Megabill’s Fate Uncertain as Senators Continue Marathon Voting
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Senate Republicans forge ahead as they try to pass President Trump's tax and spending mega bill by July 4th. Republicans really do want to pass a bill. They're ready to go, but they don't have the votes yet. And there's a lot of complex policy in here and a lot of competing political interests. Plus, the Trump administration finds that Harvard violated students' civil rights. And the surprising reason why investing in stocks that pay dividends really does pay off.

It's Monday, June 30th. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

Let's start with President Trump's big, beautiful bill. Senate Republicans have charged forward with a marathon session to pass the bill as the party races to get the legislation to the president's desk by their self-imposed July 4th deadline. One of their first moves, a 53-47 party-line procedural vote that declared that Republicans' extensions of expiring tax cuts have no effect on the federal budget.

This is a crucial part of their strategy to extend tax cuts permanently with a simple majority vote, though Democrats and budget experts call it a gimmick. The voting on amendments and procedural motions is expected to last many hours as the various GOP factions seek to push the bill in their favored direction on charged political issues like changes to Medicaid, food assistance programs, and tax cuts. The Journal's tax policy reporter Richard Rubin joins us now from the U.S. Capitol.

So, Richard, where does voting stand? Does the bill seem likely to pass at this juncture? Voting stands in continuous operation, but still spinning their wheels. And does it seem likely to pass? It feels inevitable in a sense. Republicans really do want to get something done, but they don't necessarily have all the votes locked down to have 50 votes out of the 53 Republicans to pass this thing just yet.

Are they taking votes on some of these big political issues like Medicaid, food assistance? Have those big ticket items come up?

So some of these issues have come up from Democratic votes, and generally Republicans see a couple of defections here and there, but they're generally blocking those Democratic votes. What we're really waiting for, which hasn't been scheduled yet, are big Republican votes, where you've got Republican senators who want changes to the bill. So Lisa Murkowski wanting slower phase-outs of wind and solar tax credits. You've got Susan Collins wanting more money for rural hospitals and a higher tax rate on people making over $25, $50 million.

You've got, coming from the other direction, Rick Scott, Ron Johnson, Mike Lee, and Cynthia Lummis wanting to basically freeze and then repeal the expansion of Medicaid that was part of Obamacare. So we're waiting for those big Republican amendments and for Republican leaders to pull together all of the provisions they might want to change and make those changes. Seems like the future is maybe a little bit hazy right now, but...

Given where things are at, the bill still has to go back to the House. Does it seem likely at this point that Republicans are going to make their July 4th deadline? The emoji of the month has been the shrugging guy, and I will just stick with that right now. Look, Republicans really do want to pass a bill. The important thing to remember at the July 4th deadline is that it is not real in any sense. It is fake.

what the president wants and deadlines are clarifying and motivating, but the real consequences of failure to pass something start showing up in August when the debt limit increases necessary and really hit it at the end of December when the tax cuts expire. So this is important. They want to get this done. No one wants to spend July here like we spent June here, but it is certainly not a given that this will happen. That was Wall Street Journal reporter Richard Rubin. Thanks as always, Richard. Sure. Thank you.

U.S. stocks capped a turbulent quarter by notching new records. Major U.S. indexes rose. The S&P 500 and the Nasdaq closed at all-time highs today, each rising roughly half a percent. The Dow increased about 0.6 percent. The Trump administration has sued Los Angeles over its sanctuary city policies, ramping up tensions between the city and the federal government's immigration enforcement efforts.

In a lawsuit filed today in the U.S. District Court for the Central District of California, the administration said a city ordinance severely limiting cooperation with federal immigration officials violates the Constitution Supremacy Clause and has made it challenging to carry out enforcement actions there. It named the city, Democratic Mayor Karen Bass, and the city council among the defendants. Bass's office didn't immediately respond to a request for comment. ♪

We're exclusively reporting that the Trump administration has informed Harvard University that its investigation found that it had violated federal civil rights law over the treatment of Jewish and Israeli students. It's the latest in the battle between the White House and the wealthiest U.S. university and could put Harvard's federal funding further at risk.

Doug Belkin covers higher education for the journal and joins me now. Doug, what did this investigation from the Trump administration find exactly? They cited a lot of the reports that Harvard has already created looking at anti-Semitism on campus and essentially said Harvard failed to address the anti-Semitism that was on campus, especially between 2023 and 2025.

There were issues of Jewish kids being harassed, prevented from going to school, spit on. Also in the report, there were issues of being shunned and forced out of social circles. And what has Harvard said about this?

