Government programs & regulations, spending, deficit, and budget process

[Body-by-Guinness]

By any metric, shoveling money at a service that perpetually operates in the red makes no sense:

https://quoththeraven.substack.com/p/the-case-against-subsidizing-amtrak

[ccp]

https://www.breitbart.com/clips/2025/05/20/chip-roy-we-need-more-spending-cuts-a-lot-of-tax-policy-in-bill-not-high-growth/

I don't have time to search now, but I a wondering what "pro growth" policies he would like to add and precisely what spending cuts he would like to add.

[Crafty_Dog]

I've heard Chip Roy in various FOX interviews and have a positive impression of him as a serious Congressman.

[DougMacG]

https://issuesinsights.com/2025/05/19/medicaid-end-it-dont-mend-it/



https://i0.wp.com/issuesinsights.com/wp-content/uploads/2025/05/medicaid-spending.png?resize=2048%2C1949&ssl=1

Scroll right, and that only takes us through 2023.  Where do you suppose it goes from there?  And any cut is killing people.  How financially stupid are we??

[DougMacG]

https://www.breitbart.com/clips/2025/05/20/chip-roy-we-need-more-spending-cuts-a-lot-of-tax-policy-in-bill-not-high-growth/

I don't have time to search now, but I a wondering what "pro growth" policies he would like to add and precisely what spending cuts he would like to add.

I've heard Chip Roy in various FOX interviews and have a positive impression of him as a serious Congressman.

He is exactly right.  It's a balancing act.  They need more 'pro-growth' and they need more spending cuts SOONER.  But they also need to pass the bill one way or another and they need to survive the Dem Media attack of it sure to come.
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I heard Buck Sexton yesterday call it "rocket fuel for the economy".  Yes it will help.  Better than the (Dem) alternatives.  But the analogy lacks quantification.  How much rocket fuel, a drop, a liter, or a boatload?

Some 'tax cuts' are not supply side or so called pro growth.  Child tax credit: nice thing to do but doesn't increase the incentive to invest, build a factory or employ workers.  SALT deduction:  I am horribly conflicted on this one.  It's a fairness issue both ways but doesn't increase the incentive to save, invest, hire and build something.

Those two examples are on the 'demand side'.  They leave you with a little more money mostly as a consumer, but don't affect incentives, don't add to productivity, wage growth or economic growth. Cutting marginal tax rates, especially the top marginal rate but across the board, is the main incentivizer for private sector growth.

Why are we pretending to cut spending in the out years?  He's right.  Those never happen.  Cop out.

You can't cut taxes much when you're in deep deficit.  Must cut spending now and they really aren't.

Back to 'pro growth', every marginal tax rate cut has been followed with increased revenues.  CBO IS STILL SCORING WITH ZERO GROWTH FALSE MATH.  Must reform that before any political economic math makes any sense.

Beating my drum one more time, REPEAL THE TAX ON INFLATION if you want to grow the economy, grow the revenues, balance the budget, get capital to flow to its best use.

All that said, worst possible outcome is no bill passed.  It needs 217 House members, 51 Senators and one President to support it.  We aren't going to all get what we want, not on the first pass.
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Chuck Schumer is calling the ordinary reconciliation process the "nuclear option" and says he will retaliate next time Dems have control.  Not true but if the other party won't respect the 60 vote threshold for most bills in the future, why are we worried about it now?

[DougMacG]

https://www.cnn.com/2025/05/22/politics/house-vote-trump-agenda-bill

[Crafty_Dog]

From two months ago.

https://danconiajournal.substack.com/p/on-folding-when-you-ought-to-fight?fbclid=IwY2xjawKUrZVleHRuA2FlbQIxMABicmlkETExMlBCZ3Z3UDVmZE8xQm9WAR4E18Iiq1uIsXUdbFYuOD2-0kxUedULOahw_KEUUDU1A7FAuMm69gpiSn0DjQ_aem_EnkQZSMrt_KgChNDg74y_w

[Crafty_Dog]

Update from Stephen Miller:

"I’ve seen a few claims making the rounds on the Big Beautiful Bill that require correction.

