Dem
47
GOP
53
As is obvious from the headlines, there is a running theme through much of today's post. On Wednesday, we wrote: "'Overpromise and underdeliver' is pretty much the theme of Donald Trump's political career (it's probably also true of other aspects of his life)." In case you missed it, that was meant to be a backdoor small-penis joke. In any event, there is something to be said, in both politics and in life, for setting lofty goals. But you're going to run into problems if the goals are TOO lofty, or if success causes you to double-down and overstep, or if you simply won't or can't admit it on those occasions where you came up a little short. Donald Trump has all three of these bad habits, and that is the storyline that runs through our first four items today.
As we have noted, we don't like to overdo it when it comes to talking about budget-related sausage-making, because a lot of the talk coming from Capitol Hill is just hot air and empty posturing. For example, yesterday, the SALTy Republicans in the House drew a line in the sand, decreeing that the Senate's current proposal on SALT deductions is not good enough to get their votes, if and when the Senate bill returns to the lower chamber. The leaders of this faction are Reps. Mike Lawler and Nick LaLota (both R-NY) and Young Kim (R-CA); they are reportedly speaking on behalf of at least a dozen of their colleagues.
Meanwhile, a group of five Republicans from Western states drew a different line in the sand, announcing that they are "no" votes if the bill retains provisions that allow for sales of vast tracts of public lands to private corporations. The leader of the latter faction, incidentally, is Rep. Ryan Zinke (R-MT), who—when he was leading the Department of the Interior—was quite eager to open up public lands to exploitation by private interests. His change of heart may have something to do with the fact that the current proposal will not allow him to line his own pockets. Teapot Dome-style corruption is only fun if one has a ticket for a seat on the gravy train, we suppose.
Anyhow, who knows how serious these folks are about the gauntlets they've thrown down? If either faction were to stick to its guns, that would be enough to torpedo a bill in the House, where Speaker Mike Johnson (R-LA) can only afford three defections. But as we have pointed out many times, these folks tend to back down when the rubber hits the road. If you had to bet, you would be wise to wager on most or all of them doing so yet again.
There was one development yesterday, however, that goes beyond posturing and hot-air blowing, and that presents a real problem for Republican leadership in both chambers: Senate Parliamentarian Elizabeth MacDonough ruled that most of the Medicaid provisions cannot be passed via reconciliation. The reasoning was different, depending on the particular provision in question, but most of it boils down to: "This provision is fundamentally about policy, not about the budget."
The math for the big, beautiful bill was already less-than-stellar. Now, it's become an epic train wreck. If the Republicans somehow push the bill through the Senate, in its current Byrd-bathed state, then they will not be able to make the tax cuts permanent, and they will also cause the deficit to explode. The former would displease the millionaires and billionaires who exercise so very much influence over the Party; the latter would infuriate the budget hawks in the House.
At this point, Senate Majority Leader John Thune (R-SD) effectively has three options. He can try to ram it through, post-Byrd bath, and—if he is successful—dare the House to vote the bill down. Or, he can make changes to the bill, so as to try to fix some of the many problems that have emerged. Or, he can try to do an end-run around the Parliamentarian, by creating yet another filibuster carve-out. Thune said yesterday that he would not do that, but last month he used smoke and mirrors to do an end-run around the Parliamentarian, while still being able to claim that he did not technically do an end-run around the Parliamentarian. So, he could do that again, though keep in mind that the Medicaid stuff was already unpopular with many Senate Republicans. People like Susan Collins (ME), Josh Hawley (MO) and Thom Tillis (NC) may not be eager to participate in parliamentary tricks so as to secure passage of legislation they already don't like.
And that brings us to Trump. The Republican Party is in this situation, in large part, because he made too many big promises to too many people, and now he can't deliver. Now, it can fairly well be said that Joe Biden did the same thing with HIS big budget bill. Remember when there was talk of outlays of $6 trillion or more on social programs? But what Biden did, after the Democratic members had time to get their talking points out there, was roll up his sleeves and get to work, setting priorities and developing a framework for what a feasible bill would look like. Eventually, with significant help from his staff and from Democratic leadership in Congress, he managed to get the $1.6 trillion in spending passed. That's not $6 trillion, but it's still a lot.
Trump, by contrast, just does not do sausage-making. Yes, he has underlings who TRY, but they can only accomplish so much when their boss is not clear about his priorities, or when his priorities change based on whoever it was that he last spoke to. It would help a lot if, for example, he came out and said unequivocally that his priority is the deficit, and that means the tax cuts aren't doable right now. But he doesn't do things like that, because he cannot admit, even tacitly, that he has failed to deliver on a promise.
That means that the main weapon in Trump's arsenal is bluster. He likes to threaten Republican members with primary challenges, and he will start doing a lot of that if and when a budget bill starts to get close to the finish line. He also likes to try to scare the voting public. Yesterday, for example, Stephen Miran, chair of the White House Council of Economic Advisors, and thus one of Trump's main surrogates on budget matters, warned that if the big, beautiful bill does not get passed, the economy might slip into a recession.
We actually think Miran is right about that, though that does not mean his conclusion that Congress MUST pass the big, beautiful bill is correct. Recall that the most commonly accepted definition of "recession" is two consecutive quarters of negative GDP growth. Well, thanks to Trump policies that have nothing to do with the budget bill, the U.S. is already halfway there. The federal government's number crunchers had already estimated that the U.S. economy shrank 0.2% in Q1; yesterday, that number was revised to 0.5%. In Q4 of 2024, by contrast, the GDP grew by 4%. Now, what was the biggest difference between Q4 of last year, and Q1 of this year, when it comes to fiscal policy. Hmmmm... that's a head-scratcher...
What we are saying, in so many words, is that the U.S. is probably going to enter a recession in Q2. That will happen if the big, beautiful bill passes, and it will happen if the big, beautiful bill fails. So, Miran is technically correct when he says there will probably be a recession if the big, beautiful bill does not pass. (Z)