Frozen Russian Billions Could Backstop Ukraine’s War Effort

Frozen Russian Billions Could Backstop Ukraine’s War Effort

Authored by RFE/RL Staff via OilPrice.com,

  • The European Commission is proposing a loan scheme for Ukraine backed by frozen Russian assets, repayable only once Moscow pays war damages.

  • The plan would bypass potential vetoes by Hungary or Slovakia and could mobilize up to €140 billion for Kyiv in 2026–27.

  • Key hurdles include legal risks, ECB concerns over the euro’s reserve status, and the need for national guarantees from EU states.

With the United States indicating that it may not be willing to finance Ukraine’s defense needs for much longer, the European Union is looking into various ways of footing a larger part of the bill in 2026 and 2027, assuming — as most people in Brussels do — that the war will continue.

The most obvious hint of this came during European Commission President Ursula von der Leyen’s annual policy address to the European Parliament earlier in September in which she floated the idea of a “reparations loan.”

More information has emerged about how this loan would work in a one-page discussion paper provided by the commission to EU member states. Seen by RFE/RL, the paper was briefly discussed by the bloc’s ambassadors on September 26.

Von der Leyen is due to present this paper to EU leaders as they meet for an informal summit in Copenhagen on October 1 to discuss Ukraine with Ukrainian President Volodymyr Zelenskyy likely to be in attendance. The bloc’s finance ministers are also expected to go over more details when they assemble in Luxembourg next week.

While not all the loan mechanisms have been hashed out yet, a few of the outlines are clear.

Any loan to Ukraine would be based on frozen Russian assets in the EU that have been immobilized since Moscow launched its full-scale invasion more than three years ago. The loan would be provided without actually touching the cash itself, and Ukraine would have to return the money only after Russia pays for war damages.

The reparations loan, if approved, could solve a number of issues.

Most importantly, it would give Ukraine the cash injection it needs while eliminating any potential vetoes by recalcitrant EU member states, such as Hungary and Slovakia.

It would also settle the question of what to do with Russian assets in the bloc and relieve pressure on the EU budget.

Possible Obstacles

But it is far from a done deal, and there are still a few hurdles to clear.

Let’s start with the frozen Russian assets.

It is believed that there are about 176 billion euros ($207 billion) of these holdings in the bloc, mainly in Euroclear, a Belgian-based financial markets company specializing in central securities depositories.

Some countries, notably the Baltic states, have long wanted to confiscate this money and either give it to Ukraine or use it to build up Europe’s underfunded defenses. The argument is simple: Why should European taxpayers foot the bill for the Kremlin’s war?

But many western European nations are against straight-up confiscation.

Belgium is fretting that Moscow would file a solid legal claim against the country and Euroclear for these assets.

The European Central Bank (ECB) is concerned about what confiscation would do to the status of the euro, currently the world’s second reserve currency, as such a move might prompt third countries to save elsewhere.

Bigger European countries also believe that the money should remain immobilized and instead be used for the reconstruction of Ukraine in the likely scenario that Moscow refuses to pay reparations when the war ends.

The fact also remains that the frozen assets are already being used to generate funds for Ukraine. These are the quarterly windfall profits derived from the cash — often some 1.5 billion euros ($1.75 billion) that are immediately transferred to the war-torn country.

Coalition Of The Willing?

The European Commission is now suggesting the following: Some or all of the frozen assets in Euroclear should be transferred to a so-called Special Purpose Vehicle (SPV) in exchange for zero-coupon bonds issued by the European Commission. These would be backed by guarantees from a “coalition of the willing” consisting of EU member states and possibly other countries from the Group of Seven leading industrialized democracies.

The money in the SPV would then be transferred to Kyiv as loans throughout 2026 and 2027 (and possibly even beyond that), and Ukraine would only have to pay the money back once Russia pays war reparations.

How much money would be available depends on an assessment by the International Monetary Fund (IMF), but it could be 140 billion euros ($164 billion) for those two years. It’s likely that most of this would need to be provided by Europe if the United States refuses to commit any funds to the scheme.

The good thing about this move would be that it circumvents potential national vetoes.

This was a dilemma in early 2024 when the EU agreed on its 50-billion-euro ($59 billion) “Ukraine facility” for the years 2024-2027 and Hungary initially blocked the move.

This cash was taken from the common EU budget “headroom” — essentially the spare capacity in the budget beyond what has already been committed — but all 27 member states had to give it the green light.

Some 32 billion euros ($37 billion) out of the 50 billion have already been provided to Kyiv, so there isn’t that much headroom left, and Budapest would likely object to more cash being used for this purpose.

