By Steve Levy
Republicans are blowing a once-in-a-decade opportunity to bring federal spending back in line to pre-pandemic levels by introducing the budget bill that continues spending at an unsustainable pace.
The budget has created a rift between allies Elon Musk and President Trump. Trump has been touting the bill as a needed extension of his historic tax cuts of 2017. Musk, meanwhile, has contended that the spending is still way too high and is a move in a direction contrary to the cost-cutting mode exemplified by his DOGE committee.
Trump is correct that it’s essential to keep in place the tax cuts that were not just for billionaires, as misleadingly touted by the media. Those tax cuts were across the board for working and middle-class Americans.
People forget that the standard deduction was doubled in 2017, allowing the average middle-class American to save over $2,000 a year on their taxes. If the present level of taxation is not extended, the rates will rise to the Obama-era levels which would zonk middle-class Americans with sizable tax increases.
It was indeed these tax cuts in 2017 that spurred massive investment and a booming economy. Wages were soaring across all economic strata, especially the working and middle classes. Income inequality actually decreased, and the top 1% actually wound up paying a higher percentage of overall revenue to the federal government than they did before the tax cuts.
That’s because, even though the rates were lowered, more people were working and making higher incomes, which resulted in more revenue to the federal government, not less.
So that’s the good part of the budget bill.
The rest of it is too much business as usual.
Musk and budget hawks such as Senator Ron Johnson (R-Wisconsin) are absolutely correct that there’s no reason to maintain a $7 trillion budget, when just four or five years ago, it was $4.5 trillion.
Certainly, there was a need for a once-in-a-generation increase to battle an unexpected pandemic, but once the virus subsided, there was no need to make that higher level the new normal. But that’s exactly what happened.
Compare this to World War II where there was a dramatic spike in spending to defeat the Nazis and the Japanese empire. But once the war ended, the spending came down to more reasonable levels. That’s not what’s happening now.
The loyal opposition and the media are disingenuously claiming that, unless we maintain this unreasonably high spending level, we will be starving children and allowing old people to die. This is the same fearmongering nonsense that’s always used whenever a budget trimming proposal is presented.
Take Medicaid, for instance. It has soared by 50% over the last five years. This program was initially intended for providing healthcare for poor people. It’s now being handed out to illegal aliens and to 28-year-old, able-bodied adults with no dependents sitting home playing on their Game Boys. The bill rightly calls for ending Medicaid to illegal aliens and requiring individuals to work if they’re going to collect the benefit. Nothing wrong with that, yet the media makes it sound like this is going to kill people.
And shame on Senator Josh Hawley (R-Missouri), a usually smart legislator, for falling for these big spending talking points and objecting to these Medicaid reforms.
If Republicans can’t agree on something as basic as taking illegal aliens off the Medicaid rolls, then how can we cut anything else?
It is excruciatingly hard to reduce the size of government, and it will never happen under a divided government. It is rare for the Republicans to have the White House and both chambers.
And if history repeats itself, it is unlikely that the Republicans will hold all three come the midterms. So this is their one window of opportunity to trim this budget and bring it back to a level that mirrors the pre-pandemic levels, plus inflation.
The Senate must insist on more cuts to this proposal. The opportunity may never again present itself for decades to come.