At the risk of stating the obvious, the so-called “One Big Beautiful Bill Act.” is grotesquely disappointing. This chart from the Committee for a Responsible Federal Budget tells you everything you need to know.
We have a federal budget that is far too big and growing far too fast, yet the Senate version of the bill barely alters the “current law” trend line.
Even worse, if some provisions are made permanent (as is likely), the overall spending burden might actually be higher than the do-nothing trend line.
Since Republicans control Washington and claim to be the party of fiscal responsibility, why are they kicking the can down the road?
The answer is simple. The GOP is not the party of fiscal responsibility. The Reaganites (explained here) are outnumbered by the Trumpies and the conventional big-government Republicans.
…the challenge for the Republican leadership is that their party is now profoundly divided, bordering on ideologically incoherent. Some conservative Republicans believe in Reagan-style fiscal restraint, for instance. They want a smaller government and declining deficits. But this puts them at odds with Trump-style Republicans who are explicitly opposed to reforming entitlements and seemingly don’t care about ever-increasing levels of red ink. …To make matters more interesting, the division between Reaganites and Trumpies is not the only relevant split. There are other blocs of Republican lawmakers who might throw sand in the gears. …a few Republicans from high-tax states claim they won’t vote for any bill unless there is a big increase in the federal deduction for state and local taxes. …special subsidies for wind and solar energy…go to projects in Republican states and districts, leading some Republicans to assert they will oppose the Big Beautiful Bill if the green-energy gravy train gets derailed. …Medicaid money laundering…shift ever-greater shares of the cost on to the federal taxpayers. …Most Republicans want to end this farce, but a few GOP lawmakers want to curry favour with hospital lobbyists.
I explain in the column that Republicans have very narrow majorities in both the House and Senate.
As such, so the combination of Trump populism (don’t try to fix Social Security or Medicare) and congressional Republicans who sell their votes to the highest bidder (supporters of green-energy pork, Medicaid fraud, etc) means that it is impossible to save the country from a fiscal crisis.
Here’s another chart from CRFB to underscore why I am so pessimistic.
By the way, I conclude my Telegraph column with a prediction that Trump will get the votes to pass a final version of the One Big Beautiful Bill.
…the safest prediction is that all these conflicts and divisions somehow will be resolved and Trump will have a victory. But it may be a Pyrrhic Victory in that America is probably stumbling toward some sort of fiscal crisis. Simply stated, it is unsustainable to have the burden of government spending grow faster than the private sector for an extended period of time. Even if a crisis can be avoided, that type of fiscal irresponsibility eventually will mean higher taxes, ruinous debt, or inflation. Perhaps all three. Unless, by some miracle, there’s a Javier Milei in America’s future.
As you can see, though, the legislation will not save the country from a fiscal crisis. The headline of my column says that bill means an economic crash. But we’re also heading to a crash if the bill isn’t enacted.
The bottom line is that we’re in deep trouble unless we get a Milei-style leader at some point.
Now that I’ve given all this analysis, it’s time to give my two cents on whether it will be good for the country or bad for the country.
I hope it gets enacted for one reason and one reason only. As I wrote last month, “…the bill prevents a massive automatic tax increase starting on January 1 of 2026.”
I’ve been an advocate of the “starve the beast” theory, though I admit pervasive profligacy in Washington makes it harder to defend that theory.
That being said, I definitely don’t want to “feed the beast.”
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