And while the European Commission is proposing a 100-billion-euro ($118 billion) fund for Ukraine in the multiannual EU budget for 2028-2034, all the member states must sign off on this as well, while it is also increasingly clear that Kyiv needs more immediate funding.

But this is far from a done deal, and Hungary can still put up obstacles to some extent.

The frozen Russian assets will only remain immobilized as long as the EU decides they should stay that way. And Brussels does that twice a year, in July and January, via unanimity. No country, including Hungary, made much of a fuss regarding the latest extension two months ago, but that doesn’t rule out any issues arising in the future.

National Guarantees?

The European Commission suggests in the discussion paper that a decision to prolong the sanctions in the future should be taken by a qualified majority, but it notes that this “would require a high-level political agreement by all or most Heads of State or Government.”

It is very doubtful that leaders such as Hungary’s Viktor Orban and Slovakia’s Robert Fico would simply give this a thumbs-up.

There may also be an issue with national guarantees.

How many countries would really be willing to enter a “coalition of the willing” on this?

The more countries that do so, the less money each country would have to guarantee. But in many member states, the national parliament would need to sign off on such a thing and with several countries grappling with ballooning deficits, a lot of politicians may be wary of committing to any type of guarantees.

Euroclear is also likely to push for full and solid guarantees and potentially even a say in the governance of the new loan structure.

And it cannot be ruled out that Euroclear may insist that other financial institutions holding frozen Russian assets also be made to contribute to this scheme.

Tyler Durden
Wed, 10/01/2025 – 08:00

via ZeroHedge News https://ift.tt/iYA6a4w Tyler Durden

Shutdown Livestream: This Won’t Fix Trillion-Dollar Deficits

Reason‘s Peter Suderman and Eric Boehm discuss the government shutdown live at 3 p.m. Eastern time today. Join the livestream here.

The government has shut down—but don’t get too excited. Taxes are still being taken from your paycheck, drugs are still illegal, and the Commerce Department (for some reason) still exists.

So what does the shutdown mean for ordinary Americans? And how long is this budgetary standoff likely to continue? Suderman and Boehm will be talking about this live on YouTube, X, and Facebook at 3 p.m. Eastern time on October 1.

Officially, the government shutdown happened because Congress failed to pass a new budget (or a continuing resolution) before the new fiscal year began on October 1. In reality, this shutdown is all about one specific part of the federal budget: health insurance subsidies delivered as part of the Affordable Care Act.

Senate Democrats refused to pass a continuing resolution to keep the government open because Republicans are opposed to extending an expanded version of those subsidies, which were originally created as a temporary measure during the pandemic. If those subsidies aren’t extended, millions of Americans who purchase health insurance via the Obamacare system will face higher premiums next year. On the other hand, does it make sense for the federal government to offset the cost of health insurance for households earning well over six figures?

Health care already consumes the biggest slice of the federal budget, and this shutdown is unlikely to change that—or to reduce the overall size and cost of government. Instead, brace for finger-pointing, silly memes, and yet another bipartisan decision to borrow and spend money that we don’t have.

There must be a better way to do this—Congress needs to stop governing by crisis and start passing real budgets that make clear tradeoffs.

We’ll unpack the shutdown’s short-term shocks and longer-term risk live on Wednesday, October 1, 2025, at 3:00 p.m. Eastern time.

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Shutdown Livestream: This Won’t Fix Trillion-Dollar Deficits

Reason‘s Peter Suderman and Eric Boehm discuss the government shutdown live at 3 p.m. Eastern time today. Join the livestream here.

The government has shut down—but don’t get too excited. Taxes are still being taken from your paycheck, drugs are still illegal, and the Commerce Department (for some reason) still exists.

So what does the shutdown mean for ordinary Americans? And how long is this budgetary standoff likely to continue? Suderman and Boehm will be talking about this live on YouTube, X, and Facebook at 3 p.m. Eastern time on October 1.

Officially, the government shutdown happened because Congress failed to pass a new budget (or a continuing resolution) before the new fiscal year began on October 1. In reality, this shutdown is all about one specific part of the federal budget: health insurance subsidies delivered as part of the Affordable Care Act.

Senate Democrats refused to pass a continuing resolution to keep the government open because Republicans are opposed to extending an expanded version of those subsidies, which were originally created as a temporary measure during the pandemic. If those subsidies aren’t extended, millions of Americans who purchase health insurance via the Obamacare system will face higher premiums next year. On the other hand, does it make sense for the federal government to offset the cost of health insurance for households earning well over six figures?

