This is Bloomberg Law with June Grosso from Bloomberg Radio.
Columbia graduate student and pro Palestinian activist Mahmoud Khalil has become a symbol of the Trump administrations cracked down on international students at several American universities. Khalil was the first target of Trump's effort to deport non citizen students with pro Palestinian or anti Israeli views. He spent one hundred and four days in federal immigration detention before being released last month.
They tried to portray me as a violent person. They tried to portray me as a terrorist, as some lunatic, but not presenting any evidence, not presenting any shred of credibility to their claims.
Until this week, legal proceedings have focused on the detentions of individual students, but now a federal judge in Boston is holding the first trial challenging the Trump administration's policy of revoking visas, arresting, detaining, and deporting non citizen students and faculty who engage in pro Palestinian advocacy. Groups representing university professors say the policy is chilling free speech on campuses in violation of the First Amendment, but lawyers for
the government argue that no such policy exists. My guest is immigration law expertly on Fresco, a partner at Holland and Knight Leah, and there have been lots of orders by judges over these arrests of non citizen students, but this is the first trial. Explain how we got to this point.
The Trump administration has been trying to crack down on what it believes is excessive protests on university campuses by foreign students. And it thinks that there are some number of students that are coming to the United States that are not coming for legitimate academic reasons, but are instead coming to rabl rouse or cause trouble or otherwise create anti Semitic activities in schools. And so what it's been doing is it's been revoking visas, and it's been revoking
them in a number of matters. It's been actually either just saying to students they can't re enter if they leave.
Sometimes it's been actually terminating them from the student visa database, and in other times for people who are actually lawful permanent residents, it's actually revoked their lawful permanent residence status, and all under a provision in the Immigration Code which says that the Secretary of State can revoke either lawful permanent residency or a student visa, either one any immigration
status that's not citizenship. The Secretary of State can revoke that status if the Secretary of State believes that doing so is necessary because the foreign national is acting contrary to the interests of the foreign policy of the United States, And so in other cases involving specific individuals like Mahmoud Khalil or other individuals, the judges have just taken these claims at face value and said, Okay, I'm going to rule on the legality of the question of whether what
Secretary of Rubio is doing violates the First Amendment or not. And that statute is unconstitutional either on its face or in the way it's being applied, such that these foreign students are not being allowed to express themselves under the First Amendment. But in this case, this particular judge, who's known for basically not taking any claims at face value, has decided that he would actually bring this to a trial.
So what's the main issue in the trial.
So what he's having a trial on is whether the Secretary of State Marco Rubio is actually revoking these visas in good faith because he's concerned about the foreign policy of the United States, or whether it's being done as a pretext to violate the First Amendment rights of these
foreign national students. Now, the problem is, there are a lot of precursor issues in this case, like whether this judge even has jurisdiction to be doing any of this, whether this should be done in a removal process, whether this statute doesn't even permit any judicial review of any kind.
And so the judge is sort of skipping all of those steps, and it is saying, yes, I have jurisdiction, I can review all of this, and it is just basically trying to get to the end of the book first and say I'm going to actually just get to the merits of this. What is the administration doing? Is it illegal?
And then leading to the courts all of these questions later the threshold questions about whether he even had jurisdiction to do any of this in the first place, where these cases are supposed to be brought, et cetera.
So Leon, the judge said that the trial's likely to center on the question of whether non citizens lawfully present in the country have the same free speech rights as citizen. Is there case law on that?
Well, there actually is case law on that, and that case law is pretty bad. There's a case called Haresiatis versus Shaughnessy from the nineteen fifties, and it dealt with actual lawful permanent residents of the United States, so not non immigrant visa holders like student visa or visitor visa holders. These were actual lawful permanent residents. And many of them in that case had US citizens spouses and US citizen children.
Some had US citizen grandchildren. And the issue was there was a statute that said not just current communists, but even former members of the Communist Party could be deported if they were just identified for deportation. And this was in the height of the Cold War, and these folks argued, wait a second, I'm not even in the Communist Party anymore.
