SALT-n-pessimism

Summary

The Indicator from Planet Money: SALT-n-Pessimism

Release Date: June 20, 2025

In the June 20, 2025 episode of The Indicator from Planet Money, hosts Waylon Wong and Darren Woods, along with guest Kenny Malone, delve into three pressing economic topics: the surge of stablecoins and their impending regulation, the contentious debate over the state and local tax (SALT) deduction cap, and a significant gender gap in economic sentiment. This comprehensive discussion provides listeners with nuanced insights into the current economic landscape.

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1. The Rise of Stablecoins and Legislative Responses

Indicator: $27.6 trillion

The episode kicks off with Darren Woods highlighting a staggering $27.6 trillion as the global value of stablecoin transactions last year. Stablecoins are cryptocurrencies pegged to stable assets like the U.S. dollar, offering the volatility-free appeal of traditional currencies combined with the technological advancements of cryptocurrencies.

“That is a measure of how much people are using stablecoins globally,” Darren notes ([02:30]). The popularity of stablecoins is attributed to their utility in facilitating cross-border payments, reducing bank fees, and providing a hedge against high inflation in certain countries. However, their anonymity has also made them a tool for illicit activities such as scams, drug deals, and ransom payments.

Senate Bill on Stablecoin Regulation

The U.S. Senate has recently passed a bill aiming to regulate stablecoins for the first time. Key provisions of the bill include:

• Reserve Requirements: Companies issuing stablecoins must hold reserves equivalent to the value of the stablecoins in actual U.S. dollars or close equivalents like U.S. Treasury bonds ([04:09]).

• Regulatory Oversight: The Office of the Comptroller of the Currency (OCC) will oversee large stablecoins, while smaller ones will fall under the jurisdiction of state regulators based on where the stablecoin company is headquartered ([04:10]).

However, the bill faces criticism regarding its efficacy. Berkeley economist Barry Eichengreen expressed skepticism, highlighting that regulators historically struggle to keep pace with rapidly evolving financial technologies.

“Regulators couldn’t move fast enough to act when Silicon Valley Bank's assets were vaporizing a few years ago,” Darren references Eichengreen’s concerns ([04:35]).

Supporters argue that the bill establishes necessary guidelines where none previously existed, providing a framework to manage the burgeoning stablecoin market.

Exemptions and Controversies

An intriguing aspect of the bill is the exemption for presidential families from promoting stablecoins. Darren points out that while members of Congress are barred from endorsing the stablecoin market, presidential families remain excluded from this restriction ([05:07]).

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2. The State and Local Tax (SALT) Deduction Cap Debate

Indicator: $10,000

Kenny Malone introduces the next topic by focusing on the $10,000 cap on state and local tax (SALT) deductions, a legacy of the 2017 Tax Cuts and Jobs Act under the Trump administration.

“That is the salt cap that you hear people talking about,” Kenny explains ([05:39]). Originally, taxpayers could deduct the full amount of their SALT payments, but the cap was introduced to limit this deduction. This cap has resurfaced as a major sticking point in the current legislative negotiations over a comprehensive spending bill.

House vs. Senate Perspectives

There is a significant divergence between the House and Senate regarding the SALT cap:

• House Proposal: Proposes increasing the cap from $10,000 to $40,000 ([06:05]).

• Senate Stance: Maintains the existing $10,000 limit ([06:10]).

This disparity has led to tensions, with House members describing the Senate’s position as “dead on arrival” and a “slap in the face” to efforts aimed at providing tax relief to high-tax states.

“This is the kind of policy that you would hear Democrats typically bristling at,” Kenny observes, noting the bipartisan implications since higher SALT caps primarily benefit wealthier individuals who pay more in state and local taxes ([06:46]).

Political Dynamics and Potential Compromise

Interestingly, while SALT caps are generally opposed by Democrats, blue states with higher taxes stand to benefit from an increased cap. This has led to some Democratic senators, like Chuck Schumer, criticizing Republicans for obstructing tax relief measures that could benefit their constituents ([07:06]).

Furthermore, even some Republicans from Democratic-leaning states, such as New York, support raising the SALT cap, adding complexity to the negotiations. Darren suggests that despite the current impasse, there remains room for compromise between the House’s $40,000 proposal and the Senate’s $10,000 cap ([07:43]).

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3. Gender Disparities in Economic Sentiment

Indicator: 15 Percentage Points

Waylon Wong presents the final segment, revealing a 15 percentage point gap in economic sentiment between men and women based on a recent Harris poll conducted for The Guardian.

“That is the size of the gap between how men and women feel about the economy,” Waylon states ([07:50]). The survey indicates that 62% of women are worried about the economy compared to 47% of men ([08:15]).

Underlying Factors

Libby Rodney, Harris Poll’s Chief Strategy Officer, attributes this disparity to the disproportionate impact of inflation on essentials like groceries and childcare, areas where women are more likely to manage household budgets.

“Women are experiencing the sharp edge of inflation on essentials like groceries and childcare in ways that stock portfolios can't capture,” she explains ([08:51]).