Health care already consumes the biggest slice of the federal budget, and this shutdown is unlikely to change that—or to reduce the overall size and cost of government. Instead, brace for finger-pointing, silly memes, and yet another bipartisan decision to borrow and spend money that we don’t have.

There must be a better way to do this—Congress needs to stop governing by crisis and start passing real budgets that make clear tradeoffs.

We’ll unpack the shutdown’s short-term shocks and longer-term risk live on Wednesday, October 1, 2025, at 3:00 p.m. Eastern time.

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Jefferson, Wine, and the Wall of Separation

Many people know Thomas Jefferson’s phrase about a “wall of separation between church and state.” Fewer know how that phrase entered constitutional law. It’s a curious story, which I discuss in a new Legal Spirits podcast with historians Don and Lisa Drakeman.

The story begins with Jefferson’s 1802 letter to the Danbury Baptists, written to reassure them that he shared their view of church-state relations. In that letter, Jefferson wrote that the First Amendment had built “a wall of separation between church and state.” The metaphor was memorable, but the letter was not widely circulated and largely disappeared from public memory.

This was not surprising. Jefferson played no direct role in drafting of the Constitution or the First Amendment. Although he wrote the Virginia Statute for Religious Freedom in the 1780s, which influenced American thinking about liberty of conscience, he was abroad during the Philadelphia Convention and, by the time Congress proposed the Bill of Rights in 1789, he was serving as Secretary of State. The Religion Clauses were the product of Madison and the First Congress, not Jefferson.

The Danbury letter might have remained obscure but for a rediscovery in the 1870s. Chief Justice Morrison Waite, with the help of his neighbor, historian George Bancroft, came across the letter and cited it in Reynolds v. United States (1879). The Court in Reynolds upheld the federal government’s prosecution of a Mormon defendant for practicing polygamy, despite his claim of religious obligation. Waite distinguished between belief and conduct: Congress could not legislate about belief, but it could regulate conduct that violated social duties or threatened public order. To support this distinction, Waite quoted Jefferson’s Danbury letter, treating him as an authoritative interpreter of the First Amendment.

But Waite didn’t stop there. He also invoked an earlier piece of Jefferson correspondence, a letter to a Virginia wine merchant, in which Jefferson remarked that the Constitution should be ratified and then amended to add an express protection for religious freedom. That letter was largely about Jefferson’s views on wine, not constitutional design, yet Waite used it to suggest that Jefferson was an “acknowledged leader” of the movement for a bill of rights. By relying on this passing aside, buried in a letter on an entirely different subject, Waite sought to link Jefferson directly to the First Amendment.

The move was “stunningly flimsy,” the Drakemans argue. Jefferson’s letters were written in contexts removed from the adoption of the First Amendment. Yet Waite elevated them into constitutional law, where they would play an outsized role for more than a century.

Indeed, Jefferson’s metaphor of the “wall of separation” dominated the Court’s Establishment Clause jurisprudence in the twentieth century. Although the Court has stepped away from the metaphor in recent decades, preferring instead a “history and tradition” approach, Jefferson’s words remain influential in law and politics. Few metaphors in American constitutional history have had greater staying power.

This curious episode illustrates both the power and the risks of judicial reliance on history. Offhand remarks in private correspondence—about constitutional law, but mostly about Bordeaux—became touchstones for constitutional doctrine. The episode reminds us that history can take on a life of its own in ways the Founders themselves never imagined.

In the podcast, the Drakemans and I discuss Jefferson, Waite, and Bancroft, the risks of amateur history at the Court, and Jefferson’s other writings on religious freedom. You can listen to the full conversation here.

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Minors and Addiction to Speech and Press

I’m finishing serializing my forthcoming Emory Law Journal article titled Addiction to Constitutionally Protected Activity: Speech, Press, and Religion. In my earlier posts, I argued that concerns about psychological addiction can’t justify restrictions that interfere with behavior presumptively protected by the Free Exercise Clause. I then turned to arguing that these concerns likewise generally can’t justify restrictions with behavior presumptively protected by the Free Speech or Press Clause. Today, I close with the question whether some such restrictions may be upheld when focused on speech that reaches minors.

[* * *]

Perhaps because of the First Amendment concerns mentioned above, much of the discussion of regulating addictive technologies has focused on regulating use by minors, not by adults.[115]

The Court has generally concluded that minors have largely the same First Amendment rights as adults,[116] with the historically grounded exception of access to sexually themed material.[117] Justice Thomas has recently taken the view that the Free Speech Clause “does not include a right to speak to minors (or a right of minors to access speech) without going through the minors’ parents or guardians”;[118] but no other Justices have joined him.

