Big? Yes. But Beautiful?

...not so much

July 5, 2025 ~ Vol. 31

Watching legislation being crafted in Washington is sometimes compared to watching sausage being made, but I will suggest that this week’s activities in Washington were more like making scrapple—with lots of questionable fillers to accompany the pork. The Senate took over the meat grinder after the House had finished their version of the legislation and proceeded to add billions or trillions to the cost, and to the nation’s deficit, depending on which accounting method is used to tally the fillers. The process brought out division and derision on both sides of the aisle, with party leaders and major stakeholders describing the “Big Beautiful” bill as anything from an economic catalyst (Republicans and bank analysts) to the end of civilization as we know it (Democrats, Medicaid recipients, and Elon Musk, of all people.)

There has always been robust debate in political circles about the effectiveness of combining multiple legislative priorities—stuffing numerous individual pieces of legislation into one large all encompassing “omnibus bill”— instead of proposing each bill as a stand-alone piece of legislation and debating its merits without clouding the discussion with other distracting, unrelated, or potentially competing issues. This Big Beautiful (Omnibus) Bill offers all that and more and is really just a continuation of Trump’s “flood the zone” style of offense, no different than signing as many Executive Orders as he can sign in one sitting or until his Sharpie runs out of ink. The opposition has to defend against dozens of initiatives simultaneously. Who has the time (or money, or lawyers) to focus on backtracking on renewable energy initiatives or saddling the next generation with trillions of dollars in debt when your local hospitals and nursing homes are threatened with closing? Conservative Freedom Caucus Republicans are equally displeased about the measure because of the budget busting deficits that come with it, so the accounting Congress used for those projected deficits is probably a good place to start.

I hesitate to use the word “normally” for anything that happens in Washington, but normally budget resolutions that are projected to increase the federal deficit beyond ten years must pass by a supermajority, 60/40 vote margin. Congress has been getting around that rule by passing tax legislation that is “temporary”, an example of which is the 2017 Trump tax bill that is expiring at the end of the year. If proposed legislation has no impact on the deficit, Congress can pass the legislation utilizing what is called “reconciliation”, which only requires a simple majority to pass a measure, not sixty Senators. If your goal is to get something passed, reconciliation is the preferred route. The person who would normally be called upon to decide if a budget proposal qualifies for reconciliation is the Senate Parliamentarian, but Republicans were reticent to ask for a ruling from that office, knowing what the answer would be. Senate Majority Leader John Thune opined that the person who gets to decide whether or not to petition the Parliamentarian for a ruling is the Chair of the Senate Budget Committee, who is…wait for it… Lindsey Graham. So—no Parliamentarian will be in this story.

The House had passed its own version of the bill, so that version and the Senate version had to be negotiated and reconciled by the Conference Committee (and then voted on again in each chamber), unless a majority of House members could be persuaded to embrace the differences in the Senate’s bill. That once seemed unlikely, as more than a few House Republicans had stated that they were a “Hard No” on the Senate revisions to their original bill. These things generally break mostly on party lines, but there are a few caucuses that have their own litmus test issues that run counter to the collective consensus. SALT caucus members from high tax states like New York wanted to see relief from the $10,000 limit on the deduction for state and local taxes (SALT). The new number would be $40,000 under the proposed legislation, a significant benefit for high earners in high tax states like New York. House members in purple districts like Mike Lawler’s NY-17 pressed for that concession (and now will have something to talk about when he runs for Governor). Conservative Republican Freedom Caucus members press for deficit reductions, something President Trump cares nothing about.

Before Congress could cut taxes as Trump has promised to do, they first had to revisit and re-approve the 2017 tax cuts that are about to expire. The cost of those cuts is $3.4 trillion dollars over the ten-year period, but Republicans wanted to ignore that number and calculate the renewal of legislation as having zero impact on the deficit. If Republicans ignore the $3.4 trillion hole in the budget they will, of course, be faced with a future Democratic majority that will pull the same stunt, so any declaration of victory will be short lived. Projected budgets and actual revenues and expenses are completely different sets of numbers, and the country’s debt burden will not be determined by what Republicans call it. Voters will make up their own minds when the chickens come home to roost. I wrote about said deficit chickens in a prior post. Fair warning—thanks to this new legislation, we are now much closer to the fiscal cliff’s edge. The Peterson Institute for International Economic also called the Senate’s accounting a farce.

Referring to the exploding deficit that will accompany the passage of this legislation, Elon Musk pulled out the big guns this week, threatening to primary any Republican who voted for the measure. Musk posted on X (a/k/a Twitter): Republicans who vote for it “will lose their primary next year if it is the last thing I do on this earth”. His comments have more to do with the bill’s termination of electric vehicle tax credits than any newfound concern about government fiscal responsibility. His “last thing I do on this earth” comment also has me wondering if Elon has moved up his timetable for moving to Mars. Musk found himself in the awkward company of Democratic naysayers like Elizabeth Warren, who applauded his position on the legislation. Republican legislators who might consider voting against the legislation now face primary threats from President Trump if they voted no, and from the richest person on the planet and last year’s largest Republican donor if they voted yes. Seeing the handwriting on the wall, North Carolina Senator Thom Tillis announced that he would vote against advancing the bill, and then in the same breath said that he would not run for reelection. So there.

