On the menu today: For the first time since 2018, the U.S. began the year 2025 with a Republican president, a Republican House majority, and a Republican Senate. We’re not in a recession, even if there are intermittent rattles in the economic engine. And the president appointed the world’s richest man, a man of hyperactive energy and drive, to a special advisory group focused entirely on spending cuts. On paper, this is the best opportunity for significant reductions in federal spending in many years. But it’s probably not going to happen. Yes, the work of the Department of Government Efficiency will cut a few hundred billion dollars in spending, and that’s not chopped liver. But the projected deficit for this current fiscal year is $1.9 trillion, and the “Big Beautiful Bill” will increase the deficit by $3.8 trillion over ten years. The elected leaders of this country haven’t been serious about the deficit or the debt for a long time, and as Elon Musk prepares to leave DOGE behind, he’s apparently tired of pretending that everyone else around him ever took this seriously.
Elon Unleashed
I’ve got a big piece on Elon Musk and Department of Government Efficiency coming out in the next issue of the print magazine, so I don’t want to step on the toes of that in-depth report. But the piece’s theme — that during Musk’s time running the advisory group, it fell well short of its earlier bold announced goals, for a wide variety of reasons — is now front and center in the news cycle.
Tuesday afternoon, Musk himself rhetorically set fire to the legislative centerpiece of the Trump agenda, the “Big Beautiful Bill.”
“I’m sorry, but I just can’t stand it anymore,” Musk declared on X. “This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it.”
It’s a more intense version of the criticism Musk leveled a week ago, in an interview with CBS News Sunday Morning.
“I was disappointed to see the massive spending bill, frankly, which increases the budget deficit, doesn’t decrease it, and undermines the work that the DOGE team is doing. . . . I think a bill can be big, or it can be beautiful. But I don’t know if it could be both.”
The Congressional Budget Office examined the bill’s likely effects on the deficit and the debt and concluded that it would increase the federal deficit by $3.8 trillion over ten years. That’s with $698 billion less in federal subsidies from changes to the Medicaid program, $267 billion less in federal spending for the Supplemental Nutrition Assistance Program, and $64 billion less in spending, on net, for all other purposes.
You might be wondering, “Wait, if the bill is cutting spending in those areas, why is the deficit getting higher?” Because the alternative scenario is the expiration of the Trump tax cuts, along with some expanded tax cuts, like lifting the cap on the state and local tax deduction from $10,000 to $40,000.
If you divide that $3.8 trillion over a ten-year period, you’re looking at $380 billion per year. So far, DOGE estimates that it has saved taxpayers $180 billion. In other words, all of the savings from spending cuts, canceled contracts, canceled leases, and other moves by DOGE are offset by the first year of this bill, plus another $200 billion.
Earlier this morning, Musk added, “Interest payments already consume 25 percent of all government revenue. If the massive deficit spending continues, there will only be money for interest payments and nothing else! No social security, no medical, no defense . . . nothing.”
I think Elon Musk stands out among most right-of-center leaders because when he made the now-familiar, almost clichéd promise that government should cut spending, he meant it. What’s more, Musk was naïve enough to think that other Republicans meant it, too. Since stepping into DOGE, Musk and his team haven’t just encountered resistance from long-serving government employees from the federal bureaucracy; they’ve also encountered resistance from Trump’s cabinet members and Republicans on Capitol Hill.
The editors of NR applaud the parts of the bill that attempt to put some basic spending constraints on Medicaid:
Most of the package from the House Energy and Commerce Committee involves good-government measures to ensure better verification over who is eligible. Under the proposal, there would be a requirement to verify enrollees’ addresses and to make sure the Obamacare expansion population has their eligibility confirmed every six months rather than every year.
Other changes should be just as uncontroversial for any Republican and certainly any conservative. The proposal would end Biden-era financial incentives that are designed to get holdout states to agree to the Obamacare Medicaid expansion; reduce federal payments to states whose Medicaid program covers illegal immigrants; and prevent funds from going to Planned Parenthood.
