Editorial:

Mayday, mayday, mayday... I find myself in a situation where I seem to have lost not only my day but also my sanity, echoing Joe's predicament. Vladi, please send a doctor urgently.

How do Trump's personal goals fit the bigger picture?  Although he's never read Mein Kampf, he admires some of Hitler's policies.  Moreover, Trump strongly supports Netanyahu, which creates a contrast and raises questions.  Also, his strong backing of Putin suggests a desire to disrupt Europe.  What's next in this complicated web of alliances and loy?

The strategy involves implementing separation to establish control.  The upheaval in Europe can be attributed to political factors, as President Trump abandoned the traditional approach of treating Europe as a close-knit unit and instead displayed a preference for authoritarian figures like Xi Jinping, Vladimir Putin, and Benjamin Netanyahu over Europe's democratically elected leaders.

Furthermore, the significant impact of Tucker Carlson's interview with President Vladimir Putin must be considered.  During the interview, on the sidewalk of the —alderman— of the walled Kremlin, Putin appeared good-natured and slyly happy, as if a —strong spirit—had lifted his soul.  He must have rejoiced in the good work that his Donald was doing him. Nasdrovia tovarich Donald!!! This is especially noteworthy considering the former president's messages delivered through Carlson, which Trump himself emphasised when, just three days after that controversial tête-à-tête, his statement regarding NATO allies sounded the alarms of a potential nuclear attack.

US President Donald Trump and German Chancellor Angela Merkel disagreed about Russian influence and military spending before a Nato summit. Trump criticized Germany for depending too much on Russian natural gas, while Merkel defended her country's contributions to the alliance. This clash followed a previous dispute over trade at the last summit they both attended. Trump later made more friendly comments after meeting Merkel at the Brussels summit. This meeting happened shortly before Trump's upcoming summit with Vladimir Putin, sparking concerns among US allies about his relationship with the Russian president.

President Trump criticized Germany's reliance on Russian energy and its low defense spending at a NATO meeting in Brussels. Chancellor Merkel defended Germany's independence, citing its history with the Soviet Union's control.

https://www.bbc.com/news/world-europe-44780489

In December 2023, Energy Central celebrated top contributors in the Energy & Sustainability Network at the 'Top Voices' event. Winners were featured in 6 articles, demonstrating community recognition. The platform enables professionals to share their work, interact with colleagues, and collaborate with influencers. Congratulations to the 2023 Top Voices: David Hunt, Germán Toro Ghio, Schalk Cloete, and Dan Yurman for demonstrating their expertise. - Matt Chester, Energy Central

Summary:

Trump 2.0 would mean chaos and threat for Europe. Now is our chance to prepare…

The Guardian by Nathalie Tocci

Trump’s in big legal trouble, but he’s still a nightmare for Europe…

Despite the indictments, the former US president’s return remains the nightmare – but one that’s been pushed to the back of the mind.

POLITICO EU BY *JAMIE DETTMER

Trump says he warned NATO allies: Pay in or he’d tell Russia to ‘do whatever the hell they want.’

NYT By Michael Gold

Nikki Haley denounces Trump’s NATO comments and defends her husband against his attacks.

“Don’t take the side of a thug who kills his opponents,” Ms. Haley said on CBS’s “Face the Nation” on Sunday, after Donald Trump suggested he might encourage Russia to attack a NATO member.

NYT By Maggie Astor

Why the Cost of Biden’s Climate Law Keeps Going Up

Forecasters say the president’s clean-energy incentives will be more effective than they had originally expected, in part because of new federal regulations.

NYT  *Jim Tankersley

He Grew Up in the Shadow of the ‘Wolf of Wall Street.’ Then He Got Into Debt Settlement.

Ryan Sasson built a business that reaped hundreds of millions of dollars in fees for helping people negotiate down their debts. But former clients — and prosecutors — say it was exploitative.

By *Stacy Cowley and Emma Goldberg

*The reporters spoke with more than two dozen current and former employees and customers at Strategic Financial Services over the past five months.

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How do Trump's personal goals fit into the bigger picture? Although he's never read Mein Kampf, but he admires some of Hitler's policies. At the same time, he strongly supports Netanyahu, which creates a contrast and raises questions. Also, his strongly buck to Putin suggests a desire to disrupt Europe. What's coming next in this complicated web of alliances and loy…

Germán & Co

Trump 2.0 would mean chaos and threat for Europe. Now is our chance to prepare…

The Guardian by Nathalie Tocci

As Donald Trump romps to the Republican nomination for the next presidential race, there is justified anxiety among the US’s European allies about his return to the White House. It is all but certain that 2024 will see a rerun of Joe Biden v Trump. Europe needs to prepare for the possibility of a second Trump presidency.

The last one was traumatic for Europe. This was not really for policy reasons. There were policy divisions such as Trump’s withdrawal from the Iran nuclear deal. But transatlantic policy tensions are hardly new: there have been times – the US-led war in Iraq in 2003 for example – when the rift was deeper.

Europe’s trauma had more to do with politics: Trump was the first American president not to treat Europe as family. He visibly felt more comfortable with authoritarians such as Xi Jinping and Vladimir Putin than with Europe’s democratically elected leaders.

Trump’s antipathy towards Europe has not changed. Second time around, these bad political vibes would probably translate into much greater policy chasms. Whereas his first term was internally erratic and largely ineffective, with frequent resignations and oscillations, a second could be more coherent and determined. Rather than diverse strands of the Republican party together in an unwieldy coalition, Trump 2.0 would be 100% Maga (Make America Great Again). He would not limit himself to unpleasant tweets.

Add to this, an international context that is far more challenging. Europe is deeply shaken by two wars, one of them on the continent itself. Neither Russia’s invasion of Ukraine nor war in the Middle East have any end in sight. In fact, the possible return of Trump may be among the reasons driving Putin and Benjamin Netanyahu to prolong their wars. After November, Europe’s strategic predicament could be worse than the dire one we have today.

