Heather Cox Richardson: Trump signs 1,000 page budget bill...

[erronis]

https://heathercoxrichardson.substack.com/p/july-5-2025

Yesterday afternoon, President Donald J. Trump signed the nearly 1,000-page budget reconciliation bill Republicans passed last week. Trump had demanded Congress pass the measure by July 4, and Republicans rammed it through despite the bill’s deep unpopularity and Congress’s lack of debate on it. When House speaker Mike Johnson (R-LA) presented Trump with the speaker’s gavel during the signing event, the symbolism of the gift was a little too on the nose.

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The measure makes the 2017 Trump tax cuts for the wealthy and corporations, which were due to expire at the end of this year, permanent. At the bill’s signing, Trump harked back to the idea Republicans have embraced since 1980, claiming that tax cuts spark economic growth. He said: “After this kicks in, our country is going to be a rocket ship economically.”

In fact, tax cuts since 1981 have not driven growth, and a study by the nonpartisan Penn Wharton Budget Model of the University of Pennsylvania projects that the measure will decrease national productivity, known as gross domestic product (GDP), by 0.3% in ten years and drop the average wage by 0.4% in the same time frame.

From 1981 to 2021, tax cuts moved more than $50 trillion from the bottom 90% to the top 1%, and Penn Wharton projects the top 10% of households will receive about 80% of the total value of this law, too. Those in the top 20% of earners can expect to see nearly $13,000 a year from the bill, while those in the bottom 20% of households will lose about $885 in 2030 as the pieces of the law take effect.

Past tax cuts have also driven budget deficits and increases in the national debt, and like them, this law will increase the deficit by about $3.4 trillion over the next ten years, according to the nonpartisan Congressional Budget Office. The CBO also projects that interest payments on that debt will cost more than $1 trillion a year.

Sam Goldfarb and Justin Lahart of the Wall Street Journal noted on Thursday that economists, investors and politicians are sounding the alarm that the U.S. is “bingeing on debt” when there is no national emergency like a pandemic or a war to require taking on such debt. The measure will raise the nation’s debt ceiling by $5 trillion.

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[sop]

1. Must read by Heather Cox Richardson.

"The measure makes the 2017 Trump tax cuts for the wealthy and corporations, which were due to expire at the end of this year, permanent."

I hope Democrats have the courage to undo these "permanent" Trump tax cuts if/when they regain control of Congress and the presidency. Predictably, Republicans will accuse any Democrat of wanting to "raise your taxes" if Trump's "permanent" tax cuts become an issue in '26 and '28. The conventional wisdom in DC has always been elected representatives never pay a political price for cutting taxes, only for raising them. These Trump tax cuts have to be made NOT permanent.

[Historic NY]

2. Goes to show Trump didn't learn a thing in business school

Penn Wharton Budget Model of the University of Pennsylvania .