House’s “Big Beautiful” Bill for Trump Will Take U.S. Over the Cliff

Days ago the House came forth with a budget resolution that makes clear that Republicans have no concern at all for the nation’s future. Given how
subservient Speaker Mike Johnson is to President Trump, we can be sure that the House plan is closely aligned with the president’s often expressed desires. Trump bellowed on Truth Social,

“We need both Chambers to pass the House Budget to ‘kickstart’ the Reconciliation process, and move all of our priorities to the concept of, ‘ONE BIG BEAUTIFUL BILL.’”

With the country flying past $36 trillion in debt, Trump plans still more tax cuts, beyond extending his 2017 cuts, which will be the fourth set in this quarter century, all by Republican administrations. The House resolution obliges Trump by deliberately allowing for cuts costing an alarming $4.5 trillion over the decade to come.

Money in the budget cannot be found to backfill that bunker busting crater, and the plan hasn’t figured out where to start. Johnson has simply directed the various committees to come up with $1.5 to $2.0 trillion in savings across the next ten years. Even if that were somehow possible, it still leaves as much as a $3 trillion shortfall. And, by the way, committees, stay clear of defense because, to make your task a bit more difficult, the House is voting for an added $100 billion, up from this year’s $849.9 billion defense budget.

befuddlement

Most significantly, the Energy and Commerce Committee, which handles health care spending, is asked to cut $880 billion over the decade and that unmistakably takes aim at Medicaid at least. Trump has vowed many times over that Social Security and Medicare will not be disturbed. In an interview this
Target Article: week by Fox News’ Sean Hannity, Trump said:

”Social Security won’t be touched…Medicare, Medicaid — none of that stuff is gonna be touched.”

The mention of Medicaid may have been a slip, or it revealed that the president doesn’t know what’s happening. Hours later, probably advised that Republicans are already working on huge cuts to Medicaid, Trump embraced the House resolution saying it,

“implements my FULL America First Agenda, EVERYTHING, not just parts of it.”

Slashing Medicaid to pay for additional tax cuts for the wealthy and corporations will affect tens of millions of poorer Americans who will discover that they have served Trump’s purpose in getting him re-elected and will now be left at the side of the road.

Republicans won’t stop at eviscerating Medicaid. They surely also have their eye on the subsidies paid to Americans under the Affordable Care Act to help them pay for health insurance. Trump tried twice to kill Obamacare, finally defeated in a late night dramatic tie-breaking vote by Senator John McCain. It’s an odds on bet that Trump will try again. Left with no affordable insurance options may wake his voters that they’ve been betrayed.

hiding the ball

Trump and Republicans have every intention to extend the 2017 Tax Cuts and Jobs Act. Elements of the Act are due to expire in 2026. It was passed under the Senate’s filibuster-proof “reconciliation” rule that requires only a simple majority but is limited to a lifespan of 10 years. Its extension will add $4.6 trillion to government debt over the next decade according to a Congressional Budget Office estimate of last May.

The House resolution that provides $4.5 trillion in tax cuts is so far unspecific what will make up those cuts, and so no mention is made of its encompassing the extension of the 2017 cuts. How can it? Its $4.6 billion would swamp the $4.5 trillion in its entirety, blocking the further tax cuts that Trump wants. That says that the 2017 extensions are separate, unaccounted for – and a colossal extra. Our guess is that they are not even viewed as tax “cuts” by House Republicans, just as a continuance of the status quo, so best not to draw attention. But its $4.6 trillion doubles tax cut costs to a crushing $9 trillion and makes the House resolution a fraud. There is not a word of this in the media. It hasn’t been discovered, except evidently by The Committee for a Responsible Federal Budget which projected during the campaign that Trump’s tax and spending plans are so out of hand that they could cost as much as $15.15 trillion.

expanding the oligarchy

Trump expects new tax cuts and the House has obliged with the $4.5 trillion, most of it adding to the national debt. For individuals we will presumably see the tax brackets once again whittled down so that the wealthy 10% are handed the biggest cuts and the 90% are handed token savings to distract them from the fleecing, just as in 2017. That reform reduced taxes by less than 2% for 80% of taxpayers, averaging about $1,000 a household, but gave almost $9,000 in breaks for the top 20%, and over $70,000 to the top 1%.