What might Trump 2.0 imply for Europe? On the economy and the Middle East, differences would intensify. Transatlantic relations have not been easy since Biden’s Inflation Reduction Act, or what is viewed by many as his free pass to Israel’s war in Gaza. But with Trump, things would almost certainly deteriorate.

It is likely he would U-turn radically on Ukraine. He has threatened to drop Kyiv overnight, unless it accepts a “peace” struck by Washington (likely on Moscow’s terms). Deal or no deal, it is difficult to see Trump keeping up US military aid to Ukraine. Abandoning Ukraine would probably embolden Moscow further, raising the Kremlin’s level of imperial ambition in Ukraine and beyond. If Putin believes that Trump would not lift a finger to stop him, he could go as far as threatening Nato.

A second Trump presidency could also undermine American democracy, perhaps fatally. With four criminal indictments weighing on him, Trump would move against the judiciary, further undermining its independence. He would probably make good on his threats to go after those he considers traitors, with the risk of unleashing a 21st-century version of McCarthyism.

Picking up where he left off in 2020, Trump might go further in weakening the already frail multilateral order, starting with the UN. A democratic winter in the US would not remain confined to American borders, but reverberate across the world, starting with Europe.

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Trump’s in big legal trouble, but he’s still a nightmare for Europe…

Despite the indictments, the former US president’s return remains the nightmare – but one that’s been pushed to the back of the mind.

POLITICO EU BY *JAMIE DETTMER

*Jamie Dettmer is opinion editor at POLITICO Europe. 

With former United States President Donald Trump ensnared in mounting and potentially politically terminal legal woes, some European leaders and politicians are breathing more easily . . . but only a little. 

For months now, in the margins of global summits and gatherings — including Davos, the Munich Security Conference and the Aspen Ideas Festival — discussions have increasingly turned to considering what a second Trump term might mean for Europe and NATO, as well what its impact would be on the West’s support for Ukraine.

“It is all anyone wants to talk about,” said Ivo Daalder, former U.S. ambassador to NATO, who heads the Chicago Council on Global Affairs. “Everyone’s asking everyone else what’s going to happen. I hear people asking all the time what it will do to Ukraine if Trump gets back into the White House.”

Europe’s nightmare is still of a Trump return, but it’s a bad dream that’s been pushed to the back of the mind. With the former president declaring his candidacy, and recent court appearances and indictments merely fueling his popularity among his Republican base, however, many on the Continent are now asking, what’s the plan?

For most European leaders, Trump’s first term was — to say the very least — traumatic, accompanied as it was with threats to pull the U.S. out of NATO; a refusal to emphatically reaffirm the NATO Treaty’s Article 5, guaranteeing mutual assistance in the event of armed attack; and rifts on a range of issues from trade and immigration to sanctions on Russia and climate change.

Low points came in quick, unrelenting succession. In May 2017, a few months after he entered the White House, Europeans hoped a more moderate Trump might emerge, making strenuous efforts to placate and court the man Germany’s Handelsblatt newspaper had dubbed the “Boor-in-Chief.” Surely, he would temper his campaign remarks, including his description of Brussels as a “hellhole” because of what he claimed was a lack of “assimilation” of the Muslim population.

But those hopes were rapidly squelched on Trump’s first presidential visit to Europe, dashing talk of resetting transatlantic relations that had been roiled by his turbulent election.

While Trump and his aides described the trip as a “success,” European leaders and officials complained that the team was ignorant of basic facts — notably on transatlantic trade. “Every time we talked about a country, he remembered the things he had done,” an official told Belgium’s Le Soir. “Scotland? He said he had opened a [golf] club. Ireland? He said it took him two-and-a-half years to get a license and that did not give him a very good image of the EU.”

And that first taste of Trump prompted then German Chancellor Angela Merkel, a firm transatlanticist, to question where the Western alliance was heading. Speaking at a rally in Germany, she said: “The times in which we can fully count on others are somewhat over, as I have experienced in the past few days.” And while acknowledging that Germany and Europe should strive to maintain good relations with the U.S. and Britain, Merkel also said, “We need to know we must fight for our own future as Europeans, for our destiny.”

Her mood didn’t improve the next year, when at the G7 summit in Canada, Trump took two pieces of candy out of his pocket, threw them in front of the German chancellor and said: “Here, Angela, don’t say I never give you anything,” as French President Emmanuel Macron, Merkel and others were trying to persuade him to sign a communiqué on a rules-based international order.

So, when Joe Biden — the most pro-Atlanticist president since George H.W. Bush — defeated Trump, there was unmitigated relief. “Relations will be less abrasive, and we won’t have to weather a presidential commentary of needling all-caps tweets,” a senior German official told me.

Gone was the White House’s encouragement of the Continent’s Euroskeptic populists; gone, too, was the cozying up to Russian President Vladimir Putin. Not that anyone expected all to be smooth sailing — both the U.S. and Europe had changed, and Biden seemed as though he might pursue an “America First” agenda, though not, as he pointed out, an “America Alone” one. However, the episodic questioning of the very value of the transatlantic defense pact Trump had engaged in, as well as the bruising encounters and brusque tweets aimed at European leaders, was now also gone.

However, after all this, some European politicians now fault their colleagues and national leaders for not drafting contingency plans and thinking hard enough about how to cope with a second Trump term.

For the French lawmaker Benjamin Haddad, Europe’s security cannot rest on the whims of the U.S. electorate | Geoffoy van der Hasselt/AFP via Getty Images

French lawmaker Benjamin Haddad, a member of Macron’s Renaissance party, says no one should assume Biden will be reelected, nor bank on Trump being found guilty on the indictments filed this week by U.S. Special Counsel Jack Smith — the most momentous in America’s 247-year history.

