The Republican Tax Plan is Devastating for All but the Uber Rich. It is Also a Problem for Democracy.

I have put off writing about the Congressional budget from the beginning because the process's machinations make a recipe for haggis seem as easy as using a Betty Crocker Cake Mix.

The more than 1,000-page bill passed late last night, 215-214. Thus, I felt it was time to tackle the subject and put out this extra post.

Republicans Thomas Massie of Kentucky and Warren Davidson of Ohio voted against it, joining every House Democrat.

Thomas had it right: "We're not rearranging deck chairs on the Titanic tonight. We're putting coal in the boiler and setting a course for the iceberg."

I wrote a while back about Republicans considering a $880 billion cut to Medicaid. But now Medicare is also on the line.

The Republican budget bill under consideration would trigger about $500 billion in automatic cuts to Medicare, the program that provides health insurance to around 68 million older adults and people with disabilities.

This is because Congress is bound by the statutory Pay-As-You-Go (“PAYGO”) Act, which requires any spending to be offset by automatic cuts to avoid deficit spending. According to a letter written by the Congressional Budget Office (CBO), the cuts to Medicare would total about $45 billion in 2026 and $490 billion between 2027 and 2034. Unless lawmakers otherwise offset the deficit impact of the Republican bill or agree to waive the PAYGO requirements, the cuts are automatically triggered.

The Senior Citizens League, an advocacy group, said “the potential Medicare cuts could lead to lower reimbursement rates and may force healthcare providers to limit services or stop accepting Medicare altogether, reducing access to care. Older adults, meanwhile, could also see higher out-of-pocket costs for medical services and prescriptions. And for those enrolled in Medicare Advantage, critical benefits like dental, vision, or hearing coverage could be scaled back or eliminated entirely,”

As if that were not bad enough, Trump’s One Big Beautiful Bill Act, according to the CBO, would add $2.3 trillion to the deficit over 10 years.

According to the CBO report:

The total effects reported in this analysis for the 2026–2034 period include the following:

• An increase in the federal deficit of $3.8 trillion attributable to tax changes, including extending provisions of the 2017 tax act, which includes revenues and outlays for refundable credits.

• $698 billion less in federal subsidies from changes to Medicaid

• $267 billion less in federal spending for SNAP.

• $64 billion less in spending, on net, for all other purposes. That includes increases in outlays for defense, immigration enforcement, and homeland security. Those are offset by reductions in federal pensions, receipts from spectrum auctions, and changes in receipts and outlays associated with changes to emissions regulations.

• $78 billion in additional state spending, on net, accounting for changes in state contributions to SNAP and Medicaid and for state tax and spending policies necessary to finance additional spending.

The CBO estimates that household resources would decrease by about 2 percent of income in the lowest decile (tenth) of the income distribution in 2027 and 4 percent in 2033, mainly due to losses of in-kind transfers, such as Medicaid and SNAP.

By contrast, resources would increase by an amount equal to 4 percent for households in the highest decile in 2027 and 2 percent in 2033, mainly because of reductions in the taxes they owe. The distributional effects vary throughout the 10-year projection.

This will affect everyone’s pocketbooks in other ways as well.

At one time, foreign investors considered America a good place to invest. However, now, to the world, it appears we are being ruled by a political party that believes in voodoo economics and an authoritarian ruler who spends much of his time playing golf and rage-tweeting about his detractors.

So what happens when foreign money stops investing in the US? Stopping money flows into America would mean a sharp drop in the dollar's value relative to other currencies. A plunging dollar would drive inflation, most likely forcing the Federal Reserve to raise interest rates. This contradicts their regular policies when facing a recession and rising unemployment.

As I have also written about before, the impact on interest rates could be devastating. The United States relies on foreign capital investment to pay a significant part of domestic investment spending.

Losing any significant part of that money would force interest rates higher.

But wait, there is more.

Hidden in this bill is a frightening detail. It includes a provision to remove the powers of the Federal courts. Here is how it reads:

“No court of the United States may use appropriated funds to enforce a contempt citation for failure to comply with an injunction or temporary restraining order if no security was given when the injunction or order was issued….”

In plain English, no federal court may enforce a contempt citation.

According to U.C. Berkeley School of Law Dean and Distinguished Professor of Law Erwin Chemerinsky: ‘Without the contempt power, judicial orders are meaningless and can be ignored. There is no way to understand this except as a way to keep the Trump administration from being restrained when it violates the Constitution or otherwise breaks the law.

