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New: Trump’s Budget Bill Limps Forward
On May 9th, Treasury Secretary Bessent told Congress the debt ceiling must be increased by mid-July. Congress has been focused on Trump’s “big, beautiful budget bill,” an omnibus bill including everything Trump wants plus a debt ceiling increase. This past week the “big, beautiful budget bill” took a halting step forward. Congress is in session until August 1st, when legislators go on vacation for a month. Before August 1, Congress must increase the debt ceiling or the US will fall off a cliff.
Trump’s omnibus budget bill contains items such as more money for the Defense and Homeland Security Departments. However, the primary focus is making the “Trump tax cuts” permanent. The early estimate of the cost of these tax cuts is $5 trillion. ( https://www.politico.com/
Theoretically, congressional Republicans have enough votes to pass Trump’s “big, beautiful budget bill;” they have a three-vote margin in both the House and Senate. (Most observers assume that all Democratic members of Congress will vote against the Trump tax cuts.) Because the ‘big, beautiful budget bill” is categorized as a “budget reconciliation” measure, it only needs a majority vote to pass the House and Senate.
While Republicans have enough votes to pass the bill, there’s a wing of their caucus that demands the bill be deficit neutral. Therefore, Republicans need to find ways to offset the $5 trillion. One suggestion involves cuts to social-safety-net programs such as Medicaid. While there is a possibility that Republicans will pass Trump’s “big, beautiful budget bill” by the end of July, some have likened this to solving a Rubik’s cube in committee.
This week, the “big, beautiful budget bill” was blocked in the House Budget Committee by very conservative Republican congressmen who held out for more cuts to social services, such as Medicaid. On May 18th they were appeased by House Speaker Johnson and, therefore, let the bill move out of committee (at midnight). It’s not clear how they were appeased, which makes the bill’s next move – to the House Rules Committee – complicated because aspects of the bill need to be rewritten (and the fiscal impact must be resized by the Congressional Budget Office.) Speaking for Budget Committee Democrats, Representative Brendan Boyle of Pennsylvania, demanded that lawmakers be able to view “what side agreements have been reached” before casting their vote. “Making sure all the members know transparently just what the heck is in this thing,” Mr. Boyle said, “because obviously it’s changing back in that back room by the minute.” ( https://www.nytimes.com/
The “big, beautiful budget bill” limped forward, its contents and cost uncertain. At issue is what size of deficit increase Republicans are willing to swallow – because it’s certain that the “big, beautiful budget bill” will increase the deficit by at least $3 trillion. (The tax cuts and new spending will not be totally offset by hits to social services.) There are four ancillary issues: 1.The form of cuts to Medicaid. 2. Deletion of tax cuts for clean energy. 3. The size of the deduction for State and Local taxes. 4, The size of the tax rate for the top bracket.
What’s going to happen? Given that House Republicans are scheduling critical budget reviews in the middle of the night, it seems certain that they intend to force the House to vote on a “dirty” bill: a bill where most of the legislators have not had time to thoughtfully consider the final bill language and where the financial implications are opaque. This sounds like a “big, beautiful budget bill” that adds trillions to the national debt and harms the poorest citizens.