“I believe Europeans are not taking seriously enough the probability of a Trump reelection,” Haddad told POLITICO. “Indictments, regardless of whether justified from a legal standpoint, clearly strengthen him for the Republican primary. And he’s neck and neck with Biden in the general election polls. At this point, it seems like a 50-50 scenario. Europe’s security cannot rest on the whims of the U.S. electorate,” he added.

Some planning in Europe has now finally begun on how to safeguard the transatlantic security pact — as well as how to cushion Ukraine from Trump. But not enough, according to a top lobbyist in Washington who represents some European countries. He asked for his name to be withheld in order to speak freely. “Are people preparing sufficiently for the possibility of a Trump administration? The answer is no. I’ve been saying we need to prepare for this because he looks weak in many ways, but he is the presumptive nominee,” he said.

­Notwithstanding the indictments Smith has filed, contingency planning needs to get underway in earnest, the lobbyist emphasized, arguing that worst-case scenario planning is always prudent. “Especially when you consider all the consequences we would likely see with a second Trump administration, which would be so much worse than the first. Because the question is, who’s going to go into the next Trump administration? At least you had some very solid sort of folks going in the first time around. Who’s going to go back a second time? That’s especially scary,” he added.

And as a lobbyist, he’s been working with some Republican congressman to start erecting legislative guardrails to try and restrict a President Trump from withdrawing from NATO or cutting off aid to Ukraine.

But Daalder believes such legislation, even if passed, can only do so much to fence in Trump. “Okay, you can make it law that you cannot withdraw from NATO without Senate approval. The problem with that is you don’t have to actually pull out of NATO to destroy it,” he said. “And so, I really don’t think there is a legislative fix for this. The only way to avoid Trump destroying NATO is for Trump not to become president.”

“Some of the Europeans I talk with say if the worst happens, they’ll be able to weather a Trump presidency like they did the first time,” Daalder added. “But I tell them they’re whistling in the graveyard.”

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Trump says he warned NATO allies: Pay in or he’d tell Russia to ‘do whatever the hell they want.’

NYT By Michael Gold

Former President Donald J. Trump said on Saturday that, while president, he told the leaders of NATO countries that he would “encourage” Russia “to do whatever the hell they want” to countries that had not paid the money they owed to the military alliance.

Mr. Trump did not make clear whether he ever intended to follow through on such a threat or what that would mean for the alliance, but his comment at a campaign event in South Carolina — a variation of one he has made before to highlight his negotiation skills — is likely to cause concern among NATO member states, which are already very nervous about the prospect of a Trump return.

Mr. Trump’s suggestion that he would encourage Russian aggression against allies of the United States — for any reason — comes as Republicans in Congress have pushed back against more aid for Ukraine in its war against Russia, and as European officials have expressed concerns over possible Russian aggression on NATO’s Eastern side.

Russia’s president, Vladimir Putin, dismissed those warnings as “threat mongering" in an interview with Tucker Carlson, the former Fox News host, that aired on Thursday. “We have no interest in Poland, Latvia or anywhere else,” Mr. Putin said.

But he has also called on the United States to “make an agreement” to end the war in Ukraine by ceding Ukrainian territory to Russia, comments that were seen by some as an appeal to American conservatives to block further involvement in the war.

Some European officials and foreign policy experts have said they are concerned that Russia could invade a NATO nation after its war with Ukraine concludes, fears that they say are heightened by the possibility of Mr. Trump returning to the presidency.

In a statement, a White House spokesman, Andrew Bates, called Mr. Trump’s comments “appalling and unhinged,” adding, “Rather than calling for wars and promoting deranged chaos, President Biden will continue to bolster American leadership and stand up for our national security interests — not against them.”

Mr. Trump has previously expressed his belief that support for NATO is overly burdensome on the United States, saying the alliance drains its financial and military resources. His campaign website says that the country must re-evaluate the organization’s purpose.

He has in the past recalled privately telling NATO members that the United States would not defend them from Russian attacks if they were in arrears. Last year, he claimed during a campaign speech that “hundreds of billions of dollars came flowing in” to NATO after he made that threat.

On Saturday, he again brought up that anecdote, saying that he told European leaders they had to “pay up.”

Then, he said, the president of “a big country stood up and said, ‘Well, sir, if we don’t pay and we’re attacked by Russia, will you protect us?’”

Mr. Trump said he asked the other president if the country was “delinquent” in its payments. The leader responded, “Yes. Let’s say that happened,” Mr. Trump said.

“No, I would not protect you,” Mr. Trump recalled responding. “In fact, I would encourage them to do whatever the hell they want. You’ve got to pay. You got to pay your bills.”

Nikki Haley denounces Trump’s NATO comments and defends her husband against his attacks.

“Don’t take the side of a thug who kills his opponents,” Ms. Haley said on CBS’s “Face the Nation” on Sunday, after Donald Trump suggested he might encourage Russia to attack a NATO member.

NYT By Maggie Astor

Nikki Haley condemned former President Donald J. Trump on Sunday for suggesting that he might not defend NATO allies, and that he might even encourage Russia to attack them, if re-elected.

“Don’t take the side of a thug who kills his opponents,” Ms. Haley said on CBS’s “Face the Nation.” “Don’t take the side of someone who has gone in and invaded a country, and half a million people have died or been wounded because of Putin. Don’t take the side of someone who continues to lie. I dealt with Russia every day. The last thing we ever want to do is side with Russia.”

Ms. Haley was responding to comments Mr. Trump made at a rally on Saturday night, when he recounted a conversation with a foreign leader during his presidency in which he said he might not defend a NATO country against a Russian attack if the country were “delinquent” on funding to the alliance. “No, I would not protect you,” Mr. Trump said he replied. “In fact, I would encourage them to do whatever the hell they want.”

What Older Americans Say About Age and Leadership

We asked readers whether they thought the ages of President Biden, 81, and former President Donald Trump, 77, affected their ability to be president.