But chief among the cuts will be Trump’s demand that corporate taxes – already cut in 2017 by a whopping 40%, reducing the rate of 35% to 21% — be cut yet again to only 15%.

Finally, there are all the other tax cuts that Trump pledged on the campaign trail, and his MAGA followers will tell you that they voted for him because Donald Trump keeps his promises. Are all their sizeable costs covered by the already huge hole created by the $4.5 trillion tax cut allowance, or will insanity take over?

No Income Taxes at All: OK, not a promise, but for the record we should at least record Trump’s wish to return to the 19th Century when there was no income tax and where he found his new favorite president (jilting Andrew Jackson) William McKinley, whose government was funded by tariffs. The income tax didn’t begin until 2013 with the 16th Amendment to the Constitution. Last October on Fox News, Trump lamented,

“It had all tariffs. It didn’t have an income tax. Now we have income taxes and we have people that are dying. They’re paying tax and they don’t have money to pay the tax.”

The U.S. imports less than $4 trillion in goods annually and collects $3.5 trillion in individual income taxes, which means it would take tariff rates of almost 90% to replace the income t ax. And just to put a finer point on it, at that rate, imports would decline for being too costly and so would tariff proceeds. Mr. Trump clearly has not done the math.

No Tax on Social Security Benefits: In a bid to win the vote of the over-65 age group, Trump proclaimed on Truth Social in August that “SENIORS SHOULD NOT PAY TAX ON SOCIAL SECURITY!”. The Wall Street Journal editorialized,

“We favor lower taxes as a matter of principle, but not all tax cuts have equal benefit. And this one is likely to backfire in spectacular fiscal and economic ways.”

In the current year, taxing benefits raised about $94 billion for the Treasury, but the government would sacrifice far more if Trump as his way.

Why? The tax is calculated on an individual’s income and benefits above fixed dollar thresholds. But while the thresholds are fixed, the benefits

above those thresholds rise every year because Social Security benefits are indexed for inflation; seniors receive more every year. The outcome is that Trump’s elimination of the tax on benefits would run from $1.6 to $1.8 trillion in lost government revenue over the next 10 years — and would hasten the insolvency of Social Security as well.

Seniors already enjoy advantages: Anyone over 65 gets a higher standard deduction. Social Security benefits aren’t taxed at all for those with lower incomes. Even for those with higher incomes, 15% of benefits are not subjected to tax in recognition that we have already paid income tax on the deductions from our paychecks that went to the Social Security administration. And most of all, owing to increased longevity, the amount of benefits that a high percentage seniors receive far exceeds what they paid in over their working years.

No Taxes on Tips: It all stems from a waitress in Las Vegas airing her grievances to Trump, who immediately seized on waiving taxes on tip income as a way to buy votes.

“For those hotel workers and people that get tips, you’re going to be very happy, because when I get to office, we are going to not charge taxes on tips.”

A Journal editorial last June reacted with…

“…[I]t’s too bad he’s now floating special-favor tax ideas…The political play for working-class voters is blatant.”

The Republican Party embraced it in its platform. House Speaker and Trump sycophant Mike Johnson said he would “pass it as soon as we can”.

The Committee for a Responsible Federal Budget figures the exemption would cost the federal fisc at least $150 to $250 billion over 10 years. But that doesn’t count the distortion of potentially millions of businesses re-classifying pay as tax-free tips as a way to pay lower wages. And as the Journal further said, “Soon your plumber, accountant and child’s tennis coach will want to be paid in tips.”

But above all, why should those earning part of their income in tips be anointed as a special class. As Quin Hillyer at the conservative Washington Examiner asked,

”Why should a waiter not pay taxes on an essential part of his earnings while a welder still pays on all of his?”

No Taxes on Overtime Pay: In September, Mr. Trump floated the idea of exempting taxes on overtime pay for work beyond 40 hours a week. The Tax Foundation estimates this carve-out would cost between $680 billion and $3.1 trillion over a decade depending on how it is structured: e.g., would payroll taxes (for Social Security and Medicare ) not be withheld on overtime pay all year long, or would it only be a deduction on form 1040 at tax filing time?