Harvard says that they have acknowledged that there were problems on campus and that they are very forcefully dealing with them, pushing back against anti-Semitism and trying to create a culture on campus that is better for open debate and open discourse and doesn't violate anybody's civil rights. This is the latest in a pretty fraught relationship between the Trump administration and Harvard specifically. What happens next?

Well, that's the million-dollar question. It's probably actually the $2.3 billion question because that's how much money the Trump administration has frozen in research funding from the university. Harvard and the Trump administration are in court, and then there's also negotiations between the White House and Harvard University. This could just be a turn of the screw to generate more negotiating leverage from the White House. What this is, in a sense, saying is that you have violated civil rights and

And we can stop federal funding on the basis of that. So this will probably pull Harvard's attention and say it's in your best interest to negotiate and give us what we want outside of court. The administration has targeted a number of elite universities. What is its end goal? What the Trump administration says is that kids enter university...

And they come out not proud to be Americans, very tied to particular identities, filled with grievances from one identity to the next. They're not patriotic. They don't believe that the American ideal is a good one. So what the administration would say is we are hoping that universities become more patriotic, more American, more helpful to America. And they're going in the wrong direction. And we are trying to change that.

That was WSJ reporter Doug Belkin. Thank you, Doug. Thanks for the invitation. Separately, the America First Policy Institute, a conservative think tank with ties to the Trump administration, filed a civil rights complaint against Cornell University. The complaint alleges that the university has used discriminatory DEI practices in hiring and scholarships. A Cornell University spokesperson said the school's hiring policies focus on merit and prohibit discrimination.

Coming up, the reason people love stocks that pay dividends isn't really about income. More after the break.

Finance professors have long tsk-tsked about investors' love for dividends. One study in the 1960s determined that since maximizing wealth is the point, investors shouldn't care about the payouts as they're just part of their total return. But as WSJ investing columnist Spencer Jacob writes, more recent studies have found that caring about dividends can really pay dividends. So Spencer, what exactly are investors doing?

As you said, the original study is that a company pays out a certain amount of cash, it reduces its value by that amount, and it puts that money in your pocket. You have no change in wealth because now you own a less valuable stock. Later, they tried to explain people's preference for dividends by saying, well, mentally, people put income and wealth into two different buckets. Income is like your salary and also dividends and interest, and people are much more reliant

relaxed about spending that. So they like getting dividends. But now we realize that dividend payers actually are a bit different. And this study was done of people at Vanguard who own income funds or plain vanilla funds that don't have that on the label. And they saw what they did with that money and they asked them why they did what they did with their money.

What makes these dividend stocks pay off? So people do tend to have a preference for them. And when they asked people, a lot of them gave the right answer, which is that they feel like they're higher quality companies, they're more stable. It wasn't the preference for the income, because if you look at what people did, they just reinvested their dividends for the most part. But if you look at the performance of dividend paying stocks versus stocks that don't pay dividends, there's a very big difference over the years, a very big positive difference.

The reason is that those companies tend to be a bit better value and companies that pay dividends tend to be of higher quality because they can't keep all their cash. They're committing to paying out a certain amount of their cash. And so quality and value, we know, are two factors that work very well in the long run. And so by default, you're picking those kinds of companies. Spencer, as someone who has been paying attention to this space for a really long time, did you find these results surprising?

I did find the results surprising that people just reinvested back into the same funds. I would have thought that people who prefer to have income funds must need the money, must be living off the income and spending it down and not just reinvesting it. That was WSJ Investing columnist Spencer Jacob. Thanks, Spencer. Sure.

In business news, Apple said today that it will delay offering some planned new features to users in the European Union this year because regulations are making it harder to bring them to market in the region.

The iPhone maker has to comply with the Digital Markets Act, an EU law designed to curb the market power of the world's largest technology companies and make it easier for smaller developers to do business online. Apple has routinely criticized that law, saying, among other things, that it makes rolling out new software features in Europe more complicated.

And UK antitrust officials said today they were investigating Boeing's deal to acquire fuselage maker Spirit Aerosystems. The Competition and Markets Authority has opted to open the first phase of a formal investigation, with a decision due by August 28th on whether to escalate the case. The launch of an antitrust investigation in the UK could pose a regulatory hurdle to the jetmaker's efforts to take control of Spirit's operations and stabilize its supply chain.

And that's what's news for this Monday afternoon. Today's show was produced by Pierre Bien-Aimé with supervising producer Michael Cosmetes. Additional support by Coleman Standifer. I'm Alex Osola for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.