“The world is changing too rapidly (in dangerous ways). It is time to put egos aside and let a new generation of leaders move us forward.” — Christopher Hardwick, 66, Edgewater, Md., independent

“It is perfectly normal to forget names and words at this age, but I do not believe that this renders one incapable of governing or disrupts one’s thinking rationally.” — Kathleen Young, 80, Longmont, Colo., registered Democrat

“I worked a 45-year career in nuclear power plant operation, which is a highly critical, mentally challenging occupation. In my opinion, they are both too old. There should be an age limit on U.S. presidents.” — Kevin Robinson, 65, Lincolnton, N.C., registered Republican

“I’ll make it to 70 this year. I’m not concerned about their ages. I’m concerned about their ability to think through complex situations and apply judgment in the best interest of the people of the United States.” — Ken Lawler, 69, Alpharetta, Ga., nonpartisan

“I’ll be 70 on my next birthday. I think people need to stop being presidents at the age of 70.” — Kathi Sweetman, 69, Rochester, N.Y., unaffiliated

“I am 76 years old and I believe that age doesn’t matter if a person keeps themselves in good mental and physical condition. I think age is a positive if a person has learned from their past experiences.” — Greg White, 76, Cobden, Ill., registered Democrat

Though there were disputes during Mr. Trump’s administration over some European countries’ spending commitments to their own militaries, there was no debt owed to the alliance.

When the CBS show’s host, Margaret Brennan, asked whether Ms. Haley would “adhere to the premise that an attack on one is an attack on all” if elected president, Ms. Haley said, “Absolutely.”

Our politics reporters. Times journalists are not allowed to endorse or campaign for candidates or political causes. That includes participating in rallies and donating money to a candidate or cause.

“We do want NATO allies to pull their weight, but there are ways you can do that without sitting there and telling Russia, ‘Have your way with these countries,’” she said. “If you notice, Russia has never invaded a NATO country. They’ve invaded Georgia, Moldova and Ukraine. They are actually very intimidated by NATO. NATO allows us to prevent war.”

In his rally on Saturday, Mr. Trump also insulted Ms. Haley directly, suggesting that her husband, Michael Haley, a major in the Army National Guard who is deployed to Djibouti, had left the country to avoid being with her.

“This isn’t personal about me and Michael,” Ms. Haley said in the interview on Sunday. “This is about what it says to every member who sacrifices for us. This is about what it says to every military family who sacrifices alongside of them. We can’t have someone who sits there and mocks our men and women who are trying to protect America.”

Ms. Brennan noted that, during his 2016 campaign, Mr. Trump mocked Senator John McCain for having been a prisoner of war and insulted the parents of a soldier killed in combat, but Ms. Haley nonetheless agreed to work for him as ambassador to the United Nations.

“I agreed to serve our country, and I’m proud I got to serve our country,” Ms. Haley replied.

Mr. Trump’s comments on NATO also drew condemnation on Sunday from former Gov. Chris Christie of New Jersey, who was the most outspoken Trump critic in the Republican primary until he ended his campaign last month.

“It’s one thing, and I think it’s right, for a president to say to a NATO member, ‘Hey, you’ve got to pay the dues you need to pay,’” Mr. Christie said on NBC’s “Meet the Press.” “But the problem with Donald Trump is he can’t just stop there. He’s got to say, ‘I would encourage Russia to do whatever the hell they wanted to you.’ That is absolutely inappropriate for a president of the United States or a candidate for president of the United States to be saying, but it is consistent with his love for dictators.”

Why the Cost of Biden’s Climate Law Keeps Going Up

Forecasters say the president’s clean-energy incentives will be more effective than they had originally expected, in part because of new federal regulations.

NYT  *Jim Tankersley

*Jim Tankersley is an economics reporter who covers policy from the White House.

The estimated price tag for President Biden’s clean-energy and climate agenda has effectively doubled since the Inflation Reduction Act was signed into law a year and a half ago.

Nearly all of the increase is attributable to forecasters’ belief that the law will be more popular than they had originally expected, in part because of the way the Biden administration wrote certain regulations. That rising price tag may actually be good for reducing greenhouse gas emissions — and for the U.S. economy.

The Inflation Reduction Act, which Democrats passed on a party-line vote in summer 2022, includes tax credits and other subsidies for low-emission energy technologies that are meant to help wean the nation from fossil fuels.

Many of those credits are effectively unlimited, meaning the more people or companies choose to claim them, the more they will add to federal deficits. The uncapped credits include incentives for manufacturers to build solar-panel or wind-turbine factories, and for consumers to buy electric vehicles. Budget scorekeepers have to estimate how popular those credits will be, in order to forecast how much they’ll cost.

When the law passed, the nonpartisan Congressional Budget Office published an estimate based on work by the congressional Joint Committee on Taxation projecting that the energy components would add $391 billion to deficits over a decade, from 2022 to 2031. It revised those forecasts upward last spring and again on Wednesday based on joint committee calculations.

Clean-energy manufacturing is booming.

The law has supercharged investment in American manufacturing facilities of some low-emission technologies, led by solar panels, advanced batteries and the full supply chain for electric vehicles.

An investment tracker by the Rhodium Group, a consultancy that follows energy and climate spending, and the Massachusetts Institute of Technology shows companies spent $44 billion on clean-energy manufacturing in America over the past year, with significantly more planned in the years ahead. Those companies will benefit from the tax breaks in the climate law, either directly or indirectly.

The popularity of those credits has surprised forecasters. Budget office officials said Wednesday that they now expected the provisions to add about $205 billion more to deficits through 2031 than they had initially anticipated, based on joint committee estimates.

Electric vehicles could also surge.

Forecasters now expect the consumer credit for electric vehicles, which is as much as $7,500 for an electric car or truck, to cost several times as much as initially expected. That calculation isn’t really based on sales of electric vehicles, which hit a record last year even though annual sales growth slowed from 2022. It stems from a pair of Biden administration regulations that are meant to fuel more electric vehicle sales — and which the budget office expects to be quite effective.