Musk and a lot of other people are rightfully concerned with not only the bill’s balance sheet busting additions to the national debt, but the focus on new tax incentives that deemphasize green energy initiatives like electric vehicles and wind and solar power and reemphasize exploration for carbon fuels. Musk’s about face on the White House measure is prompted by the following reality: US auto makers have lost big ground to China in the production of electric vehicles. Chinese auto manufacturers now produce over 70% of EV’s produced globally, while the US production has fallen to below 10% of global sales. EV industry vanguard, Tesla, has ceded their top selling producer status, as Chinese manufacturers BYD and Geely’s sales have surpassed them. Trump’s Big Beautiful Bill eliminates Biden era EV incentives, put in place primarily to protect EV also-rans GM and Ford from the onslaught of less expensive Chinese product. These new EV provisions also explain Elon Musk’s turning on the proposed bill with a vengeance, as Tesla will bear the brunt of the lost incentives. As silly and foolish as it sounded to hear Trump campaign with “Drill Baby Drill”, to now see a sycophantic Congress jump on the bandwagon to climate disaster is frightening. The one personal benefit that I can attribute to this 119th Congress is that I can now write “sycophantic” without double-checking the spelling.

One of the most fascinating parts of this legislative sausage making is watching individual politicians sell their vote negotiate for concessions that benefit them their constituents. Two Republican Senators that can usually be relied upon to provide such entertaining creativity are Senators Susan Collins in Maine and Lisa Murkowski in Alaska. Alaska is home to a vibrant oil drilling industry but is also one of the poorest states in the nation. Democrats needed to sway four votes to stymie the advance of the legislation in the Senate, and Collins and Murkowski were, as always, #1 and #2 on the short list of getting there. Soon-to-be-former Senator Thom Tillis would now be #3. Libertarian Rand Paul was #4, because…Rand Paul.

Murkowski and Collins represent two of the most rural states in the country, and rural areas will be the most impacted by cuts to Medicaid and SNAP (Food Stamps). One of the biggest impacts of the proposed Medicaid and CHIP (Children’s Health Insurance Program ) cuts will be those programs’ part in local health care systems for lower income patients. Here in the north country of upstate New York, fully 44% of our children benefit from Medicaid/CHIP coverage. 66% of our nursing home residents depend on Medicaid. Local Health care systems and nursing homes in rural areas operate on razor thin margins in the best of circumstances and eliminating Medicaid subsidies will put many over the fiscal edge. I wrote about the bill’s local impact to Medicaid in an earlier newsletter. I really am wondering how our local Congressional Representative, Elise Stefanik, will justify her support for this bill, especially if she runs for Governor as is widely anticipated. Opinion polling on this measure is overwhelmingly negative, with only 29% of respondents in favor of the measure. Polling is even worse for the Medicaid provisions in the bill. According to Quinnipiac Polling, only 10% of all respondents and only 18% of Republicans think that current Medicaid benefits should be reduced.

Murkowski and Collins see the rural handwriting on the wall that Stefanik does not. Senator Murkowski lobbied to have Alaska excluded from the Medicaid cuts. Since the Senate Parliamentarian would never allow an arbitrary exemption for one state, the proposed language of her carve-out for Alaska limited the Medicaid cuts to “contiguous states”, excluding Alaska and Hawaii, ostensibly because of the unique geographic conditions suffered by those two states. Add some oil drilling incentives for Alaska and Senate Majority Leader Thune got Murkowski’s vote. Like I said, more like making scrapple than sausage—lots of questionable fillers. The good senator was once again channeling Peanuts character Lucy Van Pelt pulling the football away at the last second just as Charlie Brown tried to kick the ball through the legislative goal posts. Murkowski gets an A for drama and A+ for creativity and a Big Red F for ethics. The rest of us will have to figure out who will help our (former) nursing home residents and our own rural hospital patients that no longer have a hospital. Perhaps they could all move to Alaska. And the rest of us will be driving fifty miles to find a doctor. There was hope that some Republican House members would object to the exclusion for just Alaska and Hawaii when they crafted their response to the Senate changes— unless President Trump coerced everyone into accepting it, which we know now, is exactly what happened.

These are Senator Murkowski’s comments after voting for the bill. She hoped that House Republicans would vote against the bill that she had just voted to pass in the Senate!

“I had to look on balance, because the people in my state are the ones that I put first,” Murkowski said. “We do not have a perfect bill by any stretch of the imagination. My hope is that the House is going to look at this and recognize that we’re not there yet.”

Profiles in Courage, indeed!

We have all read the criticisms about how this bill benefits wealthy taxpayers at the expense of lower income families, especially very low-income households that depend on social services like Medicaid. Even the attempts to attract populist appeal for working families fell flat which helps explain why polling on the bill shows that less than one third of the country was in favor of its passage. One widely promoted populist measure will eliminate the tax on tips for restaurant workers, a proposal Trump first floated last year at a campaign stop in Las Vegas. The measure is criticized for a number of reasons. Most restaurant workers pay very little in income tax. According to ZipRecruiter, the average restaurant worker makes about $28,000 per year, which would call for a federal income tax levy of just 12%. More importantly, what about everybody else in the restaurant? Why just the dining room servers? They are all underpaid for what they do. This proposal is just a Republican ruse to avoid the appropriate solution—raising the federal minimum wage, something that is long overdue. If someone is working full time, often at more than one job, they deserve the dignity of being able to pay for their groceries—with cash, not SNAP benefits. Period, full stop. If our hamburgers cost fifty cents more to pay for it, so be it.

While Congress worked 24/7 to advance the legislation, President Trump took time this week to fly to Florida for a photo op at a planned new ICE detention center strategically located in the middle of what appears to be a swamp, and—on the same day— introduce a new line of Trump fragrances for men and women, packaged in a DJT genuine gold-tone statuette, called “Trump Victory 45/47” lest anyone overlook how much he enjoys trading on the office of the presidency for personal enrichment, or perhaps just to offer something to mask the stench of 11.8 million people losing their health insurance.

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