The impact of the massive spending bill that President Donald Trump signed into law on Independence Day is expected to filter down to infants and toddlers — a segment of the population that is particularly vulnerable to cuts to the federal social safety net.
Many middle-class and wealthy families will see benefits from the new legislation, but programs that help low-income families keep babies healthy have been cut back. While state money funds public schools and preschool in some cases, programs supporting the youngest children are largely backed by the federal government.
The law extends tax cuts that Trump passed during his first term in office and pours billions more into border security as the president seeks to broaden his crackdown on immigration. To pay for these initiatives, the law cuts Medicaid and food stamps — programs relied upon by poor households with children — by more than $1 trillion.
The legislation Republicans called Trump’s “big beautiful bill” is set to deliver some gains for families with children. It increases tax credits, including one that now allows parents to deduct up to $2,200 per child from their tax bills. And it introduces investment accounts for newborns dubbed “Trump Accounts,” each seeded with $1,000 from the government.
Still, advocates say they do not make up for what children are likely to lose under the new law. And they fear what comes next, as the next Trump budget proposes more cuts to programs that help parents and babies.
Medicaid cuts could add to strains on families
Over 10 million Americans rely on Medicaid for health care. About 40% of births are covered by Medicaid. Newborns, too, qualify for it when their mothers have it.
The new law doesn’t take little kids or their parents off Medicaid. It institutes Medicaid work requirements for childless adults and adults with children over the age of 13. But pediatricians warn the cuts will be felt broadly, even by those who do not use Medicaid.
The Medicaid cuts are expected to put a financial strain on health care providers, forcing them to cut their least profitable services. That’s often pediatrics, where young patients are more likely to use Medicaid, said Lisa Costello, a West Virginia pediatrician who chairs the federal policy committee for the American Association of Pediatrics.
The ripple effects could exacerbate an existing shortage of pediatricians and hospital beds for children.
“Any cuts to that program are going to trickle down and impact children, whether that’s pediatric practices who depend on Medicaid to be able to stay open or children’s hospitals,” Costello said.
States also use Medicaid to pay for programs that go beyond conventional medical care, including therapies for young children with disabilities. Under the new law, states will foot a greater portion of the bill for Medicaid, meaning optional programs are at risk of getting cut.
Advocates worry that if an adult loses Medicaid coverage, it could ratchet up household stress and make it more difficult for parents to make ends meet, both of which can negatively impact youngsters. And parents who lose their health insurance are less likely to take their children to the doctor.
“When parents lose their health insurance, they often think that their children also are no longer eligible, even if that’s not the case,” said Cynthia Osborne, a professor of early education and the executive director of the Prenatal-to-3 Policy Impact Center at Vanderbilt University.
The law increases tax credits for parents who qualify
The law increases the child tax credit to $2,200 per child, up from $2,000. But parents who don’t earn enough to pay income tax will still not see the benefit, and many will only see a partial benefit.
The measure also contains two provisions intended to help families pay for child care, which in many places costs more than a mortgage. First, it boosts the tax credit parents receive for spending money on child care. The bill also expands a program that gives companies tax credits for providing child care for their employees.
Both measures have faced criticism for generally benefiting larger companies and wealthier households.
“It’s a corporate business tax break,” said Bruce Lesley, president of the advocacy group First Focus on Children. “It makes their child care dependent upon working for an employer who has the credit.”
‘Trump Accounts’ will be opened with $1,000 for newborns
The law launches a program that creates investment accounts for newborn children. The “Trump Accounts” are to be seeded with $1,000 from the government, and children will be able to use the money when they become adults to start a new business, put the money toward a house or go to school.
Unlike other baby bond programs, which generally target disadvantaged groups, the federal program will be available to families of all incomes.
The program’s backers have pitched the accounts as a way to give young people a boost as they reach adulthood and teach them about the benefits of investing. Critics have argued that families in poverty have more immediate needs and that their children should receive a larger endowment if the goal is to help level the playing field.