The first regulation is in place and expanding access to the electric-vehicle credit. The I.R.A. doesn’t allow every electric vehicle sold in America to qualify for the credit. It restricts the subsidies to cars and trucks that are largely sourced and assembled in the United States, in order to support domestic manufacturing. But there is a loophole, which was codified by a Treasury Department regulation: Car shoppers who lease, instead of buy, their electric vehicles can effectively receive the full credit even if their vehicles do not otherwise meet sourcing and manufacturing requirements. Not coincidentally, electric-vehicle leases shot up last year.

The second regulation is a proposal from the Environmental Protection Agency that could result in two-thirds of new passenger cars sold in the United States to be all-electric by 2032. The budget office estimates that regulation, once finalized, will incentivize more Americans to buy electric vehicles and cash in on the tax credit. They’ll also burn less gasoline, which will reduce federal gas tax revenues.

Concerted climate action could help the economy and the budget.

Rhodium modelers estimated last year the I.R.A. will result in a steep cut to U.S. emissions, though not quite enough to meet the nation’s pledges for 2030 under the Paris Agreement on climate change. The rising costs in the law suggest it could spur even deeper emissions cuts than those forecasts.

A more effective Biden climate agenda could potentially catalyze more ambitious global action to cut emissions and avert economically catastrophic warming levels. Administration officials have warned the risks of climate inaction are large for the economy and the budget. In 2022, the White House budget office estimated unchecked climate change could reduce the size of the economy by as much as one-tenth by the end of this century.

They also estimated climate damages could force the government to spend an extra $1 trillion or more in today’s dollars over the course of a decade on flood insurance, disaster relief, health care costs from heat waves, and more.

But the climate law now probably adds to the deficit.

The I.R.A. was more than a climate law. It also raised some corporate taxes, increased subsidies for some people who buy health coverage through the Affordable Care Act and cut federal spending on prescription drugs by allowing the government to negotiate prices with pharmaceutical companies. It also gave more money to the Internal Revenue Service to crack down on corporations and high earners who have been able to avoid paying taxes they owe. The net result, the budget office initially estimated, was a law that slightly reduced deficits over a decade.

The rising cost of the energy and climate incentives now flips that math. The law, by the C.B.O. and J.C.T. accounting, is on track to add slightly to deficits from 2022 to 2031.

Biden officials still contend the law will reduce deficits on net. They estimated this week that the I.R.S. enforcement efforts will bring in $432 billion from 2022 to 2031, which is $252 billion more than the budget office forecast. Treasury officials say that is more than enough, by their math, to offset the losses from a more successful climate effort and ensure the law still reduces deficits.

“The Inflation Reduction Act is bringing billions in private-sector capital off the sidelines to invest in America,” Michael Kikukawa, a White House spokesman, said Thursday. He said the law “will reduce the deficit over the long run by cutting wasteful spending on special interests, making big corporations pay their fair share and cracking down on wealthy tax cheats.”

He Grew Up in the Shadow of the ‘Wolf of Wall Street.’ Then He Got Into Debt Settlement.

Ryan Sasson built a business that reaped hundreds of millions of dollars in fees for helping people negotiate down their debts. But former clients — and prosecutors — say it was exploitative.

By *Stacy Cowley and Emma Goldberg

*The reporters spoke with more than two dozen current and former employees and customers at Strategic Financial Services over the past five months.

In the early 1980s, 19-year-old Jordan Belfort — who would go on to become known as the Wolf of Wall Street, a title he bestowed on himself in a tell-all memoir — had a fortuitous encounter on Jones Beach, on Long Island, with another teenager selling ice cream named Stephen Drescher.

The two became friends. Prosecutors would later note their shared hustling spirit, a drive for entrepreneurialism that curdled into a drive for grift. Within a few years, Mr. Belfort started building a pump-and-dump stock-scam empire. He took Mr. Drescher under his wing as he built a boiler room brokerage that would go on to defraud more than 1,000 investors, later memorialized in Martin Scorsese’s box office hit “The Wolf of Wall Street.”

Mr. Belfort’s enterprise collapsed in the late 1990s, when he was arrested and pleaded guilty to fraud and money laundering. Mr. Drescher went down not long after, convicted of securities fraud and sent to federal prison for nearly four years.

He, too, had a spiritual successor of sorts: his stepson Ryan Sasson.

Bronzed, athletic and self-assured, Mr. Sasson is chief executive of Strategic Financial Solutions, a large employer in Buffalo often hailed by politicians and business publications as a fast-growing exemplar of corporate citizenship. Its call center, packed at its peak with hundreds of workers, offers well-paying jobs in a region eager for economic expansion. Strategic regularly makes four- and five-figure philanthropic donations to local causes; New York’s lieutenant governor cut the ribbon at its Buffalo office opening. On its website, the company, which also has a Manhattan office, boasts of luxe perks like massage therapy rooms and bonus trips.

The company’s primary business is debt settlement, helping consumers buried in credit card bills negotiate down what they owe and extract themselves from financial turmoil. Strategic has more than 75,000 clients and has saved them $1 billion over the last three years through its negotiated debt deals, the company’s president said in January in a legal filing.

But state and federal prosecutors, former clients and former employees cast Strategic in a very different light.

The company’s business is predatory, they say, and uses a nationwide network of accomplice law firms to exploit clients — many of them struggling, low-income people — and extract fees that often total tens of thousands of dollars for services that can sometimes leave customers financially worse off than when they started. Clients think that they’re paying those fees to law firms to represent them in the high-risk process of debt settlement. Instead, the clients are funneled mainly toward workers with no legal training, and frequently find themselves unrepresented in legal proceedings.

Some manage to get the debt relief they seek, but others are left with tattered credit scores and legal judgments against them that have led to wage garnishments and debts even larger than when they started.

In January, government regulators pounced.