Political and Social Implications

The gender gap in economic concern spans across political affiliations, affecting both Democratic and Republican women. This aligns with Waylon Wong’s earlier findings that households where women handle grocery shopping perceive higher inflation rates than those where responsibilities are more evenly split ([09:31]).

“If you're out there looking at price tags of eggs and ground beef going up week after week, you are probably going to be more worried about inflation,” Waylon encapsulates the daily realities that fuel this sentiment gap ([09:41]).

Furthermore, the survey highlights that women are less optimistic about receiving raises, with 54% of women expecting a raise compared to 63% of men ([09:58]). This expectation gap underscores the broader economic uncertainties faced by women in the workforce.

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Conclusion

The June 20 episode of The Indicator from Planet Money provides an insightful exploration of significant economic issues:

• Stablecoins continue to reshape the financial landscape, prompting legislative efforts to balance innovation with regulation.

• The SALT deduction cap remains a contentious policy issue with broad political and economic implications, reflecting deeper debates over taxation and federal spending.

• A persistent gender gap in economic sentiment highlights the unequal impact of economic fluctuations, emphasizing the need for more inclusive economic policies.

By dissecting these topics with expert analysis and real-world data, Waylon, Darren, and Kenny offer listeners a comprehensive understanding of the current economic dynamics shaping our world.

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Notable Quotes:

• Darren Woods ([02:30]): “That is a measure of how much people are using stablecoins globally.”

• Darren Woods ([04:35]): “Regulators couldn’t move fast enough to act when Silicon Valley Bank's assets were vaporizing a few years ago.”

• Kenny Malone ([05:39]): “That is the salt cap that you hear people talking about.”

• Kenny Malone ([06:46]): “This is the kind of policy that you would hear Democrats typically bristling at.”

• Waylon Wong ([07:50]): “That is the size of the gap between how men and women feel about the economy.”

• Libby Rodney ([08:51]): “Women are experiencing the sharp edge of inflation on essentials like groceries and childcare in ways that stock portfolios can't capture.”

Transcript

[NPR]

Npr.

[Waylon Wong]

This is the Indicator from Planet Money. I'm Waylon Wong.

[Darren Woods]

And I'm Darren Woods. Today, mingling with us once more, our Planet Money muchacho, the marvelous Mr. Kenny Malone.

[Kenny Malone]

Oh, please, just Kenny Malone. Mr. Kenny Malone was my alliteration. That's not really true. Okay, yeah, that.

[Waylon Wong]

Or do we actually need all the honorifics because it is indicators of the week.

[Darren Woods]

On today's show, the Senate and stablecoins.

[Kenny Malone]

The salt cap sticking point and starkly.

[Waylon Wong]

Split sentiments on the state of the economy.

[Darren Woods]

That's all after the break.

[NPR]

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[Waylon Wong]

It is Indicators of the Week. Darian, you're up first.

[Darren Woods]

My indicator is $27.6 trillion. That's a measure of how much people are using stablecoins globally. Last year there was $27.6 trillion worth of trading payments and transfers on stablecoins like tether. And I bring this up because the Senate has just passed a bill that might bring special regulation for these cryptocurrencies for the first time.

[Waylon Wong]

Makes sense that there's so much money zipping through the blockchain that maybe some lawmakers want to put some guardrails on.

[Darren Woods]

Yes, and so a reminder of what stablecoins are, they are cryptocurrencies whose value is pegged to something else. Often the US Dollar. So unlike bitcoin or ether, whose values fluctuate wildly, you are promised that when you buy one of these cryptocurrencies, it'll stay basically the same. And because of this apparent certainty, stablecoins are increasingly popular with. We'll link to our full explainer on stablecoins in the show. Notes. These cryptocurrencies are often used for people sending money across borders who would otherwise face high bank fees and delays. Or they're used in countries where inflation is high, also for scams and drug deals and ransoms.

[Kenny Malone]

All right, so wide range there. What then is in this bill? Is it addressing some of those things?

[Waylon Wong]

A lot of use cases.

[Darren Woods]

There's many use cases, as Wayland said. To be clear, the things I just mentioned are illegal anyway. They don't need special regulation. But the coins themselves seem to. So the bill does a few things. First, it says that companies that run stablecoins need to hold the equivalent amount of actual U.S. dollars or close equivalents, like U.S. treasury bonds.

[Waylon Wong]

Okay, makes sense.

[Darren Woods]

Then it clarifies who's in charge of regulating Stablecoins in the U.S. the bill says for large stablecoins, it's the Office of the Comptroller of the Currency, and for the smaller stablecoins, it's actually up to the state where the stablecoin company is based. Huh.

[Kenny Malone]

Okay. So you would hope that then those state regulators are on top of this. They're having the baton handed to them.