A food assistance program faces cuts
The Supplemental Nutrition Assistance Program (SNAP) faces the largest cut in its history under the law. It will, for the first time, require parents to work to qualify for the benefit if their children are 14 or older. But even households with younger children could feel the impact.
The law kicks some immigrants — including those with legal status — off food assistance. It makes it more difficult for individuals to qualify by changing how it considers their utility bills.
SNAP has historically been funded by the federal government, but under the new law, states will have to shoulder some of the financial burden. Cash-strapped governments could decide to implement new requirements that would make it more difficult for people to qualify, said Katie Bergh, a senior policy analyst with the Center on Budget and Policy Priorities. Some states may decide to exit the program altogether.
“When young children lose access to that healthy nutrition, it impacts them for the rest of their lives,” Bergh said. “This bill fundamentally walks away from a long-standing nationwide commitment to making sure that low-income children in every state can receive the food assistance that they need.”
Apple is currently undergoing the most extensive executive overhaul in recent history, with a wave of senior leadership departures that marks the company’s most significant management realignment since its visionary co-founder and CEO Steve Jobs died in 2011. The leadership exodus spans critical divisions from artificial intelligence to design, legal affairs, environmental policy, and operations, which will have major repercussions for Apple’s direction for the foreseeable future.
On Thursday, Apple announced Lisa Jackson, its VP of environment, policy, and social initiatives, as well as Kate Adams, the company’s general counsel, will both retire in 2026. Adams has been Apple’s chief legal officer since 2017, and Jackson joined Apple in 2013. Adams will step down late next year, while Jackson will leave next month.
The scope of the turnover is unprecedented in the Tim Cook era. In July, Jeff Williams, Apple’s COO who was long thought to succeed Cook as CEO, decided to retire after 27 years with the company. One month later, Apple’s CFO Luca Maestri also decided to step back from his role. And the design division, which just lost Dye, also lost Billy Sorrentino, a senior design director, who left for Meta with Dye. Things have been particularly turbulent for Apple’s AI team, though: Ruoming Pang, who headed its AI Foundation Models Team, left for Meta in July and took about 100 engineers with him. Ke Yang, who led AI-driven web search for Siri, and Jian Zhang, Apple’s AI robotics lead, also both left for Meta.
Succession talks heat up
While all of these departures are a big deal for Apple, the timing may not be a coincidence. Both Bloomberg and the Financial Times have reported on Apple ramping up its succession plan efforts in preparation for Cook, who has led the company since 2011, to retire in 2026. Cook turned 65 in November and has grown Apple’s market cap from about $350 billion to a whopping $4 trillion under his tenure. Bloomberg reports John Ternus has emerged as the leading internal candidate to replace him.
Apple choosing Ternus would be a pretty major departure from what’s worked for Apple during the past decade, which has been letting someone with an operational background and a strong grasp of the global supply chain lead the company. Ternus, meanwhile, is focused on hardware development, specifically for the iPhone, iPad, Mac, and Apple Watch. But it’s that technical expertise that’s made him an attractive candidate, especially as much of the recent criticism about Apple has revolved around the company entering new product categories (Vision Pro, but also the ill-fated Apple Car), as well as its struggling AI efforts.
Now, of course, with so many executives leaving Apple, succession plans extend beyond the CEO role. Apple this week announced it’s bringing in Jennifer Newstead, who currently works as Meta’s chief legal officer, to replace Adams as the company’s general counsel starting March 1, 2026. Newstead is expected to handle both legal and government affairs, which is essentially a consolidation of responsibilities among Apple’s leadership team, merging Adams’ and Jacksons’ roles into one.
Alan Dye, meanwhile, will be replaced by Stephen Lemay, a move that’s reportedly being celebrated within Apple and its design team in particular. John Gruber, who’s reported on Apple for decades and has deep ties within the company, wrote a pretty scathing critique about Dye, but in that same breath said employees are borderline “giddy” about Lemay—who has worked on every major Apple interface design since 1999, including the very first iPhone—taking over.