I've renounced my affiliation with the Communist Party. And they said the courts shouldn't be able to deport me, because even if I was a Communist, what differ what it make if I wasn't actually violently seeking to overthrow the government, if I was just some sort of communists who just was an economic person not trying to overthrow the government. Why would I be deported for my First Amendment values?
And that court in nineteen fifty two said no, in these statutes involving non citizens, the First Amendment does not overcome the security concerns, the legitimate security concerns of the government,
even if the person is a lawful, permanent residence. So if the Supreme Court actually upholds that doctrine here again in twenty twenty five or twenty twenty six, whenever it gets this case, then it will remain the same, which is that when you're not a citizen of the United States, your First Amendment right are not superior to the rights of the government to be able to deport you for conduct that they feel is deportable conduct. We shall see, and the judge.
Is also going to consider whether the Secretary of State is revoking these visas in good faith.
The other issue that they're trying to get at in this trial is, yes, first, what First Amendment rights do the non citizens have? But then number two, the judge may say, well, fine, that's all fined in dandy. But if the adjudications here are pretextual and I can find that they're completely pretextual, meaning there actually is no threat
to foreign policy of any kind. I can still halt these deportations because fine, maybe the statute does allow a deportation when there's conduct that's a threat to the US foreign policy. So, for instance, the number one version of this would be that sub dictator gets a visitor visa and comes to the United States, and nobody likes that this dictator is being given safe haven to visit the United States, So that would be the number one version
of this. But at the end of the day, that might also be something that's not subject to judicial review. And that's what the Court of Appeals, the District Court, and the Supreme Court are going to need to decide, is is this issue about whether the Secretary of State is actually acting in good faith in a particular case something that a judge actually can review in the first place. And none of this is settled law, none of this is established. All of this is being made up at
the beginning now as issues of first impression. I think this judge is going to say he has jurisdiction, which is why he's going through a trial. But we're going to have to see where the First Circuit ultimately goes down on this, and also where the Supreme Court actually says at the end of the day, what actually happens. What is the procedure that needs to be followed when the Secretary of State decides that someone is acting contrary to the foreign policy interests of the United States. Can
it be challenged in the district court? Does it have to be challenged in the administrative removal proceeding? And then, depending on which court, what is the nature of the challenge. Can you actually prove this is pretextual or does the administration get enough deference that you really can't even challenge it at all? And so those are going to be the questions we're going to be deciding in the next year or so.
Let's move from the First Circuit to the Fifth Circuit, the most conservative circuit in the country, and it upheld an injunction that that stops a Texas anti immigration law from being enforced in a victory for immigrants rights. Is that a surprise coming from the Fifth Circuit?
Well, it is a surprise.
In the center was a two to one decision, with one of the Republican judges taking the side that the statute from Texas was unconstitutional. If you recall what happened in this This was during the Biden administration when the State of Texas was saying that there was an inundation of people coming into the United States. The Biden administration didn't want to do anything about it, so it needed to act, and the State of Texas passed the law basically saying we can do three things that have never
been done before. Number One, we can actually deport people ourselves to the border of Texas and Mexico. Maybe we can't bring them into Mexico, but what we can do is take them to the US side of the actual physical border. And what we can say to them is if you try to come back into the interior, if you don't actually then take the next step yourself and go into Mexico, then we're going to prosecute you for a crime. And if we do it a second time,
it'll be an even worse crime. And so from that perspective, the question was is that violate federal law. There was a district court injunction that said that yes, this violate federal law under the Arizona versus the United States case
that came during the Omama administration in twenty twelve. That was the Arizona Law, where Arizona said, We're going to basically take matters into our own hands and enforce immigration law and ask people for their papers, and if they're not here legally, we will arrest them and prosecute them for a misdemeanor. That was rule to be unconstitutional. So
this is further than that. And in a two to one decision, the Court of Appeals upheld in a permanent way the stay that it had issued that had prevented
this Texas Statute from going into effect in the first place. Now, what's interesting about this is the factual backdrop, and we're going to be talking about factual backdrops a lot today, but the sexual backdrop of this case is completely different now than it was back when the Biden administration was in office and there were these concerns about the amount of people streaming in to the state of Texas. Now pretty much everyone would admit I would think that there
are anybody streaming into the state of Texas anymore. That this traffic has stopped in its entirety. And so the question is, what is this emergency that Texas is claiming is necessary now in order to have a law like this, and I think that's going to be its biggest problem if it tries to move forward to the Supreme Court coming up next.
