When Congress finally enacts the newly passed tax and spending cuts outlined in what’s been dubbed the “One Big Beautiful Bill,” it will be “to the great detriment of the people of this country.”
Those aren’t my words, nor are they Democratic Party spin or hyperbole.
They’re the sentiments of Marc Racicot, a Republican who served as governor of the very red state of Montana from 1993 through 2001. So why is Racicot so against this bill?
To recap, in the legislation sent by the House to the president’s desk on Thursday, the expiring tax cuts enacted under President Trump in 2017 are made permanent, at a cost of $3.8 trillion over the next decade. Then there are additional tax cuts Trump wants that’ll cost the Treasury another $441 billion, bringing the 10-year tax cut price tag up to $4.2 trillion.
If you’re wondering who really benefits from this tax-cut largess, conjure up a picture of Trump and his millionaire/billionaire cronies. According to the nonpartisan Congressional Budget Office, on average, the wealthiest 10 percent get a $12,000 annual tax cut while the poorest 10 percent lose $1,600 in income every year — despite the bill’s temporary tax cuts for wages from tips and overtime pay.
The reasons for this obscene outcome are readily apparent. To pay in part for tax cuts that line the pockets of the Mar-a-Lago crowd, both versions of the bill slash spending on programs that help less fortunate Americans do crazy stuff, like receive medical care and put food on the table. For instance, the Supplemental Nutrition Assistance Program — which costs about $110 billion a year and helps poor families buy nutritious food — gets cut by $285 billion over 10 years.
Then there are cuts to Medicaid, the nation’s largest insurer, providing healthcare coverage to some 71.3 million people or roughly 20 percent of all Americans. Over the next decade, the CBO estimates Medicaid cuts will range from $793 billion under the House bill, to $1 trillion under the Senate bill. In either case, at least 10.3 million low- to middle-income Americans will lose Medicaid health coverage, the vast majority of whom work.
Which makes the Big Beautiful Bill impossible to justify with facts. So its proponents have instead resorted to lying. Last week, Trump, the maharajah of mendacity, claimed that “Medicaid is left alone. It’s left the same.” Really? Tell that to the millions losing coverage.
Then there’s the hoary prevarication, most recently parroted by Republicans like South Dakota Senator John Thune and House Speaker Mike Johnson, that these supply-side tax cuts for rich folks will stimulate so much economic growth they’ll pay for themselves and not increase the deficit. Except all the evidence belies this canard.
In fact, the London School of Economics reviewed every supply-side tax cut implemented in all 18 OECD nations (including the U.S.) over the 50 years from 1965-2015, and found “economic performance, as measured by real GDP growth per capita and unemployment rate, is not affected by tax cuts for the rich,” and cannot possibly create any enhanced economic growth.
The U.S. specific data are particularly compelling. Before 1980, top tax rates for wealthy filers were high, varying from 92 percent to 70 percent. Then beginning with President Reagan in 1981 and continuing thereafter, top income tax rates for individuals were slashed and currently sit at 37 percent. In the 45 years since, average annual growth in real GDP and employment have been worse than they were during the higher-tax, pre-supply side era. And deficits have exploded.
Bottom line: Racicot has every right to rip this abhorrent legislation.
Ralph Martire is executive director of the Center for Tax and Budget Accountability, a bipartisan fiscal policy think tank, and the Arthur Rubloff Professor of Public Policy at Roosevelt University in Chicago.