Meanwhile, on the AI team, John Giannandrea will be replaced by Amar Subramanya, who led AI strategy and development efforts at Google for about 16 years before a brief stint at Microsoft.
Hitting the reset button
All of the above departures cover critical functions for Apple: AI competitiveness, design innovation, regulatory navigation, and operational efficiency. Each replacement brings specialized expertise that aligns with the challenges Cook’s successor will inherit.
The real test will be execution across multiple fronts simultaneously. Can Subramanya accelerate Apple’s AI development to match competitive threats? Will Lemay’s design leadership maintain Apple’s interface advantages as AI reshapes user interaction? Can Newstead navigate regulatory challenges while preserving Apple’s privacy-first approach?
What’s certain is the company will look fundamentally different in 2026—and the executive team that grew Apple into a $4 trillion behemoth is departing. The transformation could be as profound as any since Jobs handed the reins to his COO at the time, Tim Cook, 14 years ago.
Elon Musk has given the thumbs up to some Tesla drivers texting behind the wheel.
The EV maker recently introduced a 30-day free trial of its Full Self-Driving (Supervised) (FSD) features on its North American cars, which has traffic-aware cruise control, autosteer, and autopark. To the Tesla CEO, the automated features in place are enough to condone texting while driving. According to safety experts, Musk’s suggestion is actually plain illegal.
In response to an X user’s question on Thursday about being able to text and drive while a Tesla is operating FSD v14.2.1, its latest full self-driving capabilities, Musk responded: “Depending on context of surrounding traffic, yes.”
Musk’s response mirrors his comments at Tesla’s annual shareholder meeting last month, where he said the company would soon feel comfortable with a multitasking driver.
“We’re actually getting to the point where we almost feel comfortable allowing people to text and drive, which is kind of the killer [application] because that’s really what people want to do,” Musk said. “Actually right now, the car is a little strict about keeping eyes on the road, but I’m confident that in the next month or two—we’re going to look closely at the safety statistics—but we will allow you to text and drive essentially.”
With a $1 trillion pay package on the line, Musk has worked to jumpstart Tesla after continued lagging sales. His lofty automation goals tied to the compensation plan include delivering 20 million vehicles and having 10 million active FSD subscriptions, as well as 1 million robotaxis on the commercially operational.
FSD roadbumps
Tesla’s FSD rollout, much like its other automated technologies, has hit snags. In October, the U.S. Department of Transportation-run National Highway Traffic Safety Administration (NHTSA) opened an investigation into the EV maker, alleging its FSD software violated traffic laws and led to six crashes, four of which resulted in injuries. It cited data from 18 complaints from Tesla users claiming the FSD-equipped cars ran red lights or swerved into other lanes, including into oncoming traffic.
There is another complication for Musk’s vision of a Tesla owner typing away behind the wheel: Texting and driving is illegal in nearly the entire country, barring Montana, according to the U.S. Bureau of Transportation Statistics. According to the NHTSA, distracted driving resulted in 3,275 deaths in 2023.
Even Tesla has warned owners against texting while driving, even with some automated features in place: Tesla’s Model Y Owner’s Manual asks drivers not to use their phones while driving with Autopilot software enabled. (Autopilot refers to Tesla’s basic driver assistance features requiring hands on the steering wheel, while FSD is a paid subscription package with enhanced automated features and does not require a driver to have hands on the steering wheel.)
“Do not use handheld devices while using Autopilot features,” the manual said. “If the cabin camera detects a handheld device while Autopilot is engaged, the touchscreen displays a message reminding you to pay attention.”
Tesla did not respond to Fortune’s request for comment.