After an investigation that started more than four years ago, the Consumer Financial Protection Bureau — along with the attorneys general of New York, Colorado, Delaware, Illinois, Minnesota, North Carolina and Wisconsin — sued Strategic and its operators, including Mr. Sasson, on civil fraud charges. They asked a Federal District Court judge in Buffalo to immediately freeze the company’s assets and hand over its operations to a receiver. Citing the case’s strength — the government prosecutors are “likely to prevail on the merits of this action,” the judge wrote — he granted their request within 24 hours.

Strategic has asked the court to reverse that decision. “We continue to believe this case is really targeting the law firms,” said Dennis Vacco, a lawyer representing Strategic. “They don’t have authority over the law firms so they are squeezing their administrative service provider.”

Strategic took in hundreds of millions of dollars in fees from clients in the last seven years, according to the regulators’ January complaint. The company transferred at least $72 million to private companies controlled by Mr. Sasson and his business partners, prosecutors said. Another $36 million flowed from the network of Strategic-affiliated law firms to the private family trust of Mr. Sasson’s longtime business associate, Jason Blust.

As federal regulators closed in on his business, a yacht Mr. Sasson co-owns went up for sale: the $2.6 million “Strategic Dreams.”

Former clients highlight the financial and psychological toll that the program took on them. More than 40 percent drop out before their debts are resolved, according to Strategic’s own legal filings. In one-third of the client cases examined by the suing regulators, customers paid Strategic’s affiliated law firms but never received any debt relief. In other cases, the debts eliminated were eclipsed by the fees they paid.

Americans have a lot of debt — to the tune of $1.1 trillion on credit cards — and there’s a huge business in helping people manage it. Many of those debt holders say they feel like they’re drowning. When they’re promised help, they don’t necessarily ask questions about what they’re paying for, and why.

The Cockroach Theory

Mr. Sasson, who is 45, was born in New York City to Ginjer and Joseph Sasson, who divorced when he was young. His mother, who died 11 years ago, was introduced by Mr. Belfort to Mr. Drescher.

After college at Tulane University, Mr. Sasson worked on a retail clothing venture. His post-college career played out amid his stepfather’s trial, 2001 conviction and imprisonment for securities fraud.

Mr. Drescher’s crimes involved manipulating the market prices of small companies’ initial public offerings. The trades netted millions for Mr. Drescher’s employer, the now defunct brokerage Monroe Parker Securities, and earned him six-figure bonuses. The family lived large, with tens of thousands of dollars in limousine charges, according to court records, often for travel to the family’s $70,000-a-summer Hamptons rental.

The sprawling scheme’s many participants included the shoe designer Steve Madden, who pleaded guilty to stock fraud. Mr. Drescher’s indictment details events that seem drawn from a caper movie, like the hours he and an accomplice spent buying gambling chips at Caesars Palace and the Mirage in Las Vegas in what prosectors said was a scheme to launder illicit cash.

The casino move was one of many tactics Mr. Drescher learned from his infamous mentor, government lawyers claimed. “What Belfort taught Drescher was enough to give him a Ph.D. in securities fraud,” William Johnson, a prosecutor for the U.S. attorney for the Southern District of New York, told the jury during Mr. Drescher’s trial.

Prosecutors also introduced to the courtroom a notion that Mr. Belfort had often discussed with colleagues, called “the cockroach theory.”

“When the regulators would squash a firm, sort of like stepping on a firm, all the roaches would scatter,” one of Mr. Drescher’s associates, Bryan Herman, said in his testimony. “So when the regulators would squash a penny stock firm, the brokers would scatter and then reappear in other firms somewhere else.”

In 2006, the same year his stepfather left prison, Mr. Sasson set up the company that became an anchor for some of his many enterprises over the next decade: Timberline Capital, which made short-term loans to retailers. Mr. Sasson invested in dry cleaners and restaurants, including My Belly’s Playlist, a sandwich shop that was sued for wage theft and settled. (In many of his pursuits, he found himself entangled in lawsuits.)

Debt settlement was a market that Mr. Sasson gravitated toward early and returned to repeatedly. It is also where his own business dealings intersected with those of his stepfather, Mr. Drescher, who had been disbarred and stripped of his broker’s license. (Mr. Drescher did not respond to a request for comment.)

“I am deeply offended that you attempt to tar me with the personal history of my stepfather, who married my mother when I was a teenager,” Mr. Sasson told The New York Times. “If you want to know the biggest influences on my life, you can start with my parents. They are of strong character and values, which I like to believe they instilled in me.”

In 2009, both men were named in one complaint in a handful of lawsuits against Elimadebt. This was a company managed by Mr. Sasson that used a business model he later incorporated into Strategic’s: handling sales for debt settlement lawyers. The lawsuits, filed by a disgruntled partner law firm, accused the company of contract violations.

Federal court filings in Miami by the angry business partner described Mr. Sasson as a “straw man” for his stepfather. Elimadebt ceased operations soon after the lawsuit was settled in 2011. (Lawyers representing Strategic and Mr. Sasson called the straw-man allegation “completely false.”)

Mr. Sasson had by then moved on to a new company, Legal Helpers Debt Resolution, which was sued by four state attorneys general for defrauding consumers by charging hefty upfront fees, then doing very little to negotiate down the consumers’ debts. (Mr. Drescher and Mr. Sasson’s mother were also tangentially involved. They ran a services business that did work for Legal Helpers.) To settle those lawsuits, Legal Helpers and some of its leaders agreed, over several years, to pay more than $14 million in penalties and consumer restitution and to cease operations, according to government prosecutors’ legal filings.

Mr. Sasson was not personally named as a defendant in the Legal Helpers lawsuits.

Legal Helpers started winding down its business in 2012. That’s the same year that Strategic appeared to start operating, though it lists its founding date as 2007.

“If you look back at the detritus of Legal Helpers after it was dismantled, the same names show up,” said Lucy Prather, an attorney for the City of Chicago, which filed suit in 2022 against Strategic and an affiliated law firm.

