In a column this week about the Congressional Budget Office’s ten-year projection report, I wrote:
As always, the CBO’s report relies on various optimistic assumptions: that temporary tax provisions are allowed to expire on schedule; that planned spending reductions actually occur; that controversial tariffs remain in place; that interest rates remain where they are now. It also assumes that in 2032, when the Social Security Trust fund dries up, Congress will borrow enough to maintain all benefits at their current level without creating more inflation. Not all these things will happen.
This morning, the Supreme Court struck down President Trump’s global tariffs, ruling that he exceeded his authority by imposing them without clear congressional authorization.
As I mentioned above, this creates a fiscal footnote that deserves attention. The CBO’s alarming ten-year outlook: $24.4 trillion in deficits, debt hitting 120 percent of GDP by 2036, and interest payments alone consuming more than a quarter of all tax revenues. Grim enough on its own.
Now add this: The Tax Foundation estimated that the tariffs the Court just struck down would have raised approximately $1.5 trillion in revenue over the next decade (on a dynamic basis). That money is gone for now, which means the CBO’s already-dire projections just got worse.
This is not a case for tariff revenue but a fiscal reminder: There is no shortcut out of this fiscal hole. Not tariffs, not emergency powers, not wishful thinking. Just the hard work of reforming spending, especially the programs that are the drivers of our future debt, before the market forces that choice on us in the most painful way possible.