Schumer caved in on the CR as I expected, but why are Republicans so happy? 
Two Guidelines
- If AOC is unhappy, that’s generally a sign something good is happening
- If Rep. Massie is unhappy, that’s generally a sign something bad is happening
Those two guidelines are in conflict.
Background
Last week I was asked if I thought Schumer would agree to the Continuing Resolution. I replied “Of course, Democrats are not as stupid as Republicans when it comes to CRs. Parties that stop the government always end up losing.”
I made that comment after Schumer said he wouldn’t support the CR. It was an obvious bluff, and Schumer relented.
AOC’s Deep Sense of Outrage
Today, The Hill reports Ocasio-Cortez on Schumer Saying He’ll Vote to Advance CR: ‘Deep Sense of Outrage and Betrayal’
Rep. Alexandria Ocasio-Cortez (D-N.Y.) slammed Senate Minority Leader Chuck Schumer (D-N.Y.) for saying he would vote to advance the House-passed continuing resolution (CR) to fund the government, which was largely opposed by Democrats in the lower chamber.
“There is a deep sense of outrage and betrayal,” Ocasio-Cortez told reporters late Thursday, referring to Schumer’s decision. “And this is not just about progressive Democrats, This is across the board — the entire party.”
Schumer, who previously said Senate Democrats would not provide the needed votes to advance the House bill, argued passing the CR is less about its contents but rather the looming threat of a government shutdown.
“The Republican bill is a terrible option,” Schumer said on the Senate floor. “It is deeply partisan. It doesn’t address far too many of this country’s needs. But I believe allowing Donald Trump to take even much more power via a government shutdown is a far worse option.”
His words echo the sentiments of Sen. John Fetterman who has also said he would vote in favor of the CR if it was approved in the House.
“We don’t agree with what’s been sent to us but, you know, if we withhold our votes, that is going to shut the government down,” Fetterman told host Stephanie Ruhle on MSNBC Tuesday evening.
Ocasio-Cortez said their approach is “incorrect” and labeled their pending vote as a “slap in the face” to voters.
If all I had to go on was AOC’s anger, I would be pleased. But there are many more details.
For example, consider my post this morning. Hoot of the Day: House Republicans Suddenly Like Clean Energy Tax Breaks
Pack of Republican Now Support
- No Medicaid rollbacks
- More food assistance
- Expansion of Inflation Reduction Act provisions to capture methane
- Reinstatement of State and Local Tax deduction (primary benefit big blue states)
All the Republicans want more military spending. None of them want to discuss Social Security other than not taxing benefits which will dig a bigger SS hole.
Only one Representative stood against this nonsense. That would be hard-line deficit-hawk Thomas Massie.
A $2 Trillion Cut Compared to $86 Trillion in Spending
The Committee for a Responsible Federal Budget (CRFB) comments A $2 Trillion Cut Compared to $86 Trillion in Spending
The House-adopted Fiscal Year (FY) 2025 budget resolution calls for up to $2 trillion in spending cuts as partial offsets for $4.8 trillion of tax cuts and spending increases. Even with those offsets, the ensuing reconciliation bill would add $2.8 trillion to deficits through 2034 before interest.
Viewed in context of the total amount of spending projected by the Congressional Budget Office (CBO) over the next decade, however, a $2 trillion cut is not all that large. Over the ten years from FY 2025 through 2034, CBO projects the federal government will spend a total of nearly $86 trillion. That means a $2 trillion cut would only represent about 2.3 percent of total projected spending.
If lawmakers feel they must have their $4.0 to $4.5 trillion in tax cuts and tax cut extensions as well as their $300 billion in increased spending for national defense and border security, then they should come up with an additional $2.8 trillion of spending cuts or revenue increases to ensure we don’t unnecessarily add to our already recklessly high national debt.
$2.0 Trillion in Cuts and $4.8 Trillion in Additions
And republicans are happy?
Well, two weren’t. Senator Rand Paul and Rep Massie.
What’s in the House’s Full-Year Continuing Resolution?
The CRFB addresses the question What’s in the House’s Full-Year Continuing Resolution?