‘This would be a stunning restriction on the power of the federal courts. The Supreme Court has long recognized that the contempt power is integral to the authority of the federal courts. Without the ability to enforce judicial orders, they are rendered mere advisory opinions which parties are free to disregard.”

Here are a few things that are also in the bill:

The estate tax exemption rises to $15 million.

The SALT deduction allows taxpayers to deduct the money they pay in state and local taxes from their federal taxable income. Lawmakers from high-housing-price states say the boost for SALT is insufficient. As proposed, it rises from $10,000 to $30,000 for joint filers making less than $400,000 annually. They are pushing for more.

Food Assistance: Work requirements to receive food aid: Under current law, able-bodied adults without dependents must fulfill work requirements until they are 54; the act raises that to 64.

Also, some parents are currently exempt from work requirements until their children are 18, but the bill eliminates anyone with a child over the age of 7.

Work requirements for Medicaid: To be eligible for Medicaid, there would be new “community engagement requirements” of at least 80 hours per month of work, education, or service for able-bodied adults without dependents. Conveniently, the new requirement would not kick in until January 1, 2029, after Trump leaves office. People would also have to verify their eligibility for the program twice a year, rather than just once.

The work requirements may seem valid in a sense, but that is not the case. The notes at the end of this post provide the facts and figures supporting the argument against requirements for assistance.

Guns: The bill eliminates a $200 tax on gun silencers, a rule on the books since Congress passed the National Firearms Act in 1934. A large Republican party supporter and contributor, the NRA supports the elimination of the tax.

Immigration: The legislation would provide $46.5 billion to revive construction of Trump’s Wall, and more money for the administration’s deportation agenda.

There is $4 billion to hire an additional 3,000 new Border Patrol agents and 5,000 new customs officers, $2.1 billion for signing and retention bonuses, and funding for 10,000 more Immigration and Customs Enforcement officers and investigators.

It includes significant changes to immigration policy, imposing a $1,000 fee on migrants seeking asylum. This is something the US has never done, a country that does? Iran.

Overall, the plan is to remove 1 million immigrants annually and house 100,000 people in detention centers.

The Military: Nearly $150 billion in new money for the Defense Department and national security is in the budget.

Your Public Lands: Republicans included a provision authorizing sales of hundreds of thousands of acres of public lands in Nevada and Utah.

There is far more, but at this juncture, that was all I could stomach.

In keeping with the backroom antics when authoring this bill, the Republicans have ensured that the painful cuts to social programs won’t take effect until after the 2026 and 2028 elections. The cowards are too scared to attend town hall meetings. Obviously, they couldn’t stomach what the results of yanking services from Americans would do to their reelection chances.

The issue is that cuts will be made at the state level over the next two years to prepare for these drastic funding cuts. This will remove the Republican party in Washington from any blowback and instead lay it directly on the shoulders of the lawmakers in the states.

The bill now goes to the Senate, where Republicans have a slim 53-47 majority. There will most likely be more changes. The Republicans intend to move the bill through the Senate using the parliamentary reconciliation process, allowing them to pass it with a simple majority rather than the 60 votes they need to overcome a filibuster.

It would be nice to think, pray? hope? that some Republican senators find a moral compass and defy this heinous bill, but then I also keep waiting for D.B. Cooper’s money to land in my backyard.

---

Work Requirements:

Most Medicaid adults under age 65 already work without a “work requirement.” Among adults under age 65 with Medicaid who do not receive benefits from the Social Security disability programs, Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI), and who are not also covered by Medicare, 92% were working full or part-time (64%), or not working due to caregiving responsibilities (12%), illness or disability (10%), or school attendance (7%). The remaining 8% of Medicaid adults reported being retired, unable to find work, or not working for another reason. Those in better health, with more education, and without disabilities are more likely to be working. Many Medicaid adults employed by small firms or in industries (e.g., agriculture, service) with historically low employer-sponsored health insurance rates; even if eligible for job-based insurance, some low-wage workers may not accept the offer because it is not affordable.

CBO estimates of national work requirements show lower federal spending and an increase in the uninsured, but no increase in employment.

Research shows that access to affordable health insurance and care promotes individuals’ ability to obtain and maintain employment.