Either way, what’s the justification? Overtime is already rewarded by federal law at one-and-a-half times regular pay. What is it about overtime pay that merits special tax treatment to boot? It certainly looks like Trump is buying the votes of police forces across America, the police being adept at padding their income with overtime.

End Cap on State and Local Tax Deduction: Those who itemize deductions on their tax returns were limited to a maximum of $10,000 of their state and local taxes (acronym SALT) by Trump’s 2017 Tax Cuts and Jobs Act (TCJA). An individual’s SALT costs would become fully deductible again in the unlikely event the 2017 Act’s cuts are let to expire. But despite TCJA’s planned extension, and the need for the cap to somewhat pay for its lost revenue, candidate Trump at a rally on Long Island last September pledged to end the limit anyway and allow full deduction of SALT.

Many lawmakers wish to at least raise the cap to $20,000.for married filers. That doubling would reduce federal revenue by $225 billion over 10 years according to the Tax Policy Center. Elimination of the cap altogether to please Trump as part of extending the 2017 Act, would cost the government more than $1 trillion.

Deductible Car Loan Interest: Speaking at the Detroit Club last October, Mr. Trump announced a tax deduction for interest paid on car loans. That would cost the government about $61 billion across 10 years.

No Income Tax on Americans Living Abroad: Another Trump campaign promise says that Americans living and earning their income abroad should not have to pay taxes to the U.S.

In the usual case, an expatriate pays to the U.S. only the amount that U.S. income tax exceeds the income tax paid to the country where he or she is domiciled. Still, expats hate the paperwork burden of having to file under two jurisdictions.

One could argue that if you are a U.S. citizen, and choose to retain your U.S. citizenship, you owe taxes to the U.S. wherever you are. Besides, ending the requirement would see an outflow of wealthy Americans moving to tax havens overseas. But in all of the cases we cite, Trump never thinks through the knock-on effects. Or is he setting up for a tax-free future for the Trump clan?

over the edge

The reckless plunge into further debt is sure to cause increasing consternation around a world in which the U.S. dollar is the reserve currency. It will hasten the moment when central banks begin to unload U.S. treasuries and move funds elsewhere. As the U.S. then finds it increasingly difficult to raise money to finance its ever-increasing annual deficits, it will need to offer ever-higher interest rates to compensate for a declining dollar brought about by our country’s reckless policies. Interest costs already exceed the defense budget. Republicans obviously don’t care. A bemused Ben Stein was a Nixon economics adviser when he came up with the oft-quoted truism “If something cannot go on forever, it will stop.” It will stop in a cataclysmic crash when the U.S. goes over a fiscal cliff.

Musk Rampages Across a Government Clueless About What He’s Doing

A mere two days after his confirmation as Secretary of the Treasury, Scott Bessent stunningly handed the keys of the vault to Elon Musk. Apart from bewilderingly ceding control of his fief, Bessent’s action was entirely illegal, but immune Donald Trump told him to do so.

The Department of the Treasury issues almost all of the U.S. government’s disbursements, some $6 trillion a year in Social Security payments,
tax refunds, veterans benefits, and then some.

Musk, with neither Senate confirmation nor FBI background check nor security clearance, has been declared a “special government employee” to head a Potemkin “department” that by law could only exist if Congress creates it, but which has nevertheless been given illegal free agency to roam the government departments supposedly to sniff out inefficiencies.

Musk has brought along a troop of engineers age 19 to 25 who have no government clearance, yet the publication Wired reports they have apparent access to all of the data in the department’s systems. That would include your social security number, your tax returns, your payment history, your direct deposit bank account numbers, and so on.

The crew comes from his companies and, before that, we suspect, some may have been products of Peter Thiel’s fellowship that paid promising youths to skip college and start businesses. Musk and Thiel were co-founders of PayPal. Wired says that one of them, a 25-year old named Marko Elez, was given administrative privileges into the payment system at the Bureau of the Fiscal Service, which means he can alter the programming code that generates government payments “that in their totality amount to more than a fifth of the US economy”. Admin access allows for the entire system to be navigated, system components to be disabled, files modified or erased, payments — down to the level of individual Americans — to be modified or stopped, or money to Trump’s or Musk’s disfavored federal agencies halted altogether.