The full-year CR is roughly equivalent to FY 2024 funding with a few anomalies, including the removal of all Congressionally Directed Spending (“earmarks”) and other smaller shifts in funding between appropriations titles (described in the table below). The net result is a $10 billion increase in funding above FY 2024 levels and roughly flat total funding between the previous two CRs and this one.
Budget Authority Allocations by Appropriations Title
Importantly, the full-year CR would put both defense and nondefense budget authority (BA) under the FRA’s Section 101 caps for 2025 by about $2.7 billion each. As a result, we estimate that direct outlay savings would total roughly $5.4 billion over the next decade. Relative to a baseline where Congress appropriates at the full level of the Section 101 FRA caps, we estimate that this bill would result in discretionary BA that is $61 billion lower than that baseline through 2034. This would result in $54 billion of outlay savings through 2034.
The FRA included a second set of caps (Section 102) that are put in place if Congress has not agreed to full-year appropriations by December 31, 2024. Those caps do not become binding until April 30, 2025, at which point a CR with appropriations above those caps would require a sequester to bring defense or nondefense spending in line with them. As a result, CBO’s current baseline assumes the Section 102 caps are binding for base discretionary spending, and appropriating above those caps would technically increase CBO’s baseline projections.
Lawmakers have reportedly agreed with the Administration (which would order such a sequester) to consider a full-year CR as full-year appropriations, which would make the Section 101 caps binding. However, if that were not to be the case, the defense total would violate the Section 102 caps and thus require a sequester of $42.7 billion to bring it into compliance.
Budget Authority in FY 2025 Under the CR vs FRA
The full-year CR would also extend $20.2 billion of IRS funding rescissions from the FY 2024 appropriations. CBO estimates that the reduction in revenues attributable to the recession will total $66 billion over the FY 2025 to 2034 period. After accounting for the decreased IRS spending, this amounts to a $46 billion deficit increase. Additionally, the bill continues $15 billion of phony CHIMPs that would result in no outlay savings, which add to its costs. Combined with the savings from lower appropriations in 2025, we estimate a net cost of $7 billion through 2034.
Smoke and Mirrors
As best as I can tell, there are at best no real savings in this CR.
A bit of this got shifted to a bit of that.
One of the things AOC is whining about is the reduction in the VA budget. Republicans are sure to latch on to that and fix it.
I am told the CR results in a big decrease in FY 2025 second half spending. But I fail to see it in these numbers.
10-Year Impact
The above chart shows the net impact over two years of bragging about $2.0 Trillion in Cuts while Ignoring $4.8 Trillion in Additions
And republicans are happy?
What a sorry Joke. I side with Massie.
If you think DOGE will fix this spending problem, then show me the details in an actual budget, passed by Congress, without absurd assumptions everyone knows are pure bullsheet.
Related Posts
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March 13, 2025: The Amazing “Success” of Trump’s 2018 Aluminum Tariffs in One Picture
I hope you can take a bit of headline sarcasm because the true story follows.
March 14, 2025: Hoot of the Day: House Republicans Suddenly Like Clean Energy Tax Breaks
21 House Republicans now like Biden’s Inflation Reduction Act incentives.
Lutnick Says Tariffs Can Eliminate the IRS and Balance the Budget
Of all the lunatic ideas on how Republicans will balance the budgets at the top of the list is tariffs.
I did the math on that idea.
We would need to faithfully collect 200 percent tariffs on everything, with of no trade frictions, no retaliations, full compliance, and no reductions in imports.
It’s even stupider than the above sentence implies. For discussion, please see Lutnick Says Tariffs Can Eliminate the IRS and Balance the Budget
Please note the “Smoke and Mirrors and 10-Year Impact” sections above.
Mish has used a graph from the CRFB.org. What a crock. Their graph is labeled as “Debt as a percentage of GDP”. Our real Debt on Dec. 31, 2024 was $36.218Trillion and our ’24 GDP was $29.720Trillion. Any third grade student could figure out our ratio of Debt to GDP 1.21.