What experts are saying
Alexandra Mueller, senior research scientist for Insurance Institute for Highway Safety, told Fortune condoning texting while behind the wheel completely undermines the purpose of Tesla’s current automated features Tesla, which are a level 2 on the five-point automation scale, meaning the models require the driver to still be fully in control of the vehicle.
“Having partial automation support doesn’t mean that you suddenly can kick back and text and not worry about driving,” Mueller said, “because that’s just not how these systems are designed to be used—and that’s also not the responsibility that the driver has when using these systems, and that’s by design.”
She said automated systems like Tesla’s are not designed to replace the driver and work because they are “human-in-the-loop” and were designed to support the driver’s discretion behind the wheel. Beeps and notifications from the vehicle if a driver changes lanes without signalling can help shape good behaviors, Mueller noted. Encouraging multitasking behind the wheel turns these features into convenience factors, rather than the safety precautions they were intended to be.
“Suddenly all your safety assessments on the technology don’t apply anymore, because you’ve changed the very nature of how the technology is supporting human-in-the-loop behavior,” Mueller concluded.
Netflix’s $72 billion play for Warner Bros. is as much a bet on the future of artificial intelligence (AI) and chips as it is on movies and shows, according to a top Wall Street analyst, who said in an interview with Fortune the deal cannot be understood without looking at Google’s technology ambitions.
Amid cries from the jilted Ellison family about a “tainted” sale process and indie producers and theater owners of the “death of Hollywood,” Melissa Otto, Head of Research at S&P Global Visible Alpha, sees a different game being played. Otto said she thinks the tech angle of the industry is being overlooked.
“I think there’s this much bigger conversation that is being missed,” she said: Google and its TPU chips.
A key question for the future of entertainment, Otto told Fortune, is control over premium video at massive scale in an era when generative AI will increasingly create, remix, and personalize moving images. (Otto called it the “video corpus” that will train and power the next generation of AI models.) Over the long term, Otto added, that is a key part of the mystery behind why Netflix, long a builder rather than a buyer, would make Hollywood history by taking out one of its biggest rivals and one of the town’s prestige legacy studios.
Co-CEO Greg Peters was asked a blunt question about that same thing this morning on the call with analysts about the historic merger. Rich Greenfield of LightShed Partners cited Peters’ own previous statement at a Bloomberg conference about how there’s a long history of failed media mega-mergers, so he questioned: “Why is this going to end differently than every other media transaction essentially of this scale and history?”
Peters, while clarifying his remarks at the conference were a bit more nuanced, acknowledged “historically, many of these mergers haven’t worked, some have, but you really got to take a look at this on a case by case basis.” Still, Peters argued most previous big deals showed a lack of understanding about the underlying business, and Netflix understands these assets and has a “clear thesis about how the critical parts of Warner Brothers accelerate our progress.” He also acknowledged Netflix isn’t expert at doing large-scale M&A.
After all, this is expensive. “We are surprised that Netflix felt the need to spend $80bn+ and pay a premium for something Netflix disrupted,” Barclays analysts wrote in reaction to the deal, “and it is not clear what problem or opportunity Netflix is solving for that couldn’t have been achieved organically.”
In a statement emailed to Fortune, Dave Novosel, a Gimme Credit senior bond analyst, said the deal looks expensive to him as well, with Netflix assuming nearly $11 billion of debt.
“While the WBD assets bring an amazing amount of attractive content, NFLX is paying a steep EBITDA multiple of more than 25x, which seems extravagant,” Novosel wrote. Once it reaches the advertised synergies, he added, the resulting multiple of closer to 15x seems more reasonable. While those are pending, “the huge amount of debt that Netflix will need to raise to fund the deal will take leverage to well more than 4x initially.” Novosel wrote investors may need to be patient. Bloomberg’s credit team, meanwhile, reported the $59 billion bridge loan being taken out to finance this deal is among the biggest in corporate history.
Here’s what Otto sees happening in Northern California, far from Tinseltown, where the Warner deal is all anybody can talk about, and why Netflix took such a big swing.
