The House passed the budget bill that Donald J. Trump chooses to call the “big beautiful tax bill.” They passed it on to the Senate, which now has to decide whether to pass an unconscionable bill that will throw about 11 million people off Medicaid in order to give tax cuts to the richest percentage of the population. House Speaker Mike Johnson said, “We will “move it as quickly as our rules allow us,” setting up a possible floor vote next week for Congress to cut funding for (among others) NPR, PBS and USAID.
TRUMP’S LATEST TARGET
In the bitter war over the nation’s fiscal future, President Trump and his Republican allies have united around a new foe: the economists and budget experts who have warned about the costs of the party’s tax ambitions. Republican leaders have set about trying to discredit any hint of unfavorable accounting on their signature legislation as they race to enact it before the president’s self-imposed July 4th deadline.The estimate arrived on Wednesday projected that the sprawling bill endorsed by Mr. Trump could add about $2.4 trillion to the federal debt over the next decade.
The GOP faithful reserved their fiercest criticism for the Congressional Budget Office, a team of nonpartisan aides who helped to author the price check, which was issued on Wednesday. Mr. Trump and his advisers have tried to paint the budget office as historically inaccurate and overly political. Douglas Holtz-Eakin, a Republican economist who led the Congressional Budget Office from 2003 to 2005, characterized it this way: the GOP has opted to “shoot the messenger.”
Appearing on Fox News last week, Speaker Mike Johnson said the tax bill would deliver the “largest amount of savings in the history of government on planet Earth.” Treasury Secretary Scott Bessent at one point likened the budget office and its methodology to the scandal-ridden, failed company Enron. Newt Gingrich, the former speaker of the House, said last month that it was a “fake budget office.”
All this in support of passing one of the most heartless budgets in recent memory, which even went after Big Bird in its pursuit of cuts, defunding such historically positive programs as “Sesame Street.” The USAID cuts not only undermined a program championed by former Republican President George W. Bush, it will directly contribute to the death of millions of children and adults in disadvantaged Third World countries which are losing programs like those aimed at curbing HIV and AIDS in African countries. The USAID program had been considered a positive success— one that did much good in the world. But doing good in the world does not seem to be a Republican priority for this administration. Quite the opposite.
BUDGET OFFICE REBUTTAL
Douglas W. Elmendorf, a Democratic economist who served as the director of the budget office from 2009 to 2015, said the nonpartisan experts were crucial for “bringing the best professional evidence to bear and laying out the consequences of policy choices to Congress as honestly as they can.”But the nature of its work — “predicting the future,” in the words of Mr. Elmendorf — also subjects the office and its peers to a fair amount of political risk.
In one high-profile example, the Joint Committee on Taxation discovered after Democrats adopted their signature legislation in 2022, the Inflation Reduction Act, that it would cost hundreds of billions of dollars more than anticipated. The discrepancy was largely due to greater demand for one of the bill’s components, a set of tax credits for electric vehicle purchases that President Joseph R. Biden Jr. offered on more generous terms than scorekeepers had anticipated. (Elon is said to be unhappy about the loss of this Biden-era incentive to buy electric vehicles.)
But Republicans seized on that mishap, seeing it as evidence of political bias in the budget office’s work. To wit: “If we as lawmakers have to make decisions based on C.B.O. and Joint Tax’s analysis, you betcha it better be right,” Mr. Smith charged at a hearing in February. “And it hasn’t been.”
ARGUMENTS: PRO/CON
Republicans also contend that congressional analysts fail to account for the ways that their new tax measure can unlock economic growth — and, in the process, generate higher tax revenues.By the White House’s estimation, the Republican tax proposal could raise output by as much as about 5 percent in the short term, compared with what might happen without the bill.
The White House analysis appeared to be premised in part on the bill extending a set of generous corporate tax deductions on a permanent basis, something that House Republicans did not actually propose. A White House spokesman did not respond to a request for comment. Using a different metric, congressional tax analysts found that Republicans’ specific changes to the tax code would increase the average growth rate in U.S. output by only 0.03 percent annually. That mirrored findings from many outside economists, including at Penn Wharton, which projected that the output would be just 0.4 percent higher by 2034. Asked about the estimate, Mr. Miran said last month that Penn Wharton had a “track record of being wrong.”
GOP VOICES SPEAK UP
“By trying to sort-of game the referee on these questions, members of Congress are going to miss the fundamental issue of whether this bill is an appropriate response, given where we are with the deficit and debt,” said Jonathan W. Burks, the executive vice president for economic policy at the Bipartisan Policy Center. Burks previously served Republicans including former Speaker Paul Ryan.
The Budget Lab at Yale, for example, found the Republican proposal could add $2.4 trillion to the debt by 2034. The Penn Wharton Budget Model estimated it would raise deficits by $2.8 trillion over a 10-year period. The Committee for a Responsible Federal Budget, a nonprofit public policy organization that supports deficit reduction, pegged the uncovered cost at $3.3 trillion over the next nine years.
All three organizations, which used different timelines, models and assumptions, found the bill would deliver meager gains in economic growth, which in turn would generate little in added revenues.Erica York, the vice president for federal tax policy at the Tax Foundation, which generally favors lower taxes, found the Republican bill would increase the debt by more than $2.5 trillion over the next 10 years.
“And when all the models are in unison — yes, this will increase the deficit; no, it will not do much for growth — it really doesn’t make sense to triple down on the strategy to blame the scorekeeper,” Ms. York added. “The legislation is the problem.”
Marc Goldwein, a senior vice president at the Committee for a Responsible Federal Budget, said revenues matched forecasts until the pandemic, later surging for reasons that included price inflation. Mr. Goldwein stressed that there was an urgent need for unbiased policy advice in Washington.“Without that,” he said, “you have chaos.”
MUSK SPEAKS ON “X”
There’s never much that I agree with Elon Musk about, but his assessment of DJT’s “big beautiful bill” is right on, for humanitarian reasons alone.
Said Musk in pronouncements on “X” (formerly Twitter) on Tuesday, Musk said that the “outrageous, pork-filled” spending bill will “massively increase the already gigantic budget deficit to $2.5 trillion (!!!) and burden America [sic] citizens with crushingly unsustainable debt”. “I’m sorry, but I just can’t stand it anymore. This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination,” “Shame on those who voted for it: you know you did wrong. You know it.” “Congress is making America bankrupt.” Musk’s subsequent posts laid out the reasoning for his opposition, suggesting that the spending and tax cuts proposed in the bill would balloon the US national debt.
“Even Elon Musk, who’s been part of the whole process, and is one of Trump’s buddies, said the bill is bad,” Senate Minority Leader Chuck Schumer said. “We can imagine how bad this bill is.”
