What Donald Trump and Congressional Republicans refer to as their “Big, Beautiful Bill” should instead be called the “Class Warfare Act.” Masquerading as a budget and tax measure, this legislation would enact the largest transfer of wealth from the poor to the rich in American history.
Yes, under the bill passed by the House, the bottom 60% of income earners would, on average, avoid the $500 bump in taxes that would have resulted from the expiration of Trump’s 2017 tax cuts. But the top 1% of income earners would, on average, come out $60,000 per person better off. A feast at the top and crumbs for those below. But even the crumbs are illusory.
To partially fund the tax cut extension, along with a host of new tax cuts, Republicans plan to cut almost $300 billion from the food stamp program over the coming decade. Add to this an $800 billion reduction in Medicaid spending, which would result in between 10 and 13 million people losing health insurance.
It gets worse. Most of the tax cuts are not matched by spending cuts, which means that they are funded through increases in the national debt, estimated at roughly $4 trillion. This will add to the existing $36 trillion in Federal debt. A decade ago, the Federal debt was manageable in size and interest rates were low. No longer. The debt has ballooned as a result of pandemic-era spending while interest rates have risen.
As a result, annual interest payments on the debt are approaching $1 trillion annually, exceeding even the defense budget. Reflecting worries about the sustainability of this trend, the credit rating agency Moody’s just downgraded U.S. treasuries for the first time in over a century. That move alone will cause investors to demand a higher risk premium when buying government securities. You can see the potential for a downward financial spiral.
There is more. By slashing green energy credits, the House bill would put the brakes on the massive surge in renewable energy investment of recent years and cede such industries to China while the U.S. remains wedded to the inferior and massively polluting technologies of the fossil fuel era. That means foregoing the millions of good-paying jobs that building out a post-fossil fuel economy would have created.
As with many of the moves that Trump and the Republican Party have taken over the past few months – including poisoning U.S. alliances, isolating the U.S. economy from global supply chains, undercutting U.S. leadership in higher education, diminishing American soft power, and much more – this peculiarly vicious piece of legislation seems surgically aimed at curtailing American power and prosperity.
The biggest irony, however, is that Republicans are engaged in a frontal assault on the very working-class voters who twice put Trump in the Oval Office. Indeed, Trump, his billionaire friends, and their loyal servants in the U.S. Congress are in the process of pulling off the greatest bait-and-switch in American history. Will Trump’s MAGA followers finally figure out that they got hoodwinked?
The Internationalist 