New York Times Op-Ed: What Are Republicans Thinking With Such a Reckless Bill? Maybe This., by Noah Millman (Gideon’s Substack):
According to the Congressional Budget Office’s estimates, the legislation’s permanent tax cuts combined with spending increases on defense and border security and large cuts to Medicaid and other social spending would add more than $3 trillion to the national debt over the next 10 years, with more red ink in the years and decades after. …
[W]hy are [Republicans] behaving in a way that appears to be both politically self-destructive and potentially ruinous for the country?
The answer may be that Republicans aren’t focused on solving a fiscal problem. They’re focused on solving a political problem, one that extends beyond the midterm elections. In doing so, they may be borrowing a page from the playbook of the Reagan-era G.O.P.
America’s fiscal mess is a bipartisan creation. It was during the George W. Bush years that federal tax receipts became consistently insufficient to support the level of spending. But it was during the Joe Biden years that the cost of interest payments on the national debt soared — yet the administration continued to pursue new spending initiatives, even as the economy boomed and inflation took off.
That joint culpability suggests that a solution should also be bipartisan, so those threatened by voter backlash on spending cuts or tax increases can walk the plank together.
But not all planks are created equal. Any negotiation over cutting spending and raising taxes will start from a base line of where spending and taxes are when the negotiations begin.
That’s where the Big Beautiful Bill comes in: The G.O.P. bill isn’t good for the economy, and it’s terrible for America’s fiscal health. But it does reset the base line. Mr. Trump’s first-term tax cuts were structured to expire after a certain number of years to limit their official cost. That’s how President Bush’s tax cuts were structured as well. But when President Obama negotiated with a Republican Congress over their extension, he could demand that the upper-bracket cuts expire on schedule, knowing that if the negotiation failed, the entire package would expire. The Republican bill would make Mr. Trump’s tax cuts permanent, depriving the next Democratic president of that leverage.
Similarly, when Democrats come back into office, they will undoubtedly fight to restore Medicaid and SNAP from the new bill’s cuts. That will take the energy that might otherwise have gone into expanding social spending from its previous base line. And the fight is likely to be happening in the context of a much more dire fiscal situation, where unpopular tax and spending changes will be unavoidable.
At that point, if Democrats need Republicans to walk the plank with them, they’ll have to make concessions elsewhere to earn their support, even as they spend their capital to undo measures that Republicans enacted on their own. …
[T]he potential upside for Republicans of making President Trump’s first-term tax cuts permanent: It may force Democrats to join with Republicans to finally address our fiscal situation in a manner more in line with Republican policy priorities. That could include unpopular changes to entitlements that would otherwise be toxic for either party to tackle. It could also include taxes that fall more heavily on working-class people than on the owners of capital.
In effect, Republicans and Democrats are playing a game of fiscal chicken, each side trying to force the other to swerve and accept policy outcomes — tax hikes on higher-income earners and cuts in defense versus entitlement cuts and tax hikes on consumption — that they respectively find anathema. With the Big Beautiful Bill, Republicans have gunned the accelerator.
It’s the kind of move that could persuade the other driver to swerve first. But it’s also liable to get both drivers killed, and the American economy along with it.
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