Trump’s Budget Bleeds The Poor To Engorge The Rich— Make The Rich Richer Again

The Art Of The Steal: Budgeting for Billionaires

Last night/this morning at 1 AM, MAGA Mike had the Rules Committee convene to rubber stamp Trump’s “big beautiful bill," the reverse Robin Hood plan crafted by Project 2025 mastermind Russell Vought. In the lead-up to the meeting, GOP leadership gave in to enough demands from the extremists who voted against it last week that it’s now far worse than anyone imagined it would be. Low income and disabled Medicaid users will be kicked off their program sooner than planned, 2026 or 2027 rather than 2029. Some Republican lawmakers worry that the ugliness of the bill is going to be suicidal for their conference, as the number of people likely to lose health care rises from an estimated 10 million to around 14 million.

The worst of the extremists who want to wreck Medicaid

On Sunday, Richard Rubin, doing an analysis for the Wall Street Journal, had already reported that the numbers don’t add up, not to cut the deficit. Despite the GOP’s desperate “last minute grappling... the plan won’t reduce federal budget deficits and would make America’s fiscal hole deeper.” You may understand the absurdity of that framing… but it is the Republican Party’s entire fiscal context. “The current proposal,” wrote Rubin, “would increase projected budget deficits by nearly $3 trillion through 2034, locking in tax cuts and spending increases that outweigh reductions in spending on Medicaid and nutrition assistance. While Republicans, who have vowed to reduce red ink, say higher economic growth will fill the gap, budget analysts across the political spectrum have panned the Republican plan, warning that it worsens the U.S. fiscal picture… ‘While Republicans were campaigning on reducing spending and controlling the growth in the debt, once they put pen to paper, their real priorities demonstrate that they care a lot more about cutting taxes,’ said Romina Boccia, director of budget and entitlement policy at the libertarian Cato Institute.” 

White House budget director Russell Vought described the spending cuts as historic. 

“It should not be lost on anyone, the degree to which it ends decades of fiscal futility and gets us winning again,” Vought wrote on X in a plea for fiscal hawks’ votes. 

… Democrats emphasized the gap between Republicans’ budget rhetoric and the bill. 

“People will lose healthcare. Kids and the veterans will go hungry. Rural hospitals face closures,” said Rep. Becca Balint (D-VT) “And yet the very rich will get even richer at the expense of our children and grandchildren, who will shoulder the burden of that additional debt.”

In designing a partisan plan that increases budget deficits, Republicans are mindful about what happens if their bill falls apart. The alternate path to preventing a tax increase on most households would require a bipartisan coalition with Democratic votes. 

That could further increase deficits. Democrats favor extending most tax cuts but would push to let tax cuts expire for top earners. They would, however, reject Republican spending cuts and seek extensions of expanded tax credits for purchasing health insurance. 

…The bill would cut taxes by nearly $4 trillion, compared with doing nothing. That includes extensions of expiring tax cuts and new temporary cuts to fulfill Trump’s campaign promises. It is partially offset by tax increases, including limits on top earners’ itemized deductions and clean-energy tax breaks. 

The GOP plan generates about $1.6 trillion in spending reductions and other deficit-reducing policies. Those include work requirements for Medicaid recipients, restrictions on nutrition assistance and student-loan changes. The bill includes several hundred-billion dollars in spending increases on border security, national defense and support for farmers.  

Final official estimates aren’t available, but the total deficit effect is roughly $2.7 trillion compared with doing nothing and letting tax cuts expire, according to the Committee for a Responsible Federal Budget. The bill may change as Republicans maneuver it to Trump’s desk by July 4. 

“On the horizon that investors care about, which is the first four years, it makes it worse,” said analyst Don Schneider of Piper Sandler. Still, he said, many spending cuts, including Medicaid changes, are real, indicating that Republicans are capable of restraining a major entitlement program. 

Republicans often argue that deficits won’t actually climb if the bill passes. They are counting on the bill’s tax cuts and Trump’s agenda of deregulation and oil-and-gas production to accelerate economic growth so much that extra tax revenue covers the costs. 

Those claims, however, usually don’t include any drag from Trump’s tariffs, and economists say they are too optimistic about policies revving up the U.S. growth rate. 

“Relying on economic growth has become the magic wand that Republicans are waving at any possible problem,” the Cato Institute’s Boccia said. 

Some Republicans say it is more realistic to assume expiring tax cuts get extended, then measure the bill after that $3.8 trillion adjustment. Viewed that way, the bill would reduce deficits.

However, the $2.7 trillion deficit increase likely underestimates potential budgetary effects. The legislation schedules popular tax cuts to expire after 2028, including extra boosts to the standard deduction and child tax credit and versions of Trump’s plans to eliminate taxes on tips, overtime and Social Security benefits. 

There will be political pressure to extend them and business tax breaks, just like today’s push for continuing expiring 2017 tax cuts. That would add $1.8 trillion, according to the Committee for a Responsible Federal Budget. 