In particular, the Court has held that minors have the same rights as adults to engage in political speech, including campaign contributions.[119] Presumably that would extend to consumption of political commentary and other opinion on public issues on social media. Minors also have the same rights as adults to access nonsexual entertainment,[120] including supposedly harmful material such as violent video games:[121]

Minors are entitled to a significant measure of First Amendment protection, and only in relatively narrow and well-defined circumstances may government bar public dissemination of protected materials to them. No doubt a State possesses legitimate power to protect children from harm, but that does not include a free-floating power to restrict the ideas to which children may be exposed. Speech that is neither obscene as to youths nor subject to some other legitimate proscription cannot be suppressed solely to protect the young from ideas or images that a legislative body thinks unsuitable for them.[122]

This logic would presumptively extend, I think, to attempts to protect the young from social media or video game design features that a legislative body (or a court applying common law rules) “thinks unsuitable for them.”[123]

To be sure, this caselaw was developed with regard to content-based restrictions, which the Court has long viewed especially skeptically. Perhaps the analysis may differ as to modest content-neutral “manner” restrictions that leave open ample alternative channels. In particular, perhaps the objection to free speech paternalism should be less when we’re dealing with attempts to protect minors from their risky choices than with attempts to protect adults.[124]

Still, paternalism—especially when it comes to the First Amendment—is generally the province of the pater (and of course, today, equally the mater). And while the Court has been open to the view that the law may try to facilitate parental control over their children’s exposure to speech, it has stressed that this can only support parents’ authority, not substitute the state’s decision for such authority. To again quote the violent video game case,

[W]e note our doubts that punishing third parties for conveying protected speech to children just in case their parents disapprove of that speech is a proper governmental means of aiding parental authority. Accepting that position would largely vitiate the rule that only in relatively narrow and well-defined circumstances may government bar public dissemination of protected materials to minors. . . .

[T]he Act’s purported aid to parental authority is vastly overinclusive. Not all of the children who are forbidden to purchase violent video games on their own have parents who care whether they purchase violent video games. While some of the legislation’s effect may indeed be in support of what some parents of the restricted children actually want, its entire effect is only in support of what the State thinks parents ought to want. This is not the narrow tailoring to “assisting parents” that restriction of First Amendment rights requires.[125]

As with the violent video game case, this suggests that the government might need to use a less restrictive alternative, such as requiring parental controls,[126] or expecting parents to use (if they want to) the parental controls that social media platforms and video game provides already include:

California cannot show that the Act’s restrictions meet a substantial need of parents who wish to restrict their children’s access to violent video games but cannot do so. The video-game industry has in place a voluntary rating system designed to inform consumers about the content of games. . . . This system does much to ensure that minors cannot purchase seriously violent games on their own, and that parents who care about the matter can readily evaluate the games their children bring home. Filling the remaining modest gap in concerned parents’ control can hardly be a compelling state interest.[127]

To be sure, the focus on what minors “bring home,” from an era where games were bought in stores, needs to be updated to a time when everything is downloaded. But the basic point remains: Because of the diversity in parental views, laws aimed at shielding minors from constitutionally protected speech have to focus on promoting parental control mechanisms, not on categorically limiting access by minors.

Indeed, the Court held this in Brown while striking down a law that merely limited sales of violent video games to children, and left parents free to buy the games themselves. That law thus already left open room for expressly parentally approved consumption of speech—yet it was still held to be unconstitutional. The Court expressly rejected the view that “the state has the power to prevent children from hearing or saying anything without their parents’ prior consent.”[128] That suggests that categorical bans on minors’ access to certain social media or video game features would be even more clearly unconstitutional.

Of course, none of this is certain. Perhaps the Court will conclude that content-neutral restrictions on, say, infinite scroll are so modest that they pass intermediate scrutiny, even though the content-based restrictions on violent video games failed strict scrutiny.

Or perhaps the 15 years since the violent video game cases have provided, in the Justices’ view, more evidence that communications technology poses real threats to children. Maybe the Court today will therefore be more convinced of the need to shield children from supposedly addictive expression than the 2011 Court was as to supposedly violence-promoting expression.