The CRFB. org graph shows the debt ratio right now, is 1 to 1. The real ratio is 21% higher at 1.21. Our real National Debt includes the $7.381Trillion that is called the Intragovernmental Debt. This Debt is even more important the Public Debt because it is owed to the Social Security Trust Fund, Government Pension Funds and various Trust Funds and Reserve accounts none of which can be defaulted on.
The Intragovernmental Top 3 debts that are a part of the National Debt. Aug. 2023
Social security Old-Age and Survivors Insurance Trust Fund $ 2.692 Trillion
Department of Defense Military Retirement Fund $ 1.376 Trillion
Civil Service Retirement and Disability Fund $ 985 Billion
If you want to see a more complete list of America’s most important debts, go to:
The Federal Government Has Borrowed Trillions. Who Owns All that Debt?
“$2.0 Trillion in Cuts and $4.8 Trillion in Additions”
Is this Roman Empire accounting? Whatever happened to it, by the way?
Carville, and now Schumer, are both correct. Don’t get in the way of the brakeless freight train roaring down the tracks. Its always been the economy(and 401k’s), stupid.
Schumer traded his vote for zero concessions. Insane. Dems own the economic collapse as much as Trump and his lickspittles in the republican party.
Congress should take another pass at the line item veto. Clinton wanted that, Congress passed it, and the Supreme Court ruled it unconstitutional. Some of the justices may have voted against it because they just didn’t like Clinton.
Congress can pass an Amendment to give the President a line item veto. The States can ratify it, then the Court will be pleased, or at least have to live with it.
I love that you think that we have the time for that.
Either way. Trump wins. You guys have no idea how screwed we are as a country..i say that as a citizen and former Trump supporters in 2016.
I agree. It’s going to blow. The question is can Trump take the foot off the gas and center the wheel to minimize the damage, or does the country go sideways into the ditch ripping the wheels off and rolling a dozen times.
Chuck will not shutdown the gov. In April Trump might impose tariffs on other nations. After a bear market rally SPX might breach Sept 11 fractal zone..
I wouldn’t say that Republicans are “Happy” about any of this, Mike, just “realistic”. (Throw up in my mouth more than a little bit) They didn’t want to negotiate with Dems right now for real cuts, understandably, so it’s merely buying time. Unfortunately for the mercurial Trump, waiting until September well might be fatal to real reform. Could that have been the plan all along? Hoping not…
Congress has been broken for approximately 30 years. It needs to get back to negotiating instead of hostage-taking and playing chicken. The Republicans in the Senate want to pass the CR, and they need Democrat votes to get it approved. So, go out and win those votes. Reach across the aisle and find out what it would take to get eight or nine votes if that is what you need. There are 100 Senators who all are supposed to represent their constituents, so let them do that. Let the democratic legislative process work as it was designed to work.
We are all in the swindle. All people and all bussiness take their share from goverment, a handful of dollars or big coffers.
Solution? I don’t know, maybe the same law for all: same taxes, rules, etc. But that’s impossible. We see a tariff tailored for each lobby, a tax, an endowment, etc. A hyenas’ fight for the spoils.
millions, billions, trillions, whats the next one again? The crawling inflation never sleeps. All the bonefide non-allies are against the dollar trade. Adding more non-alliances to the list is surely not a good idea.
If it isn’t stopped the government will DEVOUR the populace.
Devour and take everything. leaving nothing worthwhile.
It has to be stopped. It has to shrink. This is a problem all across the West.
The government is not supposed to be a business, but not it IS the business.
In Canada 70% of the economy gets absorbed into the government or its direct influence. ITs atrocious.
Then get the voters to stop it .. oh thats right … everyone but you LIKES it.
I mean, it’s true that – in the aggregate – Americans want more from government than they’re wiling to pay for in taxes. It’s not true, though, that “everybody” likes it – or even a majority. It’s that each particular interest group knows how to threaten congress and bribe. Whether it’s the Teachers’ Union that dominates the democrat party, the guns manufacturers that dominate the GOP or military industrial complex that dominates both parties. Not to mention AIPAC and the evangelicals who keep the money flowing to Israel. There’s no powerful lobbying group for “balance the budget”.
a government big enough to give you everything you want,is big enough to take everything you have.
this is a very simple philosophy, even a current college graduate can understand it after explaining it to them 3 or 4 times.