“They assume the entire Trump agenda expires at that point, and that seems unlikely to me,” said Marc Goldwein, the group’s senior vice president. “The costs are front-loaded. That is the main driver.”

Rubin leaves out the cruelty inherent in the bill. Paul Krugman doesn’t, referring to it instead as the Attack of the Sadistic Zombies. Fitting— and an apt description for the Republican Members of Congress who will have to lie to their constituents all next year when they try to explain why they voted for it, something Krugman summed up as “taking their marching orders” from Señor Trumpanzee and pointing out that it is best described as “big tax giveaways to the wealthy combined with cruel cuts in programs that serve lower-income Americans… different in both degree and kind from what we’ve seen before: Its cruelty is exceptional even by recent right-wing standards. Furthermore, the way that cruelty will be implemented is notable for its reliance on claims we know aren’t true and policies we know won’t work— what some of us call zombie ideas. And it’s hard to avoid the sense that the counterproductive viciousness is actually the point. Think of what we’re seeing as the attack of the sadistic zombies.”

To get a sense of how extreme this legislation is, do a side-by-side comparison of the impact on different groups of Americans between this bill and Trump’s one major legislative achievement during his first term, the 2017 Tax Cuts and Jobs Act. It looks like this:

The TCJA, like the current legislation, gave big tax breaks to the wealthiest Americans. But it also threw a few crumbs to people further down the scale. By contrast, the House Reconciliation Bill, by slashing benefits— especially Medicaid— will cause immense, almost inconceivable hardship to the bottom 40 percent of Americans, especially the poorest fifth.

Medicaid, in case anyone needs reminding, is the national health insurance program for low-income Americans who probably don’t have any other way to pay for medical care. In 2023 Medicaid covered 69 million Americans, far more than Medicare (which covers seniors), including 39 percent of children.

Providing health care to children, by the way, isn’t just about social justice and basic decency. It’s also good economics: Children who receive adequate care grow up to be more productive adults. Among other things they end up paying more taxes, so Medicaid for children almost surely pays for itself.

And although Republican legislation apparently won’t explicitly target childrens’ care, it will impose paperwork requirements that will cause both children and their parents to lose coverage.

Back to the comparison with the TCJA. It's true that 2017 would have looked considerably worse in this comparison if Trump had also succeeded in his attempt to destroy the Affordable Care Act, depriving millions of Americans of health insurance coverage. But he didn’t. This time the assault on health care and the tax cuts for the 0.1 percent are part of the same legislation— a “big, beautiful bill,” as Trump calls it. And after some adjustments to make the bill even nastier, it’s likely to pass.

Wait, it gets worse. One of the ways Republicans will try to slash Medicaid is by requiring that adult Medicaid recipients be gainfully employed— or, more accurately, that they demonstrate to the satisfaction of government bureaucrats that they are gainfully employed, which is not at all the same thing.

The belief that many Americans receiving government support are malingering, that they could and should be working but are choosing to be lazy, is a classic zombie idea. That is, like the claim that cutting taxes on the rich will unleash an economic miracle, it’s a doctrine that should be long dead. It has, after all, been proved wrong by experience again and again.

But right-wingers simply refuse to accept the reality that almost everyone on Medicaid is either a child, a senior, disabled or between jobs… Only 3 percent of Medicaid recipients were non-disabled working-age adults persistently not working— the kind of people right-wingers imagine infest the program. And it’s a good bet that a fair number of these people had extenuating circumstances of some kind.

So what do work requirements actually accomplish? They don’t get lazy people to work. What they do, instead, is take away benefits from people who are legally entitled to aid, because they can’t overcome the paperwork and administrative barriers. Think about it: Low-income adults, even when working, are often employed as day laborers or in other informal ways that don’t generate the right forms. They may lack the formal education to deal with complex reporting requirements. So the people who need help most are unjustly cut off.

Why, then, are Republicans doing this? Part of the answer is to save money: By making the poor even poorer they reduce the extent to which tax cuts for the rich explode the budget deficit.

But I’m actually skeptical that this is the whole story, or even most of it. If you pay attention to what right-wing Republicans do, as opposed to what they say, it becomes obvious that they don’t really care about budget deficits. Oh, they do a lot of posturing, issuing dire warnings about debt and pretending to be deficit hawks. But can you think of a single example in which the U.S. right has been willing to give up something it wants, such as tax cuts for the rich, in order to reduce the deficit?

As I see it, right-wingers’ rhetoric about the budget deficit is a lot like their rhetoric about antisemitism. It’s not something they actually care about. It’s just a club they can use to bash their opponents.

But in that case, why the cruelty toward less-fortunate Americans? Well, as I see it the cruelty, as opposed to the dollars saved, is actually the point. Inflicting harm on the vulnerable isn’t something they do with regret, it’s something they do with a sense of satisfaction.