Indeed, three of the Court’s currently sitting Justices (Thomas, Roberts, and Alito) were open in Brown to restrictions on minors’ access to violent video games, and only two (Sotomayor and Kagan) were in the Brown majority. Maybe some of the new conservative Justices (Kavanaugh, Gorsuch, Barrett, or Jackson) will take the Thomas/Roberts/Alito view from Brown rather than the Scalia/Kennedy view. Likewise, maybe Justice Jackson will side more with her former boss, Justice Breyer, who dissented in Brown, than with the other liberal Justices (Ginsburg, Sotomayor, and Kagan).

Still, there is reason to doubt that the Court—or lower courts, following Brown—will be willing to uphold restrictions on supposedly addictive communications design features, even as to minors, and even as to the content-neutral restrictions.

Conclusion

The government’s power to restrict liberty—the liberty of both providers and consumers—in order to prevent addiction has to be sharply limited when the supposed addiction is to First-Amendment-protected material. I have argued that this is true even when speech, press activity, or religious practice is seen as manipulative or fostering of compulsion. And it is true even when the actions affect people’s neutrotransmitter systems, as much speech and religious activity likely does.

The matter is especially clear as to religion. It may involve all sorts of techniques and practices that “foster compulsion” to continue in the faith, and to do things that outsiders may see as psychologically and even physically harmful. But the government generally cannot try to restrict such techniques in order to prevent “addiction to religion.”

And I think the same is true as to social media platforms’ and video games’ speech or press activities. There may be some latitude for content-neutral restrictions on some such techniques, especially when the users are minors. But even that is far from certain.

[* * *]

[115] Lawsuits that sought modifications to the game for all users, including adults, have at times been rejected precisely on the grounds that the government lacks an adequate basis for regulating adult access. See, e.g., Courtright v. Epic Games, Inc., No. 2:‌‌24-CV-04055-BCW, 2025 WL 2319148, at *8 (W.D. Mo. Aug. 11, 2025) (“Preventing future addiction in children is compelling, yet the changes that are requested would apply to all users of the games and is therefore not narrowly tailored for children.”).

[116] Brown v. Ent. Merchants Ass’n, 564 U.S. 786, 794–75 (2011) (noting that “only in relatively narrow and well-defined circumstances may government bar public dissemination of protected materials to them,” and citing Erznoznik v. City of Jacksonville, 422 U.S. 205, 212–13 (1975), which made clear that those circumstances related to sexually themed material).

[117] Free Speech Coalition, Inc. v. Paxton, 145 S. Ct. 2291, 2303 (2025).

[118] Brown, 564 U.S. at 821 (Thomas, J., dissenting).

[119] McConnell v. FEC, 540 U.S. 93, 231–32 (2003).

[120] Erznoznik v. City of Jacksonville, 422 U.S. 2015, 212–13 (1975).

[121] Brown, 564 U.S. at 794.

[122] Id. (cleaned up) (largely relying on Erznoznik).

[123] See, e.g., NetChoice v. Carr, No. 1:‌‌25-CV-2422-AT, 2025 WL 1768621 (N.D. Ga. June 26, 2025) (striking down a law regulating children’s access to certain social media that use supposedly addictive techniques, on the grounds that it “would dramatically curb minors’ ability to speak and access to speech” and that “[t]he Supreme Court has, for decades, affirmed the importance of the First Amendment rights of young people”), appeal pending; see also Computer & Commc’ns Indus. Ass’n v. Uthmeier, No. 4:‌‌24CV438-MW/‌MAF, 2025 WL 1570007, at *16–17 (N.D. Fla. June 3, 2025) (applying much the same logic, even under intermediate scrutiny).

[124] See, e.g., Langvardt, supra note 103, at 148; Computer & Commc’ns Indus. Ass’n, 2025 WL 1570007, at *15.

[125] Brown, 564 U.S. at 802–03 (cleaned up).

[126] See, e.g., In re Soc. Media Adolescent Addiction/‌Pers. Inj. Prods. Liab. Litig., 702 F. Supp. 3d 809, 836 (N.D. Cal. 2023) (allowing addictive design claim to go forward based on a theory that the products hadn’t provided adequate parental controls).

[127] Brown, 564 U.S. at 803 (cleaned up).

[128] Id. at 795 n.3. The Court concluded that the state may have “the power to enforce parental prohibitions—to require, for example, that the promoters of a rock concert exclude those minors whose parents have advised the promoters that their children are forbidden to attend.” But it concluded that it could not, for instance, be made criminal to admit persons under 18 to a political rally without their parents’ prior written consent.” Id.

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The Heritage Guide to the Constitution: Essay Nos. 126–150

To continue my preview of The Heritage Guide to the Constitution, which will ship on October 14, here are the authors of essays 126–150.