Strategic would become the biggest moneymaker of Mr. Sasson’s career.

A High-Stakes Game of Chicken

Christopher Elkins, 49, has been cited by Strategic as a success story.

Mr. Elkins enrolled with Canyon Legal Group, a Strategic affiliate, in 2019, after receiving a mailed advertisement. He dropped out of the program in late 2023. In those four years, he had debts totaling $85,000 settled for $42,000. He paid $26,000 in fees to Canyon, leaving him with a net savings of $17,000. Had his debt lingered, his interest alone — 28 percent or higher on each of his credit cards — would, in just one year, have eclipsed what he paid Canyon in fees.

But Mr. Elkins found the experience of working with the company miserable. By around the 20-month mark, he recalled, he had paid some $20,000 to have only a few relatively small debts resolved, and his credit score had nose-dived from around 740 to 520. In the following months, he faced four lawsuits from creditors; Canyon represented him in at least two, according to Strategic’s legal filings. As he tried to reach an attorney, he was continually directed to customer service.

Mr. Elkins fired Canyon. He said he and his wife then, on their own, negotiated settlements to all four of the lawsuits.

“They are vultures,” Mr. Elkins said in an interview to The New York Times. “They are preying on people who find themselves in dire need of support.”

Rick Gustafson, a lawyer who runs Canyon, said that “at trial, Mr. Elkins testified that he was ‘drowning’ in debt before he retained Canyon,” adding, “Thanks to Canyon, he is no longer drowning.”

Consumers typically heard about Strategic through advertisements — the company sent some 2 million direct mail solicitations a week — that told them they had prequalified for a low-interest loan. When they called to find out more, sales representatives often told them they weren’t actually eligible for a loan, but encouraged them to instead enroll, through one of Strategic’s partner law firms, in the debt settlement program.

Debt settlement is essentially a high-stakes game of chicken. The first thing companies tell their clients to do is stop paying their monthly debt bill. Instead, the client puts money each month into an escrow account — generally less than they would have owed for their credit cards’ minimum payments. The goal is to force the debt into default.

Once a customer fails to pay for an extended period, many creditors will write off the loan as a soured debt and sell it to a collection firm for pennies on the dollar. That’s the sweet spot for settlement: The new buyer will usually accept far less than the debt’s face value. Debt settlement negotiators use the funds their client has stashed away in escrow to pay off the reduced debt. A $30,000 credit card bill, for example, might get settled for $15,000 or less.

The maneuver causes significant collateral damage to the client. Customers’ credit scores plunge once they stop paying their bills, and many creditors will sue to pursue what they’re owed. (Strategic warns potential clients that this is part of the process.)

At that point, clients need to have lawyers who are responsive to incoming lawsuits if they want to avoid default judgments, which typically seek the debtor’s full owed tab plus additional fees. Some settlement companies make it clear that they will not provide legal aid. If a client gets sued, they refer the client to outside lawyers or tell them to go find their own.

Strategic, though, makes its legal help the centerpiece of its pitch. Sales employees’ scripts, according to a legal filing by the receiver now controlling the company, instructed them to tell prospects that they would be connected to an “established law firm that specializes in helping clients resolve their own personal debt.”

What that arrangement allowed Strategic to do is to begin billing right away. Under federal and many state laws, debt-settlement companies generally cannot charge clients until they actually deliver a settlement deal. But attorneys can.

It’s enticing for clients who are drowning in debt to feel like they can pay, albeit heavily, for a legal team to guide them through the process of negotiating down their debts.

But that’s not exactly what they’re getting, according to interviews with former employees and clients, as well as legal filings from prosectors. Cases are handed over to negotiators with no legal training. The lawyers don’t even consistently show up for the clients in court, though Strategic-affiliated firms say that they do sign off on final settlements.

By the time clients are halfway through the program, some have paid tens of thousands to Strategic and face lawsuits from creditors — with very little of their debt resolved.

“No system operated by a human being is going to be perfect, but we aimed for perfection,” Mr. Sasson said in an email. “We have helped more than 100,000 people over the years get back on their feet by saving them a lot of money. That is the definition of consumer protection.”

A Network of Law Firms

Strategic relies on a network of at least 20 law firms, which take on an average of 5,000 to 10,000 clients each — extremely high loads for firms that generally had five to 20 employees.

Mr. Blust, who worked with Mr. Sasson at Legal Helpers, oversees this network of firms. Mr. Blust’s firms keep roughly 20 percent of client fees, and the other 80 percent go to Strategic, emails filed in court show.

“With the exception of Pioneer (a law firm that hasn’t taken a new client in many years), the law firms Blust consults with (including those in this case) are owned and independently operated by the attorney owners,” said Rodney Personius, an attorney for Mr. Blust.

The lawyers who own these firms take on risks. One lawyer, Daniel Rufty, a recent law school graduate from a for-profit and now-shuttered school, paid $10 for ownership of a Strategic-affiliated firm — then, months into his tenure, found out he was under investigation by his state’s bar association for misleading clients and “criminal debt adjusting.”

Mr. Rufty was suspended from the practice of law for five years. He declined to comment through his lawyer. Strategic emerged unscathed.

Strategic’s complicated structure has come under legal scrutiny before. In 2020 — after lawyers in Florida sued Strategic and accused it of skirting the law by portraying its own employees as law firm workers — debt negotiators were abruptly reclassified by Strategic as employees of the law firms instead of Strategic or its subsidiaries. (The Florida case was settled, on undisclosed terms.)

But current and former employees, and legal filings from Strategic’s receiver, said that the new arrangement was largely illusory. While the negotiators now technically worked for the law firms, they still reported to Strategic staff. The negotiators used Strategic’s systems and in some cases, when they weren’t remote, worked from Strategic’s offices, according to interviews with former negotiators and legal filings. Some said they didn’t know the names of the people who operated the firms and were supposedly their bosses.