The New York Times first broke the story of the Musk team entering Treasury. Its report, days earlier than Wired‘s, acknowledged that the access “could give the Trump administration another mechanism to attempt to unilaterally restrict disbursement of money approved for specific purposes by Congress”, but otherwise complacently accepted that procedures were being followed. The reporters assured us that career Treasury Department attorneys signed off on access, the Musk team were made Treasury employees, passed “government” background checks, were granted security clearances, “have yet to gain operational capabilities”, and “any changes to the system would go through a review process and testing.” Skepticism was fully lacking.

If all was calm and in order, how then to explain why David Lebryk, Fiscal Assistant Secretary of the Treasury and for a few days the acting secretary prior to Bessent’s arrival, was forced out after a 30-year career for denying access to Tom Krause, CEO of Silicon Valley company Cloud Software Group?

In a letter, the U.S. Treasury said four days after the Times report that “Elon Musk’s government-efficiency team has been granted ‘read-only access’ to its payment system codes”. Senator Ron Wyden (D-OR) lashed back with,

“I’m sure the Treasury Secretary and the president want to save face and downplay the risks as Elon Musk seizes power, but nothing they’re saying is believable or trustworthy,”

He’s right. A Treasury officer several levels down was made to sign that letter rather than the secretary, because it is a lie. Wired’s reporting directly contradicts and begs the question, what good is “read only”? Or as MSNBC’s Lawrence O’Donnell put it,

”Read-only access? Really? Does Elon Musk seem like a read-only guy to you?”

The DOGE teams are out there to make changes.

Musk himself had already exposed the lie. In a tweet days earlier, he wrote that his team had learned that Treasury personnel were instructed to make illegal payments (a statement that itself is viewed as a lie to justify their making changes). Musk subsequently tweeted “The DOGE team is rapidly shutting down these illegal payments”. That gave it away. You can’t do that under read-only.

DOGE has so far gained access to 11 agencies across the government, including the Center for Medicare and Medicaid Services which has contracts totaling a trillion dollars. Several Musk associates have been given access to federal human resources databases at the Office of Personnel Management containing complete personal data, job applications, performance evaluations, medical histories of all of the millions of government employees.

The Treasury Department has now pledged to a federal judge that only two — Krause and Elez — would be allowed access to data according to strict limits and would continue to have read-only access, showing that department lawyers are either lying or covering up that there never was read-only. The judge asked the department attorney if Krause and Elez had distributed the fiscal data to “anybody else”. Humphreys said, “As far as we are aware, no, they have not, outside the Treasury Department”. As far as they are aware. In other words, they don’t know.

Then Elez resigned when racist posts were discovered on Musk’s X, mostly against Hindus and Indians working in Silicon Valley. Elez proudly summed it up last July with “Just for the record, I was racist before it was cool”.

takeover

That Musk and crew undertook these projects in secrecy, with no explanation even now of what they are doing, has given rise to the worry of “state capture”, defined as when a powerful individual is able to capture the mechanisms of government and manipulate them for personal gain.

Far-fetched? Take note that the universal elimination of inspectors general at some 18 departments and agencies sets the stage for capture. And ominously, an enabling act may be in the works. One internal communication had a tech team member mulling over how sign-in access to the Treasury Department’s systems could be simplified. That set off alarms — that Musk could be assigning creation of a “backdoor”, a secret bypass of security for entering the system at will in the future. It sparked suspicion that its purpose was to enable data to be sucked from the Treasury’s systems into the General Services Administration where another group of DOGE operatives are ensconced and for clandestine permanent access. Given that Musk’s companies have billions of dollars in contracts with the federal government, where are the safeguards against his tampering with business rivals henceforward?

Of still greater concern, what safeguards are there that data not be given to a foreign adversary? Tesla in China is utterly dependant on the good graces of the Chinese Communist Party, which has in the past few years made life increasingly difficult for U.S. corporations operating there. What is to stop Musk from extracting information to hand to China, or giving the CCP the keys to the back door, in return for favorable treatment? MSNBC’s Lawrence O’Donnell asks:

”Does anyone think there is a zero chance of that happening? Does anyone think that Elon Musk, the most erratic public figure in the world not named Donald Trump can actually be trusted with anything?” The fact is, we don’t know what they are doing.