  • Essay No. 126: The Judicial Power—Ambassadors Clause —Christopher T. Landau & Chase T. Harrington
  • Essay No. 127: The Judicial Power—Admiralty Clause —Thomas H. Lee
  • Essay No. 128: The Judicial Power—Federal Party Clause —Judge Kenneth K. Lee
  • Essay No. 129: The Judicial Power—Interstate Controversies Clause —Judge Steven J. Menashi & Eli Nachmany
  • Essay No. 130: The Judicial Power—State-Citizen Diversity Clause —Ernest A. Young
  • Essay No. 131: The Judicial Power—Diversity Of Citizenship Clause —Stephen E. Sachs
  • Essay No. 132: The Judicial Power—Land Grant Jurisdiction Clause —Judge Lawrence Vandyke & Ethan Foster
  • Essay No. 133: The Judicial Power—Foreign Diversity Clause —Seth J. Lucas
  • Essay No. 134: The Original Jurisdiction Clause —Chief Judge William H. Pryor Jr., Nathaniel Sutton, & William Strench
  • Essay No. 135: The Appellate Jurisdiction Clause —Chief Judge William H. Pryor Jr.
  • Essay No. 136: The Criminal Trials Clause —Judge Kurt D. Engelhardt, Jacob J. Thackston, & Dexter Webster
  • Essay No. 137: The Treason Clause —Joyce Lee Malcolm
  • Essay No. 138: The Punishment Of Treason Clause —Joyce Lee Malcolm
  • Essay No. 139: The Full Faith And Credit Clause —Stephen E. Sachs
  • Essay No. 140: The Privileges And Immunities Clause —David R. Upham
  • Essay No. 141: The Fugitive From Justice Clause —Zack Smith
  • Essay No. 142: The Fugitive Slave Clause —Bradley Rebeiro
  • Essay No. 143: The Admissions Clause —Gary S. Lawson
  • Essay No. 144: The Territories Clause —Gary S. Lawson
  • Essay No. 145: The Property Clause —Judge Ryan T. Holte
  • Essay No. 146: The Claims Clause —Zack Smith
  • Essay No. 147: The Guarantee Clause —Robert G. Natelson
  • Essay No. 148: Amendments—Congressional Proposal Clause —Robert G. Natelson
  • Essay No. 149: Amendments—Convention Proposal Clause —Robert G. Natelson
  • Essay No. 150: Amendments—Ratification Process —Robert G. Natelson

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Starting Today, Electric Vehicle Buyers No Longer Get a Federal Tax Credit

Yesterday was the last day to get a tax credit for buying an electric vehicle (E.V.), and motorists were apparently buying them like crazy before the credit expired. The expiration is bad news if you were about to get rid of your gas-burning car, but it’s good news for the American taxpayer.

In 2022, then-President Joe Biden signed the Inflation Reduction Act (IRA) into law. One of its provisions, a “clean vehicle credit,” awarded up to $7,500 for purchasing an electric vehicle. A similar program had existed since 2010, but automakers were limited to 200,000 credits; the IRA removed that cap. The program was set to last until December 31, 2032, but the One Big Beautiful Bill Act, which President Donald Trump signed into law in July, changed the termination date to September 30, 2025.

In 2023, U.S. motorists received $3.3 billion in E.V. credits, and as the Brookings Institution noted, the IRA was estimated to cost as much as $780 billion in total green energy credits by 2031.

If it gets more people driving cars that put less pollution into the air, it’s worth it, right? Not exactly, as it turns out.

A 2024 working paper from the National Bureau of Economic Research found that, compared to the previous E.V. credits, the IRA’s E.V. credits generated $1.87 of benefit to the U.S. economy for every dollar spent. But when compared against having no E.V. credits, the IRA credits only generated $1.02 for every dollar spent. The study further found each credit cost U.S. taxpayers around $32,000, because around 75 percent of them went to people who would have bought an E.V. anyway.

Tax credits can also artificially inflate prices, since sellers can charge more if the government will shoulder a portion of the bill. Under the previous version of the program, when Tesla and General Motors hit the sales cap and their E.V.s were no longer eligible for the credits, each company lowered prices.

E.V.s are already more expensive than other vehicle types. Cox Automotive reported earlier this month that “the price premium over [internal combustion engine] vehicles increased to $9,066.” Automakers clearly priced their vehicles so as to qualify for credits: When Tesla introduced its Cybertruck in 2023, it priced the all-wheel-drive model starting at $79,990—just $10 shy of the tax credit’s cutoff.