If the government were devouring us, the government would be incredibly rich. You want to know who’s devouring us, look at who has all the money, and buys the government so they can have more.
The government IS incredibly rich. How many nuclear powered submarines do you own?
Large, sprawling countries have big governments. I think it’s just a fact of life.
Government is a means to distribute the wealth and assets of a nation to discreet groups of individuals. That is the fact of life.
now you figure out why they prefer large sprawling governments to accomplish this goal…
Remember we only care about the independent moderate voter these days who decide all elections (the ones that abandoned us dems in 2024). And I havent figured out why Schumer is giving in yet, seeing as we are completely winning the “DOGE” war — everything theyve done is both illegal and stupid, so why would Chuck do anything but say “no budget till everyone is rehired and all contracts and USAID spending is restored.” Why would he give them what they wanted …..?
Because he’s also part of the puppet show that distracts us from who’s really stealing from us all.
For the reason that he gave – he did not want a government shutdown.
Basically, he feared Trump (and Musk) being unsupervised by the Congress.
He’s a good steward.
actually the dems painted themselves into a corner. They had no choices. It was a self inflicted wound.
From Anna Wong at Bloomberg. Interesting. For Mike.
To give some perspective on the massive spike of inflation expectations in Umich survey today, here’s a ballpark check:
-core PCE weight has 24% weight on goods, 76% on services
-The typical drop in unit labor costs associated with the kind of magnitudes we just saw in the Umich expectations on unemployment is -3% to -5%. Let’s take -4%
-labor income share in services, say 69%
-import penetration of consumption, say 12%.
-full implementation of Trump’s tariffs on global tariff day on April 2nd, 15 ppt increase on effective rate.
So the drag on core pce from the deterioration in wages is -210 bps, while the tariffs — assuming 100% pass through — is +180 bps. Net impact is disinflationary, -30 bps on core PCE.
And that’s being generous on the pass-through assumption.
In the least, one should conclude it is far from clear that the trajectory for inflation is upwards, not to mention of the magnitude in the Umich survey.
Thanks – I have no idea why 2 people would do a thumbs down for that.
Nobody needs or should want a shutdown. They did the right thing for a change.
Remember the more you cry wolf (we’ve had three dozen shutdowns in 30 years), the more the people dont believe your threats anymore.
I’m not in favor of shutdowns for any side. They do no good. The people get vacation and back pay. Nothing happens.
AOC is too stupid to see the trap the Dims have got themselves in. Schumer, snake that he is, saw it but his brain dead party didn’t
Correct on all points!
What this does is wreck all the Talking points that Dems and lapdog media constantly throw out each and every day.
Doing things the way of Mitch McConnell style and Paul Ryan Style got this Nation to where it is.
Change the Politics and the outcome will change.
Stop pretending to be Fiscal conservative supporting, then go out of ones way to Trash DOGE effort with every word.
Raise Public awareness and deliver the goods and that will enable confidence getting restored. This is proper course of direction.
when do I get that $5000 check??
Right after Republicans win the midterm elections.
Right after Elon gets his $50 billion check.
Ooops… out of money. Too bad.
Schumer is a Democrat, synonymous with criminal. Someone made him an offer he can’t refuse.
Yah, the GOP!
KGB is fulla criminals — what does that say about you?
They are all criminals, running a for profit fundraising apparatus called the DNC and RNC. If you contribute to this, you’re the problem. If you fall in line when they threaten, you’re part of the problem. If you buy their bs, you’re the problem.
Excellent point, and it has been bantered about for awhile now. The idea is to get the mid-level to upper level people who are convicted, to spill the beans, show where things are buried, or however you wish to refer it.
People like Schumer, old and ready to retire, are the perfect ones to “Pin Down” another person that comes to mind is Pelosi. These folks and many like them, will squeal like pigs, if it allows them to stay out of trouble, and keep there millions, improperly earned of course, but it’s the “Big Fish” they are looking for (Think 3-Letters for starters), and those they helped, supported, paved roads for Etc. Many will go down, before all is said and done, but this will take some time to have it all work through the system.