The first is that it doesn’t “codify the DOGE cuts.” A reconciliation bill, which is a budget bill that passes with 50 votes, is limited by senate rules to “mandatory” spending only — eg Medicaid and Food Stamps. The senate rules prevent it from cutting “discretionary” spending — eg the Department of Education or federal grants. The DOGE cuts are overwhelmingly discretionary, not mandatory. The bill saves more than 1.6 TRILLION in mandatory spending, including the largest-ever welfare reform. A remarkable achievement.

I’ve also seen claims the bill increases the deficit. This lie is based on a CBO accounting gimmick. Income tax rates from the 2017 tax cut are set to expire in September. They were always planned to be permanent. CBO says maintaining *current* rates adds to the deficit, but by definition leaving these income tax rates unchanged cannot add one penny to the deficit. The bill’s spending cuts REDUCE the deficit against the current law baseline, which is the only correct baseline to use.

Another fantastically false claim is that the bill spends trillions of dollars. This is just completely invented out of whole cloth. This is not a ten year budget bill—it doesn’t “fund” almost any operations of government, which are funded in the annual budget bills (which this is not). In other words, if this bill passed, but the annual budget bill did not, there would be no government funding. Under the math that critics are using, if we passed a one paragraph reconciliation bill that cut simply 50 billion in food stamp spending, they would say the bill “added” trillions in spending and debt because they are counting ALL the projected federal spending that exists entirely outside the scope of this legislation, which is of course preposterous. The only funding in the bill is for the President’s border and defense priorities, while enacting a net spending cut of over 1.6 TRILLION dollars.

The bill has two fiscal components: a massive tax cut and a massive spending cut."

[DougMacG]

https://thehill.com/homenews/administration/5320942-elon-musk-disappointed-big-beautiful-bill/

"Musk says he’s disappointed in ‘big, beautiful bill,’ saying it ‘undermines’ DOGE’s work"
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These rogue judges are telling the elected chief executive he cannot rescind spending in his branch, and Congress seems to be failing to put all these changes (and more) into law.

[DougMacG]

http://www.realclearpolitics.com/video/2025/05/27/desantis_doge_fought_the_swamp_and_the_swamp_won.html

So far, the swamp won.

He isn't wrong.

"Inflation is a tax."  Inflation is tied to deficit spending. There isn't a free lunch.


 (Doug) If Republicans pass this bill, the celebration that we avoided an economy of collapsing tax increase with this should be accompanied with the shame that all future overspending is now 'ours'.  We need to go much further. We need to do it soon. And we need a larger majority to do it.

[Crafty_Dog]

(1) JOHNSON: U.S. WON’T MAKE IT TO $67T DEBT: Senator Ron Johnson (R-WI) said that the U.S. is likely to have a fiscal crisis, such as a failed bond auction, before arriving at $65 trillion of national debt, which is what he says is the 10-year effect of passing the Big Beautiful Bill.

Johnson did the math in a recent interview with Tucker Carlson. The U.S. currently has about $37 trillion worth of debt right now. The Big Beautiful Bill will rack up another $22 trillion in debt over 10 years, which takes us up to $59 trillion. And then every 1% increase to the interest rate is another $4 trillion in finance costs. Current borrowing occurs at about 3.3%, but the 50-year average is above 5%. So an additional 2% increase in interest rates will produce an additional $8 trillion in debt, taking total U.S. debt to $67 trillion in roughly 10 years.

“I don’t think we’d ever hit that. Something’s going to happen. We’ll have a debt crisis. A failure in our bond auctions, spiking interest rates even more,” he added.

Why It Matters: Johnson characterizes the U.S. as already being in a chronic debt crisis that has not become acute. If the Big Beautiful Bill clears the Senate with no major changes and Johnson is correct, then the U.S. will have an acute debt crisis within 10 years. Fed to print dollars to buy the debt as a buyer of last resort, and force the federal government to cut spending to service the debt. - M.S.


, , ,


(3) TRUMP TO ASK CONGRESS FOR PERMANENT SPENDING CUTS: The White House is planning to ask Congress to enact $9 billion in spending cuts through the rescission process as soon as Monday, according to the Office of Management and Budget.