Citing Morning Consult survey data, Cox reported last week that 65 percent of people curious to purchase E.V.s “still say they would consider buying an electric vehicle despite the phasing out of the Inflation Reduction Act tax rebates. Access to charging, vehicle performance, cost savings and environmental concerns all ranked higher in purchase consideration than rebates.”

In 2018, the Pacific Research Institute found that in 2014, under the previous E.V. tax credit program, nearly 80 percent of the credits went to households with an adjusted gross income of at least $100,000, with more than half reporting incomes over $200,000. J.D. Power reported last year that among surveyed buyers, “federal tax credits have played a critical role in consumer decisions to purchase an EV.” But the numbers were higher among more expensive manufacturers, with 81 percent of Volkswagen and 72 percent of Tesla buyers citing the tax credit as a factor in their decision, as opposed to just 24 percent of Kia and 21 percent of Toyota buyers.

Consumers benefit from a range of vehicle options. But those options should be determined by the market. Motorists have expressed at least some willingness to switch to electric vehicles, and the government should let them decide what to buy without giving them taxpayer money.

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Michael Jordan’s Lawsuit Against NASCAR Could Upend Motorsports

Just imagine it: the roar of 40 overpowered sedans—plastered in vinyls hawking everything from fast food to faith, weed to Creed—bumping and banging at 200 mph. NASCAR has always drawn in unlikely characters. Beyond big screen portrayals by Tom Cruise and Will Ferrell, it has lured celebrity team owners like Pitbull, Super Bowl coach Joe Gibbs, and, most improbably, Michael Jordan. But unlike the others, Jordan has taken his endless hunt for an edge to court—the federal kind, not the hardwood.

Jordan is suing NASCAR for monopoly. His 23XI Racing team, along with Bob Jenkins’ Front Row Motorsports, has hauled NASCAR into federal court, claiming new changes to the sport’s charter system are unfair to teams. For most fans, the surprise isn’t the lawsuit’s details but the casting. Jordan, a global icon and owner of one of NASCAR’s newest teams, is playing the part of underdog, slinging stones at the France family dynasty that built stock-car racing from a Daytona beach into a billion-dollar circuit.

Jim France is heir to a three-generation fiefdom that’s been steering NASCAR for 77 years. His family controls the sanction, the schedule, the rulebook, and many of the tracks themselves. They aren’t beloved by fans, but they’ve kept the show running, and lately, the sport’s been more competitive than ever. The charter system, introduced in 2016, is central to that shift: Buy in and you’re guaranteed a start in every race, resale value in the tens of millions, and a share of the TV money. Under the current $7.7 billion media deal, tracks receive about 65 percent, teams split 25 percent, and NASCAR takes the rest.

That framework has changed the sport. NASCAR was once dominated by dynasties: Richard Petty, Dale Earnhardt, Jimmie Johnson—great drivers who won so much they nearly smothered the product. Watching them was like watching Jordan himself drop 70 points every night; thrilling in isolation, deadening for a league. The France family’s reforms broke that cycle. The charter system works like revenue sharing, and the Next Gen car functions like a salary cap. Together, they’ve produced a level of parity NASCAR has never seen. Jordan himself is proof: 23XI Racing launched in 2021, won in its first season, and has since won eight more races.

But Jordan and Front Row Motorsports say the numbers are still stacked. Even with last-place charter payouts climbing to about $8.5 million annually, NASCAR controls the lion’s share of the media haul and directs most of it to tracks it owns. The contracts, they argue, come bound with gag clauses and noncompetes that give teams no real choice but to sign and stay silent. Refuse, and you’re stripped of your charter, relegated to “open” status with smaller purses and no guaranteed grid spot.

So far, the courts aren’t buying the arguments from Jordan and Front Row Motorsports. They filed their suit in October 2024 after refusing to sign NASCAR’s new charter deal. They briefly won an injunction, letting them race as charter teams, but in June, the 4th Circuit tossed it, saying their case wasn’t strong enough. NASCAR agreed not to sell the disputed charters this season and tweaked rules so their cars can keep racing as “open” entries, though for less money. Trial is set for December 1, with the judge warning that if the plaintiffs prevail, “NASCAR will look much different by 2026.”

Strip away the filings and the spectacle is absurd: Imagine Jerry Jones storming out of the NFL, claiming Commissioner Roger Goodell runs a monopoly. Yes—that’s the point. Every league is a closed system. Your house is a monarchy, your office a dictatorship, and NASCAR a monopoly unto itself. That’s how order is kept, parity enforced, and the game protected from chaos. The grown-up way to change the earnings split is called negotiation. The childish way is to sue and beg a federal judge to strong-arm your partner.