A judge blocks the administration from denying all asylum claims at the southern border. You're listening to Bloomberg. A DC federal judge has barred the Trump administration from expelling asylum seekers, saying President Trump overstepped his legal and constitutional authority. Judge Randolph Mass said portions of Trump's January twentieth executive order violate the Immigration and Nationality Act and the US constitutions
separation of powers. The US Constitution can't be read to grant the President or his delegees authority to adopt an alternative immigration system which supplants the statutes that Congress has enacted. I've been talking to immigration attorney Leon Fresco of Holland and Knight. Has the Trump administration been denying asylum claims?
Correct? What has happened since the Trump administration has taken power in January of twenty twenty five is they tightened a regulation that was already being challenged through the Biden administration. What the Biden administration was saying was you can't come across the border illegal and ask for asylum. You have to make an appointment using the CBP one app and go to a port of entry and ask for asylum at the port of entry. But if you try to go in between the ports of entry, you are not
going to be allowed asylum. You're going to be pushed back into Mexico because you're going to be banned. So that was a provision that the Biden administration has. When Trump comes into power, he then says, not only will you be pushed back, not only will there be this band, but there's not going to be a legal way to come into the port of entries. We're closing the CDP one app, We're closing the parole programs that allow you to apply to come in legally. And so there's no
way in period. There's no asylum, there's no requesting it at the ports of entry, there's no requesting paroles, nothing, there's no way to ask for refugee status. If you're just basically trying to arrive to the United States to ask for a refugee status aka asylum, there's no way to do that. And so when that happened. There literally is a provision in the law that you can challenge that in the District Court for the District of Columbia,
and that's what people did. They first challenged the Biden administration. That case never got to a decision, so it got converted into a challenge to the Trump administration's policies. And now after a lot of excessive briefing back and forth, because the Supreme Court had issued doctrines earlier in the Biden administration saying you can't get preliminary injunctive relief like this. You can only basically get summary judgment, and then that has to go all the way up to the Supreme
Court before something like this can be stopped. So they were saying that district courts and circuit courts, on their various statutory regimes, don't have the jurisdiction to enjoin these kinds of asylum programs. They can only enter a final judgment saying that they think it's illegal, and then that has to work its way up to the Supreme Court, who then has to decide whether it's illegal or not. So that's what's happened here. A district judge from the
District of Columbia has said this is illegal. You have to provide some way for people who are outside of the United States who when they arrive at the United States are able to apply for asylum. You can't just have a wholesale ban on people applying for asylum. And that that's what's basically happened here, and so that the executive orders and regulations that have been issued by the
Trump administration banning asylum are declared illegal. Now that declaration won't go into effects again unless and until the Supreme Court allows it to go into effect. But nevertheless, if the Supreme Court agrees that there has to be some way for people to apply for asylum, then the numbers will eventually change from the zero numbers that we have now.
I mean they may not change immediately because there will be this game of sort of you know, touching the stove and seeing what happens when you touch the stove, etc. But once people touch the stove enough to see that no, the government does indeed have to let them in and then let them apply for asylum, then you will see people doing this again.
I mean, asylum is a pretty basic concept in this country through our history. What do you think the Supreme Court will do well.
It's difficult because if you're actually going to look at this, and I always try to use the either AI judge or the robot judge, or the judge that has no political sentiment of any kind, it's hard to read the statutory framework which says that regardless of how you enter the United States, if you're in the territory of the United States, you're permitted to apply for asylum, which is what the statute literally says, and then say, well, there's
no way to apply for the asylum because what's happening is the administration is using a second statute which says that they can pick places or reasons, discretionary reasons why people cannot get asylums. So, for instance, let's say there's some new AI crime that nobody thought of when they read the statute. They can say, anybody who's committed this
AI crime can't get asylum. Okay, fine, nobody thought of that when there was a statute, fair enough, But people did think of the fact that if you came illegally you could apply for asylum, because that's literally what it says in the statute. So can that be a reason? Is that really a permissible reason that you can use your discretion for to not allow people to get asylum,
because that's literally one that's covered in the statute. It's not like AI where it would be a brand new thing nobody thought about, which was the whole point of Congress giving this authority to add new discretionary reasons why somebody couldn't get asylum. This is one that was already contemplated.