[Darren Woods]

Yeah. And you've hit on a major criticism of the bill. Berkeley economist Barry Eichengreen wrote an op ed in the New York Times this week. He pointed out that regulators couldn't move fast enough to act when Silicon Valley Bank's assets were vaporizing a few years ago. And so he's sceptical that regulators will be able to scrutinise the hundreds or even thousands of stablecoins that that could be issued all over the country. Supporters of the bill, though, say that this at least gives some rules of the road as opposed to none.

[Waylon Wong]

And speaking of rules, I read that the Trump family can still promote their stablecoins under this bill.

[Darren Woods]

Yeah, members of Congress can't shill the stablecoin game, but presidents and their families, they are notably excluded.

[Kenny Malone]

Speaking of carve outs and priorities, I suppose my indicator this week is, is $10,000. That is currently the maximum amount of state and local taxes that you, any of you are allowed to deduct on your federal taxes. $10,000.

[Darren Woods]

This is the salt cap that you hear people talking about.

[Kenny Malone]

Indeed, the salt cap. The olden days, you used to be able to deduct all of the salt you paid. But then in 2017, the first Trump administration put the $10,000 cap in place as part of Trump's Tax Cuts and Jobs Act. And now the is back in the news because it's apparently a big sticking point on the gigantic spending bill that's getting hashed out right now.

[Waylon Wong]

Yeah, there's a mismatch right between the salt cap in the Senate's version and then the House's version of this bill.

[Kenny Malone]

Indeed. So the House passed a version with a much bigger salt cap, $40,000. The Senate's version still has the $10,000 cap. And this is a big enough issue that members of the House have said things like, the Senate's bill, quote, is dead on arrival and a quote, slap in the face.

[Darren Woods]

I find this debate super interesting because salt really cuts across party beliefs. Higher salt caps really benefit people who own a lot of property and are paying a lot of taxes. That is wealthy people.

[Kenny Malone]

Indeed, this is the kind of policy that you would hear Democrats typically bristling at. This is true.

[Darren Woods]

And yet it's the blue states that benefit the most from increasing salt because they tend to have higher taxes. And so you'll have Democratic New York Senator Chuck Schumer. He's snarling at some of the Republicans for not wanting to raise the cap.

[Kenny Malone]

That's exactly right. And this time around, we are also hearing from New York Republicans in the House who have a slim majority and have been pushing for the salt cap increase, which is a tax cut of sorts after all, just then, to have their Senate colleagues slap them down. But look, I mean, ultimately, the rhetoric coming out of the Senate seems to indicate that negotiations are still to come, that there's a lot of room for compromise between a $40,000 salt cap and a $10,000 salt cap, making the bill dead on arrival. Waylon, what do you have that's dead on arrival?

[Waylon Wong]

Oh, my segment. Great. I'll just see myself out.

[Kenny Malone]

Yeah.

[Darren Woods]

Now, what's suddenly alive on arrival is Waylon's segment.

[Waylon Wong]

Hit us. That's right. I've got piping hot fresh survey results. My indicator is 15 percentage points. That is the size of the gap between how men and women feel about the economy. That's according to a new Harris poll conducted for the Guardian. And the Survey shows that 62% of women are worried about the economy versus 47% of men.

[Kenny Malone]

That is a bigger gap than I would have expected. So. So the women are more concerned.

[Waylon Wong]

We are worried, Kenny. And this gender gap in sentiment cuts across party lines. It's not just Democratic identifying women who feel more negative about the economy and inflation. More Republican identifying women also signal they felt worse than men. Here's how the Harris Polls chief strategy officer summed it up for the Guardian. Her name is Libby Rodney and she said women are experiencing the sharp edge of inflation on essentials like groceries and childcare in ways that stock portfolios can't capture.

[Darren Woods]

Okay, a very traditional role kind of explanation of things. Is there more to it than this?

[Waylon Wong]

No. Because you know what? In the year of our Lord 2025, women are still more likely to do the grocery shopping, right? Yes, that is the reality and indicator listeners might remember. A couple years ago I interviewed an economist who studied inflation expectations among heterosexual Marri couples and her findings are pretty stark. So in households where men didn't grocery shop, they expected much lower inflation than their wives. And then in households where the spouses split the shopping more equally, this gender gap went away.

[Kenny Malone]

Yeah, I that intuitively makes sense. Like if you're out there looking at price tags of eggs and ground beef going up week after week, you are probably going to be more worried about inflation.

[Waylon Wong]

Yeah. So the Harris poll showed that women are more concerned about food prices and affording essential goods than men are. The gender gap also shows up, though in sentiment around jobs and workplace stuff. So 54% of women said they think they'll get a raise this year versus 63% of men.

[Darren Woods]

And if those men do get raises, well, maybe they should go to the grocery store and see how far their paychecks stretch.

[Waylon Wong]

That's right. Thanks for joining us for indicators of the Week, Kenny.

[Kenny Malone]

Oh, it is my pleasure.

[Waylon Wong]

This episode was produced by Angel Carreras with engineering by Kwesi Lee, and it was fact checked by Tyler Jones. Cake and Cannon is our editor and the indicator is a production of npr.

[NPR]

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