Other modest reforms include adding a part-time work requirement (80 hours per month) for able-bodied adults between the ages of 19 and 64 and asking the Obamacare population (rather than previously eligible individuals) to pay up to $35 for some services covered under Medicaid.
Naturally, there are Republican senators who don’t want to do that — most notably and loudly Josh Hawley of Missouri.
Hawley is one of five GOP senators who reportedly could combine to scuttle the bill that narrowly passed the U.S. House of Representatives.
The issue bringing the group together is the proposed cuts in Medicaid, totaling at least $600 billion over 10 years, according to an analysis by the nonpartisan Congressional Budget Office.
Almost three months ago at a GOP rally in Maryland Heights, Hawley told this bureau, “I’m not going to vote for Medicaid benefit cuts.”
He also said the GOP has to be careful in cutting funds from Medicaid and the Children’s Health Insurance Program, programs that benefit about 1.5 million Missourians, or about 25 percent of the state’s population. . . .
Other Republicans identified in news reports as possible opponents are Susan Collins of Maine, Jerry Moran of Kansas, Lisa Murkowski of Alaska, and Thom Tillis of North Carolina.
The editors of the Wall Street Journal wonder if part of the reason Musk is so irate about the Big Beautiful Bill is the provisions that will relate to Tesla:
The House bill does avoid a $4.5 trillion tax hike next year and cuts spending by some $1.5 trillion over 10 years by making some useful reforms to Medicaid, student loans and food stamps. It also ends most of the Inflation Reduction Act’s green-energy subsidies.
Ah, but Mr. Musk doesn’t want to eliminate that pork. “There is no change to tax incentives for oil & gas, just EV/solar,” he said on X.com last week, retweeting another user post that said “slashing solar energy credits is unjust. But what’s more unjust is the damage that is done to people’s lives during storms and blackouts, because ultimately you can’t replace a human life.”
Mr. Musk is parroting the climate lobby’s specious claim that tax breaks like depreciation that are available to all manufacturers are a special benefit for the oil and gas industry. But it’s rich that he is denouncing the House bill for not cutting spending enough while also fuming that it kills green-energy tax credits, as if they are a matter of life-and-death for Tesla.
There is this widespread perception among Republicans — and Americans generally — that the deficit can be eliminated and the debt can be managed just by cutting some foreign aid programs. Brookings: “Opinion polls consistently report that Americans believe foreign aid is in the range of 25 percent of the federal budget.” According to the Pew Research Center, “In fiscal 2023, the most recent fiscal year for which data is largely complete, the U.S. government disbursed $71.9 billion in foreign aid.” That amount “works out to 1.2% of that year’s total federal outlays, which were more than $6.1 trillion. Since fiscal 2001, foreign aid has ranged between 0.7% and 1.4% of total federal outlays.”
Remember, all total U.S. foreign aid is measured in the tens of billions, with a “B,” while the deficit each year is measured in the trillions, with a “T.” There are 1,000 billions in each trillion. If Congress and the administration agreed tomorrow to not spend another dime on any form of foreign aid, it would not make any significant impact on the overall numbers of the deficit and the debt. (This is not a blanket defense of all foreign aid programs; they ought to be kept or eliminated based on how well they achieve American objectives.)
About a half hour before Musk’s criticism yesterday, Congresswoman Marjorie Taylor Greene announced to the world she hadn’t read the bill closely and thus missed a provision in its pages that “strips states of the right to make laws or regulate AI for 10 years.”
We’re in the very best of hands, America.
ADDENDUM: In case you missed it yesterday, if you’re someone who wants Trump’s policies to be as tough as his rhetoric — particularly on issues like Hamas, Russia, and Iran — then the “TACO” term makes sense. If you like it when Trump backs down from an initially destructive stance, the way most free-market conservatives feel about Trump’s his various tariff extensions, then you shouldn’t be mocking the president for allegedly chickening out, because that’s probably going to make him dig his heels in deeper.
But if you’re a Democrat, and your default setting is that Trump’s first instincts are always wrong, why are you mocking Trump for chickening out? You guys should be hoping he chickens out more often!