So I do think if you have a disinterested, non political, computerized judge, it would seem to me that that judge would say, yeah, there has to be some way you can apply for asylum if you enter the United States. But we're going to see what the Supreme Court does.
Because the Supreme Court may just say I get all that, and that's fine and dandy, but I don't want to return to the state of affairs in the Biden administration where there were hundreds of thousands of people coming each month across the border, and so they may just say too bad. We'll really just have to see where the
Supreme Court will go down. As I sit here now, I cannot make a good faith prediction because of other cases we'll talk about in a second, where I would never have guessed the Supreme Court would have ruled the way it did. And I think the Supreme Court is just tired of interventions that don't allow the Trump administration
to enforce immigration laws. And so they may just say, look, if the Congress wants to do something, that's great, But if the Congress isn't going to do anything, we're not going to recap the president's ability to enforce immigration law.
Yeah, I mean on the emergency docket. The Supreme Court has basically given Trump everything he asks for regarding immigration, including last Friday where they said he can deport people to third countries.
Correct. So in this case, here's what happened. You had eight individuals from all over the world, the notorious sort of countries. We can't deport people to Cuba, Allos, Cambodia, et cetera. And so what the Trump administration is basically trying to accomplish as it's basically saying, look, I think these countries are acting in a pretextual manner not allowing us to deport their citizens back to their countries. If we actually make things onerous enough and difficult enough, they'll
eventually start taking their people back. Whether it's directly or if we deport them to very strange places, then those individuals will starve to death unless those countries accept them back. So they will eventually give them a travel permit to go back to Cambodia or Loos or Cuba or something, because they're that's just going to let people start to death in the middle of some strange country. So it
tried to test out this theory in South Sudan. It tried to deport people from Cuba and Laos and Cambodia and other places, eight people to South Sudan. But in the process of trying to do that, it didn't allow these individuals to raise a claim that they would be subject to torture if they were deported to South Sudan. And so there was a district judge who said stop that, you can't continue this process. And the problem was by the time that order was entered, the individuals were already
in Djibouti. And I think this is another issue of bad facts make bad laws, because now there was eight people in Djibouti where the US basically was stuck. What was it supposed to do with these people? You know, do you do trials for whether they're going to be torture or not. Who are these Americans having to take care of these people in Djibouti? You know they can't
go home now. It was a big mess, and so I think the Supreme Court was worried about just this logistical nightmare of having at least a month or two or maybe more of hearings and trials for these eight individuals to may claims about whether they would face torture in South Sudan, and so basically threw its hands up and said, you know what, we're done with this. Allow
these people to be sent to South Sudan. But in the meantime, that's created a president now where the Trump administration will be able to send anybody to South Sudan or Libya or any other country it wants to. You won't have an opportunity to be able to raise a claim that you would be tortured in that country. You can only raise a claim that you will be tortured in your country a citizenship. But they'll say, fine, okay, so you'll be tortured in your country a citizenship, whatever
that may be. But who cares, We're now going to send you to Libya or South Sudan or some other country, and so I did not expect the Supreme Court to not allow for some due process to be able to make these claims. But that is where we are, and so at the moment, unless the Supreme Court comes back and revisits this later, which by the way, it has
done in other issues. There were some times during the Biden administration where it lets certain things go into effect that then it later said, this makes no sense, why
did that happen, and then it actually enjoined them. And so this could and maybe even probably would happen later moving on in the future, especially depending on if the news starts getting really stark and people start actually dying, you know, if they get deported to certain places, then the facts may get bad enough that the Court does
revisit this, and maybe more quickly than not. But at the moment, the current state of affairs is the Trump administration can deport any foreign national to any country it wants to, as long as it's not their country of citizenship where they fear persecution or torture.