Either your signature or brains will be on the CR? /sarc
Mish-
maybe you would find the WSJ article – A Baseline for Tax Reform SuccessMike Crapo is right to use current policy as his budget guideline.
By The Editorial Board helpful for understanding budgeting decisions
Thanks.
I had already seen that.
It’s bullsh*t. To get TCJA passed the first time they did it for <10 years.
Now they want to extend that and not count the increase.
Then on top op that, Trump wants more for defense, more for this and more for that. This is why the bottom chart in my post is accurate.
Pentagon hasn’t passed an audit in, what, 8 years? That should trigger an automatic 5% cut of their total budget yearly. That means in 2026, if they still cannot pass an audit, it triggers another 5% cut. Once they can figure out how to fudge the books to pass a budget, those cuts remain, meaning they have to justify any increases beyond the new, reduced starting point.
Ditto! Defense is MAJOR BLOATED. I live by a Lockhead PORK F35 (MASSIVE WASTE) plant and their stunting pilots are always showing off the planes and their enjoyment. F’ that. We spend WAY, WAY, WAY too much on defense. and should unquestionably GUT Defense and the F35 for starters.
It’s really pathetic that we’ve had cases where the air fleet we send on an attack on some bee’s nest capital in blight land can be worth more than the country we are blowing up! Crap, don’t lose a B-2 plane!
(And lets talk about how EVERY NEW BOMBER IS SO MASSIVELY LESS COST EFFECTIVE THAN THE PRIOR BOMBERS.
We still use 50+ yr old B-52s.We RARELY use the (finally) cut back B-2. Which is FAR more expensive to use, AND FAR more wasteful than the B-1s we end up using.We haven’t had a reasonable bomber in 30+ yrs since the B1. And the B-2 doesn’t carry jack compared to the B-1, much less the B-52.
I’ve been saying missles have largely replaced NEAR ANY need for bombers for 30+ yrs. What’s this fascination that we have to have a VERY EXPENSIVE pilot overhead dropping anything but money? And now the world is moving on to the next generation of warfare DRONES. Bombers have been a financial blackhole waste and will continue to be.
Did I mentioned gut the military budgets?!
And throw thousands of Republican factory workers out of jobs? Fergit it.
Boeing is in Seattle and very Democratic. Washington’s senators always vote for Boeing pork.
Point being the MIC is Uniparty.
Speaking as a Fed retiree, they know where all the money is (in my agency they were obsessive about it). Whatever money isnt accounted for is money they dont want you to account for.
So it’s more perfidy than ineptitude. Not sure which is worse.
Perfidy Fits!
So how much did you take, or was that theoretical? Did everyone take, or were at least some honest? What % would you say took part? 75%-85% or more? Give us some details…
Give it up Boo! You’re retired, and should have nothing to worry about, RIGHT?
“Help Our Country Out” Are You not a Patriot? I get it, You Did… Did You? Just curious, seeing as how You mentioned it and all, and seemed quite “Aware” of what exactly “Went Down”
Its a big organization with millions of humans (and contractors) in it. There arent a lot of generalizations.
Very, very, weak…
Its very hard to steal anything when there is no cash anymore. Clinton brought in the charge (credit) cards in 1990s where every penny is easily accounted for. We initially had some new military recruits that went wild with the cards, but that got handled pretty quick. I stole my share of pens and spiral notebooks, but nothing out of the ordinary. And like any office work (they even did a TV show about it), we did NOT work 40 hours a week. 🙂 But we did show up. What more details you want?
OK, I made my point, as did you… have a nice evening.
Scott, I’m with Stu on this. If you’re a retiree, spill the beans. Not about your benefits, but about the bigger experience over the last few months.
(Worked at home last 9 years — retired last year)
If Stu and Realityczech ask questions, as long as they fit to the theme of Mike’s posts, Ill try to answer. Im afraid the dirty dealings and rampant waste and theft you are hoping to hear about didnt happen much in my agency — not that I saw.
I’m not hoping to hear anything but what is actually happening. I would assume that most people just want as honest of an accounting of the day to day.