The Republican Senate's Big Beautiful Bill: A Desperate Move to Solve a Political Problem

The Republican Senate has passed its version of the One Big Beautiful Bill Act, which includes permanent tax cuts, increased spending on defense and border security, and large cuts to Medicaid and other social spending. However, the Congressional Budget Office estimates that this legislation would add more than $3 trillion to the national debt over the next 10 years, with even more red ink in the years and decades after.

Key Takeaways:

• The Republican Senate's bill is strikingly unpopular among voters, with even some Republican lawmakers expressing ambivalence or outright hostility.
• The bill's focus on solving a political problem rather than a fiscal one may be its primary motivation, with Republicans borrowing a page from the playbook of the Reagan-era G.O.P.
• The bill resets the baseline for future negotiations on spending and taxes, depriving the next Democratic president of leverage to extend the upper-bracket tax cuts.
• The fight to restore Medicaid and SNAP from the new bill's cuts may be a major challenge for Democrats when they return to power, with the energy for expanding social spending lost from its previous baseline.
• Republicans may be hoping to use the fiscal crisis to steer the country into a solution more favorable to their policy priorities, including unpopular changes to entitlements and taxes that fall more heavily on working-class people.
• The Republican bill may have made a solution involving a value-added tax (VAT) more likely, which is a regressive tax on consumption that would be part of any serious attempt to solve America's looming fiscal crisis.
• The bill has gunned the accelerator on the fiscal crisis, making it more likely that Democrats will be forced to join Republicans in addressing the situation in a manner more in line with Republican policy priorities.

Statistics:

• The Congressional Budget Office estimates that the legislation would add more than $3 trillion to the national debt over the next 10 years.
• Imports of goods totaled approximately 12 percent of American GDP in 2024.
• The cost of interest payments on the national debt soared during the Joe Biden years, yet the administration continued to pursue new spending initiatives.
• The 1982 tax increase was larger than either the 1990 or 1993 tax hikes that were explicitly intended to address the expanding deficit.
• Payroll taxes went up, the retirement age went up, loopholes of various kinds were closed, but the headline rates from the 1981 reform remained the same.

Sources:

• The article did not provide explicit dates for publication or timestamps. However, it mentions the Trump administration and the Biden administration, suggesting a time period around the late 2010s to the early 2020s.
• The Congressional Budget Office's estimates on the national debt.
• The article cites Noah Millman, who writes the newsletter Gideon's Substack and is the film and theater critic at Modern Age.