So in the past month, the Trump administration has ramped up raids on home holmes, workplaces, courthouses, some more than one hundred and fifty lawsuits across the US have been filed alleging that federal agents are using excessive force and warrantless arrests while engaging in illegal racial profiling to target non white people. I see why they're suing. Do these suits have a chance.
Well, the problem is these are very fact intensive suits that don't really lend themselves to class action. What they lend themselves really, if you're looking at this again from the dispassionate computerized judge, issue is, in a specific case, was a specific person apprehended by ICE because of an
enforcement action that violated the need to go get a warrant. So, for instance, as an example, suppose that ICE was in an apartment building and had a warrant to get one person, Joe Smith at apartment one oh one, and then ICE just started knocking on all the doors. Than anytime someone opened a door who look you of a certain ethnic group, that I just apprehended that person and been asked questions later, that would be a situation where that person's apprehension would
violate the Fourth Amendment. And then they could say, within the context of their removal proceedings, you need to dismiss my removal proceedings because they started on the basis of this violation of my Fourth Amendment right, So that would be the way to handle that. As a class, it becomes more complicated because there unfortunately does need to be This is sort of one of the oddest debates. And this debate I saw it a lot when I was a staffer in the Congress, and I'd have this debate
with many of my fellow Democratic colleagues. I'd say, look, the whole point of these alienage statutes, whether you like it or not, is there does need to be a certain racial profiling component to it, because the whole point is we need to profile are you a citizen or are you not? And so we need to get to the bottom of that, and so we do need to treat people differently on this. This isn't like another law where you know it's burglary and that we don't care
about the human being who's doing the burglary. We just ask are you in the house? We find, we arrestue. If you're not in the house, you're not the burglar. We don't arrestue. Okay, those are easy, but the whole purpose of these crimes. Unfortunately is these are status based crimes. This is not like other crimes. So you do have to treat certain people differently just based on their status.
And so because of that, this becomes very complicated because the government does have to arrest people on the basis of these sort of immutable factors which are their status. And so that's why I don't think as these cases
percolate up the courts. They may be successful at the beginning in certain individual district courts, but as these cases percolate up the courts, I think that the Supreme which has been very very adverse to any kind of facial challenges of any kind and has always really been trying to push litigants towards these as applied challenges in their particular case, especially in this type of framework, is really going to say to individuals, look, if I did something
to you in your particular case, challenge it either within the context of your removal proceeding, or sue them. You know, let's say you're a US citizen and you got placed in nice custody for ten days, to them and say why was I placed a nice custody for ten days? And you know, get civil damages or something like that. But to actually have injunctive relief that sort of creates new procedures that ICE has to follow. I don't think that the Supreme Court is going to allow that to be put in place.
Class actions are not easy. Thanks so much, Leon. That's Leon Fresco of Hound and Knight. Coming up. Who wins Who loses? In Trump's Tax Bill? This is Bloomberg and nearly nine hundred pages. President Trump's new tax bill is a sprawling collection of tax breaks, spending cuts, and other Republican priorities, including new money for national defense and deportations. So who wins and who loses? My guest is an expert in tax law, Alex Raskolnikov, a professor at Columbia
Law School. Alex, what are your biggest takeaways from the bill?
Well, the two biggest takeaways is one, it's enormously expensive, and it just drings the moment of reckoning much closer. It's going to increase the deficit by trillions of dollars, and sooner or later the bond market is going to make us pay. That's in terms of revenue and then
in terms of distribution. It is basically an extension of twenty seventeen bill, which favored the better off, and this one favors the better off even more because of the pretty harsh measures having to do with health care and food stems at the bottom of the distribution, So it's pretty regressive.
The Congressional Budget Office projected the bill would increase federal deficits by nearly three point three trillion, But Senate Republicans are proposing a different strategy of figuring that out.