Why USAID?

Elon Musk on his own seems to have brought about the obliteration of the $45 billion a year aid agency. The world’s richest man has halted the flow of assistance to the world’s most vulnerable people in the poorest countries all over the world, cutting off the supply of food, healthcare, and life-saving drugs in the most desperate places such as war-ravaged Sudan. The United States Agency for International Development, or USAID, is the world’s biggest donor, providing humanitarian aid for tens of millions of people.

Not to Elon Musk who tweeted, “USAID is a criminal organization. Time for it to die.” Trump has said that USAID is run by “lunatics” and “radicals”.

Republicans are complacent, always opposed to money spent on foreign aid, even though the USAID budget amounts to only .06% of the nation’s expenditures. Their knowledge of USAD seems to extend no further than a number of admittedly stupid projects which constitutes Fox News’ entire characterization of the agency. Primetime hosts Laura Ingraham, Jesse Watters, and Sean Hannity gleefully told us of $2.5 million to promote DEI in Serbia, funds for a transgender opera in Columbia, $32,000 for a trans comic book in Peru. Not a single word about what good USAID does in the world, the good will image the agency spreads about our country. Nothing about the opening it creates for China and Russia to rush in and replace our image with their own. Going no further, the Fox News hosts ignorantly and irresponsibly leave their viewers thinking that the $45 billion a year is in its entirety a “slush fund”.

(Interestingly, on their first night after the story of the Treasury infiltration broke, none of the three nightly commentators of the supposed “news” organization made any mention whatever of Musk’s illegal Treasury breach).

The new Secretary of State Marco Rubio welcomes Musk’s destruction of USAID. Long a critic, he says:

” [E]mbassies around the world complain that USAID… is not only not cooperative, they undermine the work that we’re doing in that country…They won’t tell you what the programs are. They refuse to answer questions.”

A serious complaint, but one that suggests that USAID, an independent agency created by Congress in 1961 during the Kennedy administration, should dutifully follow the State Department’s lead.

Accordingly, Rubio has folded whatever remnants left of USAID into the State Department, which amounts to quite a power grab. He has appointed to review the aid agency’s programs a top official at State, Pete Marocco, who once served at USAID. The review will be less than superficial. It is already decided that only 294 foreign service officers and civil servants will replace the several thousand who managed the disbursement the globe over of the tens of billions of dollars annually that has for decades so won America’s reputation for humanitarian beneficence. Just 12 will handle what trickle of funds that may continue for the entire continent of Africa, for example.

As for Marocco, NBC News tells us that,

”his attempts to consolidate power and slash funding drove officials to write a dissent memo that ultimately pushed him out of office.”

The network also reports that Marocco and his now-wife were identified in multiple images as being among the Jan. 6 rioters at the U.S. Capitol, one of the images showing him entering the building through a broken window.

So, the question of why did Musk choose USAID as his first target? A Financial Times article of last September titled “Musk, Thiel and the shadow of apartheid South Africa” sheds some light. Both spent early years in South Africa, Musk until he was 17. Simon Kuper, the author of the article who also has ties to South Africa, says about the country in that period that Whites “of a certain mindset” thought that the differential between comfortable White society and the dreadful conditions under which Blacks lived, forcibly relocated into racially segregated neighborhoods, “was inscribed in nature”.

“Certain people were equipped to succeed in capitalism, while others weren’t. That was simply the way it was, and it was pointless to try to mess with nature.”

Perhaps an inborn indifference to the plight of other humans is why Musk has neither morals nor qualms about bringing USAID assistance worldwide to a halt. He had an influential grandfather who moved his family from Canada to South Africa because they “were very fanatical in favor of apartheid”, according to Elon’s father Errol. They had Nazi sympathies, the father said. Did that imprint on young Elon? In those years of his growing up and until the early ’90s, Elon saw a meddling USAID working against granddad’s apartheid until it was finally overcome. Is Elon using his control of the U.S. government to get even?

Feb 7 2025 | Posted in Takeover | Read More »