The moment you move from the negotiating table to the courtroom, you stop being a partner. You prove yourself a bad-faith actor, conscripting the government to dictate terms by fiat. That doesn’t just tilt a revenue split, it undermines the entire structure of the league. Why would tracks invest if payouts can be rewritten in court? Why would sponsors commit if contracts can be overturned by a judge? Once antitrust litigation becomes a substitute for bargaining, the league doesn’t bend—it breaks.

Teams do have other options. Tony Stewart’s SRX series may have been a sideshow compared to NASCAR, but it landed a TV deal and packed short tracks on Thursday nights. Dale Earnhardt Jr.’s CARS Racing Tour gives drivers and sponsors another outlet. They’re smaller, scrappier, and nowhere near NASCAR’s scale—but that’s the point. If you don’t like the house rules, you can always start your own game. What you don’t get to do is drag the government in to rewrite the rulebook of someone else’s league.

To let courts dictate the terms of a private league is to declare that nothing built can ever belong to its builders. The France family turned a regional curiosity into a national spectacle. If antitrust prevails, they’ll be reduced to tenants in their own house. And for what? So Michael Jordan can pose as the underdog in a sport that made him competitive overnight. That isn’t justice—it’s vandalism dressed up as fairness.

For this Chicago sports fan, it’s a bit hard to watch. Six championships earned him a bit of grace and that global trademark: “Air Jordan.” This little antitrust sideshow might just ground him.

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Jefferson, Wine, and the Wall of Separation

Many people know Thomas Jefferson’s phrase about a “wall of separation between church and state.” Fewer know how that phrase entered constitutional law. It’s a curious story, which I discuss in a new Legal Spirits podcast with historians Don and Lisa Drakeman.

The story begins with Jefferson’s 1802 letter to the Danbury Baptists, written to reassure them that he shared their view of church-state relations. In that letter, Jefferson wrote that the First Amendment had built “a wall of separation between church and state.” The metaphor was memorable, but the letter was not widely circulated and largely disappeared from public memory.

This was not surprising. Jefferson played no direct role in drafting of the Constitution or the First Amendment. Although he wrote the Virginia Statute for Religious Freedom in the 1780s, which influenced American thinking about liberty of conscience, he was abroad during the Philadelphia Convention and, by the time Congress proposed the Bill of Rights in 1789, he was serving as Secretary of State. The Religion Clauses were the product of Madison and the First Congress, not Jefferson.

The Danbury letter might have remained obscure but for a rediscovery in the 1870s. Chief Justice Morrison Waite, with the help of his neighbor, historian George Bancroft, came across the letter and cited it in Reynolds v. United States (1879). The Court in Reynolds upheld the federal government’s prosecution of a Mormon defendant for practicing polygamy, despite his claim of religious obligation. Waite distinguished between belief and conduct: Congress could not legislate about belief, but it could regulate conduct that violated social duties or threatened public order. To support this distinction, Waite quoted Jefferson’s Danbury letter, treating him as an authoritative interpreter of the First Amendment.

But Waite didn’t stop there. He also invoked an earlier piece of Jefferson correspondence, a letter to a Virginia wine merchant, in which Jefferson remarked that the Constitution should be ratified and then amended to add an express protection for religious freedom. That letter was largely about Jefferson’s views on wine, not constitutional design, yet Waite used it to suggest that Jefferson was an “acknowledged leader” of the movement for a bill of rights. By relying on this passing aside, buried in a letter on an entirely different subject, Waite sought to link Jefferson directly to the First Amendment.

The move was “stunningly flimsy,” the Drakemans argue. Jefferson’s letters were written in contexts removed from the adoption of the First Amendment. Yet Waite elevated them into constitutional law, where they would play an outsized role for more than a century.

Indeed, Jefferson’s metaphor of the “wall of separation” dominated the Court’s Establishment Clause jurisprudence in the twentieth century. Although the Court has stepped away from the metaphor in recent decades, preferring instead a “history and tradition” approach, Jefferson’s words remain influential in law and politics. Few metaphors in American constitutional history have had greater staying power.

This curious episode illustrates both the power and the risks of judicial reliance on history. Offhand remarks in private correspondence—about constitutional law, but mostly about Bordeaux—became touchstones for constitutional doctrine. The episode reminds us that history can take on a life of its own in ways the Founders themselves never imagined.

In the podcast, the Drakemans and I discuss Jefferson, Waite, and Bancroft, the risks of amateur history at the Court, and Jefferson’s other writings on religious freedom. You can listen to the full conversation here.

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