Yes, okay, it's easier to understand with spending than with taxes. So I'll just give you an example of what Democrats may do next time they're in power. So let's say they want to help people who are struggling economically, and they decide to enact the program that's going to guarantee every American an annual income of let's say forty thousand dollars a year. Okay, so if you make twenty, you're going to get extra twenty, and if you make ten,
you're going to get extra thirty. And if you make nothing, you get forty thousand a year. So, you know, not lavish, but pretty good. Obviously, it's going to cost enormous amount of money, right, so the Democrats are going to say, oh, but we're going to enact this program only for one month. So they pass a law that enacts is unbelievably generous program for one month, and a week later they convene again. Congress convenes again and say, well, we're now going to
extend this program permanently. How much is going to cost? And so what Republicans are saying now equivalent to what Democrats are going to say, then it's going to cost nothing. It's going to cost nothing because there's already a forty thousand dollars payment. And so we're just continuing with what Republicans call current policy. It's not the law. The law is that the program expires, but the policy is that the program is active now, and so it costs nothing.
To extend something forever that costs enormous amount of money. So that's the trick.
It's quite a trick. You mentioned the Medicaid and snap how many people are going to be out of health insurance.
So here too, they're varying forecasts, and of course Democrats are saying more in Republicans are saying less. So I think a pretty reasonable forecast is about ten million people will lose insurance, will lose Medicaid. The big reason is there's going to be work requirements, and so people who
can't meet them will lose coverage. Half of the ten million roughly these are all estimates, but half of the ten million is estimated to lose medicaid because they will not comply with work requirements because you know, it's like they may not have access to the internet, or they may not just understand how to feel forms, or they may not know that they need to feal forms. So these people would not comply with requirements even though they could comply, they just won't feel the right form in
the right place. Now you're talking about low income population with you know, hard lives and a lot of worries about, you know, where the food is going to come from tomorrow. So it's not unreasonable to say that some people will just not do what they should do and could in principle do. But it's an estimate. But under any estimate, any estimate, I think it's safe to say that millions of people are going to lose medicale And what about.
The claim that you know, the very very rich billionaires, etc. Are going to benefit from the bill?
They're definitely going to benefit from the bill. I don't understand where the claims are coming on the Democratic side, but there's the greatest beneficiary or that this is the bill that's like the biggest giveaway to billionaires. Official scoring from the government does not show distributional consequences above two million a year of income, so we're not definitely talking about billionaires, and you know, these people are going to be better off. The bill is fairly regressive, but it's
not specific to billionaires. When I'm thinking about what specific provisions in the bill can disproportionately benefit billionaires, I don't think them. So there are definitely provisions that benefit millionaires and multimillionaires and billionaires, but in terms of the impact in terms of how it's going to feel compared to
the taxes they pay. Now, it's going to be millionaires and people making you know, somewhere from two to five hundred thousand a year who are going to really feel the biggest difference in terms of comparing to what they're paying.
Now, what about the salt taxes? I mean they raise those just for a time.
That's why I said that, you know, it's millionaires and people making two to hundred thousands a year, so two to five hundred thousand a year reference was about soul, So it's a pretty noticeable change. It's temporary, but noticeable extra allowance of a deduction that will be felt by people making about that amount, like two to five hundred
thousand something like that. So, of course, state taxes vary by state and the thresholds vary by state, so it's hard to be prec but roughly, like you know, the affluent people who are not rich probably but doing well. Now you said it's temporary, Yeah, it's temporary. The entire personal income tax side of twenty seventeen reform was temporary and guess what, it just became permanent. So this is
the thing both parties tried to do. Democrats tried to do it with build back better you know, if something is expensive. They passed these changes in law that's temporary changes fully hoping and planning to make them permanent, because not making them permanent, you could argue, is a tax increase.
And what about some of the promises that Trump made, like no tax on tips.
Yes, it's also temporary, but it's enacted. There will be no tax on tips. How much money is going to save is a question. You need to remember that about forty percent of taxpayers they know federal income tax, and that's what we're talking about here, we're talking about changes in federal income tax law. So about forty percent being no federal income tax at all, and so no tax on tips means nothing to them. Then of course it won't surprise you that the compliance rate on reporting kIPS
is not super high. So some people who are not reporting any kIPS even though they get them, you know, that doesn't matter for them that there's going to be no tax on chips. But for some people it will and it feels good, you know, if you're getting kIPS. But there's like this new rule that you don't have
to pay tax. It's also temporary. So just like this state in local tax xtra reduction is going to expire, I think by the end of twenty eight and then those see it's going to be the same game again and again that not extending, it will be a tax increase.
