayer.

After the most serious health issue in a series of them the past five years, Sanders said he “felt good,” adding, “I don’t feel good right now, but I felt darn good during the game.”

Sanders was miffed that his team didn’t capitalize on early takeaways, convert several big-play opportunities on offense or make nearly enough run stops against Georgia Tech, falling 27-20 in the season opener at Folsom Field.

Sanders coached his first game for Colorado since undergoing surgery in May. He was away from the team for much of late spring and early summer before rejoining the squad for preseason camp. Dr. Janet Kukreja, director of urological oncology at the University of Colorado Cancer Center, said in a news conference in July that Sanders is cured of cancer.

Upon returning, Sanders focused on getting his third Colorado team, and the first without his sons Shedeur and Shilo and 2024 Heisman Trophy winner Travis Hunter, to employ a different play style, based on being more physical at the line of scrimmage. Colorado made some strides Friday, as a rushing offense that had been last in the FBS during Sanders’ tenure generated 146 yards on 31 attempts.

But Colorado allowed 320 rushing yards and three touchdowns to Georgia Tech, including the tiebreaking, game-winning 45-yard dash by quarterback Haynes King with 1:07 left.

“Defensively, no, there’s no way you can say you’re physical when you got your butt kicked like that,” Sanders said. “But offensively, you probably were sitting out there saying, ‘Dang, they should keep running the ball’ because you saw the physicality we’ve been talking about.”

Although Georgia Tech committed turnovers on its first three possessions — becoming the first team to do so in a season opener since Florida International in 2010 — and didn’t reach the end zone until late in the first half, Sanders said, “It’s hard to applaud the defense right now.”

After the three early turnovers, Georgia Tech had three drives of 75 yards or more and a 61-yarder in the closing minutes. Colorado linebacker Reginald Hughes said Georgia Tech’s gap scheme “messed with our eyes a little bit” and caused the Buffaloes not to properly fill several holes in the run game.

“We’re at a good pace, inclining to be the defense that we want,” Hughes said. “We’re not quite there yet. It’s really more so execution with us. We play fast, we get after it. It’s just executing situations. Stuff like that, it shows up later in the game.”

Quarterback Kaidon Salter, a transfer from Liberty making his first start for Colorado and replacing the record-setting Shedeur Sanders, had an early passing touchdown and finished with 159 passing yards and 43 rushing yards on 13 attempts. Deion Sanders noted that Salter could have run even more and been more of a true dual threat.

“Most definitely, I feel like I had those opportunities,” Salter said, “but me being a dual-threat quarterback, keeping my eyes down the field, I felt like I had chances to throw the ball downfield and make some plays.”

Despite Colorado’s significant personnel losses at quarterback and wide receiver, Sanders said the offense doesn’t need time to come together, adding, “We’ve got to go get it and do it right now.”

He said he saw enough good things overall to still expect a strong season.

“We’re definitely going to be fine, I’m not concerned about that,” Sanders said. “We could have won that game. It’s not like we got our butts kicked. They ran the heck out of the ball, they did that, but we had opportunities.”

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