Is the future of entertainment Northern or Southern California?
Part of Netflix’s thesis, according to Otto, is that it’s a tech company at heart and it recognizes Google’s rapid advancements in AI, particularly its advancements in TPU chips.
“What TPU chips do really, really well is in the modality of video in generative AI,” Otto said, as they essentially turn mathematical representations into moving pictures in much the same way GPUs revolutionized natural language AI by tokenizing and modeling text. Instead of ChatGPT and text, think Gemini 3 and YouTube videos.
Netflix already trails YouTube in total share of streaming time, with Bank of America Research recently citing Nielsen data showing YouTube held 28% of U.S. streaming, versus Netflix’s 18%. Otto said this threatens to go up another notch when and if Google’s TPU chips turbocharge content made with generative AI.
“I’m sure that it’s feeding into the strategy,” Otto said. “If I were Netflix and I knew that Google, one of their formidable competitors, had this chip technology and was essentially plowing billions and billions of dollars into developing the infrastructure so that they could carve out the corpus of the video modality in generative AI, I would want to build a moat around my business.”
On the surface, Netflix is buying a legacy studio with a deep library, beloved franchises, and a global brand—and paying up to do it. The combined streaming and studio business generates about $25 billion in revenue and roughly $4 billion to $5 billion in EBITDA, but margins on streaming remain thin, making the economics of the deal look tough in the near term. Executives have emphasized overlapping subscribers, obvious cost cuts and an expected $5.5 billion in efficiencies, the kind of “low‑hanging fruit” that can occupy management for the next 12 to 24 months, Otto said.
But in a world where TPUs can make high‑quality video “basically for free,” any player lacking both the chips and the content could find itself outgunned as AI reshapes how entertainment is produced and consumed. That makes Netflix’s big splash for Batman, Harry Potter, and the like a different kind of moat, and a different kind of game than the classic Hollywood rivalries of yore. Otto said it was plausible generative AI entertainment could be seen as an extension of the recent IP wars that saw Hollywood deluged by floods of superhero movies and sequels, with Disney’s Marvel Studios ushering in a computer generated revolution in the 21st century. “I think that’s not an outrageous assumption.”
By absorbing Warner Bros., Netflix increases the volume and diversity of content it can feed into recommendation systems, experimentation and, eventually, its own AI‑driven video tools. Otto also noted the deal potentially gives Netflix more exposure to advertising, an area in which Alphabet has dominated and where Warner Bros. still generates $6 billion–$7 billion in ad revenue. While the ultimate destination of that ad talent remains unclear, as they may go to the spinco that includes WBD’s cable assets such as CNN and TNT. (Netflix has only been active in ads since 2022, having been a premium subscription service since it pivoted from DVD rentals to streaming in the late 2000s.)
Imagine a world, Otto said, where you could create your own versions of the crime classic Columbo starring an AI-generated version of legendary actor Peter Falk, who died in 2011. (Columbo had several homes on TV on neither Warner Bros. nor Netflix, as it was first an NBC property in the 1970s, and then an ABC property from the late ’80s onward.) “In this day and age, boy, wouldn’t it be interesting?” Otto asked rhetorically.
In many ways, she added, this moment is remarkable because Netflix may end up neither a subscription nor an advertising business, but an AI-based one that doesn’t quite exist yet. “It’s kind of exciting because it means that it’s anybody’s game,” Otto said.
Otto also raised the spectre of TikTok, the social media giant partially under the control of Larry Ellison.
“They’re a formidable competitor as well,” she said. What’s likely, she added, is the future will be unpredictable. The rise of AI “could provide some really amazing innovation over the next couple of years.” She agreed it could create a bonanza for show business lawyers who wrangle over the rights of things like the likeness of Falk, which was a major issue in the recent Hollywood strikes.
“That may be the real story,” she said.
[Disclosure: The author worked internally at Netflix from June 2024 through July 2025.]
Politics8 years ago