And what about no taxes on Social Security? That didn't happen, did it?
No, that did not happen. I'll tell you something happened. But whatever happened definitely is not no tax on Social Security. What happened is that seniors get an extra deduction six thousand, double for married couples. Extra deduction. Now, what does it mean in terms of Social Security? And seniors are people who get Social Security most of them, So a lot of people who already get Social Security now are part of that forty percent that don't owe any federal income taxes.
So a deduction is useless if you don't owe any tax. For some people who do pay some taxes, this deduction will possibly reduce or possibly eliminate the tax, so for them it's going to be a valuable deduction. But it's not specifically tied to Social Security income. And for some people who paid a lot of money into the system and received pretty or maybe have some other sources of income, they will take a deduction of extra six thousand and
will still low tax. So there's no rule that says social secure the income is not subject.
I've been hearing from people who have heavy student loan debt, usually medical school or graduate school debt, complaining about what this bill does, what have they changed there?
So they definitely may changes to long repaining programs. They're complicated, I mean it depends on what kind of loans these are, It depends on the kinds of jobs people do, and it also depends on how much money people learned. These changes affect people whose loan payments were reduced because their
incomes were sufficiently low. So doctors are not the first people who come to mind when you think about this, But for people whose incomes are fairly low, you know, for some of them, loan repayments under the old program were just eliminated basically as long as the income is law, and that has gone away, so as I understand that there will be either many fewer or no people who owe student loan payments who will be allowed to pay
nothing at all. But I think the minimum payment from what I've seen, is something like ten dollars a month, So it's more of an instrument for the government like to know who owes something than a real payment. Ten dollars, I think is a pretty phenomenal amount. That's one big change in student loan repayment. I'm sure there are others, but these are complex programs.
Is it still a boon to businesses?
So yes, there are new deductions very favorable basically allowing businesses to subtract what they pay on equipment, and also on R and B. You know, if a business buy the machine that's going to last ten years or twenty years, the economic depreciation lasts for twenty years. The value of
the machine gradually declines with where and care. But these provisions allow subtraction immediately of whatever is spent the equipment and also on R and B. The argument where this is not terrible is that it's supposed to be promoting economic growth. Right, so if businesses can invest in equipment and this and that long lived asset and take deductions right away, it makes it more profitable for the business to do so, so they will do the investment, they
will invest in research and so on. So that's the standard economic rationale for allowing this generous deduction. It's basically a subsidy. It's not reflecting economic deterioration. The counter argument is that this is a subsidy for equipment like long lasting equipment, and long lasting equipment these days is robots, and so this is a tax incentive. And you know, the machines are replacing people increasingly, so maybe it's not a good idea to facilitate them. And further replacements of
people by machine. So that's sort of a more recent concern that this bill does not address and intact makes more serious.
The rise of AI. Can't get away from it. There were a lot of promises made with the last tax bill passed during Trump's first administration. What was the real effect of the last bill?
There was nothing like, nothing like what Republicans were saying in twenty seventeen. There was some economic growth in nominal terms, meaning if you just look at dollars that was attributed to the exchanges, and I think if you look at the growth of the economy as percentage of growth domestic product, they basically was not. So again, you know, there are many ways to do this estimates and democratic economists and
Republican economists again come out with predictable differences. But it was pretty clear then, I mean, there was really no significant, serious doubts that the growth effects are not going to be large, and they weren't, and so it's going to be the same this time. Well, of course this comes on top of massive threat of tariffs that are really bad for growth. So you know, like this is hardly a Congress and the president for super focused on economic growth.
And that may be an understatement, we'll see. Thanks so much for joining me.
Alex.
That's Professor Alex Raskolnikov of Columbia Law School. And that's it for this edition of The Bloomberg Law Show. Remember you can always get the latest legal news on our Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify, and at www dot bloomberg dot com slash podcast Slash Law, and remember to tune into The Bloomberg Law Show every weeknight at ten pm Wall Street Time. I'm Junie Grosso and you're listening to Bloomberg