Lawyers for Strategic and its affiliated law firms have insisted, in court filings and in interviews, that the arrangement is valid and transparent.

“The firms’ attorneys are involved in every settlement,” said Terrence Connors, a lawyer representing the firms.

‘To Have No Money for a Week Was Terrifying’

When Anne Barsch, 48, first learned about a Strategic-affiliated law firm, Monarch Legal Group, she felt a wave of relief. She had roughly $60,000 in debt from making home improvements and supporting her young children. She thought Monarch could negotiate down those debts and represent her when creditors sued. She and her husband agreed to pay $818 monthly into an escrow account for the program.

Ms. Barsch said in interviews, and testified at the trial in Buffalo, that she lost trust in Monarch when she learned that a judgment had been entered against her by a creditor — after she’d stopped paying bills, at the firm’s instruction — and her lawyer hadn’t shown up in court to represent her. Her bank account was frozen for a week.

“To have no money for a week was terrifying,” she recalled, adding that she then started reading about Monarch online and learned the firm was being sued by the City of Chicago.

She sent letters to her creditors saying she had been “scammed” and asking to negotiate with them on her own. She learned that Monarch had sent lawyers to represent her for just 30 percent of her court dates, according to her testimony.

A spokesman for the law firms said they settled six of Ms. Barsch’s 10 debts. Ms. Barsch said they settled two, and she and her husband did the others on their own.

Another Monarch client, Julia Briggs, 43, who had been sued by a creditor, showed up at her own court date and discovered that no attorney had come to represent her. Leading up to the hearing, she said in interviews, she was told she couldn’t get her attorney’s direct contact information, leaving her to wonder: What exactly were all her legal fees going toward? She then reached out to a new lawyer, Scott Priz, to file suit against Strategic in 2022.

A spokesman for the law firms said Ms. Briggs signed up for a 24-month program and left roughly halfway through.

While customers like Ms. Briggs and Ms. Barsch said they were unfairly served by the firms, the federal prosecutors’ case rests on a narrower legal issue.

Debt collection laws are a patchwork mostly governed by state statutes. But a federal law requires debt settlement companies that promote their services by phone to close the deal for legal services in person, through a face-to-face meeting with the customer.

Rather than sending sales representatives, Strategic, on behalf of its affiliated law firms, hired gig worker notaries — who effectively came into each meeting cold — to handle those meetings and finalize paperwork. The crux of the government’s case hinges on whether those notaries qualified as sales representatives of the law firms.

A Lavish Corporate Culture

When Ben Kopp, 35, started at Strategic in 2018, the job at first seemed like run-of-the-mill sales. He made 150 to 200 calls a day, seated among rows of other headset-wearing salespeople, pitching customers on the debt settlement program.

But just hours into his employment, Mr. Kopp was cautioned not to tell customers that he was calling from Strategic and to instead say he was calling from one of the law firms associated with Strategic, or from one of the law firms’ support organizations. He recalled looking across the table and catching another new hire’s gaze.

“We kind of met eyes and were like, ‘All right, what did we get hired to do?’” he said. “‘Why wouldn’t we tell them what we’re calling from?’”

Many of the salespeople who worked at Strategic believed, at least in their early months at the company, the clients were actually getting good legal representation, Mr. Kopp said. He had a clearer view into what was happening because he had a college friend who worked on Strategic’s negotiations team.

After a few months, he began searching for a way out, realizing that many customers felt they were being exploited. “It affected me from a moral perspective,” he said.

Some of his colleagues also came to realize — over break room conversations with colleagues in customer service — the potential harms of the program. He heard one sales consultant announce proudly to her teammates that she had enrolled her mother in Strategic’s program. Many in earshot were alarmed, he recalled. “We couldn’t come out and say, ‘Don’t do that’ but we were trying to hint toward, ‘Why would you do that?’”

Still, there were perks. The money clients paid fueled a corporate culture with lavish touches. High performers were presented with Rolex watches and steakhouse dinners. The top salespeople were flown to Las Vegas. Office parties featured beer kegs; celebrations were held at restaurants, with cocktails and D.J. music.

Mr. Sasson’s business, at its prepandemic height, was bringing in tens of millions of dollars each year, according to former employees and legal filings from prosectors.

In 2017, the company sold itself to its employees, through a financial transaction known as an ESOP (Employee Stock Ownership Plan). The deal valued the company at $242 million. Mr. Sasson described the transaction as something of a gift to the employees — “our Strategic family,” he called them — who had built the company.

Mr. Sasson had, effectively, cashed out. His employees now owed 100 percent of Strategic.

A Surprise Federal Lawsuit

On Friday, Jan. 12, in the middle of the afternoon, Strategic’s nearly 1,000 employees — all working remotely, as the staff typically did on Fridays — were abruptly shut out of their company systems. Some were cut off right in the middle of calls with customers.s

Three days later, workers learned over group chats with managers that there had been a lawsuit filed against the company. They were told they’d be put on paid leave while the company’s lawyers fought back. On Friday, Jan. 19, the federal court in Buffalo unsealed the regulators’ complaint.

Former employees said they had been drawn to the firm because of its pitch about helping struggling people get back on their feet.

“It’s that fantasy job that you see in television and movies — like at the beginning of ‘The Wolf of Wall Street,’” said David Briggs, who worked as a litigation negotiator for Strategic until 2022, and did not know about Mr. Sasson’s family connection to Jordan Belfort when he drew the comparison. “They really kept you hyped up; they kept you feeling like you were part of a family, a team, and that you were doing good in the world.”

The fate of Strategic — and its work force — is now in the hands of the federal court. If the company remains in receivership, it will soon be out of business, Strategic’s lawyers have told the court.

And the ESOP — the vehicle that turned over ownership of Strategic to the company’s employees — will be wiped out if Strategic folds. Mr. Briggs’s shares were valued on his last statement at $6,090. He anticipates that by his next statement, that number may fall to zero.