On the Gross Fiscal Negligence of the Washington GOP
The gross negligence of the Washington GOP with respect to its fundamental duty in the governance process of American democracy—to function as the Watchdog of the US Treasury—seems to know no bounds. Very simply, with current policies fixing to add $22 trillion of baseline deficits over the next decade on top of the $36 trillion of public debt already on the books, the only plausible ” One Big Beautiful Bill” (OBBB) for an honest conservative party would be a plan to slash the baseline deficits by material amounts—-say $8 trillion over the next decade, at minimum.
But even that would mean a $50 trillion public debt by the mid 2030s and potentially a rolling disaster from there—-as the Baby Boom driven OASDI rolls surge upwards to 100 million recipients by mid-century. And yet, the imposters, double talkers, rightwing statists, military/industrial complex-footmen and Trumpites (yes, we do repeat ourselves) who now dominate the party on both ends of Pennsylvania Avenue are having a leisurely debate about how much to add to the $22 trillion of new red ink already baked into the cake.
That’s right. Rather than urgently pursuing the ways and means to make subtractions from these enormous baseline spending columns—a target rich venue that amounts to upwards of $90 trillion over the decade ahead—they are proverbially fiddling while any hope of saving the nation’s fiscal bacon literally burns.
If nothing else, a Republican White House with even nominal regard for fiscal rectitude would be sounding the alarm about the surging red ink flowing from the FY 2025 budget through April. As it happens, a macro-economy which is teetering on the edge of recession still has had enough residual gumption to generate a 4.9% 0r $146 billion revenue increase YTD. So that last gasp of economic growth-driven revenue gain should have been seen as a godsend bridge to enable time for launching a full bore attack on spending.
Nothing doing at the Trump White House, of course, the short-lived exertions of the now departing Elon Musk and his DOGE boys to the contrary notwithstanding. In fact, Federal outlays during the first seven months of FY 2025 were up by more than double the revenue gain—-that is, by +9% and $340 billion.
And, yes, these billowing gains were spread across-the-board. Indeed, in most case the increases YTD are so large that any fiscally responsible White House would have sent a five-alarm package of rescissions and entitlement curtailments to Capitol Hill within weeks of the inauguration.
FY 2025 April YTD Spending Increases By Federal Agency:
- Commerce: +100.0%.
- Homeland: +52.3%.
- Interior: +43.8%.
- Veterans: +16.6%.
- DOT: +12.7%.
- USDA: 11.0%.
- HHS: +10.7%.
- Interest Expense: +9.6%.
- Social Security Administration: +8.8%.
- DOD: +8.3%.
- Energy: 7.3%.
Indeed, in what is surely a case of the dog which didn’t bark, the Trump Administration has not yet sent a single dollar of rescissions to the Hill—even after the DOGE boys mustered up a sweeping roadmap for exactly that. So the pathetic claim that the nation’s festering fiscal catastrophe was all the fault of “Joe Biden” just doesn’t wash. Without even trying hard, the White House could have hoovered-up a $100 billion rescission package of defense and nondefense discretionary spending cuts just to get the ball rolling.
Yet that default on out-of-control departmental spending came on top of Trump’s taking off the table Social Security, Medicare, Veterans and defense, along with mandatory payments on the debt that now exceed $1 trillion per year—even as he essentially urged the GOP to give Medicaid a hall pass, too. Rather than offering a modicum of push-back on the latter, however, the alleged conservative Senator from Missouri, Josh Hawley, spoke for much of the GOP caucus when he echoed Trump’s behind closed doors admonition not to “f‑‑‑ with Medicaid”:
“I hope congressional Republicans are listening,” Hawley wrote in a Tuesday post, re-sharing a report about Trump telling the GOP at the meeting to leave Medicaid alone.
Hawley has long warned his party against Medicaid cuts, writing in a New York Times op-edearlier this month that slashing health care for the working poor “is both morally wrong and politically suicidal.”
Of course, the Dem rhetoric is that deep cuts in Medicaid will be used to fund tax cuts for the rich. Never mind that sweeping Medicaid reforms are badly needed and fully justified given that the rolls have grown from 40 million to 80 million since the year 2000 alone—even as total Medicaid spending has more than quadrupled and real benefits per recipient have grown by nearly 30%.
Total Federal/State Medicaid Spending and Recipients, 2000–2024
Still, that’s exactly the political pickle that GOP put itself in when it passed the unpaid for multi-trillion s0-called TCJA of 2017. That is, rather than stand behind these corporate and individual tax cuts on a permanent basis with offsetting spending cuts, the cowardly GOP tax writers in December 2017 caused most of the TCJA to expire in December 2025. That enabled the bill to comply with Congressional reconciliation process rules—no long run deficit increase—but it also left on the doorstep of a future Congress a tremendous due bill amounting to $4 trillion of built-in tax increases over the next 10-year budget window.
Needless to say, the GOP is now so obsessed with avoiding the massive 2026 tax increase that it planted squarely in the tax code that any spending cut that it can get a consensus for—such as the relatively superficial cuts in Medicaid and food stamps in the OBBB—will be going not to desperately needed reduction of the baseline deficit, but to paying the due bill on its eight years-ago tax cut. And as it does, it will be giving the Dems still another opportunity to demagogue about heartless Republicans taking food stamps and medical insurance from poor people to pay for tax cuts for the rich.
And, yes, that’s actually the math of the One Big Beautiful Bill approved by the House last week. Fully 55% or $2.1 trillion of the $3.8 trillion cost of extending the TCJA will go to the top 5% of households with incomes of $250,000 or more.
But here’s the thing. The top 5% are already being taxed to the gills and actually face a marginal Federal rate of nearly 45% when you add the extra Medicare and investment income taxes to the 39.5% top rate in the regular schedule. Accordingly, in 2022 the top 5% accounted for 61% of all of Uncle Sam’s income tax collections.
Moreover, in the case of the blue states, where much of the $6.1 trillion of AGI attributable to the top 5% is earned, combined Federal/state/city marginal tax rates are well above 50%. So there is every reason of fairness and economic incentives to roll back the top marginal tax rate to 37% because the producer classes should never have even that much confiscated from their earnings in the first place.
And yet and yet. The “stupid party” insists on setting itself up for the kind of demagogic attacks that are being waged in the Senate right now because it insists on playing budgetary shell games with the tax-code—all of which sooner or later come back to bite it in the political arse time and again.
So once again all the new provisions for eliminating tax cuts on tips and overtime, off-setting deductions on Social Security income and deductions for interest on car loans are set to expire in 2028, creating yet another tax increase cliff just a few years down the road. The fact is, if the intended permanent tax reductions in
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LewRockwell.com is a libertarian website that publishes articles, essays, and blog posts advocating for minimal government, free markets, and individual liberty. The site was founded by Lew Rockwell, an American libertarian political commentator, activist, and former congressional staffer. The website often features content that is critical of mainstream politics, state intervention, and foreign policy, among other topics. It is a platform frequently used to disseminate Austrian economics, a school of economic thought that is popular among some libertarians.
